Tim Linden

I'm the CTO of TimTech, I love coding with PHP and MySQL.
I'm addicted to tracking clicks and email marketing.

How Do I Start A Traffic Exchange?

Going through my inbox I found numerous people asking my advice on starting a traffic exchange. I also get asked about the cost of starting a traffic exchange, and more about manual traffic exchange scripts and how to customize them etc.

The truth to the matter is, it will take money. I did a post about How To Make It As A Traffic Exchange Owner, where I didn’t mention money at all. This is basically the follow up to that where it’ll talk only about the money and the whole idea of what a traffic exchange is.

People start traffic exchanges for different reason. The most common is to make money online. They think if only they had a traffic exchange, they’d be golden. Others start a manual exchange to provide traffic for the rest of their empire, or to build a list, and finally others start one because they want to have their own site and don’t know what alternatives there are.

The reason you are starting an exchange completely determines the way you should start it. If it’s just a hobby and for fun, please ignore the rest of this post. If you are here to make money, build a list, funnel traffic to your core business, keep reading.

It takes money to make money” is often quoted, and it applies in business. You can argue all you want but do you really want years of struggling? If you don’t have the money to start a business, don’t! Your best bet is to build a list and learn how to make a profit selling other people’s products and services.

Having cash available to start your business is crucial because the business has requirements. If your surfbar is too slow people will stop surfing and go somewhere else. So it requires a proper server. If your site looks poorly made it’ll get poorly promoted (if at all). It requires a proper design. I could go on and on.

This is a business, and so you have to stop looking at it like it’s a person. It doesn’t matter what’s on the inside to 99% of the people online. Looks matter, speed matters, script matters, support matters. If you want to make a profit, you have to cater to what actually works and not what you think works in a perfect world.

Remember that list of 70 or so traffic exchanges? Do you really think everyone has the time or even desire to surf all 70? If you were in a mall surrounded by 70 other stores, would you have your store just thrown together or would you make it look like the best store in the mall to get people to walk in? It’s the same concept!

Everyone has this idea that if you build it, they will come. They may, but you won’t be making any money, and all that time you did spend on it is wasted and can never be taken back. It still cost you something, time.

If you are thinking about starting a traffic exchange, check out TELaunchFormula.com. If you can’t afford that, then do yourself a favor and don’t try to start a traffic exchange. Don’t fall for the cheap scripts or cheap hosting. If you can’t afford to take the risk you need to really build a business, then you shouldn’t be trying to start a business.

 
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19 comments for “How Do I Start A Traffic Exchange?

  1. November 13, 2008 at 8:45 am

    So the real question is where the money best is spent when you are first starting out? What percentage of should be spent on advertising, and what percentage on design, etc. Also what things are less important to invest in right away and what things must absolutely not be compromised at all, when building a traffic exchange?

    Jonathan Hayness lastest blog post..Veterans Day 2008

    • Tim
      November 13, 2008 at 12:09 pm

      All of the above. With literally hundreds of traffic exchanges running, you need to have everything top notch to get noticed and make a good profit.

  2. Michael Hall
    November 13, 2008 at 10:13 am

    I agree with Jonathan’s questions above. Can you shed some light on the subject Tim?

    Michael Halls lastest blog post..Really Good Advice For Marketers

  3. November 13, 2008 at 11:51 am

    Some things that I would say about it as an exchange owner is this:

    1. Never compromise on a good design, it is key if you want to own a traffic exchange. A traffic exchange is an advertising service, if you can’t present a good image with your service then how can people expect to get any results with it?

    2. Focus on trying to bring something a little different to the table, but not so different and complicated that people get confused. If you give people too many options inevitably they get frustrated and move on to something they are more familiar with.

    3. Once your exchange is up and running you have two main goals as an owner, encourage activity without sacrificing traffic delivery and promote your exchange to get it bigger and better. More real people in your exchange means more effective advertising for everyone. So focus on advertising your exchange and keeping your members informed about what you are doing to keep them active. If you aren’t using about 50% of your budget to advertise your site then your growth will be stunted, and I’m talking about more than just in traffic exchanges too.

