Why Start An Online Business And How It Trumps Offline Business

Why Start An Online Business And How It Trumps Offline Business

Posted by on Jun 5, 2011 in Work From Home

Why Start An Online Business And How It Trumps Offline Business

The financial crisis of 2009 / 2010 has severely affected the financial capabilities of many households. According to Wall Street Journal, half of Americans would not be able to deal with an emergency that would cost them $2000 in the next 30 days.

And many experts suggest that the risks are still enormous when it comes to stock markets and economy in general.

So how do you make yourself financially secure in the years to come?

Why An Online Business Trumps Offline Business

Lots of people have been looking to start an online business now that the Internet is all around us. And common sense tells us that there is no stopping the Internet from getting to every possible device and part of our life.

Which means that offering your products and / or services to billions of people is the way of the future.

Here’s why an online business trumps offline:

Imagine a typical offline business – selling a product. This can be clothes, cell phones, furniture, etc.

The company involved in an offline business has to typically buy the raw materials, manufacture the product and then sell it with profit.

When they run out of stock, they have to manufacture the product again in order to earn money.

If their production stops so does the income.

An online business on the other hand creates information and ideally – digital products. The information on how to tie a tie for example does not have to be updated every month!

And creating a digital product costs you only once – after that there are infinite copies of the product.

This is the single most advantageous factor of an online business compared to an offline business: you have unlimited copies of your product!

I created a set of videos for tennis beginners in April 2007 and still made 337 sales in the last 12 months.  I worked hard for 3 months to create that product and have been earning income ever since.

Clickbank earnings

Starting An Online Business Or Looking To Make Money Online?

The key to long term success though is to build a stable online business. But that still requires effort and time and some money invested.

The more exciting and on the first sight more profitable approach is to try and make money online.

That’s why there are 15 times more people looking for information on how to make money online than people looking to start an online business.

make money online searches per month

online business searches per month

Making money online is for most people the search for the best way to game the system and to earn the most money in the easiest way.

I understand that approach as I have used it too in the past – and it worked really well for some time.

But eventually every trick will be abused so much when the masses learn about it that major search engines will change their algorithms and advertising networks will lower their payout and the latest trick will not work anymore.

Building a sustainable online business on the other hand is the approach that will work in the long term.

The key to success is to approach it EXACTLY the same as you would starting an offline business.

The only difference in the long term will be much higher profits as you’ll be creating digital products with infinite number of copies and you’ll be able to reach millions of people instead of just a few thousand that pass by your store in a typical month.

My personal recommendation to start your online journey if SBI! And I also offer to help you out at the beginning stages.

But even if you don’t choose SBI, you should seriously consider starting an online business with another system because of its many advantages compared to an offline business.

And if you’re still not convinced that the current financial system is unstable, then I warmly recommend that you get yourself a copy of the Oscar winning movie Inside Job.

You’ll see what kind of people are really pulling the strings in the background and that because of their greed and obsession for power the next financial crisis is inevitable in the near future.

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    12 Comments

  1. This is very inspiring.

    A few years ago, I started a traditional service business that was unustainable. I made a very small profit for each sale but had to spend a lot of time providing a service. The more sales I made, the more time I had to spend.

    Here was the real problem. If I made too many sales, at some point, I would not have time to continue doing all of the work myself. However, the amount of profit would not cover the cost of hiring someone to do part of the work.

    In other words: at some point, more and more sales would mean less and less money.

    Now, I have started an SBI site, and I love the advantages of this online business model:

    1) More sales do not mean higher costs.

    2) More sales do not mean more time working. I can continue to manage it all myself.

    3) I get paid in advance (by credit card) instead of having to manage a negative cash flow and chase clients for payment. And I don’t have to worry that clients will default on payment after I have spent money and time on production.

    Tomaz, I am really impressed at your sales numbers for your tennis videos. Would you be willing to talk about your marketing strategy for this product?

    A couple of months ago, I launched my first digital product through an SBI site. I made about 60 sales to my newsletter list when I sent out the “launch mail,” but I’ve made only a few sales since then. People are not buying it directly from the website.

    I would like to learn how to continue selling a digital product over time, the way you have.

    Thanks so much for everything you share on this blog.

    Nancy

    [Reply]

  2. Starting an online business to make money is unquestionably the smartest thing anyone who is a hard worker can do.

    Fortunately, it is a LOT of hard work. And most people just can’t deal with making 30 cents a day for hours and hours of work. They can’t see the long term payoff.

    Good for us, I guess 🙂

    [Reply]

  3. I think the biggest thing you need to do is dive into the online world and see how things work. I got into the online world two years ago. Now that I am in the online world, I have a much better understanding of how things work. You can’t possibly make judgements about an online business if you aren’t willing to get involved.

    The best thing about an online business is the start up costs are minimal compared to a brick and mortar store. It’s a minimal risk with a possibility of high rewards. You can’t ask for much more than that in today’s global economy.

    [Reply]

  4. Nancy – I don’t really have a special marketing strategy – except to presell the products with lost of free articles.

    I also got around 1000-1500 daily visitors to my tennis site so making a sale per day is actually not that good. ;(

    Of course, that’s why I need to create more products to satisfy the needs of different tennis players – some want instruction, some mental and some strategy topics…

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  5. Thanks, Tomaz. I am clearly doing something wrong. My website currently gets over 2000 daily visitors, and I am only selling 1 digital product per week. I am going to try making the product more visible on my site. I also probably need to improve my sales page.

    [Reply]

  6. Great article for these economic times, Tomaz. You don’t even need a product to make money online. I started a content site to try to supplement my retirement income. It took a lot of time at first, but now I’ve doubled my retirement income.

    Many of our retired friends have had to cut back in this economy, but because of my online activities, our income keeps growing a little each month. Now I’ve started a second site and mapped out a third.

    Online is definitely the way to go, if someone has the patience work at it and keep going until success catches up with you.

    [Reply]

  7. Online businesses absolutely trump offline businesses. And the harsh learning curve just makes it better for those of us that persevere.

    One note, with 3D printers becoming more common we’ll have to expand our definitions of “digital products”.

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  8. Good niche idea (3d printers), Nancy! Have you registered the domain yet? 😉

    [Reply]

  9. Good post Tomaz. I was thinking as I was reading the post how you really don’t need to create a product. Then I saw Gloria’s comments above. Of course I don’t have to tell you this Tomaz as you have an extremely successful site where your income is mostly as an affiliate.

    Tomaz is right about SBI also. I tried to succeed in the “get rich quick world” trying one shiny thing after another. I have more traffic after 5 months with my new SBI site than I ever got with a multitude of sites before. There is no secret but discipline and hard work. Thanks Tomaz.

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  10. One other point: The amount of learning you go through with SBI is tremendous and the information about generating website traffic and monetizing can be very helpful in other businesses too.

    It is a slow process. It’s a marathon, not a sprint, but the reward of passive, residual income is worth the effort.

    [Reply]

  11. Great post and great comments. Thank you Tomaz for this site!

    [Reply]

  12. I also have to second that creating an online business whether it would be selling your own product, getting involved in affiliate or MLM is probably a wise choice for a person to make if they want long term financial success.

    However, it’s not for everyone as I observed it from some people. People are used to working for a boss and not for themselves, which is perfectly fine.

    As a Fresh-out-of-high-school-man, I’ve decided that I would take the path for my own future by studying software engineering so that I would have the basic concepts of producing software and marketing it, without physically producing it.

    Times are getting interesting as more and more people are looking for ways to make money from home. It’s not an easy path, but it’s worth the bruises and trips.

    Very Inspiring,

    Doosca.

    [Reply]

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