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The 5 Best Revenue Models in E-Commerce History
There was a time, back in the 20th century, when everyone wanted
to have their own online shopping cart system. By 1997,
Amazon.com had served their millionth customer and was really
starting to impress regular folks. The internet looked like a
realistic way to do business, maybe even for small businesses.
So soon everyone wanted a shopping cart, got one ready to go,
and... nothing. They didn't get any traffic. Then came the
website submission hounds with programs like SubmitWolf. It
worked for a time, though some submitters turned into spammers
and thus began the game of cat and mouse between spammers and
search engines.
As the number of websites grew, and around 2000 when Google, who
had partnered with RedHat and Yahoo, began to become a real
force, it was no longer enough to have a website and submit
it... at least not for small businesses online. Sure, about $66
billion dollars in in goods was sold online in1999, but mostly
by big players who already had bricks and mortar momentum. If
the new guy on the block wanted a piece of the action, he had to
get smart and stay smart.
Cue the SEO experts, a growing herd of geeks with a profusion of
theories about the directories and search engines. Some search
engine optimizers were ethical and followed the rules set by
search engines. Others practiced "black hat" SEO. The search
engines guarded closely how they rank pages but some SEO
devotees put all their energy into trying to reverse engineer
those algorithms, to discover the magic formula, and find holes,
however temporary, to exploit.
By the dawn of the 21st century, some basic "white hat" SEO
principles had solidified, and the fad had shifted from shopping
carts to informational websites. You can't optimize something
that doesn't have information, and the more you have the better.
Also, a lot of internet junkies prefer the purely digital and
neither had, nor wanted to have, any physical products to sell.
But digital purists need money too, so various revenue sources
have been explored - from running advertisements (clunky old
banners and the dynamic AdSense variety), to helping others sell
their goods through affiliate programs, to developing their own
digital goods, like
ebooks, special reports, even programs and
web utilities. These paths have already been trailblazed, but
you still must to choose the best one for you. If you have a
product, you'll want to use the internet to sell it. If you
don't have one, you could develop one. If you don't want to,
sell other people's. If you don't want to do that, just run ads.
Let's forget, for the moment, that these all depend on incoming
web traffic, and just focus on the pros and cons of each revenue
source:
1. Selling physical goods requires warehousing, shipping,
returns, and heavy customer service. It's a significant
investment of time and/or money, but this has the highest
revenue potential.
2. Just running ads is much less work, especially with if you
don't have to deal directly with the advertisers. However, the
earnings per click are quite low, so you need a lot more traffic
to make good money. And not all informational topics are
profitable. For example, searchers for entertainment and sports
information don't tend to click on ads or buy anything.
3. When you promote other people's goods as an affiliate, you
sit between the last two options- it can pay better than ads and
be less hassle than hard goods. But you still have to provide
content on profitable topics, and you need to be a comfortable
and effective salesperson for the products that pay your bills.
4. Developing and selling your own digital products is at least
as much work as selling hard goods, but requires much less
overhead. You can write an ebook, turn it into a pdf, and get it
onto a website with very little money.
5. And we shouldn't end without mentioning that you can also
sell your services online. If you write about what you do,
whether you're a web designer, lawyer, doctor, psychologist,
carpenter, whatever, you can get web visits from prospects in
your local area and turn those people into customers.
About the author:
Since 1999, Brian B. Carter has reached 2 million readers,
received 5 calls per week from prospects, and sold his first
book. His new ebook is "How I Made $78,024.44 in Six Months
Online". For more, see his SEO/PPC
Website.
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