Making money online - Part 3

Making money online: 3 ways to earn a living on the internet

• Introduction and index
• Part 1 - Selling other people's products
• Part 2 - Selling your traffic
• Part 3 - Selling your own products (which is this post)

If you have enough web experience and some good products or services, a third way of making money online is selling your own products. These products can be home-made physical goods, like souvenirs, paintings, models, etc. Or they can be services, like web designing, programming code, corporate blogging, or marketing. They can also be "info-products", which are basically e-books that can be downloaded after payment, containing detailed information and solutions on a certain topic.

Let's take a closer look at these possibilities:

Physical goods
Since you are a home-based entrepreneur, these goods must be things you can produce at home. You may produce them on demand, that is, whenever you get a purchase order. You may also produce them beforehand (especially if the time and effort needed to complete one unit is relatively small), and sell out of stock.

Services
Obviously, these cannot be stocked. You will need to actively work on each project, even if you develop a "template" procedure with your service. Especially if you are providing a service that will need extended attention during the course of contract (like programming, where you will certainly be asked to fix bugs, even if your code is sharp and the bug is on the user), you must calculate your price very carefully. Try to negotiate a fixed fee, covering a certain amount of time, and then a variable fee for extra time spent.

Infoproducts
In my opinion, these provide the most profitable niche of our times. Not just for the producer, but also for the purchaser. Check out Amazon, and you will find many great e-books, at a price incomparable to the value they provide.

The secret is mass production. You, as the author, take all the time to create an in-depth collection of information, experience, and methods to approach and solve a certain problem. You do it once, yet you can sell it over and over again to many individuals facing the same problem.

Let's say you plan to sell 5.000 copies and price your info-product accordingly. Then each individual purchaser, will be more than glad to buy that information from you, at 1/5.000th of what it would actually cost them. It's a win-win situation.

Selling online
You will need a website that handles online shopping, and a payment system. There are many detailed and large solutions available on the market, but in the beginning, it would be better to minimize initial costs and maximize availability.

It would of course be nice (and wise) to be able accept secure credit card transactions, but most of such services need some sizable initial cost. It is of course up to you to decide, but if you're tight on budget, you might want to consider alternative "net-oriented" payment methods. The best known is PayPal, and is more cost effective compared to larger services.

Pricing
A very vital issue that is mostly overlooked. Your price must cover your costs (including time and effort, which we tend to take for granted as free), and must also leave you a margin of profit. You will also need to take into consideration the prices of similar products. You won't be able to sell much if your product is priced five times more than your competitors.

And despite you might get a sales boost, it's not really a good idea to price your product at a fifth of market average. Although you will enjoy some boost in sales, it will probably be not five times as much as you would at a higher price. If your price is very low, your quality will be under suspicion.

Making money online - Part 2

Making money online: 3 ways to earn a living on the internet

• Introduction and index
• Part 1 - Selling other people's products
• Part 2 - Selling your traffic (which is this post)
• Part 3 - Selling your own products

Constant traffic is every webmaster's dream.

There are many sources of internet traffic.

Reports show that a majority of all internet traffic comes from search engines. That is why there is a whole industry devoted to "search engine optimization". The higher you rank on search results, the more traffic you receive.

Other sources include links through other sites, links or online word-of-mouth in forums, email groups, chatrooms, and also offline referrals.

So when a website begins to attract traffic through various means, its profile in the internet world also rises. Although I personally believe that rich content is much more important to success, traffic is still considered by many as the "currency of the internet".

Indeed it is very possible to turn high traffic into solid money. These are different from true affiliate programs (that is my opinion, of course). Affiliate marketing focuses on valuable content, selling, and pre-selling. Affiliates get paid when a visitor completes a purchase.

The traffic-based programs, however, also pay for pure clicks, or even pageviews, whether it finalizes into a sale or not.

Google Adsense
Adsense is the most famous and innovative program in this category. Google has employed their search technology in the program, and although you have little control over what ads will show up on your site, the program tries to pick the ones that are most related to your site.

Adsense pays for clicks on their ads. Google doesn't tell how much of the revenue they get from the ads is shared by Adsense affiliates. But broadly speaking (very broadly), each click will earn about $1 for the affiliate.

CTR
This is short for "Click Through Rate", or how many viewers of a certain ad (or link or banner) actually choose to click it. It is generally given as a percentage, and it varies widely between ads of different topics. It also varies between different sites for the same ad (better content of course provides higher CTR).

But just to give you an idea, again a very broad average for CTR is about 2%. That is, 2 out of hundred people who visit your Adsense site will actually click on the ads. I must repeat that this is a very general average. Poor sites with little content have CTR's close to 0%, while original sites with a certain theme may enjoy CTR's of 10% or perhaps even higher.

