Loring Windblad
Copyright 2004 by http://www.organicgreens.us and Loring Windblad. This article may be freely copied and used on other web sites only if it is copied complete with all links and text intact and unchanged except for minor improvements such as misspellings and typos.
It's great to have a challenging and interesting hobby such as origami, papier-m�ch� sculpting, fine art - painting and/or sketching, rockhounding, photography, or jewelry making. It's even more exciting to have a specialty in one of these fields that no one else has, and then to turn your special talents into a successful home-based business. It's gratifying indeed to be able to take two or more of these and combine them into a paying proposition.
That's exactly what Loring Windblad of Sierra Vista, AZ, did.
But these aren't isolated stories. Men and women across the country are joining the ranks of entrepreneurs converting hobbies into moneymaking propositions. It's important to note that none of these women originally planned to start a business. On the contrary, interest by others in their hobbies convinced them to sell their work.
LORING WINDBLAD'S CUSTOM-BUILT COMPUTER BUSINESS
Loring Windblad spent 20 years in the US Army in Electronics, and retired from that position on January 1st, 1976. But in the course of those 20 years additional skills were picked up including teaching (electronics), typing (over 100 wpm), general writing and technical writing (electronics and communications, lesson plans, etc), photography and even SCUBA diving.
Years and miles later (read on below, also) found Loring in Canada playing in a major bridge tournament but also renewing acquaintance with his first love, whom he met in 1952. Strange things happened and they got married in June of 1990 and began their own business in July of 1990. The business took on a form of its own, evolving from humble beginnings into a Desktop Publishing and Graphic Design endeavor by September, when they purchased their own computer - and landed their first big job starting October 1st.
That same Friday night, September 30th, was portentous in several ways. Loring played his baseball games for his computer baseball league and then shut the computer down at midnight and went to bed. When the computer was turned on at 8 am to start the new job, nothing happened. Dead. No computer working. Obviously a dead power supply? No? Actually yes. The computer was two weeks old, under total warranty, but nothing could be done warranty wise over the weekend. So Loring called around to every computer business in the area and found one open on a Saturday morning, drove there, found a power supply that looked exactly like the one in the computer at home, made a deal to "rent it" for a week until a replacement could be gotten on warranty, took it home and put it in the computer.
It worked! The job began, a few hours late but on the day it was supposed to begin. And a new career was launched, even though we didn't know it at the time.
Calling upon his 20 years of experience plus lots of long talks with the Custom Computer Builder who had sold them their first computer, Loring slowly learned about computers and how to build them. Then, in 1992, a friend of a friend wanted a new computer. Loring "custom built" a computer for him, a brand new 486 CPU "screamer" type. The client was well satisfied. Time passed. Friends later in the year wanted computers, so Loring built them new computers. By 1994 Loring was building 5-6 custom computers a month, most months, in the "high profit" days of computers when they paid $400 or more profit per computer.
One of the biggest things was finding wholesale suppliers for a new computer builder to purchase quality components from. With a little help from their original computer salesman, i.e., making careful notes on everything he told them, June and Loring developed a list of possible suppliers, then applied for re-seller status. And sure, there were periods when no computers were sold as well as months when 6-8 were sold. It was obviously a struggle, but a good one.
Networking became a way of life. June joined all the women's networking groups and Loring joined all the missed networking groups. Both made presentations and work came in, both desktop publishing and new computers. From 1995 to 1998 Loring sold an average of 25-30 computers a year. However, by 1998 the profit margin was falling out of computers, the days of $400 were gone. By 1999 the margin was down to $100 a computer and when you are servicing a computer for 3 years warranty service on a total of $100 it starts getting pretty old pretty quick.
The sales kept up for a while, but by 2001 new technology, low profits and pending retirement for June and Loring caused a re-think of priorities. By the end of 2002 building custom computers was a thing of the past and a new era of life - retirement - was upon us. But the trip to and through building computers has been a fascinating one.
LORING WINDBLAD'S PHOTOGRAPHY VENTURE
Way back when Loring first met June he learned that June knew how to not only take pictures but to develop and print those pictures in her basement darkroom. Never one to take a back seat when he could be learning something new, when Loring a few years later went to Vietnam in the Army he took up photography, including learning how to develop and print his photographs. This was 1965 to 1967. And in 1966 Loring helped to establish and run the unit photo hobby shop in Vietnam.
When Loring returned to the US he became an electronics instructor at Fort Monmouth, New Jersey, and he quickly made contact with the Post Photo Hobby Shop and got a part time job, thus learning more about photography for himself but also helping to teach others the fine art of photography.
