Starting Online Business

Starting Online Business
(Home or Elsewhere)

If you’ve decided to start an Internet business because you think it’s an easy way to get money quickly, you are going to be in for a surprise. You certainly can build a profitable business online, but it takes time, work and money.

Those three variables (time, work and money) are interdependent. With a lot of money to invest, you can shorten your time horizon considerably, and you can reduce the amount of work that you will have to do. With a little money, it will take longer, and you will have to do more of the work yourself to reach success.

However, starting an online business can be considerably less expensive than a comparable brick and mortar (i.e., offline) business. Indeed, that is one of the major attractions of Internet commerce: lower start-up costs and lower continuing overhead.

You must decide what kind of Internet business you want to build. Even if you think you already know the kind of business for you, read about the others so that you are certain that you’re overlooking something that makes more sense for you. Here are the major alternatives available to you. We address each of these in more detail on other pages on this site.

Retail:  This is probably what most people think of first when considering an online business.  Perhaps they’ve had their appetites whetted with an eBay experience or two.  You can sell two kinds of products online—digital or physical.

Digital products include ebooks and software, for example.  In most cases, those products can be immediately downloadable for the buyer, so the merchant does not have to worry about shipping.

Physical products include virtually everything else, from cars to safety pins.  Physical products can be handled in two ways.  Some online merchants keep stock on hand and arrange for the shipping themselves.  Other people use dropshipping.  In that case, the merchant never sees the product.  It goes directly from the dropshipping company to the customer.

Service: (If you plan to offer a service that requires your presence at the customer’s location (e.g., cosmetology, pet sitting, etc.), read the section on moving an already established business to the online world.)  Here I want to describe services that are handled entirely online.  Examples of these are free-lance writing, software engineering, editing, etc.  You attract your customers with your online presence, and you deliver your work electronically (in most cases).

Affiliate:  Affiliate marketing is probably the least known by the general public.  Quite simply, an affiliate marketer drives customers to another business and receives a commission if that customer takes an action (such as buying a product).  It is possible (although not advised) to be able to pursue affiliate marketing without even having a website.

Advertising (e.g., Google Adsense):  Some people make a very good living by selling advertising on their websites (note the plural!).  The biggest provider of advertising for the Internet is Google.  They have a service called Adsense, which places contextual ads on websites.  A contextual ad is one in which the content of the ad is determined by the content of the page on which it appears.  A page about jewelry will display ads that pertain to jewelry; a page about depression may display advertising for psychotherapists or certain pharmaceuticals.  If a visitor to the site clicks on the advertisement and goes to the sponsors site, the person who displayed the ad (e.g., you) gets paid.  The amount paid for a click depends upon how much the advertiser had to pay for the ad space (determined by the competition and google).  Some ads will result in $0.05, others may bring $12 for a single click.

Many people opt for a combination of two or more of these options in order to receive multiple streams of income from their niche.  We describe «niche» elsewhere.