So how much is a visitor worth?
I knew this question would come, that's why I put those very general figures above.

Let me emphasize once again, that these figures are very broad approximations, and may vary widely between different ads, and according to the "power" of your own site.

So with an average 2% CTR and $1 per click from your advertiser, 100 visitors will earn you $2 on the average. And if your site attracts 500 visitors every day, you will make $300 a month.

Yes, that wouldn't exactly "make you rich quick".

But let's say your site covers a certain topic in great detail. Your content is rich and original, and offer a lot of value to your visitors. Your site doesn't attract as much traffic as 500 visitors per day. But all those who do visit, are keenly interested in your theme. And you succeed in giving them what they were searching for. And your ads are also very related to the needs and wishes of your visitors.

Let's say this way you could get a CTR of 8%. You only get 250 visitors per day, but with $1 per click, you can manage to earn $600 monthly.

You see where I'm getting? With half the visitors in the first example, now you can make double the money. Isn't that impressive?

How can that happen? Need I repeat: Content is king.

Making money online - Part 1

Making money online: 3 ways to earn a living on the internet

• Introduction and index
• Part 1 - Selling other people's products (which is this post)
• Part 2 - Selling your traffic
• Part 3 - Selling your own products

Selling other people's products, also known as "affiliate marketing", is a good way to start your own home based internet business.

This is very briefly how affiliate marketing works:

A company (or an individual) has some products or services for sale. They want to increase their sales volume, so they setup an affiliate program. People who sign up as affiliates, try to sell (or pre-sell) the products or services on their own, through various channels. In return, the producer pays a certain commission to the affiliate for each successful sale.

Such a summary is of course over simplified, as there might be many turns and twists along that main plotline. I'll try to expand on some important points.

Affiliate networks
These are sites which hosts a large number of various affiliate programs from various producers. A few well known examples are Commission Junction, Click Xchange, and Performics.

These networks save the producers from the effort of launching their own program and trying to find volunteering affiliates. But for this service, they usually request a setup fee and/or a commission from sales.

And for affiliates, they present a wide variety of choices in available programs. They also enable the affiliate to cumulate their earnings from different programs and receive the sum in one check. And although networks don't request entry fees from affiliates, almost all of them slice part of your commission to themselves, even if they declare so publicly or not.

Individual affiliate programs
These are individual companies who are confident enough to setup their own affiliate marketing programs. A very good example is the associates program of Amazon.

Contrary to most network programs, individual programs usually allow the affiliates to link to single product or service, which is a plus. But the terms and conditions of the program might be designed to favor the producer over the affiliate. This is especially true of small unknown companies, so that is something the affiliate must research before spending effort on the program.

Tracking sales
Affiliate sales are usually tracked by methods that employ cookies and JavaScript.

The affiliate is given a unique link that leads to the original producer's site, so when a visitor clicks that link and makes a purchase from the original site, the referral id shows that the visitor came from the affiliate site.

Or a code in the affiliate's site installs a cookie on the visitor's computer when a link is clicked, and when the visitor comes to the original site, the cookie proves that he/she was directed by the affiliate.

However, if the visitor has turned off JavaScript and disabled cookies for security reasons, the tracking system becomes very vulnerable. Even if the visitor clicks through the affiliate link and arrives at the original site, possible purchases are very hard to track without cookies or JavaScript.

Why would someone make a purchase through an affiliate?
(And not directly from the original site?)
This is a very good question indeed.

When affiliate marketing was first developed and introduced, a vast majority of people involved in web related business asked the very same question. They claimed that the whole idea made no sense, and would never work.

However, it works alright. In fact, the affiliate "industry" has grown much further than it was initially imagined by its believers. And it's still expanding today.

Why? Because content is king.

Let's say you want to buy a camera and begin searching online.

You visit Company A, which has a wide variety of cameras, and claims all of them are perfect for you.

You visit Company B, and perhaps C and D. More cameras, more options, and it seems all of them are excellent cameras.

You get a little suspicious, and decide to do some more research. You go to a search engine, and try some keywords like "cameras, price, comparison, models".

The results bring up Company A and B again. There are also many sites in the results which (to your disappointment) consist only of links to A, B, C, and D. And also some adult or gambling sites which have included your search terms on their pages.

Then you find this little site: It is created by a photography enthusiast. It compares various camera models from various companies, discusses their pros and cons. It also helps you decide which functions are required for your situation, and which functions you would never use, so better not pay for. There are also some nice anecdotes about buying cameras, and you find yourself having spent quite a time on this site.

After you have read most of all there is, you discover there are links on this site to buy various models of cameras, also the one you have decided to purchase. You read the link text, and find out it is an affiliate link.