Loring's next posting was to Panama where he continued with the local Post Photo Hobby Shop as a Photo and Color Printing Instructor for 2 � years, and also picking up work as a free-lance photographer. Loring soon began photographing such things as kids visiting with Santa, then developing and printing and delivering the photos, Then action work such as youth Karate matches, Pop Warner football games, Little League baseball games, and both team and individual photos. And, of course, weddings. All these photo endeavors paid surprisingly well, and Loring was soon not only very busy but making enough money to more than support his photography needs. And teaching helped keep Loring up with everything in the photography field so soon everyone with a question about cameras and photography was coming to him.
Being around military bases there was always opportunity for youth sporting event photography. And wedding photography. From 1970 thru about 1977 Loring did a pretty brisk business in photography, made a lot of friends and took a lot of pictures. And made a pretty good "extra income" that not only paid for all his cameras and supplies but provided a lot of extra money supplementing his income.
But it was hard work and long hours and Loring's son, silver smithing and rockhounding were getting in the way. The transition was made leaving photography behind and embracing a new business - jewelry making and silver smithing.
LORING WINDBLAD'S SILVER-SMITHING BONANZA
Loring was always a rock collector. This gave him an eye for rocks that were different everywhere he went. As a soldier in the US Army he managed to live in France for four years, Panama for five years, and Southeast Asia (Vietnam) for 2 years, as well as extensive periods from coast to coast across the United States including California, Georgia, New Jersey, Kansas and Arizona.
Loring was divorced while he was in Vietnam when his son was three. Eight years later, in August of 1975, his ex- called and said, "I can't handle your son any more. You've got to take him!" Without getting into gory details-."Well, ok", and his son came to Arizona to live with him.
Loring, Jr., was an excellent artist and got straight A's in art in school. He was now in a new environment and Windy, as a way of keeping his son's interest up in the arts and new things, began taking Jr. and his friends out on camping and sightseeing trips in the Arizona desert. Loring also was taking Geology courses with the local Junior College, and began imparting that knowledge to his son and his son's friends while on their outings in the desert and mountain country of SE Arizona, the Basin and Range country.
Rockhounding gave the desert jaunts with his son extra meaning. Identification of various kinds of rocks and geological formations soon were followed with explorations of the old turquoise mines and an education in the copper-related gemstones of turquoise, malachite, azurite and chrisocolla. Use of the Army's lapidary hobby shop led to cutting slabs of the stones, revealing hidden patterns, then cutting the stone slabs into cabochons enhancing the pattern intricacies.
What are cabochons without jewelry? Silver smithing classes followed and then Junior turned his cabochons into some jewelry pieces for his mother and sister. Then came wax carving and lost wax casting, running the full gamut of classes and skills available. In order to keep expenses down Windy located wholesale outlets which supplied him with components to assemble jewelry such as chains, pendants, findings, etc.
After two years, Junior decided it was time to move back with his mother and Windy was left with all sorts time, of jewelry skills and pieces of original jewelry building up, some pieces rather unique. He turned to the local flea market and soon established himself as a regular jewelry maker, attending almost every weekend. Sales increased, and soon Windy began his jewelry business, The Stonewerkes, Southwest Originals in Wood and Stone. He was attending weekend flea markets and Art in the Park and Craft shows all over Arizona to sell his products. And he built up a chain of 8 businesses in two states which also handled his jewelry on consignment.
Loring actually took his "rockhounding" hobby turned jewelry business a large step further. He subscribed to all the commercial and trade magazines as well, and then combined his talents as a photographer and as a writer, photographed his silver smithing and lapidary work, wrote photo-journalism articles on "how to" silver smithing projects and then sold them to the magazines.
Loring says "You never know when what you do as a hobby can end up being a very profitable business. Over the past 40 years I have had the rare pleasure of turning three hobbies into professions: photography, electronics and now rockhounding. And using other skills such as technical writing and typing in those endeavors. From humble beginnings-."
Loring Windblad has operated his own HBBs for nearly 40 years, is a published author and freelance writer. Loring has written grants, business plans and resumes that got the job done right. His latest HBB endeavor is http://www.organicgreens.us
How Much Should You Pay for a Click
Andy Quick
Title: "How Much Should You Pay for a Click?"
Copyright © 2002
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How Much Should You Pay for a Click?
