Case Study: Bargain Babe (USA)

Based on an interview Nov 17 2010 with editor-publisher Julia Scott.

The name of the publication and / or company

Bargain Babe

Established

January 2009

Form of the organization

Web address

http://www.bargainbabe.com

Describe the site or business in few words

I share strategy, coupons, and inspiration to help people save money. Money saving tips.

Staff numbers

Who’s creating the content

Content creators, paid full-time

1 (Julia Scott, the editor-publisher)

Content creators, paid freelancers

2 (They produce 3 posts a week in total out of the 20-30 total blog posts per week)

How is your time divided between doing business and content?

Anywhere from a third to half of time writing, the rest of the time goes to the business side.

“I used to be a fulltime reporter, and when you’re a reporter you have the luxury to report and write all day long. There are very few meetings. I realized after I started Bargain Babe that I have to do all of the business stuff: deal with advertisers, get my site listed, work on SEO, network with people, learn everything I needed to know about running a business, filing my taxes… All this stuff that, as a reporter, you don’t have to deal with. I spend anywhere from a third to half of my time writing and the rest of the time, on all the business stuff.”

Business, marketing & sales, other

Hired an accountant to do year-end taxes. One of the freelancers does social media aka. Facebook Page and Twitter feed.

“I don’t have a publicist, I don’t have an advertising anything. It’s just the two freelancers and me. I occasionally basically hire people when I need to.”

System engineers: (technical maintenance, site design and development staff etc.) paid full-time

Friends do most of the tech work for free. Some of the work is outsourced to geekmommy.com.

“I’m not a super techie person, myself. I know how to run a basic website but when the site goes down I need help so I’m working with her (geekmommy.com) on some projects.”

How they make money

Revenue models and sustainability

Would you say your business model is sustainable?

Yes, sustainable in the sense that you can pay bills and have some extra. Julia Scott says she’s making more money now than when she worked with the newspaper.

“However, blogging and running www.bargainbabe.com is a whole lot more work than when I was a journalist in a newspaper. It’s relentless. You never know when something is going to break. Of course, when everything goes right, you get to take all the credit which is really rewarding and amazing. But it is very draining to run a website, I have to say; it’s a hard job.”

Yearly revenue

“Almost six figures” means close to $100.000

Where does your revenue go?

Julia Scott says she is frugal by nature and has relied on friends to help set up the site. She didn’t have any capital to start off with the site, so she works from home, has lunch at home, uses her old laptop and publishes on free WordPress. The running costs are low as well: she uses Skype for phone calls, $60 a year. Domain name was $150. Hosting is few hundred dollars a year. Scott would estimate that the expenses are probably a few thousand dollars a year.

“One of my biggest business expenses when I first started was making flyers. I had a friend design a flyer, I wrote all the copy myself. I would go to Kinkos and they had a free colored paper offer if you made a copy there and so I got Hot Pink ones. I would cut those flyers myself, cutting paper two hours every month or something.”

How much do you pay to your contributors?

Pay per blog post, between 300-and-600 words. She has a whole writers’ guidelines, including how to do links and a sort of mini lesson on SEO.

What about profit?

Save and reinvest in the business. Good content is important, so she invested by hiring an illustrator and paying for good contributions.

“I am a big saver. I max up my IRA and I don’t have a 401K anymore because I work for myself but I have basically a self-employed version of that called a SEP, and I’m hoping to max out that this year. So I have been saving a lot but I do reinvest in the business.”

What kind of advertising you sell

Julia Scott is a firm believer in diversifying revenue streams online. Advertising is not the biggest revenue stream but producing content for other sites: for WalletPop, run by AOL. The affiliate programs are a huge revenue stream because her content on saving and shopping ties into it really well. Advertising changes from month to month. She does also public speaking in classrooms, some blog consulting and is asked to be an expert or commenter in traditional media.

“I make very little money off of Google AdSense, which is one of the best known ad networks. There are a lot of specialized ad networks. People forget about that and just put big banner ad on their website and that’s it. A lot of traditional media is looking for stories that bloggers are writing about and, you know, as a good writer you should be able to write anything at any length for any audience, so a lot of it is rehashing content using your expertise that you develop and share on the blog or website to writing a bigger story.”

Do you see your publication as your main product?

“My site, like most journalism sites, is free for anybody to read. I don’t charge for my content; I don’t believe in a paywall. And yet all of the money that I make from my site is derived from that content.

So, you now, a lot of people say, ‘Why do you spend so much time on your content? I mean, you don’t make money off of that.’ It’s like, ‘Well I don’t make money directly off of my content but it’s the basis, it’s the foundation for the entire site and if that foundation is not good, if it’s not really good content nobody is going to want to buy that. Nobody is going to want to come back and visit, nobody is going to want to hire you to do other projects.’”

What would be the most important thing on your road to sustainability?

“Well, I’m sure what makes it sustainable is that I spend less than I make. It is also important to have the part-time writers helping me out and the blogger friends that can help me out with guest post when I want to take a vacation and still put some content up.”