How to make money on the web. In the real world.
There are many people with many ideas on how to make money on the web.
Some are ok, some are good, but most are just re-hashed old ways that some think will work on the web, because they worked in other ways.
Most books and information being sold as "how to make a gold mine on the web" are just old, outdated ways they rarely if ever worked in regular media and regular way of selling stuff, just with a new coat of paint over the same old, tired message "you TOO can be a millionaire!".
So how DOES the average person or a small business actually USE to web to make PROFIT? (Yes Amazon Books sold 147 million dollars in books in 1997, but did any bother telling you that they LOST over 25 million dollars doing it????)
Here is a good, practical way to make money on the net, now, today, that has Very low start up cost, almost no over head, and will leave you with a higher percentage of profit per dollar of sales than any other way I have discovered in 25 years.
THE OLD WAY
lets take an example. a 25 dollar book, sold the old way, and the NEW WAY. Lets compare the old way to sell , and the new way using the web, and look at the pro's and con's of doing it both ways.
This is how the average book or information course has been sold up to this point in time.
You buy a 10th to 1/4 page ad in a national magazine or newspapers, asking person to send their name to you, then you send then out a information brochure with letter, envelope to order, brochure , testimonial....etc, and them hope a high enough percentage of the people that you mail the information pack to... order the book.
Lets look at the economics of the old way.
Lets see how much of the 25 dollars that book sells for that you get to keep.
First the book cost 3 dollars to print, the credit card processing and shipping and the people to open mail and package and wrap and every other cost to get the book to the person' is approx 7 dollars. This is all the direct costs of getting the book to the customer. This does NOT included your normal business overhead and payroll.
The advertisement, if everything does right, if you spend 1000 dollars, will cause about 300 people tp send for the information packet, so 1000 divided by 300 = $3.34 cost for getting each inquiry.
Each sales brochure including printing and postage, will cost approx 60 cents to send to them, and the average response to the sales brochure is from 17% to 37% depending on the type of offer. So you have to mail 4 to sell one. (a 25% brosure to sales conversion rate)
Each one you mail cost you 60 cents, plus the $3.34 cost each one for the magazine ad, so $3.34 + $.60 = $3.94 cost for send every one you mail out. This gives you a 25% sales response rate, meaning you have to mail 4 to get one order, and $3.94 X 4 = $15.76 .... so it cost you $15.76 advertising cost for every book you sell, and $7.00 to get the book to the customer, $15.76 + $7.00 = $22.76 .....$25.00 - $22.76 = $2.24 Gross profit per book.
now out of that $2.24 profit you have a few bad credit cards, and few bad checks, rent, phone, payroll, bookkeeping costs, and all the other overhead that a business normally has that has to come out of that $2.24!!! Many (most) times...you have more going out than you have coming in. (You are loosing money)
That is the OLD way. Lets take a look at the NEW way.
You place Small space (one column by one or 2 inches high) and classified ads in magazines and newspapers, with short targeted message that gets attention. These ads point to your webpage.
All the 'selling' is done on the webpage, and the customer can use a secure credit card system to order book or product directly from the webpage. They type in the credit card number, and the address to ship the book to. This information then is emailed or printed out and sent directly to you or the place that is doing the shipping for you, and the credit cards are automatically approved, processed, and the money is direct deposited into your bank account within 48 hours.
Let look at the costs and profit this way.
First, your advertisement can be much smaller, because all that 'selling' that you used to put in magazine and in the letter, is now on the webpage.
The customer can anonymously 'check it out' 15 seconds later, with out mailing you anything.
You have NO printing and mailing costs to get the sales message to the customer!
The cost of getting the people to the website versus getting them to send and mail you a letter, is probably in one tenth or one twentieth the cost of the 'old way"!
The website costs, can be as low as 1 cent for every person that looks at it, even lower if you get a lot of people looking at it.
You can put up a website for anything from free to 50 dollars a month.
First, the cost of getting them to the website versus getting them to mail you a letter is greatly reduced, down to where it may cost only 20 cents per person to get them to the webpage.
Now we have the cost of the website, which is very low per person that reads it. (In fact, web page costs per visit are so low, you almost can not even consider that cost in the equation, but to be realistic, I have included every cost)
Let's say it costs you about one cent per person that read you webpage. (that's about the average).
If even only 5% out of a hundred people that visit page buy book, lets look at the costs and profits.
The ad cost was 20 cents per person to get them to the webpage, times 20 , (5% sales rate, or 1 in 20 purchase) means u have an ad cost of $4.00 per sale for the people that bought the book. Add to that the webpage cost of another 20 cents, and u get total ad cost of $4.20 per sale.
Now, when you take the $25.00 sales price of the book, and subtract the $7.00 that the book still costs you to print and process the order, and get book to the customer, and then subtract the $4.00 cost of the magazine or newspaper ad to get them to the webpage and the webpage costs, you are left with total Gross Profit of $14.00 per book, versus #2.24. that is 625% MORE profit on the same sales volume that doing it the old way!
This is on top of the fact that you are maybe spending 1/10th for advertising per month that you were, for the same amount of sales...
Lets look at look at it another way....
For every $100 dollars you spend on magazine or newspaper advertising, you are getting 500 people to the website, you are selling 25 books at $25 dollars each. That is $650 dollars worth of books for every $100 dollars you spend on advertising!
Put another way, that is 350 dollars profit, on every 100 dollars spent. (and in newspapers the turn around time on the money, from the time the ad comes out, to the time you have the money in your account, is DAYS not weeks)
Another thing: you don't have to pay for the magazine or newspaper ads until the 15th of next the following month, 3 weeks after the credit card sales are already deposited into your account. This means that you have the money and the profit in hand.... many times long before the advertising bill even comes due!
All in all, this is the best , fastest, and most efficient way to make money for the average person that I have found.
Paul Swartz