So What Type Of Online Business Model Should You Start With?
Ok, so the question of the day is what type of online business model should you really start with online? (but first things first my friend). The more important question at this point might be “why did I even consider such an undertaking”, and trust me it’s an undertaking all right.
Over the last 7 years or so, I’ve literally seen thousands upon thousands of online business wannabes go down with the ship. The lure of waking whenever you want to every day, walking to your laptop in your pajamas clutching your “coolest dad” cup or not listening to the Hitler like rants of that idiot boss anymore may have finally sucked you into the HBHC, (home business hopeful club).
Let’s slow down here just a bit cowboy and start at the real beginning, not the fake beginning you have in that foggy head of yours. Visions of grandeur are common at this point in a potential home business owner’s head, but don’t be fooled, it’s not all sunshine and rainbows as Rocky said.
There’s a lot of things to consider in your search for the golden goose, but let’s first change our mindset just a little before we start brainstorming.
Are You Passionate About Anything…
I guarantee you if you asked 100 people this question, maybe half, maybe, would have an answer for you and that answer probably is not what they are really passionate about after all. Believe it or not, there is a process to go through to really bring this to light many times.
Scott Dinsmore has an awesome blog called LiveYourLegend that does exactly that, taking you through this self discovery process. If you have trouble really having clarity in this regard, I suggest going there, sign up for his newsletter, get his freebies and check out his courses along the way as well.
Now, having said that, just being passionate about something may not be enough. You may have a passion about sea turtles, but I really doubt thee is a demand there or an opportunity to make much money if there were.
There’s a lot of folks with websites in the blog graveyard right now because of this way of thinking. They found their so called passion, put together what they thought was an awesome looking blog and starting blogging about sea turtles, (or whatever their obscure passion could be).
Let’s look at Stanley’s situation. He had spent 30 great years in the Air Force and had fallen in love with sea turtles in his travels to some of the most famous beaches around the world. He knew everything there was to know, the breeds, their colors, their diets, how they nested…well, you get the picture.
He was so passionate and knowledgeable about them; he could sit down anytime and just write about them. That’s just one of the litmus tests of a good online business idea to pursue by the way, but we’ll get into that more later.
You Mean Passion Isn’t Everything?
Well, at this point you probably know the answer to that question. Passion in your online business model is not everything but it certainly doesn’t hurt anything either. Creating content for your blog is a big problem for many people and most of the time it’s because they got bored, thinking this was their passion, when in reality it was not at all.
Now, our friend Stanley couldn’t understand what happened. He did everything right in his eyes, he wrote about sea turtles, he created an awesome looking blog about sea turtles, and he even found an obscure forum about beaches around the world where he could even discuss with like minded folks, the wondrous sea turtle plight.
Is There a Market For Your Passion?
I like to refer to Pat Flynn of SmartPassiveIncome when faced with this question. His blog is all about transparency first and then about building passive income streams online and boy has he been super successful.
He was working for an architecture firm when he got laid off from his job. Without getting too deep into his story, (you can go to his blog for that), he took an idea, a passion and created GreenExamAcademy.com which is a place architect hopefuls can go for anything and everything really.
In this case he did have a passion and through his research determined there was certainly a need in the marketplace for this type of service and the rest is history as they say.
Now, let’s look at another one of his successes, SecurityGuardTrainingHq.com. He personally didn’t work in this field but his Mother had. Now, do you think Pat was really passionate about security guard training? Probably not, but once again, he did the research and determined it would be a profitable venture.
He could create content by bouncing things off his Mom, while still having some knowledge in his own head just from osmosis as they say.
The Blog Marketing Online Business Model…
As you can see, more importantly, Pat did the research and found that not only were people searching on Google for this information, but he could build a blog, monetize his blog, build a list, create related products or courses and enjoy the fruits of his labor in the form of passive income.
To have continued success, he simply has to create content periodically for his blog, market his content, maybe create a Facebook Fan Page and do some advertising possibly. He simply engages his audience along the way while enjoying his growing bank account.
Do you think Stanley and his deep passion for sea turtles did this research? Well, I can tell you he certainly did not, therefore that littered online business graveyard we were talking about, just keeps growing and growing.
So, as you can see, being passionate about something is not the end all be all of a successful online business. So much more goes into the process and only a few of the persistent ones with a vision really persevere online.
Now, the blog marketing method is just one type of online business model but there are many more as we will discuss as we move along.
The Affiliate Marketing Online Business Model…
You may have seen affiliate marketing in action and not really have known what was taking place. If you’ve purchased something on Amazon or Ebay from time to time, you may have purchased through an affiliate link and not have known it.
