When it comes right down to brass tacks there are just a handful of basic ways to make a living with your own on-line business. Methods of execution and the variance in skill sets and knowledge of each individual allows for infinite possibilities but really, every business on the web is going to fall into one of these categories:
1. Sell a product to retail customers as a virtual store:
a. You can choose to sell a physical product using a traditional storefront site. Lots of infrastructure involved but the potential rewards are huge, just ask wossname from buy.com, I'll bet he takes nice vacations. The primary challenge to this method is the capital investment required to stock products before you make any sales. You need wholesaler relationships, a warehouse, a dedicated server and probably staff for order fulfillment and such.
b. You can choose to sell digital products - ebooks and informational products in electronic format - directly through your own website. You'll see some of that here on my Resell Page. The barrier to entry here is creating enough traffic to your site that you can actually make some money. You really need repeat visitors and regular updates to your product offerings.
2. Sell on eBay, either through auctions or in an eBay store. Lots of money available here if you know what you're doing and don't mind spending a fair amount of time on sourcing products, packing, shipping and answering silly questions. My all time favorite : I posted as an auction item "Original 1974 Jeep Technical Manual". I included a photo of the cover which is clearly marked "Nineteen-Seventy Four Jeep Technical Manual". In the description I wrote that this was the factory Jeep Manual for 1974 model year CJ-5, CJ-6, Cherokee and Truck models, the 'bible' written by Jeep for use by Jeep technicians. I got a question on the item - "What model years does this cover?" The ebay model offers a couple different ways to go depending on how much time you want to invest and how much special knowledge you have.
a. You can resell garage sale or estate sale items which is time intensive but generally a fun way to spend your weekends, the above mentioned Jeep Manual cost me 50 cents and sold for over 50 dollars. I've also gotten some items that I thought would sell and didn't. Since I rarely pay more than a dollar for an item unless I know there is a profit available it's not so horrible, I certainly win more often than I lose. Still, it is time consuming to find the items, clean and photograph them and then post the auctions and fill the orders. After I got through the first couple dozen auctions I had learned enough and refined my technique enough to average about 10 minutes per listing. So if six items make a combined profit of more than $50 I feel good about it. If you want to make a living at this, spend some time deciding what you love enough to commit your time to. The profit is not the important thing unless you want to be miserable but well paid. If that's you, stick to your day job. The most successful sellers in this category are the people who would buy and sell in their chosen category just for the fun of it.
b. You can buy lots at wholesale and sell individual items which can be a profitable way to go or it can be very frustrating when the market just isn't there and you've got $1000's worth of stuff cluttering up your garage or office. If you're looking to purchase products at wholesale and resell them, be careful about buying lists of wholesalers. Most of the time it will be easier to just go to www.globalsources.com and work with the Asian manufacturer. Discretion being the better part of valor I would discourage this approach unless you also have a bricks and mortar presence and are simply using eBay to expand your reach. One of our eBay stores is simply an extension of our physical location and website: For now it generates just enough sales to support itself and that is all that is really required. We sell low demand, high priced items that people frequently agonize over purchasing for months before they finally pull out their wallet. Letting people find us on eBay drives traffic to our website which in turn drives people into our store. On average, our customers finally make a purchase on their third or fourth contact.
c. You can sell through a drop shipper. For those unfamiliar with drop-shipping, basically you are selling products that belong to a wholesaler. You sell the item, collect the money and place the order which the drop shipper then sends directly to your buyer. You don't need much capital to get started and you never have to physically handle the product. This method has very high profit potential on eBay but you need the right drop shipper and you need the right product. If the item is backordered or suddenly unavailable, it's you who have to take the heat from the buyer. And if the fulfillment process isn't handled right, you get the negative feedback on eBay. The biggest challenge to this method is finding the right drop-shipper. There are a ton of folks out there who claim to be drop-shippers but are really just agents for drop-shippers. You place an order with them, they place an order with the warehouse and your customer gets their product. It works but you're giving someone else a part of your profits and all they do is forward an order to someone else. As far as products go, looking at 'hot seller' trends on eBay and trying to sell what everyone is buying is a very short-term approach. You'd be far better served to spend some time searching the 'Want it' listings and devising a strategy from that information. There is a software package available that claims to do that for you but I have not tried it so I can't recommend it. If you want to try it out yourself Click Here!
d. Sell an information product that exists in electronic format and can be downloaded as soon as the payment is made. This is another high profit way to go but you need a good product at the right price. The set-up process is a little bit more complex than a regular eBay auction but not frighteningly so. If you have highly specialized knowledge on a subject and can write your own eBook to sell for a few bucks a throw, you're golden. If not, you can find a ghostwriter and share part of your profit with them. There are a lot of writers who don't want to do business directly but will jump at the chance to make a few hundred bucks for a few hours work. There are also a lot of offers for material with resell rights or master resale rights that you can use to get started.
3. Affiliate programs or reseller programs. This is my absolute favorite way to get a more or less automatic income stream going. All you do is provide a link from your website to their website, after setting up as part of an affiliate program, and when customers go and buy something, you get paid. This is a fun way to go but does require some management skills and fairly basic website building skills. You need to keep up with the various promotions being offered by the seller and make sure your links are fresh and current. The good news is that the profit potential is basically unlimited, the barrier to entry is that you have to find a way to drive traffic to your site in order to get people to click those links. If you're active on eBay you can use those customer contacts to start building your mailing list.
4. Pay per Click (PPC) Search engines. Similar to an affiliate program but done in a more specialized area. You build a page with links and each time a link is clicked that advertiser pays you for the lead. The same barrier to entry exists, you need to drive people to your website from the traditional search engines (Yahoo, Ask, Google, MSN). Search engine submission is not hard to do but it is time consuming to do it yourself. Google's AdSense program can be used on a web page that also does something else, I haven't really explored this one yet but the rumor is that it can be lucrative if you already have a site that's drawing 1000 plus page views per month.
An important thing to remember is that this is a numbers game. If you focus too narrowly you lose. Affiliate programs, PPC programs, linkshare and Adsense all require lots of eyeballs because only a small percentage will actually click through unless you are already an established expert with a customer base that trusts you.
Moving on now to the second lesson:
The Basics of Affiliate Programs Previous Page