How can I really make money online?
Hi Dave. I've been trying to build an online business for almost a year now and still don't seem to earn more than pocket change each month. I've tried various approaches, from a drop-shipping e-commerce store to an information-based site with advertising to a course on search engine optimization. None of 'em have worked. So, tell me honestly, how do I really make money online?
Take heart in that you're far from the first person to ask this question. In fact, when I asked my Twitter followers what their #1 tip was for making money online, a number of them promptly said "I have that question too" or "how DO you make money online?"
Making this more complicated, there are a lot of people selling dreams and empty promises, offering up courses that promise to show you the secrets to making hundreds, if not thousands of dollars a day. Maybe. If you're lucky. But probably not.
There are a lot of reasons why it's not so easy to make money online, but perhaps the two biggest issues are lack of a competitive advantage and an overly tactical approach. Let me explain a bit further...
While I believe that overall business is essentially a win:win proposition and that competition is good, I also think that for any given product or service, there are only a finite number of customers in the market at any given time. Whether you're offering leads for house painters or selling Bibles translated into Klingon, your market just isn't infinite.
That means that you're going to inevitably have competitors and that odds are pretty good that some of them are going to be better, have a more attractive design, and have been in business longer. That means that you need to have some sort of differentiator. Do you?
That's one of the biggest problems with drop ship or affiliate businesses too: if you're selling exactly what everyone else is selling, at the same price with the same product photos and descriptive text, how can you compete? Worse, if you use a highly popular tool like Yahoo Stores, your core framework is the same too (which is the secret benefit of using a tool like Hypersites, but I digress).
So your first challenge is to identify a business where you can offer something better than your competitors, something that'll motivate your visitors to become your customers. That might be some unique packaging or combinations of products (you know, the "buy two and get this free book!" sort of offers) or a better guarantee, or strong customer testimonials, an 800 number, security certifications, etc.
A more important issue, however, is your ability to step beyond tactics and look at overall strategy. So, so many people I know who are trying out the entrepreneurial approach end up having an overly myopic focus on one or two traffic building or conversion tactics at the cost of their overall business strategy.
You know what I'm talking about, it's the "build a list, sell to it with JVs" or "make an info product by interviewing people and sell it for $99" or "find a product line from a company that drop ships and just slap up a store". And y'know what? None of them work because it's like trying to build a house by just focusing on the brickwork slated for the chimney.
What you need is a strategic vision, an overall sense of what makes a successful business and a clue about how everything fits together. That's strategy.
And that's where I suggest you get started.
Oh, and those suggestions from a couple of my Twitter pals (you could be one too, btw, if you followed me):
Even here, though, what do you notice about most of this advice? It's tactical. What I think you need are teachers and colleagues who can help you learn strategy and help you steer your business.
With any luck, there are entrepreneurial groups in your own community that can help you find a few people who can help you out. A good place to look for these groups is meetup.com.
Another way to attain a better sense of strategy for your business is to create a board of advisors, a group of people who agree to hear about your challenges and ideas on a regular basis and offer up biased reactions and ideas, biased in your favor!
There are various mastermind groups out there that you can learn about through word of mouth: if you can join one of those, I would strongly recommend it. The few I've been involved in for the last few years have been invaluable for my business.
Finally, if I can tout an organization that I'm involved with, I'm part of a group of top experts in all facets of online business, from search engine optimization to shopping cart design, article marketing to blogging and new media. Tactics, but with an underlying strategic vision of how to make an online business really successful. The group? Stompernet. If it's still open for membership (it's often closed) I encourage you to check it out.
And keep plugging away. Stay focused, learn everything you can about the segment you're in, study competitors who are doing well or who appear to be doing well, and test, test, test. Don't ever assume you know what will work with your customer segment, just keep trying different things and measuring the results.
Oh, and one more thing. Good luck. You might just need it.
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