How to Create an Online Business: Choosing the Right Money-Making Method

in makemoney •  3 years ago 

If you're like me, in your travels around the internet, you may have seen blogs, articles, tweets, or other items about people making money online. A lot of money. Most of these were probably advertisements of some kind, but they were probably also effective. I mean, who doesn't want to earn a lot of money, particularly online, without a boss or an office or a commute? I don't know about you, but the thought sure appealed to me.

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The bad news:

There is no shortcut. You may see advertisements saying that you can earn thousands of dollars in weeks using this method or that method, but those are just advertisements. Some of the products they are selling may be very effective in doing what they say they do (and others not so much), but there is no shortcut that cuts out all the legwork. You have to put some work in, even in the form of mental effort figuring what seems within reach for you and what your plan is.

So if you're willing to put some work into it, you can build a true online business. There are a number of methods people use to make money online, but I am going to focus on three such methods in this article.

The first method is affiliate marketing. Affiliate marketing is when you promote someone else's product. If you send buyers to the product owner, you get a commission, a slice of each sale. For some products, this slice can be small, and for others it can be pretty big. The key is to find people that are motivated to buy a certain product, and helping them do so. It's a win-win-win situation: you help people find products that are helpful to them, you help the product owner find customers, and you receive compensation for that help.

Affiliate marketing is really an umbrella term that covers a whole array of strategies. Some affiliate marketers create ads that show up in AdSense or in search results, but they have to pay for the privilege. This is called Pay-per-click advertising or PPC. Other people focus on creating quality content on their websites and work to make sure that people can find that content through search engines. This is called Search Engine Optimization or SEO.

PPC advertising can be brutally competitive and requires a not-insignificant amount of money up front, so I don't recommend that people new to the online business world start here. SEO can be a much better path for the beginner, but it is not easy and requires some research and thought. Most people would recommend that you find a small niche that doesn't have a ton of competition, and start there. This is where the research comes in.

As far as which products to sell, there are some options here as well. I'd say the major affiliate programs are Amazon, ClickBank, and Commission Junction.

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The second money-making method is Google AdSense. AdSense is how Google offers their ads. As a webmaster, you sign up with Google AdSense and they give you a chunk of code that you can put on your website. When people visit, Google displays ads related to the content on your webpage. If the visitor is interested, they click on the ad and you earn a small amount of money.

When I say a small amount, I mean it: anywhere from a few cents to a dollar or two for an individual click, though it's almost always the former and not the latter. With AdSense, it's all about traffic: if you get a lot of people to go to your site, some percentage of them will click on the AdSense ads. But since you only make a little bit with each click, you need a lot of people to click. (General rule of thumb: for every 1,000 page views you have, you earn between $1 and $5)

This is why AdSense is not a good idea for beginners. Starting out, it's hard to get a ton of people to visit your site. As a result, you're much more likely to make cents than dollars with AdSense.

The third method is product creation. The idea is to create an informational product that will satisfy a certain need that your customers have. You could create an ebook, or a series of videos, or a piece of software, etc. The point is that you answer a question that your customers have, or fulfill some need that they have. Usually you want to choose a pretty specific niche, as some areas can be pretty competitive.

This path requires a lot of research and a lot of work put into creating the product. You can offer your product directly through your website, or you can offer it through networks like ClickBank, where affiliates will sell your product for you, though you have to give them a commission to do so. Another downside of product creation, as opposed to affiliate marketing, is that you have to provide customer service, process returns and complaints, field questions, etc. It can require a lot of work, but it can also be amazingly successful if you do it well and satisfy a real need for your customers.

So that is an overview of some of the ways that people make money online. I would recommend doing some research on each path to see if it seems like something you want to pursue. I would also recommend starting a blog. This can be a great way to learn about creating a business online, and it gives you a way to practice and try out ideas. And the great thing is that you can take it as far as you want; your blog could be a side-project that doesn't really go anywhere but helps you learn along the way, or it could turn into a huge success.

One last suggestion:

after doing some initial research, I highly recommend that you take the time to create a business plan for your online business. It doesn't have to be anything fancy; two pages could easily be enough. But taking the time to think things through and to put some real thought into your plan can be tremendously helpful down the line. And you can always change the plan or add to it as you go.

I hope you find these online business suggestions helpful. Be sure to stop by ER's Money Blog for more on creating an online business and making money online. Thanks for reading!

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