Work From Home Online Guide

There are really only two ways to monetize a website:
1. Get traffic and use it to sell goods or services that you own; or
2. Get traffic and sell that traffic to other site owners who are selling goods or services that they own.
As you learn more about working from home online, you’ll find that you can look at anyone’s website, even the big players like CNN, and know exactly how they’re monetizing. And their monetization methods will always fit into one of these two categories.

Category 1: selling your own stuff. That stuff can be a physical object (like a tool or a toy), or an electronic object (like a software program or an e-book that you own the rights to), or a service (like web design, which you can sell to anyone in the world; or lodging at your bed and breakfast, which requires your customer to come and visit you in person).

Most online entrepreneurs are chasing Category 1 monetization methods because the income potential is theoretically very high. But with that high theoretical income, you get lower odds of success. There are two reasons for this. First, it’s harder than you think to create a product that people are willing to pay enough money for to keep you in business. And second, online customers have no loyalty whatsoever–they’ll surf the net for hours to buy something at a lower price than you’re offering, no matter how much you cater to their emotions by offering them entertaining and engaging content. These two factors are the reason that most of the websites successfully selling their own stuff are large companies with access to a lot of cash for product development and promotion.

It’s true that a few of the A-list internet marketers somehow get away with selling 30-page e-books that they wrote themselves for $67, if they hype the product relentlessly and get an army of affiliates to buy advertising for them. But beware of the average newb’s claims that he bought a Lamborghini this year by selling e-books. Internet marketers are infamous for puffing their sales numbers. In reality, the refund rate on e-books is very high. And the majority of the book-buying public thinks that e-books are worth less than a book that’s printed on paper, not more. The odds are a bit better if you’re a programmer and know how to write software, but they struggle too. The biggest complaint seems to be the risk of spending a year or more writing a program that the public turns out not to want to buy.

If you’re determined to sell your own stuff, your best prospects are in selling hard-to-find physical merchandise, or using a website to sell online services one customer at a time, or using a website to get more customers to your bricks-and-mortar business. Don’t think you’ll get rich using a website to sell the shipping container of cut-rate power drills from China that you bought “wholesale” on Ali Baba. Just don’t.

Category 2: selling your traffic to other site owners who are selling their own stuff. In this scenario, you’re an independent salesperson working on commission, which is the internet business model best suited for the solo entrepreneur with no access to venture capital. Initially I was very resistant to this monetization approach. I didn’t want to sell–I hate selling. I also didn’t like the idea of someone else owning the product I would be depending on for my livelihood. I wanted to be completely self-contained and hang on to every cent of income that my business idea generated. It took me a year of spinning my wheels creating product after product that didn’t sell before I was ready to look at what other solo website owners were doing and admit that maybe–just maybe–they were smarter than me.

There are three ways to sell your website traffic online. The first is to set up “billboard” type sites and populate them with syndicated advertising from ad brokers. The most established of these is Google’s AdSense for Content program, where Google gives you a 20% to 30% commission every time one of your visitors clicks a Google ad running on your site. Most of the ad brokers only pay you a commission if your visitor takes some action, like clicking on an ad. The big sites with hundreds of thousands of visitors a day are the only ones that can collect money simply for running an ad that people look at. Making money with Adsense is one of the best ways to monetize your website.

The second way to sell your website traffic is with affiliate marketing, where you set up a page selling someone else’s goods or services. You get paid a commission every time someone uses your page to find the owner’s order page and buy his stuff. More and more companies are setting up affiliate programs that you can join and make it easy for you to set up your site with them. In fact, a number of solo site owners report that the two biggies, Amazon and eBay, make them the most commission dollars, because their customers know and trust those names. You should also check out Wealthy Affiliate review for another take on this type of income.

The third way to sell your traffic is by compiling an opt-in e-mail list from people who visit your site, and let other internet marketers use your list to sell their stuff. When you hear the term “joint venture” thrown around, this is what it’s referring to. It sounds impressive, but it’s really as lowbrow as selling your mailing list. If you see the acronym CPA in internet marketing, it stands for “Cost Per Action,” and it refers to how much another site owner will pay you for gathering names for an e-mail list.

That’s monetization, and it’s the first thing you should think about when you decide to work from home online. Don’t–I repeat, do not–choose a topic for your site based on your interest or “passion” alone, put up a site, and only then decide how to monetize it. Instead, your first question should be, “If I put up a site about X, how will I monetize it?”

Other than that, I strongly urge you to sell your traffic, not your stuff, when you’re first starting out. You can’t make money online without traffic, and getting traffic is a full time job in itself. Add on the time it takes to develop a product that real customers, other than the very gullible, will pay money for, and suddenly you’re no longer a solo entrepreneur. Know what you’re doing before you go down that road.