    Use article directories, safelists, PPC, and other methods to bring in customers from outside the traditional traffic exchange circle. Otherwise you are just passing the same old customers around from exchange to exchange.

    Mike Coursey

    • Ray
      November 13, 2008 at 10:04 pm

      I was thinking about using one of those rent a script services, thanks for the info. Who did you use to design your exchange?

  4. November 13, 2008 at 11:56 am

    Good post, Tim. One thing I would like to know is, what percentage of exchange members are upgraded. Is there an industry average?

    • Tim
      November 13, 2008 at 12:10 pm

      Depends on your pricing point. StartXchange has less than I Love Hits, but it also costs more.

  5. Marlon Hurd
    November 13, 2008 at 12:19 pm

    This was the realest information I’ve ever seen on the internet. Someone finally with guts to tell someone, It takes money to make money.

    That is so true. Also with the guts to say if you don’t have the money to start one the you shouldn’t be trying.

  6. November 13, 2008 at 12:53 pm

    I agree 100%. I am in the process of starting an exchange, and I finally have enough money together to buy the script. My designer is waiting in the wings, and now I have to get the money to pay him. I am taking this easy, and doing it one step at a time. I plan on launching on January 1st.

    Thanks for all the information you provide – it is invaluable.

    Carole

    • November 14, 2008 at 4:29 am

      Hi Carole,

      You do know that the least expensive part of starting a Traffic Exchange is buying the script. That’s the easy part. Getting it installed figure $75-$100 unless you are a programmer, $400-$500 for a decent design, $200-$500 for mods, $5000-$10,000 for the first months advertising unless you are a non money making exchange and you can live with a couple hundred members per year. $2500 per month min. for advertising for the next 11 months and a min. of $1000 per month for each additional month. When you hit 1500 members you will want to add a dedicated server at $175.00 per month.

      Like Tim says: It takes money to make money! If you don’t spend a decent amount on advertising then you will just be another one of the thousands of Traffic Exchanges that start and fail their first year and lose money, month after month!

  7. Max Ziegler
    November 13, 2008 at 2:28 pm

    To buy an LJ script, pay for programming fix and the extra frills you want, plus a decent design by a pro, figure about $1,000.00. Maybe a little more if Paul Kinder et al bring their new script out for us masses.

    If you are not a programmer (as I am not) you need to line-up your stand-by programmer prior to your launch. What are you going to do if suddenly the script sticks or develops some other glitch? Your members will get real sour real quick and go elsewhere if your site is down.

    Don’t waste your time and money on one of the cheaper scripts widely advertised for sale or rent I did waste my money and trash-canned it before launching, saved myself some egg on face for using a piece of crap.

    Mr TE Jon Atwood owns Zoot hosting which you want. A host not dedicated to the TE industry can give you an emergency very bad time. Don’t fall for “unlimited” advertising hype of other hosts, there aint no such thing. When the host discovers that you are sucking resources you can be impolitely and without warning shut-down.

    Assuming you are successful you will (hopefully) soon need a (great quality) dedicated server at over $300.00 per month.

    Then comes advertising as Tim mentioned. A person can spend as much as they want (kind of like buying a car, how much does one cost?). Some will dispute me but plan on several thousand dollars for start-up misc advertising, and count on never stopping your advertising budget, rather increasing it every month. In addition to ‘clicking’ TE’s, how are your advertising skills? I would wager that a survey of the successful TE owners would indicate that they do NOT depend completely on advertising on other TE’s. Reading interviews with TE owners Tim has posted in the past revealed that about 60% of their TE promotion is done by the owner, and 40%or less by the members.

    In real life it takes 2 years to start an offline biz and get it into profit (for the 5% who don’t fail). Have your financial ducks in a row so that you don’t need to live from your TE profits for an extended period of time while you are ramping-up advertising, hosting and service staff.

    Possibly the best advice I’ve heard was listening to a recording on Affiliate Funnel, “build your list first.” If you can’t build a list how can you expect to build a TE?

    It takes passion, guts, a determination to not ever quit, to start any business, and a TE is a time demanding biz. It is a biz that will need your undivided attention, figure on 18 hour days. Also figure on hiring at least one person very soon to assist with service. The successful TE’s provide 24 hour service.

