Brainstorming is one of the most important parts of your strategy for making money online. It is often skipped over quickly as we are all in a hurry to make money. Picking the correct niche market is vitally important when you first start making money online because you probably don’t have a large budget and you need to create some money quickly. If you choose a niche that is too competitive, you might end up spending all your budget and never get noticed. If you pick a market that is too small with low margins, you may find that there is not enough traffic for you to generate any income.
So what type of market is best and what type of competition can you handle with a small budget. Well, here is a mistake that most new marketers make when they decided to make money online. They think that they should create an e-commerce store like Sears, Walmart, Best Buy, Bass Pro Shop, JC Whitney, and other large stores that sell all sorts of products. I do realize that those companies are making millions and even billions of dollars and that would be nice to have, but we are going to start out with something realistic. Remember, we don’t need to make 1million dollars right now, we just need to make $100 per website per month. The best type of market is a market that has high profit margins, good traffic and low to medium competition. I want to find niches that I can make $10-$100 per sale using an affiliate program with the long term option to sell these products via drop shipping or wholesale.
When I have this mindset of the type of market that I am looking for, I will take a notepad and write down some ideas. Usually I will start with some markets that are personally interesting to me. For example, I am interested in the automotive industry. So I think about things that I could sell in that industry. Here again, I wouldn’t want to create a website that sells every type of auto, every type of automotive part, and every tool used for the automotive industry. I want to narrow down my focus quite a bit. So I will begin at the top, should I sell cars, well there is a lot of paper work and licenses required to sell cars, but I could sell car leads. Many auto dealers will buy leads for up to $50 dollars per lead. So I could call around to local dealers and see what the going rate is, but this will not fit my future e-commerce drop shipping or wholesale model. So I will move on to something else. I could sell parts for cars, or sell tools for mechanics, but then I would be competing with Auto Zone, Advanced Auto, Mac Tools, etc…. So, for me I want to choose something more specific that has large margins and less competition. I could still compete in the parts industry or the automotive tool market, but I want to focus my sites on specific tools or specific categories of parts. Normally I will pick up a magazine or browse the web and go through some of the categories. So for the examples that I used… Lets say we are looking at car parts. I find that the more expensive parts have to do with racing or extreme use of parts whether for show or off-road. So if I narrowed my site down to racing parts, I would find that the market is still way to competitive. (we will cover how to determine market competition in a future post) So a market that would be ideal for us would be something that would be a niche within that market. Such as selling performance headers, race suspension, racing seats, race fuel cells, etc… When you break it down to this level you are able to focus your site on a niche that is a sub category of your main competition. Also, you can often find domain names with your keywords for you niche which also gives you an edge on your competition in the search engines.
Now that you see how we find niches it is important to realize that just because you are building niche sites doesn’t mean that you can’t compete with the large market giants. You will just go about it in a different way. One main advantage that you have over them is that you can move faster than them. Once you get your strategy going, you will be able to build hundreds of websites in no time at all. This means that you gradually take over the market 1 sub category at a time and before you know it you are dominating the market with hundreds of sites in their niche.
So to conclude this post about brainstorming, I would say that I don’t always look for crazy ideas that no one has ever tried, or come up with weird niches that no one has ever heard of. I just take successful markets and break them down to a level where I can compete.
Oct 10
10
How To Make $10k per month – update
The first month has been completed for our case study and in that month we were able to update or build 11 different websites and we passed our first goal of $1500 by about $500. This month we have a goal of $3000 and we have already passed $2000. I think part of why we are doing well at this point could have something to do with the first niche that we have decided to market, but it will be interesting to see how things go with other niches.
So finally I have decided to create a case study on how to make $10,000 per month. I have not done this yet, but this is my goal in the Case study. The way that I will attempt to accomplish this is by creating 100 websites that make at least $100 per month on each website. You see it is not difficult to make $100 per month on 1 website, so I figure that doing that 100 times should not be that difficult. My goal is to complete this before January 2011, but I am not sure if I can complete that or not being that it is almost October and I am just getting started. Also, I have a baby on the way in a few weeks, so I am sure that my life will be getting a little bit busier with him on the way.
My name is Matthew Longley and I have been internet marketing for about 4 years. I have managed SEO for several companies and I run my own full-time SEO business (Site Source 101). I have read tons of the guru E-books, tested as much SEO and link building software that I could get my hands on, and tried most of the get rich quick schemes online. It took me a little while, and I guess we all like to look for the easy way out, but after meeting many of the gurus and trying their training, I realized that most of them don’t actually make their money practicing what they preach, they make their money when we buy their products. So, one day I decided that I would just do what I know works and forget about all the other hype and guru training that is out there.
That was the day that I started studying from people that I knew I could trust, and that always gave me good advice. I didn’t always like their advice because it usually involved work, but I knew what they said would work. So I began to follow their advice and most of them told me that it is important to test everything and just do what you find works well for you. So after doing that for a couple years, I have found some strategies that work well for me and my clients.
Now that I have found some strategies and systems that work well for me, I plan to implement them for this case study to show others how they can make money online starting from a small budget and working your way up to a nice passive income.For this case study I will not be able to reveal specifics on the niches that I am working on, but I will reveal the strategies that I use and reveal what I do to find good niches. That will be enough information to help you and also to protect my websites and markets that I am involved in.
The basic principle that I will be using when working on this strategy is that I want to create these sites with the end goal of converting them into e-commerce websites. So at first I will start out using an affiliate program for a product, affiliate programs normally average about 15-25% profit depending on the niche. Then I move to drop shipping e-commerce, there is usually a 25-30% profit with drop shipping. Then I will move to wholesale e-commerce and normally make 30-50% profit. Those numbers really depend on the niche as some niches have very small margins, such as electronics, and others have very large margins, such as alternative health supplements. I don’t always want to move to wholesale site because when you sell wholesale you usually have to warehouse your own products and depending on the size of the products, that can be more of a hassle then it is worth.
Here is the basic affiliate strategy that I use for creating affiliate websites. It is really simple in this diagram but I will cover these items in more detail in the future.
Once this process is completed and the site is producing over $100, then I will revisit the site and determine how I can increase the profits on that site. Once the site is healthy and it seems that the niche is profitable, it is then time to consider converting the site to e-commerce and carrying your own products. This allows you to increase your profit margins and also ads value to the site if you ever decide to sell the site or business.
In my next post I will go over the different areas of the affiliate site cycle and also update you on my progress on this case study.
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