Now, do you exit this site, go to the original company site, and buy your camera from there?

Or do you click that affiliate link, knowing the creator of the site that helped and entertained you will make a buck out of it?

Some people do the former. They cannot bear the thought that they will be helping someone earn a buck by doing something as simple as clicking.

But a good majority of people do the latter. They appreciate the effort and value presented by the affiliate, and they know that it's not their own little click that will make bucks for the affiliate. The affiliate deserves to earn the buck through his/her great content.

That's how and why affiliate marketing works.

Making money online - Introduction

There are of course many ways to make money on the internet. There are also many programs that claim to make a lot of money, and usually very quickly.

The internet is a very dynamic medium. Every day new trends sparkle, and yet more ends up in ashes. What was considered to be an absolute fact now, may become "the funny idea" next year.

That is why I will cover the most solid ways to earn a living with your home based internet business. These are all proven mainstream methods, which rely on concrete techniques and strategies.

So this post is like an introduction and index to the 3 part series I'll be submitting. The topics I will be covering are listed below, and I will update the links as I finish each part.

Making money online: 3 ways to earn a living on the internet

• Introduction and index (which is this post)
• Part 1 - Selling other people's products
• Part 2 - Selling your traffic
• Part 3 - Selling your own products

How to get rich quick online?

Unfortunately, there's no such thing as getting rich quick. Not offline, not online. Well, maybe if you win the lottery or something, that could count against my point. Yet still, there's no scientific way you can follow to win the lottery. There are of course programs which claim to guarantee a lottery win, but I'm sorry, those are just scams.

You can't get rich quick doing nothing.

But you can get rich over a few years, doing whatever you like to do most.

The internet is an endless marketplace. An ever growing bazaar. The demand is immense, and so is the supply. But if you know what to sell, and how to sell, there's no reason to stop you from making a fortune.

What the internet lacks today is original content. When you search for information on a specific topic, it usually takes a while to locate what you seek. Most of the time, you are confronted with sites consisting merely of keywords, or just links to other sites, or duplicate pages which doesn't contain the information you need.

And surprisingly, such sites are always jammed with banners, pop-ups, and sponsor ads. Who would bother clicking a casino ad on an otherwise empty site, when desperately searching for how to an insect bite?

Content is king.

The internet is a massive collection of human experience. We all have problems and needs, and we all resolve them some way or the other throughout our lives. But perhaps we could have done better?

Or even maybe, we have dealt with a certain situation perfectly. And there are many people around the globe right now, trying to overcome the same situation?

I guess you get what I mean.

In the early days of the internet, "build it, and they will come" was a true suggestion. The web back then wasn't flooded with useless copycat pages with loads of ads.

But not today. If you put up a site, the chances are high that there are already thousands, if not millions, of similar sites on the net. So no one will come.

Today, the motto has transformed into "build original content, and they will come".

So no way to get rich quick doing nothing but copying and pasting.

But if you do develop and publicize your own content, no matter what it may be about, people will come. Because we are all humans after all, and there is about 6 billion of us. What interests you, certainly interests others, too.

And once you get your content going, and your visitors coming, it's just a matter of converting that traffic into income. That is something which can be accomplished through quite scientific ways. Unlike winning the lottery.

And as a last note, always remember that the king is content, and not traffic. Plain untargetted traffic will not get you anything. Do spend your precious time on building original content, and traffic will follow. Don't fall into the common trap of trying to do it the other way around.

A blog on Home Based Business Ideas

Greetings..

This is my new blog at Blogger, about home based businesses using the internet.

Who wouldn't wish to be able to work when they feel like so?

Who wouldn't wish to have more time for their own, or to spend more time with their friends or family?

Who wouldn't wish to do something they truly enjoy, and earn a living out of it?

These wishes may sound a bit like fluffy dreams, but they are not. The unimagined growth of the internet culture has made all these possible. More and more people everyday turn to working from home, and be their own bosses.

Definitely, it's not as easy as it sounds. But it is also far from impossible.

I'm hoping to make this blog a complete resource for those of you who wish to earn their living through the internet, at the comfort of their homes. Life is too short and too precious, to spend on routinely doing something you hate and don't get paid enough for.

I am a lazy and unorganized person, and that's why I chose to blog, instead of putting up a clear-cut and well organized website. This means my posts will come from many various aspects of home based businesses, and not in a certain hierarchy. But I hope it will be helpful nevertheless. And you can always search for a specific topic in my blog using the search bar at the top.

I have also put up a side blog, covering the steps I took building this blog. Kind of like a "the-making-of" in movies. It's called Building a Blog, you might also want to check there, if you want to start your own blog but not exactly sure how.

Well, I guess that's about it for my first post.
Thanks..