Andy Quick
You have a web site ready for action. Your product catalog, order
tracking, credit card payment system, and fulfillment process are all
in place. Now all you need is traffic! Many web entrepreneurs have
learned that the magic nut to crack is attraction: get a steady flow of
customers who explore your site and eventually purchase goods. The
overhead costs of most web businesses are minimal relative to brick and
mortar stores. However, the variable marketing costs can over shadow
sales revenues by orders of magnitudes. Unfortunately, unlike the
saying in the movie Field of Dreams, "If you build it, they will not
come!" Luckily, the industry has learned this lesson; some the hard
way, and others in spite of the losers. Dot-coms are clearly not the
darlings of the capital markets any longer; however, there is still
money to be made! If you plan to start a web business or already have
one but are not sure how to increase traffic and make money at the same
time, you should consider a science-driven approach. What does that
mean? Read on-
How to Lose $500 in 12 Hours
One weekend, my business partner and I created an affiliate commerce
site. The site comprised a list of links to other online retailers.
People go to our site, pick a link to a jewelry store for example, buy
something, and in turn we receive a commission from the sale. The
process of creating the site, signing up the affiliate agreements, and
turning it on was a cinch. The cost was virtually nothing. We, being
new to this whole web business concept, thought we had an incredibly
smart marketing idea: pay to have our site come up in an ad box on a
major search engine (Google) every time someone searched on the word
"gifts". The word gifts is searched for 49,000 times per day! We
figured we would have a good flow of visitors and the money would start
rolling in. For certain, we would at least break even. We sunk $500 in
one day and let it rip. Here's what happened:
Our investment in Google - $ 500
Number of times our ad was displayed (impressions) - 36,964
Number of times people actually clicked on our ad when they saw it
(click-throughs) - 429
Number of times a person visiting our site made a purchase - 10
Our total sales revenue- $ 77
Our total gross profit - $ (428)
The whole process took less than 12 hours. At least we learned a lesson
quickly at a relatively low cost. Let's look at this event from a
slightly different perspective, putting the costs in terms of number of
visitors:
Our investment in Google - $ 500
Number of times our ad was displayed (impressions) - 36,964
Number of times people actually clicked on our ad when they saw it
(click-throughs) - 429
Ad cost per visitor - $ 1.17
Number of times a person visiting our site made a purchase - 10
Average sale per purchase - $ 7.70
Average revenue per visitor - $ 0.18
Average gross profit per visitor - $ (0.99)
We were basically giving $1 away for each visitor that came to the
site. Not a winning business model. However, taking this information,
we can assess which marketing techniques can work best for the
business. Let's add 2 additional critical data points to our table:
Our investment in Google - $ 500
Number of times our ad was displayed (impressions)- 36,964
Number of times people actually clicked on our ad when they saw it
(click-throughs) - 429
Percentage people who clicked on our ad (click-through rate)- % 1.16
Ad cost per visitor - $ 1.17
Number of times a person visiting our site made a purchase - 10
Percentage of visitors who purchased something (conversion rate)-% 2.3
Average sale per purchase- $ 7.70
Average revenue per visitor- $ 0.18
Average gross profit per visitor- $ (0.99)
Running the Numbers
Putting this all together, you can create a formula for estimating the
gross margin per visitor for a specific marketing campaign:
Average Gross Margin per Visitor = Average revenue per visitor -
Advertising Cost per Visitor
Advertising Cost per Visitor = Campaign Costs /(Impressions x Click-
through rate)
Average revenue per visitor = Conversion rate x Average sale per
purchase
Putting it together:
Average Gross Margin per Visitor = (Conversion rate x Average sale per
purchase) - (Campaign Costs / Impressions x Click-through rate)
Using our Google example, the average gross margin per visitor would be
calculated as:
Average Gross Margin per Visitor = (0.023 x $ 7.7) - $500 / (36,964 x
.016) = (0.99)
Remember, this formula can only be used for a single type of campaign.
Depending upon your target audience and the type of campaign, all of
the above variables can change. When we launched our Google campaign,
we used impression-based advertising, that is, we paid Google a certain
amount of money for every 1,000 impressions of our ad (about $15 per
1,000 impressions in our example). However, just because our ad was
displayed inside someone's browser did not mean they would click on the
ad itself.
Enter pay-per-click advertising. This advertising model allows you to
pay for an ad only when a person actually clicks on it. In this model,
you are guaranteed to get visitors. However, the cost per click is
usually much higher. Let us assume we ran our same Google campaign
except we used pay-per-click advertising. Pay-per-click also factors in
position which will drive the amount you pay per click (the higher the
ad position on the screen, the higher the price per click will be).
