Everyone’s probably seen the free sms sites I’ve blogged about that allow you to send SMS at no cost straight from your computer. Today I will uncover their secrets and how they make money with an official interview from the CEO of letxt.com.au as mentioned in yesterdays post here.
Start of Interview:
VK: So How many users have you got so far?
LETXT: We have about 300 plus sign ups after we went live last week.
VK: Cool, Where are your users from and how did they find you?
LETXT: Well at the moment only people from Australia & New Zealand can join, we use Google Adword to bring in most of them.
VK: How much have you spent on Adword since you launched the site? How many SMS have been sent so far?
LETXT: About $70 on Adword & 700 plus SMS sent so far.
VK: How much do the SMS cost you when someone sends them?
LETXT: It’s about 10cents each per SMS sent.
VK: So the sites working on a loss at the moment?
LETXT: Pretty much, we don’t plan to breakeven for 18 months and yes that is a long time to be out of pocket.
VK: So if your only charging 10cents (cost price) for gold credits (extra features on the site such as email to sms) how exactly are you planning on making profit?
LETXT: Well when we start getting enough users we can start buying the sms in bulk at 9 cents, then we will make 1cent per gold credit sold, but most of the money will be made on advertising space throughout the site to other company’s.
VK: Do you know if the other companies are making money, Such as Youtext, Smsfun, SMSpup?
LETXT: Not sure about youtext, don’t know where they’re pulling money from but if I had to guess it would be from all the ads on the site, but SMSpup and the others are large marketing companies, They have ads on their sites and have email advertisements as well. Let’s say they charge 0.40 per email to advertisers and they have over 60k users, they can make quite a lot! ($24000 per send out)
Thanks letxt for the interview and good luck in the future.
Leave a comment