Three fundamental steps to make money online
Updated: Apr 11, 2021
How to make money online?
The three steps are: (1) have products; (2) identify buyer; (3) build your store in a market. You must have the products. You must have the people who demand that product. And you must conduct business in a store. In online business, the store is online. That is why it is called an online business. Everything else is real and physical.
This mysterious topic may seem like it has an easy simple answer, but it doesn’t.
In this program let me explain all the concepts, steps and tradecraft necessary to launch a successful business.
First let us think about why people make online business. Online is opposite to offline business, which is the majority of how business is conducted. The vast majority of business is conducted with a physical space - a store, a restaurant, a tech company compound, a dentist office, a bakery, a printing press. It is expensive to conduct business with a physical space, because you need to pay RENT.
An online business may have no physical footprint. In theory it seems you bypassed land lords and a lot of costs.
There are two ways you can make money online. The first is to make a business. The second is to work FOR a business.
To build a business, you need assets such as capital. To help with others’ business, all you need is time. In this case, time is the asset.
We see business all around us. But what exactly is a business? A business is simply selling products to customers in a store. You must build such business with time and money. In business, time is money.
You must have the products. You must have the people who demand that product. And you must conduct business in a store. In online business, the store is online. That is why it is called an online business. Everything else is real and physical.
Following this train of thought, it is easy to design ways to make online business. Here are some approaches.
one, Make contents and sell them to “content consumers”. Two, Become middleman or salesman. Three, Make your own products and sell. Lastly, Invent your products and sell.
When most people think about “entrepreneurship”, they want to invent new products that solve unique problems. However, it is only one of the ways to make a meaningful business.
“making money” is not the same as doing business, but it is related. Here are some pathways to make money.
Sales - commission.
Attractions - advertising placement.
Buy and sell - price difference.
Build, buy and sell - long term.
Building a store and traffic on your own.
It is important to note that if you don’t have a store, and you don’t have a quality product, it is almost pointless to attract people. Many people want to attract as many of them as possible. Think about it. If your followers have nothing in common, no one will buy a single thing from you.
There are a number of phrases that are commonly used. Here are some of them and the essence of that phrase.
Affiliate marketing: marketing and sell products.
Influencer: aggregate traffic.
Dropshipping: sell products to followers.
Website: a “physical address” online.
Online course or Youtuber: make videos and contents.
Everyone is a different form of “selling something to someone”. Each phrase refers to your contribution to the chain of global business.
The analogy of a physical store is a website. A website must have a domain address. Each website also tells the search engine what it does. There are protocols to tell the search engine what you do, so that the search engine correctly catalog you.
No matter how creative you are, your website must be cataloged and understood by the search engine, so it knows who is likely interested in seeing your website.
Over time, the search engine, such as google, build a list of keywords that the search engine thinks your site is associated with. This list of search words and your ranking on each word is your business’s blood line.
If you operate a page within a platform for example Amazon or eBay, then the platform has its own database and each platform tries to understand what you represent.
Remember one thing from this page please. It is not about who you are, it is about what the search engine think who you are.
An empty store on the street sells nothing. It is important to stock your website with things to sell, otherwise you attract people to it for nothing.
Each page must also tries to sell products. If you just attract people to click on your site and there is no product to sell, the site is not for business. The only exception is a portal site - but it requires constant maintenance and the barrier of entry is high.
Ideally you want to have visitors having the same interest. People who are not interested in what you stand for or what you offer should not come in at all, because it is a waste of time for you and them. Such visitors are called organic visitors - they either come in to your site through search result they initiated, or are lead through advertisement that caught their attention.
Can you build a website without any skill? yes. You can use drop and place features of modern web builder tools. However, keep in mind that if you have an easier time then you are most likely operating your business on someone else’s platform. The platforms will invariably provide you convenience and charge for that.
Some platforms claims to bring you native traffic. However, you should be very aware of such claims. Most of that kind of claims are not as effective. There is always a catch.
The platforms makes money, whether you make money or not.
Experience in business is important. There are tradecraft and mind sets that only comes with experience and failures. The following trade crafts are important no matter how you want to make money or make business online.
Letting Google know who you are;
Finding and keeping followers;
Finding or making good products;
Identifying a good name.
Each one of the areas are somewhat opaque and take a long time to find out the truth.
We will provide more instructions on each topic in the coming episodes.
There are a number of scripts that many people follow. Here is a list of them. In the early days of the internet, companies such as Amazon, Yahoo and eBay established the most profitable way of making money online. Such companies are either advertisement placement agencies, news portal with potential for advertisement placement, and middleman.
Individuals today must be creative and hard working. Here are three paths many use. Influencer build organic traffic and then offer webinar on important money-making topics. They sell the course and charge for the digital contents. Some creators of online courses use heavy advertising and then sell digital contents. These include Udemy and other online course sites. In a third way, one can become a pure content maker, sometimes referred as a digital marketer or blog writer. If you are really good, you can sell advertising and “clicks”.
If one can get rid of fantasies and false hope, then business becomes easy. Over exuberance end false hope can cause massive waste of time. Most people realize this too late.
There are many hidden failures such as stores with zero traffic and zero sales. Of course no one ever know them because they are online.
In the online world, what your audience sees is what the search engine decide to show. Having a good relationship with the search engine is critical. However, this costs money.
Online commerce has brutal conversion. Out of 1 million followers such as on tik tok, only 10 of them will buy something from you, and they still demand the insanely low price. Never assume that you have a million customers if you have a million followers.
Online business costs money. You don’t need to pay rent, but you need to pay the domain companies, the search engine companies, and the platform companies. Further, you need to pay your source to buy products from them for selling. If you develop your own products, there is a large cost of research and development, or R&D.
Many people operate under the impression that online business takes no money to start and can be easy. People are driven to try to become influencers on social platforms. Many people promote that “get rich quick” scheme and they show you their pictures with good cars at young age. All these are elaborate schemes to get people to pay them for products. If something sounds too good to be true, it is probably not true.
Unfortunately, many people realize this too late.
A large number of entrepreneurs want to solve problems and change the world. They want to make products or minimally viable products. They want to make brand new products that never existed before, and then try to find the buyer. This sounds very reasonable but requires a lot of time and funding. The customer acquisition cost is very high without a funnel.
We will discuss details related to items mentioned in this episode, in coming episodes. Stay tuned. Thank you.
Making contents takes a lot of time. If you like the contents, it is greatly appreciated if you could press the like button so that we know the contents are useful to someone in the community. Thank you.