    Discouraged? Quit now, save yourself grief, embarrassment and money. Not discouraged? Go for it and do it right.

    Every different kind of business can be very rewarding, to those who have a passion for it, and a real pain in the arm expensive drudge for those lacking the passion.

    Forget the pretty picture of your beach chair under a palm tree on a tropical white sand beach as your image of the life of a TE owner. If you want a “set and forget” biz it is simply not TE ownership, however it is achievable on the net.

    “Whatever the mind of man can conceive and believe, it can achieve.”

    Those who are doing a good job with their TE(s) have a great biz, that they enjoy and have a passion for.

  8. BPxWP
    November 13, 2008 at 3:45 pm

    To be honest, the look and functionality is why I always promote TrafficEra. No offense Tim. I love that script.

    I have used other exchanges, but I like TrafficEra’s the best. StartXchange is still a decent Traffic Exchange, but I just prefer TrafficEra’s look and feel.

    On the flip side, I am always checking out this blog. I don’t believe Traffic Era even has a blog like this. It is nice to have a channel to communicate with the Traffic Exchange owner.

    But back to the main point of the conversation… looks, speed, and quality are the most important IMHO. If the quality of traffic is poor, noone will waste their time with your Traffic Exchange.

  9. bill
    November 13, 2008 at 5:54 pm

    I do not want to start a TE there R 2 many out there any ways!!!! So I think I will just try to sell my product online and read your blog TIM! And I think your TE is # ! (10)
    and always will be!

    Since there is so Much compition With TE’s now!!! I will look into another way to make monies!

    Shirlene and Bill

    • bill
      November 13, 2008 at 5:56 pm

      sorry I mis-spelled competition
      Shirlene

  10. Jon Olson
    November 13, 2008 at 8:43 pm

    Great post. I’d like to echo what I’ve read here and just let it be known, running these things is a wonderful job. I don’t even consider it a job, it’s more of a passion.

    However, don’t for one second think it’s all peaches and cream. This is a VERY tough market to break into, and remember that the people you will be competing for with surfers have hundreds if not thousands of dollars a week going into their business.

    Yes, you read it right. Thousands of dollars a week sometimes is what I pay to advertise my exchanges, get scripts fixed, add new designs, find JV partners, fly to offline events, network with others….

    This is a job and a career, treating it as a hobby will only get you so far. If you are serious about it, the sky’s the limit. But please do not fall for the ‘instant riches’ dream we see so much in the business.

    My exchanges, Affiliate Funnel, everything I own is the result of blood sweat and tears…Trust me, lots of tears =)

    It can be done, but to do it right, you need to be aware of what you will be required to put out.

  11. November 13, 2008 at 9:59 pm

    True there are dozens perhaps hundreds of TE’s that work and even produce, but never make it big, because they lack the design and thus promotion. I know I’m a member of few.

  12. Max Ziegler
    November 14, 2008 at 4:41 am

    Thanks Mr TE Jon for giving the insight of ad budget costs.

    So folks, to compete for your Members with the big guys who are spending thousands per week on their advertising? Can’t get there from here if you need to suck the profits out every week to buy groceries and pay the rent.

    “Shoestring” start-up means you have outside money to fund the shoestring.

    It can be done, it is being done by some, but more fail than succeed as in any other new business, offline or online. Can you sustain your passion level thru days, weeks and months of discouragement about long hours and no profit to go to the beach with?

    RE another question: I have heard that 7% to 9% total upgrades is a good number. Do some math, what do you keep (after paying commissions and payment processor charges) x 7% of 1000, 2000 etc. members? Not much, for sure.

    Returning to the advice of “build your list first,” the money you learn to make on your list can fund your shoestring.

  13. November 14, 2008 at 6:53 am

    I’ve got the passion, so I’ll keep plugging!! It does take work, and it is really hard to motivate members. I am taking lessons from The Masters-that’s you Tim and the rest of the owners for the Super Surf group!

    Mariannes lastest blog post..Marketing On Social Sites

  14. November 19, 2008 at 8:29 am

    There are some great insights here.
    Either makes one more determined to get there or want to give up, but we love a challenge.

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