We are going to discuss some of the different types
of businesses on the net and how they make their
money. We will then discuss some basic "internet
business models" you can use to make money online
as many people still don't understand the concept of
these business models. There are only four basic
types of companies doing business with any impact
in cyberspace today:
1.Large Corporations (A.K.A. "Fat Cats")
Many of these companies don't do anything to
promote online, perhaps thinking their URL and
external promotions are sufficient. And they are
probably often correct in approaching the net
this way. The ones that do promote online
prefer to purchase banner advertising on high
traffic sites; a tactic that apparently pays off
(We are talking here about huge companies
like Pennzoil, Nike, CNN, etc.).
The companies referred to here are the
electronic cowboys like Yahoo (the search
engine), Netscape (the browser) and Netcom
(the ISP). These companies took a very
different approach to business on the net
hoping it would pay big dividends in the end.
Many failed, but a few succeeded and grew to
enormous size, such as the ones listed above.
Yahoo for example, gave away free listings
anticipating people would come and the net
would "catch on" with the general public. They
lost a lot of money with no revenue stream in
the beginning, but once the internet grew, they
could charge big dollars for advertising on
sites with as many as 15 million hits every day.
They got so big they were able to go public and
make millions with their stock offering.
Yahoo took a big risk and a loss in the
beginning only to reap huge rewards in the
end, and the same thing happened with
Netscape. They gave their software away to
become a dominant force and create a
monopoly on web browsers and then made
their money by selling advertising packages,
and co-partnering with other products later. A
risky strategy that has paid in the billions.
These are small companies run by individuals
who are inexperienced in traditional business
or the ways of the internet. They are of the
"gold rush" mentality and make the same
miscalculations made by inexperienced people
in any business venture.
These business owners often think there is one
secret to success. They think if only they could
just find that one trick, their work would be done
and they could then lie on the beach with an
ever-growing bank account. But as we will see,
there isn't any one big secret, just a whole
bunch of little ones!
These business owners often think there is one
secret to success. They think if only they could
just find that one trick, their work would be done
and they could then lie on the beach with an
ever-growing bank account. But as we will see,
there isn't any one big secret, just a whole
bunch of little ones!
4.Small Savvy Companies (A.K.A "Winners")
The "winners" are smaller companies run by
experienced business people who exhibit a
high level of awareness and hard work
promoting their website. These companies are
currently having the best success on the Web,
just as this type of business owner is having the
most success in your local neighborhood. They
usually start as one-man operations and can
grow enormously into outfits with many
employees.
But whatever approach you decide to take,
learn from others' mistakes. Don't re-invent the
wheel. If you try to, you are taking a big risk.
Model your business after another that has
already proven to be successful and yours
likely will be too.
Some keys of any successful product or
service:
1.Go after a very specific "niche" market (I did
this with most of my online businesses). Try to
offer a specialty product or service that is
generally unavailable through traditional retail
channels. It is critical that the target market be
specifically identified and located online.
2.Go after the general public - something
everybody wants and try for high volume, not
the profit margin or specialty product angle.
Example: An online CD store with a selection
like no other and better pricing to boot.
In my opinion, running two or three (or more)
websites and targeting a niche for each one is the
easiest way to make money on the net. Everyone is
looking for the "big buck" makers and often niche
markets are ignored. This is how I have made most
of my money online.
I offered something in demand for a small market,
and expected only to make $20-50,000 a year from
it. But I soon learned that if I set everything up to be
completely automated, I could run three or four (or
even more) businesses this size in only a few hours a
day. By combining several small incomes like that, it
is easy to earn in excess of $200,000 a year, all for
investing about an hour a day (per business) now
that everything is mostly fully automated.
If you really want to "retire" after you set up your
businesses, hire a manager to work a few hours a
day to take care of the daily chores that need to be
completed. This is how I started. I ran everything
myself at first, then got so busy I had to hire someone
part-time, then in less than 1 year, had to hire 3 more
people full-time just to handle the daily operations of
the 2.4 million dollars in business I do between my
four online businesses.
So when you grow a little, hire an employee to run
your daily operations. I know many homemakers with
kids who would be thrilled at the opportunity to bring
home fifteen grand a year... and often have lots of
free time between 10am and 3pm when their kids
are in school. Your help could be doing all the routine
chores and you could be traveling around the world
or just sitting on your patio knowing you're making
$500 to $1,000 a day doing absolutely nothing. This
is not a "pipe-dream"... with today's technology you
really can do it (heck, I do! -- although I have to admit,
I love to work, so I work a lot).
I hope this helps in your future marketing decisions.