|
Strategy - The Secrets to Making Money Online
These days, it seems like everyone is trying to make money on the Internet. Whether it be power Ebayers or a friend selling organic soaps, everyone is trying to cash in on the Internet boom. But in reality, very few people are actually making decent money at it. The majority of websites get the occasional sale and are struggling to survive.
Forget About Hard Goods
As an individual Internet entrepreneur, there are several keys to starting an online business. First, as a general rule, never sell hard goods. Hard goods, also called tangible goods, are things like CDs, nutritional supplements, clothing, or pet supplies. Basically, any merchandise that requires physical shipment to the consumer is a hard good. These kinds of websites are extremely high maintenance and usually have tremendous overhead to maintain inventory. The time and headaches associated with shipping products, not to mention late, missing, damaged, or incorrect merchandise, will make you a slave to your business and put a real dent in your wallet. Plus, how many orders could you realistically ship per day as a sole proprietor? Not many. This essentially limits your profits from the start. Some people would argue that wholesale companies that drop ship products directly to the consumer offset these problems. Unfortunately, many of these wholesalers do not offer customer support, meaning you
are still responsible for resolving most shipping issues with the customer.
Beyond all of these issues, and perhaps most importantly, hard goods are very hard to sell online. The reason: they are typically non-proprietary items that represent a saturated market. It's a case of too many companies selling the same thing online. For example, I know one man who thought he’d make a fortune online selling air purifiers. Little did he know he was competing with thousands of competitors, including the giants of the retail industry. Who would you rather buy from, SharperImage.com or BobsAirPurifiers.com?
The only exception I will make to selling hard goods online is if you are an inventor. If you have a unique product, like the people who created the Iraqi “Most Wanted” Playing Cards, you stand to make a lot of money online. But such items are typically beyond the reach of the typical Internet entrepreneur.
Think Soft Goods
If you can’t successfully sell hard goods online, then what can you sell? Soft goods. You must create your own intellectual property that can be sold online. You create the proprietary written and/or graphical content and place it in a password-protected directory on your web server. Visitors will come to your free site, read your enticing marketing material, and purchase a username and password to access the password-protected information. This is commonly called an instant membership or subscription website. From financial advice to career assistance to adult entertainment (porno), there are a countless number of enormously successful fee-based, subscription websites on the Internet. In fact, you are probably a member of one of these sites right now. Examples include: www.match.com, www.morningstar.com, and www.classmates.com.
The reason these types of websites are so successful for the Internet entrepreneur is they are the antithesis of hard goods. They have virtually no overhead, no inventory, no shipping, low maintenance, and are unique entities. In other words, they won’t cost you very much to run, and their proprietary nature means less competition.
Minimize Overhead, Maximize Profits
Throughout this resource, I will constantly suggest ways to keep costs down. Your goal should be to create a business that can stand the test of time. You want to make deliberate moves that will positively impact your business and lead to positive cash flow. In other words, do not blow your money on T-shirts before launching the website. At the same time, do not be excessively cheap and stunt the growth of your company. Be prudent.
Don’t Quit your Day Job
If you have a job, do not quit it. Not yet anyway. Eventually, you may be able to quit your day job, but it takes time to grow a website. Wait for the website to mature and post consistent profits before making such a decision. Evenings and weekends are typically sufficient to manage your Internet business.
Multiple Streams of Income
If you truly want to make A LOT of money online, consider starting multiple websites. Start with one website, learn the ropes, and then create more. Your collective profits will eventually surpass your wildest dreams.
Next Section: Pick a Topic
|
|
