Building A Business In The Online Space – Part V – Online Businesses
The World has changed completely and opened up possibilities that did not exist when I started my entrepreneurial journey.
In this series of articles, I am introducing new ways on the internet to work when your job will get blown away through the disruption announced.
My ideas and statements are driven by real-life experiences, applicable to different situations and industries. They are not just theoretical constructs but lead to empirical theories that can be substantiated by statistics and common methods.
In the forth part, I focused on classical reseller and franchises.
In Part IV, I identified 5 major requirements for building a sustainable business:
- Good products with good revenue.
- A big market interested in the product, where you can attract your niche.
- A plan.
- A sales strategy
What are the products you could sell? What is your target Market? What is your plan? What is your sales strategy? What actions do you take?
The biggest problem to overcome in my point of view is the production process to get to a good product.
I spent 12 years producing my documentary. When I had it finished, I had no energy, no money, and no working sales strategy established to sell my product successfully.
This is a common problem for any producer and inventor and a reason why many product based startups fail.
What I knew from being a programmer was how to set up a website with a shop component to download the documentary file in 5 language versions and I built on this basis.
When I had the website set up and the trailer was ready so anything could be published I searched for techniques to sell the documentary online. By incident, I found an education, not just addressing the part of the online sales but getting deep into modern marketing strategies and entrepreneurship.
An entirely new world opened up for me.
These guys had rocked the market since 2008, made their millions online and started to teach in 2010.
As a first step, I learned how to promote my documentary on Facebook and Youtube by using the beautiful trailer for marketing purposes. With very little financial effort the trailer went viral on Facebook.
I was not willing to give the documentary away for free, so I charged 35$ for the download. This might have been a stupid thing to do in a era, when movies on Apple TV are sold for 9.50$. I had my reasons to do so, but selling more than 200 copies at a price tag of 35$ was more than expected.
What I just wrote is actually a complete game changer!
- I sold a digital product worldwide
- There was no work of mine involved in the sales process, once launched
- Sales were running 24/7
- Social Media Ads initiated the transfer of the clients to my website to trigger the sales process
This process just works and it is the basis for a complete shift in mindset!
I actually had more or less 900 clicks on my website over 2 weeks while organic traffic also started to flow.
At the time I couldn’t handle the potential as I was still experimenting.
Even if the documentary is a historical evergreen piece of work and it keeps its value, I don’t see it as a great product according to my list here. It is just too cheap and this requires selling a big volume of the product to make good and lasting profits.
The second problem I faced was the audience. Most were not willing or able to pay.
As of today, I see the reason why the trailer went viral in one key factor. The documentary addresses the emancipation of the black culture which is quite a big topic.
Even so, it doesn’t solve a real problem and while in production mode and very influenced by the artist environment I was acting in, I did not reflect on this.
Big changes in the online world
In an early stage of the digital economy, there was a lot of try and error as well as spam and fraud involved in online selling.
Clients were burned through security issues when entering their credit cards. Products you ordered have not been delivered and it was all quite new and mystical.
I think we all agree that buying online has changed since the early stages of the digital economy and almost any transaction is made in the online space nowadays up to big amounts of money.
By accepting this reality the following statements are not out of reach anymore!
What if you could sell a completely digital product that provides you with 1000$ commissions per client?
What if you don’t have to produce this digital product but just make the referral to an interested client?
What I am describing is called high ticket sales of digital products as an affiliate.
There is absolutely no argument against selling high priced products online nowadays if they are worth the price.
A Tesla car can be bought online and it costs several 10000$.
You absolutely can produce a very expensive product and sell it online. If it is digital or if it is physical at the end is just a problem of setting up a different form of production and delivery.
If you start up with an online business in today’s world, producing your own product as a first step might not be the best idea. I discuss this at a later stage but it is absolutely possible.
This is the reason for me, why affiliate marketing is such a powerful business model.
Selling products as an affiliate is the equivalent to a classical store, selling retail- or digital products for a producer and earning a commission.
Maybe you have experienced this model already as Amazon is partly built on it and owes a big part of its success to it. If you register at Amazon Associates you can generate a special link to any product on the platform. If you promote the link on any of your channels and one of your referrals buys from Amazon you get a commission of 3-10% directly from Amazon.
This is a completely free strategy and for anybody in the third world, it can make a big difference concerning her/his income.
By registering, networking in social media and just promoting the link it can be the start of a great online career!
If your network would buy things on Amazon anyway you don’t do any harm to anybody by directing them to your website and promoting useful gadgets.
On the buyer side, if you plan to buy a product anyway, why would you not help out somebody who is affiliated to the producer company and gets his commission through you.
I don’t see anything potentially compromising in this online business model.
Thoughts about the marketing side
The early days of affiliate marketing when you could use Google AdWords and Facebook Ads at lowest prices are almost over and social media is getting crowded concerning easy marketing strategies. The first generation of affiliate marketers sells low priced products to a mass of clients. A product may cost 30$ and they make a commission of 5$ where they have to discount the marketing costs.
This is still a valid option but will it be sustainable when Ad costs and competition go up?
When I started with the implementation of my own online business in 2016 there was still a big confusion about online businesses with an affiliate model. Most people thought it was an MLM (Multi-Level Marketing) construct, a Snowball System or Network Marketing.
There is no direct connection between MLM constructs and Affiliate Marketing!
Online Affiliate Marketing is the modern way of Retail Sales. Nothing more and nothing less. Almost all variables of the old economy as written in my introduction are still valid. What changed is the tools and possibilities to become creative over the entire process and profit from all of these possibilities.
In my point of view and as far as my experience people don’t struggle with the limited possibilities anymore. The big challenge is to find the right approach that suits the personality, vision, and mission of a founder of an online business.
Most people around the globe still think in an old world setup and their switch into the digital economy is blocked by limiting beliefs, principals learned in the past and prejudging.
When you understand how the current world works you see that it is not so different from the old world but with so many more opportunities.
What is your experience with the digital economy?
In the next part of this series, I dig into the topic of different income streams online.