That’s certainly ok as long as the consumer gets what they ordered at the price they ordered and in a timely fashion, right? Nobody really cares at that point if someone that lives in a cabin in the woods of Montana received a $3.69 commission do they?
The Affiliate Marketing Concept
Affiliate marketing has been around almost as long as the Internet, most people just don’t realize it. Affiliate marketing is predicated on people selling other people’s products for a commission. That can be huge corporations like Amazon or accomplished network marketers like Ray Higdon or Bill Pescosolido.
Anyone with a product to sell can allow affiliates to sell for them. The real question they have to kick around is just how much they’re willing to pay their affiliate sales force in commissions on each sale, which in turn determines your commissions.
The real beauty of the affiliate marketing model is that someone brand new to the Internet can sell someone else’s wares and make a commission. This is a huge relief for so many starting out with an online business, as it’s common knowledge that the “big bucks” are really made after you start creating your own products, but we all have to start somewhere.
So Which Affiliate Products Should I Sell?
There are literally hundreds of thousands if not millions of products you can sell as an affiliate marketer. Choosing a product can be as easy or difficult as you want it to be, but the journey to find the right products for you can be a long and tiring one.
Here are some questions you need to ask yourself:
Do I feel comfortable promoting products I know nothing about?
Do I have an online marketing platform to promote my affiliate products?
Do I want to promote products that are “evergreen” or that constantly change?
Do I want to market affiliate products that are tangible like Amazon or Ebay?
Are the commissions paid, enough to support a full time online business?
As you can see this is another area that requires homework and due diligence on your part. Once you decide that an online business is for you, you have to do tons of research so you make the right decisions sooner than later.
Otherwise you can lose 3 yrs, 5 yrs and even 10 yrs if you’re not careful. Notice I didn’t say waste because you have to learn from your mistakes and move on. It’s just so much easier if you can shorten that learning curve and that’s what I plan on helping you with on my blog.
I wasted 5 yrs, (sorry lost), in my online journey, and I so wish I could get that time back. I would probably be a millionaire if I could, but I’m moving on remember.
As an affiliate marketer one of the most important questions you have to ask yourself is “do I want to jump around or be industry specific”? I fell in love with marketing online so it really was a no-brainer for me. That probably comes from my 20 yrs in sales and marketing in the private sector.
So the only arena I work in is online marketing. I only market products that serve that audience and I love it. I sometimes lay awake at night thinking of new ways to do something with a new affiliate product that just came out. Now, when you can find that feeling, you’ve got something for sure.
Some people can market different products everyday and it doesn’t matter to them. One day they’re making a video about a Minolta TG436 digital camera and the next it’s a high end Food Network cookware set.
An inherent problem to this type of affiliate marketing is that the specific product is replaced by a new and improved one so your ability to make a commission after doing tons of marketing for those particular items can go away.
I made a commission on a Mike Dillard product the other day from an article I had written over 3 years ago…now that’s leverage.
The Two Most Common Affiliate Marketing Models
If you choose to market tangible products like for Amazon or Ebay, the commissions can be extremely low, which means you have to sell a ton of products to really make a good living. Now, can it be done, certainly it can, just a ton of very repetitious, boring work in my opinion.
And always remember, if you just do Ebay selling for instance, they can have a terms of service change one day that takes your income from $5000 per month to $50 per month. My advice regardless which type of online business you choose is to never put your eggs in one basket and NEVER, NEVER, NEVER let anyone control your business like that.
The second most common affiliate marketing model is to decide on an industry and go with it. It can be muscle cars, knitting or even vacationing in Italy. Therefore, anything and everything you do to market will be based around one, solid theme, which makes it easier to build long term, passive income just as Pat Flynn has done.
Be careful and make sure there are products to market for your niche. You can put the words “affiliate” or “affiliate products” behind vacations or muscle cars or whatever the case might be. Spend a ton of time here. This is one of the most important aspects in your discovery for the right affiliate products to market.
A good rule of thumb is that they offer 50-75% commissions; otherwise you will go broke trying to make any real money. And remember, a product can be a 200 page ebook about vacationing in Italy that someone sells for $39. Selling information products is one of the most lucrative ways to market affiliate products today, don’t forget that.
The Network Marketing Model (MLM some may call it)…
A network marketing company sells their products utilizing a word of mouth marketing platform, therefore they don’t normally use traditional types of advertising such as radio, TV, billboards or retail stores. A distributor network is built instead.
There is usually a product startup kit to purchase if becoming a distributor is your interest. There are network marketing companies in many industries including nutritional, make up, candles, jewelry and energy like electricity. Mary Kay and Amway are two of the most successful network marketing companies in history.
