Running a website that actually makes money (a few questions)

Factual Questions
1

I can’t tell if this is GQ or not, but here it is anyway:

Background

I run a website about games, humor, and whatever else. The site does ok, but the messageboard is very popular, usually getting between 300 and 400 thousands pageviews per month (this number isn’t as impressive as it sounds, as one avid reader can generate 100 pageviews in an hour if so inclined).

Anyway, the server expenses are getting higher, so I’m going to start a premium service on the site. Premium members will pay like 5 bucks a year and get enhanced options on the site in return.

My questions:

  1. Counting the people who are interested, it looks like the site will make about 500 bucks a year (give or take). Is this something that I’ll need to put on my income tax returns?

  2. Anyone else here do something similar with a website? How did you accept payments? I’m looking at paypal.com and achex.com so far…

  3. Any other advice?

Thanks,
Chris S

2

  1. Yes.

  2. I run a trading website that makes money. As regards how people actually pay you, there are basically 3 options.

Option 1 is you set things up with your bank so that you open an Internet Merchant account (terminology may vary), you can use their online credit card transaction processing facility, and they pay the money (less commission) into your business bank account. You will also need a good web technician to write some cgi scripts for you so that customers can input their details or you can try using off-the-shelf or 3rd party scripts. Wherever you get the cgi script, someone will need to intergrate this with the bank’s cc processing facility. And you’ll need some sort of database that tracks the orders as they come in.

Option 2 is to go with a system such as paypal or eazypay, in which basically you and your customer both open an account with a 3rd party who contractualy agrees to effect the transfer of money. The drawbacks are that (a) they take more commission and (b) if a customer complains about you, or says you didn’t deliver something they paid for, the 3rd party (e.g. Paypal) can freeze your account (and the incoming money you want to get your hands on) until they are happy you have cleared your name and established your innocence. This can take awhile.

Option 3 is to have your entire business website and operation hosted by a third party that provides all the transaction processing facility.

I went with option 1 for the greatest possible security and ease of sorting out problems/complaints. But it’s up to you which choice you fancy. Read around on the net to assess the pros/cons of each choice.

  1. Think big. Making money on the web is great fun once you’ve got the hang of it. 500 per year is nothing. Aim for 500 per month!
3

What ways are there to make money on a site that you are having hosted for free (which pretty much rules out ads.)

4

Careful with free webhosts – many of them ban commercial activities in their terms and conditions. Read them carefully first.

5

My wife and I spent a year putting an online European art store on online.

I kept a journal of everything that happened over the year including all the tax and credit card programming information. It runs a good 40 pages, but if you’re interested, you’ll find it at:

http://www.htmlgoodies.com/journal_part1_1.html

6

That’s a fantastic journal, Phydeaux – very handy indeed.

7

Wow thanks - and if this is really Joe Burns - I have both of your books. Keep up the great work!