Newbie Guide 3
In this final part of this Newbie's Guide to eBiz we will look at some pros and cons of the part I business models and the impact of the business concepts of part II. To review, basic business practices are critically important to any of the various business models so make sure you investigate and research good basic business practices.
Affiliate and dropshipping are eBiz models that are very close in concept and practice. The basic difference is that affiliate programs make fixed commissions on what is sold where dropshipping is more like a typical retail outlet where you buy from a wholesaler who is willing to ship directly to the buyer and you decide your profit margin. You can also add the true wholesale model here but we discourage newbies from buying into a wholesale purchases in lots unless you are very comfortable with concepts like inventory and accrual over time. Wholesale has much potential for profit margin and can be applied in the auctions area but has higher risk.
Affiliate, dropship and wholesale/retail business models are normally marketed with a website either a content or straight ecommerce store. Affiliates is perhaps the "easiest" and we use the term loosely, since your sales are generated through affiliate links that can be more generalized to the entire affiliate website' inventory. Dropshipping requires keeping up with your wholesaler's inventory and specials so it takes a little more attention. The advantage to both of these models is that you don't need to stock inventory, keep up with shipping and the providers deal with returns & refunds. The disadvantages are relatively low conversion rate, low profit margins and requirements for lots of traffic
Millions of dollars and many a comfortable living are made off of eBay, and still can be but don't be fooled about it being easy. Every newbie interested in eBiz needs to understand the nothing is easy else everyone would do it. If you can find a reliable and cost effective source of products then there are advantages of plenty of customers with little overhead. The auction model is very competitive and saturated. The disadvantages far outweigh the advantages in or opinion. Aside from the fact that an auction is absolute and the highest bidder wins regardless if it covers your cost or not plus you have to deal with shipping, returns, and pay the auction company a commission on successful transactions.
Blogging is another questionable business model although it is inexpensive if you have the time to write, can attract interested users, get some help through contributors and convince others to invest in advertising on your blog. The biggest disadvantage is the shear number. There is no authoritative list but estimates that we have seen are definitely in the millions. Of course you can use your blog to plug certain products for affiliate products but we recommend blogging more as an advertising medium than a source of income. Beware of the schemes of “blogging for dollars”.
eBooks and software is a good business model for many reasons but primarily because there is no physical product. The products can be delivered instantly, no shipping or handling. You don't even have to create your product. You can pay a freelancer to have something created, purchase a private label rights (PLR) product for resale, or become an affiliate for other eBook authors. eBooks are arguably the best “bang for the buck” since you can sell product in many niche markets. Clickbank is the premier resource for publishing and selling eBook/software products.
Services market may be a good choice for those looking for extra income and not necessarily a residual income. There are plenty of available programs out there for things like transcription, claims processing, and even article writing. The biggest disadvantage is these are like your JOB, you have to do something to get paid. If you have technical skills there are some great opportunities in web development and programming.
The University of Biz is a resource for the newbie to cut through the confusion and not spend a fortune in exploring eBiz opportunities. We do not believe that you should be forced to spend a lot of money to find out the basic truths of ebiz. This article attempts to summarize the various areas of opportunity with some considerations for each.
Affiliate and dropshipping are eBiz models that are very close in concept and practice. The basic difference is that affiliate programs make fixed commissions on what is sold where dropshipping is more like a typical retail outlet where you buy from a wholesaler who is willing to ship directly to the buyer and you decide your profit margin. You can also add the true wholesale model here but we discourage newbies from buying into a wholesale purchases in lots unless you are very comfortable with concepts like inventory and accrual over time. Wholesale has much potential for profit margin and can be applied in the auctions area but has higher risk.
Affiliate, dropship and wholesale/retail business models are normally marketed with a website either a content or straight ecommerce store. Affiliates is perhaps the "easiest" and we use the term loosely, since your sales are generated through affiliate links that can be more generalized to the entire affiliate website' inventory. Dropshipping requires keeping up with your wholesaler's inventory and specials so it takes a little more attention. The advantage to both of these models is that you don't need to stock inventory, keep up with shipping and the providers deal with returns & refunds. The disadvantages are relatively low conversion rate, low profit margins and requirements for lots of traffic
Millions of dollars and many a comfortable living are made off of eBay, and still can be but don't be fooled about it being easy. Every newbie interested in eBiz needs to understand the nothing is easy else everyone would do it. If you can find a reliable and cost effective source of products then there are advantages of plenty of customers with little overhead. The auction model is very competitive and saturated. The disadvantages far outweigh the advantages in or opinion. Aside from the fact that an auction is absolute and the highest bidder wins regardless if it covers your cost or not plus you have to deal with shipping, returns, and pay the auction company a commission on successful transactions.
Blogging is another questionable business model although it is inexpensive if you have the time to write, can attract interested users, get some help through contributors and convince others to invest in advertising on your blog. The biggest disadvantage is the shear number. There is no authoritative list but estimates that we have seen are definitely in the millions. Of course you can use your blog to plug certain products for affiliate products but we recommend blogging more as an advertising medium than a source of income. Beware of the schemes of “blogging for dollars”.
eBooks and software is a good business model for many reasons but primarily because there is no physical product. The products can be delivered instantly, no shipping or handling. You don't even have to create your product. You can pay a freelancer to have something created, purchase a private label rights (PLR) product for resale, or become an affiliate for other eBook authors. eBooks are arguably the best “bang for the buck” since you can sell product in many niche markets. Clickbank is the premier resource for publishing and selling eBook/software products.
Services market may be a good choice for those looking for extra income and not necessarily a residual income. There are plenty of available programs out there for things like transcription, claims processing, and even article writing. The biggest disadvantage is these are like your JOB, you have to do something to get paid. If you have technical skills there are some great opportunities in web development and programming.
The University of Biz is a resource for the newbie to cut through the confusion and not spend a fortune in exploring eBiz opportunities. We do not believe that you should be forced to spend a lot of money to find out the basic truths of ebiz. This article attempts to summarize the various areas of opportunity with some considerations for each.
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