It's true - anytime you start an online business
, the number one question is how will I make money?
Let's face it, you could have the greatest idea in the history of man, but if you don't have a viable plan to ring the virtual cash register, you aren't going to get very far. The great news is that there are so many ways to generate an income online, you should have no problem determining a business model that's right for you and your online business.
Let's go over some of the ways top you can earn a living online
.
1. Selling Physical Products
2. Selling Your Services
3. Selling Information
4. Becoming An Affiliate
In this article, I'm going to discuss the first method that I use. Selling Physical Products.
This method really boils down a phrase you've undoubtedly heard before - buy low, sell high. Needless to say, if you are unable to do this, your business won't last long. Even if you produce a product on your own you are still going to have some expenses. This all goes into the buying low side of the equation. You've got to project your costs ahead of time. Know how much it's going to cost you to produce the product - including your time. Then, determine how much you can realistically charge for it. When you do this effectively, you'll know what your profit will be even before you start selling it. Remember, you make your profit when you purchase or make you goods - not when you sell it.
Of course, there are a number of questions that must be answered before you can get started.
a. What type of product or service do you want to sell?
For many people, this is one of the toughest questions they face when first starting out. Of course, in your case, you've done niche research that has likely provided you with numerous ideas.
b. Is there enough interest in the particular product(s)that I'm interested in selling?
You now know how to determine demand, so this is no longer a issue for you.
c. Where do I sell my product(s)?
There are several venues for you to sell your products. If you are just starting out, it may be very tempting to simply set up shop on an auction site such as eBay. If that's someplace you'd like to consider, understand that the eBay marketplace is extremely competitive. Unless you are dealing in very to find items, you've got to be able to compete on price. If you can't, it's very difficult to turn a profit on eBay these days. This isn't to say that eBay doesn't have a place in the over scheme of things. For example, you could develop a web site from which to sell your product(s), but use eBay as a traffic generation vehicle by setting up a low cost store and list some auctions. I wouldn't limit my sales venue to a single location.
d. How do I let people know I am in business and selling product(s) X?
I'll cover the answers to this question in the traffic generation tutorial later on in the course.
e. How can and where can I purchase the products on a wholesale basis that I've chosen to sell?
I'll cover this later on in this tutorial.
You may recall me saying that it's possible to open a business online
in which you don't know anything about the product. While this is true in some of the other areas, it is really beneficial to know something about what you are selling online, especially if it is a physical product. While you can get into something you don't know anything about, you'll find it much easier and much more enjoyable if you are selling something that interests you and that you have a background in. That being said, I've sold things in the past that I had no idea about and have done quite well. Musical Instruments were something that I did very well with, yet I had no idea about them when I first got into selling them. If you don't know anything about a particular item you decide you want to sell, you're going to have to have a source of information - be it a personal contact, such as the manufacturer or sales rep - in order to converse intelligently with your customers.
To begin with, I'd like to go over several of the top selling items on the internet. While this provides a good starting point for you to think about in terms of choosing a product or category of products to sell in your new business, it's important to realize that many of these areas are saturated with major manufacturers or resellers offering these products. Of course this doesn't mean you can't sell them too, but it will mean you'll have to be creative and offer a spin that others may not be. I've found it best to get into things that have enough of a potential customer base, but not directly into a super hot category such as electronics for example. Too much cut throat competition for my liking. I'll discuss how to determine some ideas on how to determine what areas are areas to stay away from as we move forward. For now, here are some of the top selling categories on the internet:
1. Clothing
2. Toys and Video Games
3. Electronics
4. Computer Hardware
5. CDs / DVDS
6. Books
7. Home Furnishings
8. Jewelry
9. Health & Beauty
10. Automobile Related
11. Music
12. Food
13. Sports Related
So, not only is it critical that you choose a product that has a solid chance of selling, it's critical that you get into an area that is not super competitive - especially if you are just starting out. Unless of course, you can beat the competition on price. For example, if you were to locate a wholesaler for computer hardware and start selling it online, you'd likely be in for a rude awakening. Why? Because you'll likely be paying more for it than big retailers / web sites are selling it for! But, if you were able to find a source for product that allowed you to beat your competitors on price, you'd likely have a positive outcome. Same goes for a lot of the categories above. If you are absolutely sold on selling items from one of these categories, your chances of success would be much higher if you were to get into an a smaller niche / offshoot of one of them because beating the big guys on price is not realistic.
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