The idea of starting online business and making a lot of money as short as 30 days can be exciting. It is attractive and has got many people rushing to be part of the great income opportunity.
But statistics shows that only 3% of the persons that came into the industry make it while the others just struggle and hardly make enough income to sustain themselves. Ironically, the few ones that make it often do that stupendously and become success examples that several others that are struggling are hoping to be like.
What is the problem and why are many people that often spend so much time and money are not making it? There are several reasons and you need to know and guide yourself against them so that you can succeed.
Before we look at those things that make many to fail, let’s understand what internet marketing is all about.
What Is Internet Marketing or Online Business?
Internet marketing is a process whereby the internet technology is used as a means to promote a particular service or product. Online business is similar to internet marketing in the sense that the internet or online technology is used as a means for transaction or promoting a business.
The whole idea of internet marketing or online business is based on ability of a marketer or business owner to reach out to millions and billions of people who have access to the internet thereby leveraging on the technology to make more sales than what is possible without the online platform.
Statistics of Internet Penetration and Usage
We have about 3.5 billion internet users in the world. There is an estimation of 5.8 billion mobile device users worldwide and it means almost 80% of the people on earth are mobile.
In 2014, mobile internet users overtook desktop users. We now have more people using mobile devices to search, connect and even do business than those using laptops and desktops.
What it means is that the number of people you can now reach through online technology is bigger than what we used to have in some years back.
Nigerian internet users are estimated to about 86.2 million users as of 2016 out of about 186million population of the country. Our share of the world internet users is 2.5%.
It means, when you put your product or service on internet, you have capacity of reaching about 46.3% of Nigeria population. Think about it, no TV or radio station can give you such access to such big portion of the country population.
This is why internet marketing or online business is set to be the next platform for worldwide market revolution. The earlier you embrace it, the better. Traditional marketing method, though still effective may soon become “old school” as years pass by.
How Is Money Made Online?
Several years back when I heard about making money on internet, it didn’t initially cross my mind that the money to be made online will be coming from real people. It was as if there is a mysterious way by which the internet pumps money to you.
You know some of the copywriting like “make money while you are sleeping”, “how to make 1 million dollar in few months doing little or nothing” etc, didn’t help the matter until I was able to understand how the money-making idea works online.
You need to understand that money only comes from the people that have access to the internet as you can see from the statistics above. The idea is for you to reach out to several people that are interested in your product or service via the internet and connect to them through their devices.
They are real people with genuine need. You simply want to provide a solution to their problems. If you have what they want, they are willing to bring out their debit/credit card to pay for your service or product.
Therefore, it is important that you handle the internet business as a serious one because you are providing services to human beings that expect you to care enough, respect and treat them well.
You therefore want to handle your online business as you will do with traditional or offline business. The difference here is that you can automate most of your work using technology without necessarily seeing your customers face to face.
Products and Service You Can Market Online
Internet has become a booming marketplace and there are several types of products and services being promoted online. Let us look at some of the available categories of businesses.
1. Physical Products & Delivarables
Computers, phones, Homes, Cars etc
2. Digital Products & Goods
Kindle books, software, Apps, online games etc
3. Informational Based Products
“How To” learning course e.g, How To Make Money, Learn How To Speak French, How To Lose Weight in 30 days etc (typically not available as physical product but can instantly be downloaded online)
4. Mom & Pop Services and Businesses
These are local small businesses selling services and goods in their targeted area e.g. Graphic design, data entries, groceries etc.
5. Large Corporations and Franchised Companies
Fortune 500’s, $50 million+ yearly revenues, etc.
Building Your Online Marketing Business
Our interest is in building “online marketing business” and starting as a small business owner. We are going to narrow down our focus. Any type of products you are willing to market online will fall into these two major categories:
1. Physical Products
2. Information Products
Physical or retail products are usually consumable good or things we use physically. Things like phone, car, house, body wash, soap, food and drinks. People like to buy physical product because it often carries end result of solving a problem or satisfying a need.
Are opportunity based products that are often purchased in order to achieve a result, promise, or desire that is fulfilled through the product.
There are different-types of opportunity products but usually they fit into one of these categories:
Make Money, and Investment Opportunities (stocks and bonds, franchises, MLM, online marketing products, etc.)
Opportunities (double your dating, meet your dream mate, better sex, online dating and advice etc.)
• Health and Fitness
Opportunities (Lose weight fast, put on more muscle, vegan diets, gluten free lifestyle etc.)
Pricing Differences Between Physical & Information Product
Physical Good Pricing
In other to sell a physical product, there is a pricing model you need to follow. Usually, a physical product’s retail price is determined by considering the production cost, distribution cost and then the profit margin. It sounds really simple. But often time, you cannot raise your price against the known market price.
You can only do that if you have a way to differentiate yourself from the competitors possibly with your brand or market positioning. Still, you may be in for a fierce competition which may affect your profit margin and you may need to sell a lot of the same products to remain a profitable business.
Big organizations can have a way to edge competition by investing heavily in the product, crashing down the market price and positioning themselves as leaders in the industry. But as a lone person, just starting out, it may not be easy to compete with such big organizations and it may take long time of struggling to survive in the marketplace.
Opportunity Based Product Pricing
The formula for pricing Opportunity Based products is quite different, and is often based on the end result and potential of the opportunity, plus the buyer’s “desire” to achieve that result.
You may need to factor delivery, production and maintenance cost, but they are usually far less than what is incurred in physical good production. With this, you have a potential of making high profit at the end of the day.
For example, you can produce an online course that you are selling at the rate of N3,500.00 per download that does not have more than 25 pages without spending a dime on production.
To do that, you simply type the information in MS-Word and convert it to pdf and it is ready to go. If you decide to publish the course as a printed book, then, you will need to spend quite some amount of money with the lithographer, printer and other professionals in the printing business value chain before you can get it your book out. In fact, 25 pages of physical book may look somehow ridiculous for you to charge as much as N3,500.00 per copy.
Though the difference in physical product and opportunity based product is that you are not buying a book, you are actually buying knowledge, an opportunity and it doesn’t matter whether it is one page or two pages, the motivation for the buyer is to have access to what is promised that can change his or her life or help to fulfill a particular desire.
With opportunity based product, you are selling ideas that are often proprietary and big organizations may not be able to compete with you at this level. If it is a product that you have its exclusive right, then you can charge premium for it.
The Best Products To Start With
Having gone through the pricing analysis, it is clear that opportunity based product is:
• Easier to start
• Less stressful
• Can be done on full automation
Therefore, it is always recommended for anyone that is starting out online to start with information product. If you don’t have enough cash, you may not be able to go into selling physical products as you may often need cash to stock products which is not so with information based product.