Let's say we pay google $0.50 per click and based on Google's traffic
for the word gifts, we receive 170 clicks per day (or visitors), or in
total 1000 visitors over the life of the campaign (we still only put in
$500, so $500/$0.50 = 1000). Using our same ratios, let us re-compute
our Average Gross Margin per Visitor, modifying our formula slightly
(notice the formula is simpler):
Average Gross Margin per Visitor = (Conversion rate x Average sale per
purchase) - (Campaign Costs / Visitors)
Plugging in the numbers:
Average Gross Margin per Visitors = (.023 x $ 7.7) - ($500 / 1000) =
(0.32)
If we used a pay-per-click advertising model, we could have saved $100.
Either way, we would have lost money, but imagine if we had started
with $5,000 instead of $500. The nice feature of pay-per-click is that
you know ahead of time how many visitors you will receive. If you know
your conversion rate and your average sale, you can modify the formula
to determine the most you should pay for a pay-per-click campaign:
Max Pay-per-click = (Conversion rate x Average Sale per purchase)
In our Google example, our maximum pay-per-click should be $0.18. For
every penny we pay less than our maximum pay-per-click, we're making
money! Unfortunately, as of this writing, the minimum pay-per-click
cost for the word "gifts" on Google is $0.37. The ultimate lesson is
that for this particular site, the Google marketing campaign will not
generate sales revenues. But is that really true? We could increase our
conversion rate and our average sale per purchase. We could increase
our conversion rate by optimizing the design of the web pages. We could
increase our average sale per purchase by entering affiliate agreements
that offer higher commissions. Let's say we used the $0.37 pay-per-
click model on Google for our gift site. In order to make money we
would have to get our average revenue per visitor to at least $0.38. If
we just focused on our conversion rate, we would need to increase the
percentage of visitors who make a purchase to 4.9%. If we left
conversion rate alone, we would need to increase the average sale per
purchase to $16.50. Alternatively, we could try and increase them both.
Not All Ad Models Are Created Equal
Using the same model, let's look at a different type of campaign:
newsletter advertising. This form of advertising involves placing an ad
embedded in a newsletter that is distributed to a subscriber base via
email. The model for calculating average gross margin per visitor is
exactly the same as impression based, except your target market is
different. For example, let us say we spend $1,000 to place an ad in an
email newsletter about shopping tips. And let's say the newsletter
reaches 500,000 subscribers. If we used the same click-through rates
and conversion rates, our average gross margin per visitor would be:
Average Gross Margin per Visitor = (.023 x $ 7.7) - $1000 / (500,000 x
.0116) = $0.004
We're making money!! (not much, but the margin is positive).
Translation: this campaign brings us under a half a penny per visitor.
Another helpful ratio is to calculate the return on your advertising
dollar:
Return of Advertising = [(Impressions x Click-through rate x Conversion
rate x Average sale per purchase) - Campaign Cost] / Campaign Cost
Or in our case:
Return of Advertising = [(500,000 x .0116 x .023 x $ 7.7) - $1000] /
$1000 = 2.7%. Translation: you're making 2.7 cents in gross revenue
for every dollar of advertising you spend. Also keep in my mind that
this newsletter reaches a different target audience. While people on
Google may casually look for gifts, the recipients of a shopping
newsletter may have a higher tendency to buy (i.e. your conversion rate
may be higher). If your conversion rate were higher, let's say 3%, your
new average gross margin per visitor becomes $0.05!! or a 34% return on
our dollar.
The Bottom Line
Using formulas to compute the success of marketing plans is extremely
helpful and reduces the risk of throwing away precious advertising
dollars. However, understand that each marketing campaign will differ
based on cost per click, conversion rates, target audience, and average
sales per purchase. I encourage you to track all the data available
about your marketing campaigns so you can realize profits instead of
losses.
Marketing on the web can be difficult. Predicting the behavior of
surfers is an art unto itself. Before you begin spending a lot of money
on advertising, experiment with different types of campaigns, track all
of the results, and make future marketing decisions based on real
customer behavior. Also keep in mind that there are other, free forms
of advertising. Writing articles, participating in newsgroups, print
advertising, and email marketing are other examples. Remember that all
of these marketing techniques will have different click-through rates,
conversion rates, and revenues per visitor.
Andy Quick is co-founder of Findmyhosting.com (www.findmyhosting.com),
a free web hosting directory offering businesses and consumers a hassle
free way to find the right hosting plan for their needs. Feel free to
contact Andy at andy@findmyhosting.com in case you have any questions
or comments regarding this article.
Andy Quick is co-founder of Findmyhosting.com (www.findmyhosting.com),
a free web hosting directory offering businesses and consumers a hassle
free way to find the right hosting plan for their needs. Feel free to
contact Andy at andy@findmyhosting.com in case you have any questions
or comments regarding this article.
