When you first set up a competition site, it’s important to understand the various income streams you can expect.
It’s a good idea to look at some examples of other competition sites. Here are a few we’ve worked with, to whet your appetite:
- Nitrous Competitions
- Click Competitions
- Ace Competitions
Also, bear in mind that you have to spend money to make money. So, you’ll need to balance the money coming in with the money going out, and aim for at least a little bit of profit.
The things you’ll spend on are: prizes, marketing, and web devs.
Ticket Sales
The core of most competition sites’ income comes from ticket sales. But—surprise, surprise!—it’s not as simple as that. There are a few things to consider here.
Your ticket sales have to cover the business expenses associated with buying, marketing, and selling prizes, with a little bit extra added on for profit. The more entries you sell, the greater your potential revenue will be.
Lots of competition websites prioritise a high volume of low-cost entries — lots of smaller prizes, instead of one big ‘un. It’s an ‘every little helps’ kind of attitude. You don’t have to invest in massive, expensive prizes, risking the expenditure not meeting the income.
Selling lots of tickets for little prizes, however, adds up, contributing to your income. Lower-value prizes cost less. They might make a smaller profit, but they can be run more frequently to help bolster your profit margins. Over time, it adds up.
That’s not to say ‘avoid big, impressive prizes at all costs!’ That would be silly.
The high-value prizes cost more for your business to buy, of course, but there are positives too. They tend to be more attractive to your customers, for example. They’re things they might not be able to afford single-handedly.
Supplementing Ticket Sales
For extra security, you can give your ticket sales a helping hand. You can do this through affiliate marketing and advertising.
Advertising and Affiliate Marketing For Competition Sites
Another way to make money as a competition site is to invest in affiliate marketing.
Companies can pay you to feature links to their products and services on your site. These affiliate links will generate income when people click on them. Increased traffic increases your potential income.
Similarly, brands can sponsor your competitions; for example, they could pay you to use their products as prizes, in return for the exposure your competition will give them.
This is not only a good way to raise money for your website, but also a great way to grow a community around your brand. Partnerships like this grow your network, acting as a form of social proof, which helps people trust your brand.
Sooo… Are Competition Sites a Viable Business Model?
A properly managed comps site is a good option for those looking for a side-hustle or even a singular business venture. If it’s your dream, we can help you realise it.
We’ll just encourage you to think about profit margins and sustainability, rather than simply prioritising hella ticket sales.
These are the factors which impact how profitable a website is:
1. Effective Marketing Strategies
You need to have enough custom to sustain the purchase of prizes, the running of the site, and the marketing of competitions.
The key? Effective and efficient marketing to ideal audiences.
2. Prize Value
That combination of occasional high-value prize draws and frequent little ones. Consistency is key, as well as thinking about target audiences and your brand’s theme.
3. Operational Costs, Return on Investment, and Scalability
This refers to how well you balance what you’re spending on web development, adverts, payment processing, and legal fees, with the money that’s coming in.
That means your budget should be responsive to your income and scalable within those parameters. For example, if you decide that 10% of your income is spent on marketing costs, that changes and grows as your business does.
Well, Hey! Don't You Look a Million Dollars?
If all of this sounds good, but you don’t know where to start, we recommend starting here.
We can also offer our KnowledgeBase: a comprehensive library of how-to and informational articles on everything from competition know-how to email marketing.
Zap can help you with your marketing, prize value, and operational management, taking your competition website from Zero to Hero.