Products are sold to friends, family, neighbors, co-workers etc. Word of mouth marketing is a very strong method, unfortunately most folks run out of people to talk to unless they have mastered the art of taking rejection, and most have not, so the majority of new distributors simply quit. The mega successful like Brian McClure or Holton Buggs, not only become masters of recruiting, but also master how to get customers and build teams into the thousands of distributors.
Like every other business online, having a marketing plan is vital. Most network marketing companies don’t have one outside of contacting your friends and family.
You can build your online presence utilizing marketing systems like My Lead System Pro which is the premier lead generating system for network marketers online today. It takes a lot of the guesswork out and has a ready made marketing system for you to use starting NOW. The learning curve is almost eliminated with such a system and is designed for beginners really.
And yes you can certainly do everything yourself saving a little money, the problem is it will never come together for you because there is so much to it; you will never be able to grasp it all. You will then become overwhelmed and quit. That’s what I did the first time and wasted 5yrs, (sorry lost).
Is Network Marketing and MLM The Same Thing
In theory it is the exact same thing. With the progression of the internet as a marketing vehicle the two lines have blurred quite a bit. What really defines network marketing or mlm as it were is the way people are paid in the organization.
If commissions are paid to a distributor for building a team known as a downline through different levels and in turn his team members are paid the same way, then it’s network marketing or mlm.
The definition is really how the commissions are paid and the distribution of the products is designed.
I look at network marketing a little differently. I bought Mike Dillard’s Magnetic Sponsoring on the recommendation of another associate who was in a network marketing company that I was not in. Now wasn’t that word of mouth or because of my network of associates?
I wasn’t in Mike’s or my friends network marketing companies, but I bought one’s product on the recommendation of another, so the sale happened because of my personal industry network.
I have purchased other marketing products on the recommendation of someone in my online business network and the product creator made a commission and also my business associate that recommended it got a commission as well. To me, buying anything through the referrals of others in my network of business associates is network marketing…that’s my take on it.
Can I Make Money With an MLM BUSINESS?
That is an easy answer, YES you can! It is a small percentage of people that make substantial money in mlm. But think about this for a minute. How many millions of kids play Pop Warner football with the intention of making it to the Pros?
You see the road is paved with good intentions. Only the strong survive and only the super persistent have or develop the thick skin it takes to be super successful in business, regardless of the nature.
The network marketing business is no different. You must first do the research on the company, the products, and the principals involved. But more importantly, you need to choose your sponsor and mentor carefully. If they’re not willing to talk to you before you become involved with them dump them, don’t sign up.
I don’t care how “great it looks”, never become involved without getting the warm fuzzy from your future sponsor. They don’t necessarily have to hold your hand all the time, but they should be accessible in some way and have a marketing plan for you to hit the ground running.
A Direct Sales Business Online…
So what is a direct sales business anyway? Well, once again the lines have blurred a bit over the last few years, so let’s take a look.
Traditionally whenever a company sells directly to the public without a retail model it’s considered direct sales. So you might think that mlm is direct sales and you would be correct in that assumption, but not the model we’re gonna be covering here since we already covered the mlm business model.
It’s just that some direct sales companies use the mlm framework to deliver commissions to its distributors instead of paying the full commission to one person that made the sale, that’s the difference.
Many direct sales companies are using the “party platform” to sell product these days. The distributor has a party at their house and paid a commission from all products sold at that party. This would be considered a single level direct sales company.
With the Internet in full swing many direct sales information companies are selling their products online and offering huge commission many times. A commission on one product of several thousand dollars can be common for sure.
With the right marketing platform and system in place you can see how a person can make thousands of dollars really quickly with this online business model.
Of course having the capital to advertise on places like Face book and in solo ads certainly doesn’t hurt either, but that goes back to having the proper training, mentor and marketing system in place and ready to go.
So there ya go…
The biggest decision you will ever make is not deciding on the type of online business you will pursue or the type of products you will market, but simply making the decision to never give up regardless of what happens each time.
I can say with some certainty that with your first online business you will not make it a success and probably not with your second either, and maybe not the third. It’s a business first, so treat it as such, but most do not, hence the 98% failure rate. The majority of people try a little and quit…
But after 8 years of plugging away online and still not being able to make a consistent, full time income out of this thing, I had a couple of realizations. Yeah, I know it only took me eight years…lol.
Ya see, I was still bouncing around looking for the “trick” or the “silver bullet” to make a million in 30 days. Well, I’m here to tell ya it doesn’t exist…so, it was time to get busy building a real business ..so that’s what I did.
I wish you all the success in choosing the right online business model for your Internet business and look forward to seeing you again.
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Talk to ya...
::The Five Guy::
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