RECOMMENDED: Find the perfect business for you with our Business Ideas Tool.
Getting good information on the Internet is tricky. Anyone can publish anything with a cheap hosting account and a domain name. An authority website stands above the noise by providing detailed, honest, and trustworthy information about a specific topic.
It makes money through affiliate products and promotions and by advertisements on the site. A model authority site, such as Dr. Axe, provides people looking for health advice with articles, workout routines, healthy recipes, and more. This is not to be confused with a niche website, which has much less content, and may or may not have the same level of quality.
Who is this business right for?
This kind of business is ideal for individuals who are passionate about a subject, love writing and reading about it, and have good managerial skills. Since authority sites are so large, they are rarely run by just one person. Usually, the owner delegates a variety of tasks to other people, with many of the tasks outsourced to independent contractors and content creators.
This business is very flexible due to the fact that content scheduling, and all business-related activities, can be done on a flexible schedule. Most authority site owners don't have to meet face-to-face with clients or customers on a daily basis, if ever.
What happens during a typical day at an authority website?
A typical business day is spent creating content and managing the editorial calendar. When the site is just starting, the owner may be directly involved in creating the content. As the site grows, however, the owner will become less involved in the day-to-day operations and will instead oversee an operations manager.
What is the target market?
The target market is the general population and specifically Internet users. Since authority websites make money primarily through ad revenue and affiliate sales, it's doubtful you'll ever have to speak to any of your site visitors or "customers."
How does an authority website make money?
Authority websites make money through a combination of selling affiliate products, in-house products, and direct-placement advertisements or media placements.
Affiliate products and online media ads are the most common.
An authority site owner signs up to become an affiliate with a major brand or website so that it can resell its products or services. The authority website never handles customer information. Instead, it simply refers business to its partner business.
The authority site receives a credit for every purchase made by a referral. Affiliates typically earn money as a commission or percentage of the total sales price of products or services they're reselling. Commissions vary by company and industry.
For example, a product that sells for $100 may have a commission rate of 10%. This means whenever the authority site refers business to a partner business, and that referral buys something from the partner business, the authority site receives a commission in the amount of $10.
Another way authority sites make money is by selling their own products. Usually, a product will be an online product, like an ebook or ecourse that can be easily downloaded from the website. In some instances, the authority website will sell services, however, this is rare.
A third way authority websites make money is by hosting ads on the site. These ads can be in the form of pay-per-click ads (e.g. Google AdSense) or in the form of direct media placements. A media placement is when an authority website negotiates for the placement of an ad either directly with an advertiser, bypassing third-party promoters, or with an established media ad agency that works directly with a company or advertiser. Direct media placements can be very lucrative for authority sites. However, most ad agencies and companies will only consider direct media placements on sites with established high-volume traffic patterns.
What is the growth potential for an authority website?
Growth potential for an authority site is good, provided the site can secure the content, revenue streams, and affiliate products to make the site work. Since everything is hosted and handled online, the theoretical upper limit for growth is infinite.
Authority sites, by definition, are large websites. They cover a wide range of topics in an industry. For example, an authority site may cover a variety of topics on health and fitness. Or, it may cover topics on personal finance. Or, it may cover travel topics.
What are some skills and experiences that will help you build a successful authority website?
There's no formal experience needed to start and run an authority website, however, it helps to have business experience. You should know basic HTML and have a rudimentary understanding of website development and how hosting platforms work.
What are the costs involved in opening an authority website?
Costs are minimal. An authority website can be started for the cost of hosting and a domain name. This will set you back about $100-$200, depending on the hosting company you choose. If you plan on ramping up your content quickly, you will also spend several thousand dollars every month on content creation.
What are the steps to start an authority website?
Once you're ready to start your authority website, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:
- Plan your business. A clear plan is essential for success as an entrepreneur. A few important topics to consider are your initial costs, your target market, and how long it will take you to break even.
- Form a legal entity. Establishing a legal business entity prevents you from being personally liable if your authority website is sued.
- Register for taxes. You will need to register for a variety of state and federal taxes before you can open for business.
- Open a business bank account. A dedicated checking account for your authority website keeps your finances organized and makes your business appear more professional to your customers.
- Set up business accounting. Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
- Obtain necessary permits and licenses. Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
- Get business insurance. Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
- Define your brand. Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
- Establish a web presence. A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers. Save 15% when you create a business website with Weebly.
Select your state below for an in-depth guide on completing each of these steps in your home state.
Where can I find a business mentor?
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
What are some insider tips for jump starting an authority website?
Start with content. Hire content creators on popular freelance websites and ramp up your on-site content. Contact major media outlets and other authority site owners (in non-competing industries) and tell them about your "grand opening." Form partnerships with other blog owners and see if you can write a few guest blog posts about your new website.
How to promote & market an authority website
Promote your site in forums, on other blogs and authority websites, in the media, and on social media.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Keep growing your backlinks. Publish valuable content. Maintain an email list and send emails regularly. Entertain and engage your site visitors to keep them coming back for more.
How and when to build a team
It's not necessary to build a team, unless you need or want rapid content creation and distribution in the early phases of your site development. A minimum of two content writers will probably be necessary.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate an authority website. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Maintain Personal Asset Protection
Don’t think that just forming an LLC, or any other type of business, will save your personal assets in case of a lawsuit or other matter by itself.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.
Two of the simplest steps that will protect your business, and yourself, are to:
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
Trademark & Copyright Protection
If you are developing a unique product, concept, brand, or design, it is prudent to protect your rights by registering for the appropriate trademarks and copyrights.
The nature of legal requirements in distance education is ever changing, especially in regards to copyright laws. Here is a frequently updated resource, which can help keep you aware of the legal requirements.
How much can you charge customers?
Since authority websites make money through ad revenue and affiliate sales, you don't have to worry about setting prices for customers. The "product" is free content.
What are the ongoing expenses for an authority website?
Ongoing expenses include hosting charges, domain renewal, and any marketing costs you incur for content creation, distribution, and promotion. These costs could range from just a few hundred dollars per year to hundreds of thousands of dollars for large scale content creation and promotion.
How much profit can an authority website make?
Authority websites can bring in a few thousand dollars per month or several million dollars per year. It all depends on how large the site is, how much you're making from ad revenue and affiliate sales, and what your traffic numbers and traffic patterns are.
How can you make your business more profitable?
Make your business more profitable by selling high-commission affiliate products or services, negotiating for direct placement media, and selling ebooks or other online products that have a high value and low distribution cost.