[This is the eighth in a series of posts about entrepreneurship as a way to protect your income in a bad economy.]
Once you’ve identified the markets you think you may want to serve, check to be sure you’ll face healthy competition.
That’s right: You want competition.
Because so many entrepreneurs have preceded you into the Internet marketplace, chances are very good that someone has already tried to serve the market you have in mind.
If they’ve been successful, they’re probably still competing in that market. If they weren’t successful, they’ve either disappeared or are in process of leaving the market.
Imitate the successes.
Look for Signs of Life in the Market You’ll Serve
When you’re trying to find an oasis in the desert, scan the horizon for signs of life. You’re likely to find a good watering hole is one where plenty of plants and animals have already gathered.
You can see how competitive a market is by searching on keyword phrases that are likely to be of interest to your market. Look for the number of Google ads that appear along the top and right-hand margins of the results page.
Be careful. It can be challenging to interpret the results you see. You want some competition, but not too much. If you have too many competitors, you’ll be paying too much for your Google ads because the others will be bidding up the cost of the most important keywords.
Too Crowded for Beginners?
So how much is the right amount of competition?
That depends on how sophisticated your competitors are, how much experience you have, and how much money you can afford to spend while you get established.
It may take you awhile to determine how sharp your competitors are, and it will certainly take you some time to establish a winning presence.
Find Other Peoples’ Products or Services to Sell
You don’t need your own product to sell at first, though you may want to develop one later to earn more profit.
You can sell other peoples’ products or services as an “affiliate marketer.” You do all the marketing at your own cost, and you earn a commission on the revenue you generate through your affiliate.
Work Through an Affiliate Clearinghouse
Remember Clickbank from the preceding post? It’s one of dozens of online clearinghouses where you can find affiliate offerings to sell. While Clickbank focuses on digital products, others list many services such as travel, consulting, coaching, training, etc., as well as nearly any kind of physical product you can imagine.
Commissions vary by offering, and the affiliate clearinghouses will tell you how much you can earn by selling each.
Locate Your Own Sources
In addition to working through a clearinghouse, you can also find your own affiliate-marketing opportunities. This will take you more time than going through clearinghouses, but it may be a better way to find products you can get passionate about.
It can also be a good way to offer products in proven markets without facing competitive that’s too intense for your level of experience.
When you find a product or service you think may be promising, go to the supplier’s Web site and look for a page or section with the word affiliates in it.
If the supplier has established an affiliate program, the site will tell you how to get more information about it. If a supplier hasn’t set up with an affiliate program, I suggest you look for an easier path. Trying to create a new affiliate program with a supplier is probably more effort than you want to invest at your stage of the game.
Start Selling
Once you’ve identified an offering you want to sell, you set up shop and start driving traffic toward the affiliate site through a variety of methods. The two most common are to create an ad campaign on Google Adwords and to write articles that contain links to the website you want to promote.
Your affiliate will handle the sales process, the billing and collecting of money, and the delivery or fulfillment of the offering. They’ll send you a check for generating any sales they close.
You Don’t Even Need Your Own Website — at First
Your articles and Google Adwords campaigns can link directly to your affiliate partner’s site, eliminating the need for you to create your own site.
Although you can get started without your own site, it’s a much stronger strategy to build your own as soon as you can. If you just point traffic toward an affiliate site without first passing it through your own, you’ll have no interaction with prospects.
This means you won’t have a chance to build your own relationships, and you won’t know the customer’s name or e-mail address. All that information will belong exclusively to your affiliate partner.
Grow Your Own Lists of Customers and Prospects
In Internet marketing, as in all direct marketing, your most valuable asset will be your customer list. This is because you can sell the same customers different products over and over.
The lion’s share of profit will come from what you sell after the first transaction. If you don’t build your own list, you’re passing all that future profit opportunity to your affiliates and saving none for yourself.
Focus on growing your own lists! All your business leverage will come from the size and quality of your list. With a strong list you’ll be able to attract better and more profitable relationships with the more desirable and exclusive affiliates.
To make real money in the long term, you’ll need your own website or blog. It shouldn’t cost more than a few hundred bucks. For starters, your affiliate may have designed one you can use for almost nothing.
When prospects come to your site, you can use a variety of techniques to encourage them to provide their name and e-mail address. Then you can build your own list before you pass the traffic along to your affiliates.
The next post will wrap up this topic.
Stay fresh.
–Scott Silverback