Part 1: A Letter from Grandma and changing business model

Tell us about your newsletter and how you choose the information you include in the issues.
A Letter From Grandma started long before Absolutely Victorian, back in my Geocities days. A Letter is just exactly that - a letter.

I write about my week, things I've read or learned recently, places or sites I've visited, craft projects that I'm working on and so forth. Whenever I can I try to fit the advertising that I run into the theme of the newsletter, which of course brings wonderful results for the advertiser.

Maybe what I should really say there is that I try to build the theme around the advertising that I know I'll be running. And I will notify particular advertisers if I've planned a themed issue that I think their product might fit particularly well into. I try to publish once a week on Sunday morning while it is still quiet.

How does your site's card offerings differ from competitor sites?
If you want to be able to make your card send any message to anybody in exactly the way that you want it to look, then Absolutely Victorian is the only place you'll find that. Altogether I think I have somewhere in the neighborhood of nearly 2000 card illustrations, close to 500 stationery patterns, 100 or so stamps (cards have stamps on them, right?) and just over 300 midi, many of which are not available anywhere else.

And of course I'm always adding more because I love restoring the antique graphics that I use as a basis for almost everything.

One of my biggest pet peeves about every card site that I've visited is that the background color selection is terribly limited and most of the time the colors offered are just downright ugly. I solved that with the very first version of Absolutely Victorian by installing a Java powered colorpicker that will let you use any of 16.7 million colors - just fine for anyone that has a fairly new machine, as most of the Net does.

Those 256 Netsafe colors don't apply to the overwhelming majority these days. And then a friend rewrote the applet for me so that you can see the background and text colors as they will appear on your card.

So, when you make a card at Absolutely Victorian what you are really doing is the first and only to date real online craft, digital quilting if you see what I mean.

Your services are free to those who visit your website. What are the challenges in generating revenue from the site?
When I first started the postcard site I didn't have the first clue about many things connected with owning a large site, not the least of which were the costs associated with Web hosting. I nearly died when I saw my first excess bandwidth bill! And I have never once had a month without one.

To make bad matters worse, I allowed myself to believe, despite Business 101, what the developers of the card script that I initially used told me regarding costs, income model and so on. I was encouraged to believe that income from the banner advertising would more than pay for the site, the scripts, the excess bandwidth charges and so on while leaving plenty left as a nice income for me. And that has never been true for me.

Affiliate programs have virtually eliminated CPM banner advertising on all but the very highest traffic sites and my income model was based on CPM ad space sales. Pay per clicks, then pay per actions and finally pay per sale compensation models have all reduced the income stream from banner advertising over and over, to the point that it is for the most part not worth our while to bother to deliver banner advertising.

The income doesn't cover the bandwidth that is used in the delivery.

What changes did you make to your business model in order to survive?
When I started to see excess bandwidth bills arrive large enough to make the strongest linebacker cringe and the income stream fall through the floor, I started hunting a new income model that would work. That, by the way, was within a month or so of the time that we opened the doors to Absolutely Victorian.

The first thing that I tried is the income model that eGreetings.com is using, affiliate programs that integrated the extras that one associates with occasions for which one would send a card: flowers, candy, and so on. Doesn't work.

As a long haul business, selling flowers is great if you're the florist. But you can't count on them if you're the commissioned sales person, even if you integrate them and even if you are as huge as Yahoo. Part of the income stream, maybe (though these types of items have never brought me a single red cent) but surely not all of it.

After the first Winter Holiday season and thousands of click- throughs, I tried something else.

The next thing I tried was selling our Absolutely Victorian Stationery as email stationery. Initially we just let folks download it free, but then I found myself spending so much time providing instant customer service. Some of the folks were so new to computers that they didn't know C drive from the mouse. A friend packed the stationery in an automatic installer for me and we've been charging for it ever since.

Email stationery is pretty popular, especially among those new to the 'Net. It's pretty and I've never had trouble selling some each month.

This has drawbacks too, however, there is no Mac version. It doesn't work with WebTV - which many folks start out with. Many of the patterns are fantastic for cards but you can't type on them, they're too busy. And to keep folks buying you have to keep putting together more and more new packs of various new patterns.

Bottom line, it brings in enough change to help keep the server up and running, but nothing that I can eat on. These days when I produce a new pack, it's just a small one that I then give away as a prize for Telling A Friend. This has always been and still remains the single most effective means of advertising we use.

What are some other challenges to generating income through free ecards?
The big question that I've been tackling now for several years is what can you do or add or provide in the way of a service or affiliation that will actually bring in money from free ecards. And the keyword I've found is integrate, integrate, integrate. And do it in a way that is unique.

We've just partnered with a site that lets us print real postcards from the graphics (after redoing them in a different format) as well as a different company that allows them to be used on T-shirts, soon to be other promotional type items. This has only been up a couple of weeks, so I don't have any hard data yet and the number of graphics that we have available are as yet limited. I suspect, though, that this is going to be a winner.

I've had lots of requests lately for our various wedding illustrations as invitations. Right now I'm licensing those out on a per use basis on request, but I'm looking for a way to integrate them into someone else's product. And I have a couple of other ideas that are firmly in the works that I suspect are going to actually allow me to collect a paycheck at some point this year. That will be a first.

Without a doubt advertising in A Letter From Grandma has produced the lion's share of the income stream over the long haul. Ask me next year how long it took to make a profit and I might have an answer for you.

Continued...