How to Make Your First $50,000 Online
June 26th, 2007 |If you’re worried about your financial future and you’re really committed to doing something to change it, then you should seriously look at building an online business of your own.
Is it a slam dunk? No way. But it’s much easier and can be more lucrative than buying a franchise, going into real estate or playing the stock market.
The advantages of Internet business are many fold. The major ones being: online businesses are easy to start, they don’t require much capital, you can work whenever you want, you can work from anywhere, and the upside is nearly unlimited.
The question is, “How to get started?”
Making your first $50,000 is the key. If you can make $50,000 online, you can easily go on to make a million… because you just do the same thing, twenty more times.
The hard part is that first $50,000. That requires that you learn the fundamentals, take action and keep at it until you get results. It also requires a strategy.
The strategy for making your first $50,000 begins with deciding if you are going to focus on physical product or information products and services.
Physical products are tangible things like golf clubs, clothes and tools. Informational products and things like: ebooks, newsletters, reports, music, audio books, videos, courses, etc.
Physical products need to be manufactured, inventoried and shipped by truck, train or plane to warehouses and then to the end consumer.
Building an online business selling physical products is very difficult and not very profitable. First you need to purchase and then inventory the product. This requires capital and storage space. Then it requires handling and shipping the product and processing returns.
Many people who build online businesses focus on getting and processing orders and dealing with a “drop shipper” which eliminates the need to purchase and ship the products.
Making money building a business selling physical products online is very difficult because the competition is intense and the margins are very small. Generally the margins run between 5% and 25%.
However, there is an even more difficult issue.
If you’re selling TVs, or any other major or easily identifiable product, and using a “drop shipper” (so that you don’t have to purchase or handle the items), it is extremely easy for your customer to “shop” your price by doing a quick search for the same product using Google, which will turn up the cheapest price on the net. If that’s not you, then you’ve just lost the sale.
On the other hand, profit margins on information products are very high. They can go as high as 75% for affiliate commissions and as high as 95% for your own information products. More importantly, it’s very difficult for your potential customers to “shop” your prices. Information products are much easier to differentiate and hence hold their margins much better.
The reason for these high margins is that information products can be digitized and stored on hard drives. When a sale is made, a copy is made from the hard drive and sent to the customer over the Internet for only a few pennies.
No manufacturing costs, no inventory costs and almost no shipping cost means very high margins and potentially very high profits.
Bottom line, if you’re serious about making money online, you’ll make much more if you concentrate on selling information products, instead of physical ones. None of the successful Internet marketers or online entrepreneurs I know sell physical products. (That should be the best indicator of which you want to sell.)
Once you’ve made the decision to focus on information products or services, then the next decision is your starting strategy. The question now is do you start as an affiliate selling other people’s information products and making commissions, or do you start with your own information products.
There are four elements you need to master to make money online. They are the product, the technology needed to operate your business, getting traffic to your site(s), and converting that traffic into customers and money.
All four need to be working together to make money.
The easiest and fastest way to make your first $50,000 is to start selling third party information products and collect commissions.
Select a high priced information product ($300-$1000) with a high commission (35-60%). Join their affiliate program. Set up a simple mini-site, or pre-sell site, and drive traffic to it. At your site, your pre-sell or recommend the third party site and then redirect them to the that site. Each time one of your “redirects” makes a purchase, you earn a commission.
So let’s assume you select a product, set up a pre-sell site and start driving traffic and earning commissions. Then your strategy is to improve the conversion of your pre-sell set. By adding audio and video sales messages to improve your conversion, using split-testing to see what works, and using traffic tracking tools to determine your most effective traffic sources, you should be able over six or eight months to increase your conversion by 5 to 10 times.
Assuming you’re making only $10 per day and you increase it by 5 times over six months, then you will be making $50 a day, times 30 days, or $1,500 a month with one affiliate product.
Once you have started earning commissions with one product, then you do it with a second, third and fourth affiliate product. By the end of one year you can easily be making $1,500 a month times four products or $6,000 a month. You have now made your first $50,000.
If you have select the correct technology so that your sites operate automatically, you should be able run four or five affiliate products in about two hours per day.
Once your part-time, online income equals your full-time day job, it’s time to quit the day job and go full time online. Now you just multiple your efforts and start making a six and seven figure income.
Please visit www.YourFirst50K.com for more information & to receive your FREE copy of my ebook titled “How to Make Your First $50,000 Online”
