Why Does it Cost $4,500 a Month to Run Infopackets?

Infopackets Reader Bill S. writes:

" Dear Dennis,

[Why does it cost] $4,500 a month to maintain your website? That seems very high. I realize I run a much smaller site than yours [150 users / published once a month], but I paid $192 to register my [website via registrar] and have my site hosted by GoDaddy for four years. That works out to four dollars per month. I also subscribe to Windows Secrets Newsletter and frankly get much more information from that newsletter and associated site than from yours. It's contributions only by the year and I send them $25. "

My response:

Respectfully, I think you're comparing apples to oranges. Also, we've been doing this for 10 years and there are costs you haven't even considered.

First of all, my hats off to Windows Secrets. They are a great site and provide quality information.

That said, let's compare some key differences. Windows Secrets sends out their newsletter once a week. We do it 5 times a week.

Yes, Windows Secrets has in-depth articles. On the other hand, we produce shorter articles (for a reason): not everyone wants to read long articles. That's why we cite our sources.

Basically, we take technical information and present it in easy to read, simple English. That's how we started this site 10 years ago, and that's what our user base expects.

Also, it's not within our budget to produce lengthy articles (like Windows Secrets does once a week) on a daily basis.

That brings up another issue.

Some users suggested publishing once a week instead of 5 times a week to cut operating costs. That's not going to happen. There are many reasons to consider here; one is that we already have a huge following of people that expect news and information delivered daily. I'm not about to cut that off.

The other issue is that we generate revenue by keeping things fresh. If I take that away, it will only kill existing revenue. Also, Google just passed a "freshness" algorithm update that would lower our traffic if we stopped producing on a daily basis.

As for our operating costs:

The web hosting itself costs close to $350 a month for a dedicated server, which we also use to send out the newsletter and ensure our email deliveries (which also requires constant modification).

We have 6 writers and editors and they also need to be paid. Yes, it really does cost $4,500 a month and none of that $4,500 goes into my pocket. Anything beyond that ("the break even point") is what I use to pay my bills, put food on the table, and pay my mortgage.

If you were to break it down, the $4,500 a month is roughly $200 a day (5 day work week) and is split between 6 people (part-time).

The work currently involved in running this website on a daily basis includes writing 2 feature articles, editing of those articles, daily server / list maintenance, compiling the newsletter, inserting / keeping track of ads in the newsletter, answering emails, resolving unforeseen issues (programming), maintaining the site to be compliant with email service providers (programming), adding additional features to the site (programming), corresponding with affiliates, writers, editors, setting up future campaigns (software reviews / discounts every 2 weeks that fund the site), and of course, sending out the newsletter every day to 100,000 people.

In all, it takes 5 to 6 hours a day (on average, sometimes more) just to set the articles live on the site and publish the newsletter. We do it every day. That doesn't include all the other tasks (mentioned above) required to run the site.

In short, it requires a tremendous amount of effort to run a website of this scale. Thus, $200 a day to pay our staff (on average) doesn't seem like much but it does add up to $4,500 a month (including hosting fees) -- and that doesn't even include the cost of advertising.

Thanks for your understanding.