Model 3: Product Sale Revenues
Advertising is not the only way to make money from a website. Online trade is blooming more and more over the past few years and more and more people stop visiting their favorite malls because they can find the same products at more affordable prices online. You can find everything on the internet – from a third-party liability insurance to a yacht. The priceless thing in this option is that you can shop as easily from a store based in your city as from a little store in a small village along the Urubamba River in Peru, as long as the owner has a website offering their products.
Often, the products offered online are cheaper – another reason that encourages people to use this technology. The lower prices in online stores are explained with the fact that in order to offer your products at a store on some of the main or commercial streets in the city, you have to pay a high rent and overhead costs, have a cash register and pay salaries to your employees. All these expenses affect the end-price of the products, while you get rid of all these costs when you decide to sell online. Yes, you will not need a cash register either because the billing and the payments are done digitally.
The question you should ask yourself is what you can offer for sale. It is best to sell something you have made on your own or something you have a fast and easy access to. If you want to open a store selling smartphones, you will have to receive a product assembled in China, packed in the USA, and delivered to you through ships or trucks. Do you really think that you can sell them at a cheaper price than those offered by the Chinese online stores?
The internet gives access to a potential market of billions of consumers but you should not neglect the fact that people, who shop online, also have the chance to compare the products and their prices quickly and easily. In real life, you will spend tons of time and nerves to do this – going through all the stores in a mall, or God forbid, several malls. Women call this therapy, while men, on the other hand, are ready to buy the ugliest and most uncomfortable shoes/women’s shoes from the very first store they enter just to avoid touring all of them.
However, things are different on the internet. You do not have to go through all stores, try on the shoes, wait for a bigger or smaller number, neither will you have to listen to your wife, who always finds and likes a few other things you have not planned to buy this weekend. You can surf the internet with a few clicks of the mouse. You can compare the prices either by entering into every single website or by using the price comparison websites, such as Google Product Search. You must be sure that if a client decides to purchase something from your website, they have definitely compared the prices and delivery conditions with at least 4-5 other websites.
Thus, the best option is to sell your own unique products. If you are an artist, you should sell your paintings; if you are a beekeeper, you should sell your honey; if you are a writer, you should sell your books. If you are a person, who does not produce anything, then you will have to find a way to sell someone else’s products at a more profitable price than your competitors. In fact, this is not as difficult as it seems. There are many producers, who have no idea about “who this internet is” and how come everyone knows them… Many of them can hardly imagine that their products may be sold to clients in Canada, Mexico, or Norway. And they do not have to imagine it – you will be their connection to the world.
The good thing about the internet is that it gives everyone the chance to find their clients. The proverb “different strokes for different folks” is valid in full force here. No matter what you launch for sale on the web, you must be sure that someone somewhere is looking for it – what is important is to find one another, which will definitely happen, eventually. One of the most interesting products I have seen sold is canned Hollywood air – the air the celebrities breathe. The can is absolutely empty but sells like hotcakes to people, who want to get close to their idols and inhale the same air. Other enthusiasts are selling airplane sickness bags. You can often find old computers of the IMKO-2 era, or Apple 2, furniture made of garbage, and whatnot. These examples are not something that everyone would buy but there are enough people in the world, who may want to own them for one reason or another.
Find your niche
Of course, you do not have to think of the stupidest thing in the world to start a business – the world is big enough to find thousands of products you can sell, things that no one has thought of yet. You should bear in mind that many of the stores were started not under the clever management of a white-collar manager appointed to master a multi-million company but after someone had spent a lot of time searching for a concrete product but never found it. While scrolling through the forums this person has found that other people are looking for the same product, too, but no one knows where to find it and eventually, following the principle that necessity is the mother of invention, the person in question opens their own online store to satisfy the demand.
A clear example of this is the NOOK e-book reader, which I wanted to buy along with thousands of other non-American citizens. Unfortunately, the deliveries were restricted only within the USA. I started looking for ways to acquire it fast and easily through American addresses. I found tens of websites that offered such service – at a certain price you can order a product at their address and then they can ship it to your country. However, the delivery to my country was too expensive, even more expensive than the product itself. So, I visited eBay.com and looked for the product there. I found an enthusiast, who buys NOOKs on his address in a small town of less than 1,000 people in USA. The delivery to his hometown was free. After receiving the devices, he re-sent them to people from all over the world at their expense, while the difference in the price was of only $6.
I placed an order and in less than 10 days I had the chance to read my favorite books digitally. I was surprised to learn that this “enthusiast” had sold more than 20,000 such (and other) products, which made an annual profit of about $120.000. U.S. police officers are paid about $35.00-50.000 a year, while a salary of over $100.000 is considered very good, almost perfect, there.
I studied his working methods in detail. The young entrepreneur had created a website selling products like NOOK. All of them had free deliveries for within the USA, while he was re-sending them to other countries. The website was elementary and the software systems I mentioned above are cutting-edge technology compared with his internet presentation. The major reason for him being a successful trader was that he satisfied the needs of consumers from all over the world, offering the desired products at really good prices and counting on big turnovers. For the standards of his small town, he was more than wealthy, and the good thing was that he did not even need to leave his home to manage his entire business.
No working hours, no bosses, no team of people not knowing what they are doing, just a single person, a website, an eBay profile, and the money starts flowing. To achieve this success all you need is to be observant and find what people around you and those on the internet need, what they complain about, what they lack… Solving a real consumer need is a guarantee for successful business not only on the internet.
To start an online business you do not need a website with complex online store software. A good example of this is the HandmadeNel website – www.handmadenel.com. It was launched as a blog in Blogger.com and developed into a website where the author – Neli Apostolova, shows her latest hand-made items to her fans and also allows them to buy any of them. I will not hide the fact that I have used the website and Neli’s services, too. This is a telling example because many online traders focus on how to buy cheap garbage from the other side of the world and then sell it at 800% higher price. In this case, you can see how an author and an artist of a certain type of products find a market for what she creates. From her very own studio, she is selling unique products with no analog to every part of the world. The idea here is not concentrated on “What can I sell to deceive consumers and make a fortune?” but on “I have these products and opportunities, how can I cash them in the best possible way?”
In practice, online product trade is an ocean where you can easily fit in. The selling methods are different, as the easiest one you can start with is by using websites like eBay.com, as well as their regional analogs, where after a simple registration that takes one minute you can publish an ad for one item or another. In case your business expands, you can move to the next step and make your very own online store. You must be sure that your clients themselves will put you on the right track.