Nine Things to Consider When Starting Your Internet Business

How 3 People Selling Similar Products Online can Have Dramatically Different Levels of Success

We see this happen all the time. In one of the most recent examples, two people, Sheryl and Marge started similar Internet businesses. A few years later – Sheryl is making $500 a month – Marge us pulling in $30,000 a month.

What did they do differently?

It wasn’t marketing, advertising expenditure, SEO or any of the obvious answers. What Marge did to out-earn Sheryl by a factor of 60 was simply deciding to present her product in a unique way.

In this lesson, I’ll show you 9 such unique ‘touchs’ you can add to your product to really make it fly. This isn’t about rocket science – it’s about being creative.

Let’s take a look at 3 ways of selling an online product. The basic way, the better way, and what we call the brilliant way. These three examples will help you understand what you could fix about the way you present your product.

The Basic Way

As an active user of online dating sites, Sheryl notices that many men struggle to write a decent introduction and profile to post on a dating site. As a consequence, they get hardly any responses from prospective dates. Sensing a market opportunity, Sheryl writes a 50 page ebook targeted to men on how to market themselves better in the dating market. She prices the book at $6 and sells it on Amazon.com.

She makes $3 per sale as the distributing site, Amazon.com, takes 50%. Selling 100 copies a month, she makes only $300 a month.

Later Sheryl also decides to advertise the book herself on Google and Yahoo!. To afford pay per click advertising rates in the busy online dating market she has to increase the price of her book to $15.

At the higher price, Sheryl now sells only 50 copies a month but by selling them on her own and not on Amazon.com she now makes $750 a month. After paying her advertising bills on Google and Yahoo!, she earns an income of around $500 a month.

This is good….but far from great. Sheryl could have been a lot more innovative.

Let’s take a look at Marge’s story, which is what we call the better way.

The Better Way

Marge writes a book on dating, just like Sheryl, but she knows that selling it online will not bring her much more than $500 a month so she tries something different.

She gives away the contents of her book for free online. She sets up a website dedicated to dating tips. The 50 page book is broken into sections and she designs the site according to search engine optimization rules so she gets a steady stream of traffic from Google, Yahoo!, bloggers and fellow site owners who link to her site.

How does she make money? By giving away her book for free she now has traffic coming to her site. Better yet, this traffic is highly targeted and consists of people looking for dating tips and advice. Marge makes money by reviewing and recommending various dating sites to her audience. Since the online dating industry is ultra-competitive, many websites will pay Marge affiliate fees between $10 and $50 for every customer she sends to them.

By offering free advice, her audience comes to trust her and to appreciate her honest reviews. She in turn makes money every time a visitor signs up for a site she reviews.

Here’s a case study of an even bigger success!

The Brilliant Way

In the summer of 2003, a very passionate and professionally trained guitar player named Quincy approached us with an idea that he had. Quincy’s idea was to help people learn to play their favorite songs on an acoustic guitar in a fun, simple, and intuitive way.

Quincy told us that he had never seen any product online that made learning to play guitar fun and easy. He said, “Every guitar instruction book and DVD on the market is not teaching people how to start playing their favorite songs, they all focus on music theories and boring practice lessons!”

Quincy definitely had the passion and enthusiasm. He convinced us that it was easy to create professional looking books and DVDs at home, and that he could come up with the single best book and DVD bundle for beginning guitar players. Because we were intrigued and loved the passion that Quincy had for his idea, we told him we would go into business with him if he could deliver a killer product.

When we did some research on the potential market we were stunned by the results! There were literally hundreds of thousands of people searching online for how to play guitar! That’s when we decided to help launch iPlayMusic.

Next we needed to figure out how to market the product that we initially wanted to sell for $19.95. We decided to market our product in two ways. One, we got the book and DVD listed on Amazon.com, and two, we hired a web design company to build us a fancy site so we could sell directly to traffic that came from Google.

After three labor-intensive months, we had a great product, and a very polished website. We thought the rest would be easy! But we were wrong.

First, Amazon.com delivered a slow trickle of sales that did not add up to more than a few hundred dollars per month. Not exactly the exciting and thriving business that we had imagined. Second, our professionally designed website was not converting. We were buying lots of traffic from Google but the traffic was not converting into sales.

People were simply not buying our beginner guitar books and DVDs.

Because of these disappointing results we decided to go back to the drawing board. From the few hundred customers that had purchased our lessons, we knew that they LOVED our product! They could not stop raving about it.

So we decided to completely change our approach. We realized that if our beginner book and DVD was so successful, why not give some of it away for free? As a small business, it is very hard to get people to trust us and buy from us. However, it is far easier to give them something for free, earn their trust and then convert them into paying customers later. Plus, giving away some of our lessons would cost us next to nothing since ebooks and videos could be formatted into easy downloads.

We added free demos and created a free online course that customers received over two week span. We also made our instructional videos available through iTunes, which got us a lot of publicity.

We then went back to creating more content and started working on the next volume of lessons to help beginning guitar players take it to the next level! In addition to expanding our instructional “Learn to Play Guitar” lessons we also created detailed how-to videos teaching people how to play some popular guitar songs.

Lastly, we came up with the idea to create a “Beginner Guitar Bundle” that combined our lessons with an acoustic guitar. Since we don’t make guitars, we contacted a leading guitar manufacturer and struck a deal where we were able to source guitars at over 65% less than retail price.

We now had a $129 product with a profit margin of over $65 per order.

This time, all the changes we made worked and iPlayMusic soon reached sales of over $1,000 per day. We haven’t looked back since.

Screenshot of www.iPlayMusic.com

So as you can see – there are 3 very different ways how to start an internet business and market an informational product online. The last thing you want to do is follow the crowd and sell your product on Amazon.com. Although Amazon.com is the easy way out, it’s not very effective and you won’t make the money you’re hoping for.

We identified 8 qualities that make a product a potential hot seller. Here are the 8 qualities and a comparison of how the 3 different business models we described in this lesson stack up.

Factor	Dating eBook	Sage-Hearts.com	iPlayMusic.com
Easy to Store/Deliver	x	x	x
Low Startup Cost	x	x	x
Easily Automated	x	x	x
Attractive Price Point		x	x
Upselling Potential			x
Free Trials/Downloads			x
Can be Resold		x	x
Creator is Passionate		x	x
Total Score	3	6	8

You can use this checklist to rapidly identify if your product is worth selling online and if so, to refine your business model to make it more viable. If you are in the process of starting your own internet business, use this checklist as a guideline.

Sincerely,

Vishen M Lakhiani and Michael P Reining
Co-Founders, MindValley

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