How many of you think starting a business online is too hard or unrealistic, or maybe you think the numbers aren’t worth it.
A lot of people have this misconception of the economics behind an online business, and like every misconception, it’s because of a lack of knowledge.
There’s a lot of stories of people failing, or more accurately, people giving up and this has a ripple effect on everyone else. From the person having seconds thoughts on starting, to the person somewhere along the journey thinking of giving up.
All these doubtful Debbies make it harder for everyone else emotionally to find the courage to start an online based business.
I’m here to dispel all that negative loser talk, and shed some honest light on the real situation of making money online.
Is it all happy days and sunshine? No, not at all.
It can be frustrating, tedious with many long hours. But it’s not a waste of time, effort or money IF you’re committed AND know what you’re doing.
I’m not going to talk about the business knowledge of whatever business model you want to take on, nor am I going to talk about the entrepreneurial spirit needed to succeed.
I’m JUST going be talking about the facts and figures that are pretty much relevant for every form of online business.
Including my own.
First off, how much does an online business need to make for it to be worth it for most people?
If it’s passive, not a lot, I’m sure most people would be happy and willing to put upfront effort if they can get a few thousand dollars every month to cover rent or bills.
But if it’s active income then all those long nights and endless worrying needs a bigger monetary reward.
Let’s say $10,000 USD per month. (that’s already a 6-figure salary!)
So what does it take to make $10,000 USD per month?
Not a lot. Let me give you a few examples using industry averages.
(this article will not use an optimistic approach, just realistic averages I found around the web as well as my own personal experience)
How difficult it is for you to make $10,000 per month comes down to how much the product or service you’re selling. A couple cents per view on a Youtube channel is going to seem impossible unless you have a million subscribers.
But if you’re selling a product for $1000, then you suddenly only need 10 customers per month.
And before you start thinking it’s unrealistic to sell such an expensive product, then I’m going to tell you right now.
That is the secret to gauranteed online business success.
Of course, not everyone can sell expensive products, it depends on what niche you’re in and what business model you plan to use.
My Kindle publishing business makes nowhere near 10k per month, in fact its 1/5 of that. $2000.
At a profit margin of $2 – 20 per unit sold, reaching $2000 per month is already a great achievement. To make it to $10k, I’d be looking at 5x my sales numbers. That’s not an easy task.
So I started affiliate marketing.
My programs made me anywhere from $3 – 100 per sale, and this was the moment I understood how online business worked for small solopreneurs like you and I.
It’s all in the numbers.
Instead of selling 400 – 500 books to reach $2k, I just needed to sell about 40 units of various products.
And I’ll be honest, Kindle publishing is still easier because of the special business model it has, but the difference in the numbers made me realise this applies to EVERYTHING ONLINE.
From drop shipping to blogging to video courses and everything else.
The profit margin is the key to your success and how fast you will achieve success.
The Math Behind it All
The fewer sales you need to make, the easier it is for you to reach your monetary goals with the same amount of effort. Which is great! because it means you can make $5k, $10k, or even more with the same working hours, as long as you pick the right products to sell.
With $100 affiliate commissions from Siteground, I was reaching $2k a month with just 20 sales.
That’s less than 1 sale a day!
You don’t need a lot of people clicking your link for the odds to be in your favour if you just need one person to buy.
In fact, you realistically only need 2k – 4k page views/ traffic/ clicks a month to make 20 sales.
Why? because internet averages for successful conversion is 0.5 – 1%
That’s the average, not the top performers, just the average.
Are you feeling excited and hopeful now? I know, its hard not to be.
But if it’s so easy, why do so many people give up?
There’s a lot of reasons why people give up. Entrepreneurship is a rollercoaster ride to say the least.
I’ve lost count of the number of times I have questioned every decision I’ve made in my life because things weren’t going how I thought they would.
I’ve thought of giving up on this very blog, MDW many times at the beginning. I wasn’t getting the traffic numbers and it was disheartening to think I might need to grind endlessly for another year to reach big 6-figure traffic numbers.
And that’s the thing. I was focused on the traffic, and not the product.
Most people focus on the size of their audience when they start making money online. It seems to make sense at first glance. But this can make your road to success seem out of reach.
The task of getting 100,000 page views, subscribers, followers is a lot more intimidating than a few thousand. The idea of selling several hundreds of books is more intimidating than selling a couple of dozen.
So how do you make $10,000 per month online without giving up before you succeed?
Sell or promote a product that gives you a $50+ profit for each transaction. The higher the better.
If you can find a product to promote or create your own that makes you at least $50 per transaction then you only need around 20,000 in traffic instead of the golden standard of 100,000!
As I write this, this site gets just under 30,000 page views per month and for the conversion rate, around 1%. I’ll let you do the math… 🙂
MDW isn’t a big site in any stretch of the word, but MDW makes me a full time income semi-passively, and that’s something many bloggers can’t say even with higher traffic numbers and stats.
Why?
Because the products I choose to promote and the quality of my traffic.
If you’re struggling to start or thinking of giving up, then scrap all your existing business goals. Find a product that makes enough profit and go from there!
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