What are the
Different Types of Money Making Businesses on the Internet?
©
David Peterson - 2006
There are 4 basic types of businesses
that you can operate on the Internet. Each of these 4 types
has a different level of expertise needed from you the
business owner. ALL OF
THEM CAN EARN YOU MONEY!
The 4 types of Internet
money making business ideas are:
-
Multi Level Marketing
Programs (MLM)
-
Affiliate Programs
-
Reseller (eStore
distribution)
-
Manufacturer Direct (eStore
distribution)
I placed the 4 business
types in this particular order to give you a gauge on the
level of Internet expertise that you will need to know. Also
the marketing expertise that you will probably need tends to
follow this order as well. Let's look at Internet expertise
and Marketing expertise as "barriers of entry" to an
Internet business.
A "barrier of
entry" is simply a term that means how hard it is to
start a business. This term applies to both ebusinesses as
well as traditional brick and mortar retail stores as well.
Internet expertise deals with the infrastructure needed on the
Internet and marketing expertise means everything from
creating advertising campaigns to budgeting for those
advertising campaigns. There could be many other barriers of
entry besides Internet and marketing expertise, however let's
just focus on these two and how they relate to our 4 business
types.
Internet Expertise:
Marketing Expertise:
If we look at the 4 types
of businesses we can now explore how simple or how hard each
of these two expertise are going to be.
Multi Level Marketing
(MLM) - An MLM program is a way for you to sell a product
or service while you are a member of a team. You have a team
above you and if you are successful at the MLM you will create
your own team below you. Everyone in the team makes some money
when the product or service is sold. The absolute ease of
entering into a Multi Level Marketing ebusiness is why they
are so popular today.
In terms of Internet expertise you typically don't have to
know anything about the World Wide Web. The MLM's parent
company does all of the work for you. They create the website,
they give you the tools to edit and change the website, and
the cost to join the MLM is typically minimal so no money has
to be "set aside" for this type of Internet
business. The opportunities with MLMs come in the form of
marketing expertise. Typically most MLM ebusiness owners start
late in the game so there can be literally thousands if not
hundreds of thousands of people selling the same thing you are
trying to sell. The great news is the MLM parent company has
probably already created the ad campaigns and can explain
exactly how to run those campaigns. The two major areas of
focus will be that you will have to set aside some marketing
dollars to compete and your only real competitive advantage is
how much time you invest in the ebusiness.
Affiliate Programs -
An affiliate program is your site selling someone else's
product or service. An example of an affiliate program would
be if you have a hobby website running and you want to sell a
magazine or some other product related to your hobby. Choosing
an affiliate program in this example is simple. Just go to CJ.com
and choose from one of a 1,000 of different affiliate programs
and payouts. The Internet expertise needed for an
affiliate program can be fairly limited. Today it is very easy
to create a basic yet very beautiful website. As an example at
Web.com
for less than $10 month you can have a professional website up
and running within a few minutes. You do have to maintain that
website and make content changes to that website but typically
companies like Web.com
have the tools available for that purpose. The marketing
expertise side of the equation can be a bit trickier.
The tricky part is no one is really around to tell you how to
create a marketing campaign around the product. Also there can
be hundreds if not thousands of other affiliates trying to
sell the exact same thing. I personally love affiliate
programs when I can get in very early before everyone else
jumps in and starts selling the same product.
|
Turning
money making ideas into a money making business is a race!
You
are in a race with Success and Failure
-
When running
this race will you succeed in your business before going
broke?
-
When running
this race will you succeed in your business
before your family says "enough is enough?"
-
When running
this race will you have enough working capital to pay your
new vendors and your old mortgage?
-
Can you see
the finish line at the end of the race?
-
Will you know
when you have won or lost the race?
Do
the 5 questions above worry you?
Order
Been There - Done That Now! |
Reseller -
Personally this is my favorite type of ebusiness. Basically
this is a business where some other business creates the
product and you just sell it over the World Wide Web. Normally
you don't even have to touch the product, you just sell it and
tell the manufacturer where to send it. I have been very
successful at it with my JDPDigital.com
and my Everlight.biz
estores. The Internet expertise varies depending on how
sophisticated the website becomes. As an example the Everlight.biz
store is a template website that was purchased for about
$50.00 and I just added the pictures and content. The JDPDigital.com
site was created from scratch with a simple design that can be
updated easily. However in both cases if you did not know a
lot about HTML (HTML = the language used to create websites)
then neither type of the design would work for you. It would
be too frustrating. If you don't know HTML it's really not a
problem just go to Web.com
and use one of their template ecommerce setups. Just as
with the affiliate program above the marketing expertise
needed to be a reseller can be steep. Unless you get in while
the product is new you will probably run into plenty of
competition. This competition will require you to constantly
create new marketing campaigns and to spend quite a bit of
your hard earned sales dollars on those campaigns.
Manufacturer Direct
- The difference between a manufacturer's direct program and a
reseller is who holds the inventory. If you are running an
Internet Manufacturers Direct business out of your home then
you will have to stock those products you sell in your home
and ship them from your home. Your Internet expertise will be
just like the resellers above. Your marketing expertise will
also be just like the resellers above. The main marketing
difference is that you typically have to pay for your product BEFORE
you make the sale with this type of business, so you will have
to have money "set aside" in order to begin this
type of ebusiness. The other main marketing difference is that
you typically have complete control over how you market your
ebusiness. Since you bought and paid for you product the
manufacture has limited control on how and where you
advertise. For example if you want to price the product well
below what everyone else is charging on the World Wide Web
then the manufacture direct approach is really the only type
of model you can choose. All of the other 3 types want pricing
control so they would probably stop doing business with you
unless you conformed to their pricing model.
In conclusion there are
several factors to look when trying to get ideas on what types
of money making Internet businesses to choose from. I
personally like being a reseller but I have also made money as
an affiliate as well. If you are serious about an Internet
business my suggestion would be for you to read my book Been
There - Done That. That book covers everything from
advertising to staying focused on your business.
Good luck on bringing your
money making ideas to the World Wide Web!
Sincerely,
David
Peterson
Author
of:
Been There - Done That
David
Peterson's Search Engine Optimization Guide
Please
send all correspondence to: questions@usreference.com
|
