Making A Living Online – The Numbers You Need To Know
My first thoughts about making a living online were predictably naïve. I assumed that it would just be a case of getting a website up. The I’d fill it with products and sit back to watch the money roll in. After all that’s what I was seeing when I did my research. I’m not completely stupid and did realise that I’d need people to visit the website and buy things – but how hard could that be?
After all I was used to selling audio-visual packages for events and conferences where people paid (pre-recession) £20K or more for our services. Apart from my salary, car and smartphone, my end of that was 2% commission. If that customer booked us again in the same year I got 2%, after that – 1%.
When I looked at making a living online with an e-commerce store the numbers were a little different: My store sold wine and related products which netted me between 4% and 5% per sale. Of course the average sale was probably around £150 and if I left my job, there would be no regular salary.
They’ll Come Running Just As Fast As They Can – Won’t They?
But as I say, my naive impression was that millions of people would be visiting my website. If even 10% of those visitors bought something I’d be rolling in it! It (I imagined) would be almost like going to door to door selling things everyone wanted for a tidy profit. Better still, the door stepping would be 24/7/365, worldwide and effortless. I wouldn’t have to deal with storing or delivering products either – Amazing!
What I hadn’t reckoned on was that whilst that scenario can be close to the reality of making a living online – getting those visitors (the ones that might buy that is)- is neither free nor easy. I had chosen the wine niche with the reasonable assumption that most adults like it. Already the potential market was shrinking (though still vast) when I removed everyone under 16 and everyone who doesn’t like wine. No point in targeting them.
Then I discovered that the free methods of getting visitors to my site I’d been taught weren’t that successful. I’d have to do paid advertising to get quality traffic and when I started looking at that I could see the numbers changing again. I mean how much is it worth spending on advertising to earn a £5 – £20 commission?
Then It Dawned on me ……
Maybe if I became seriously great at internet marketing and advertising I could get my costs down. But it soon dawned on me that even with a constant tide of visits and sales and an acceptably low cost per sale, this was not a good model.
Like my work based sales commissions, it was possible to earn from repeat sales, and wine lovers, like myself, do get through a fair bit of the stuff, but still, the numbers were not stacking up.
This is actually what stops a lot of people from making a living online. The numbers. If you start as most do, by selling other people’s goods and services as an affiliate without looking hard at the important numbers you’ll run into trouble.
Those numbers are:
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Your average customer value
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Your average customer cost.
If the second is the same or higher than the first – you’re on to plums.
Making A Living Online – Why The High Ticket Approach Wins
So It was eventually obvious that it would be easier in many ways to sell high value products or services. In simple terms my 2% earnings on a £20K AV package – £400 is way better than 5% of a £200 case of wine – £10, especially if the cost of those sales was equal. There’s also the repeat sales to consider.
This is why you should, with those two important numbers in mind, look at “High ticket” goods and services if you’re serious about making a living online. There are some other good reasons for this other than the obvious profit margin…
The most advantageous high-ticket products are in the information space: Areas like E-learning, personal development and training. Why? because if you sell those types of things they’ll often include several automated income streams and the ability to build residual income from recurring membership fees.
From Small Seeds To Big Trees
The very best high-ticket affiliate programmes will also put your customers into a sales funnel. Here’s how that works. You introduce a new customer to the product line. Usually that will involve a small initial sale, which you are paid for – often the entire value or close to it.
That customer is then introduced to the deeper product line. They might, if the products/services are good and you’ve introduced the right type of person to them, go on to buy a membership. That would pay you another, higher commission AND a slice of the customer’s monthly membership fee. Now you are starting to make a living online. Really great sales funnels will offer your customers progressively higher priced products that you will be automatically paid commission on.
Why Putting Most Of Your Eggs In One Basket Can Be Smarter
You can see from this that with a high-ticket affiliate marketing business your job is simply to introduce new customers – via your marketing efforts – to the sales funnel. With no further effort (or cost) to you a £20 commission can turn into a £200 commission and possibly a monthly recurring £20 commission, Should that customer decide to purchase other products your commissions could be into the £thousands.
To my mind the best high-ticket affiliate programme is offered by SFM and DEA. In fact I’ve just outlined their business model. Money wise it’s very lucrative but it get’s better. They also provide you with the best online marketing training on the market, geared to selling high ticket, high commission learning and business products. As an SFM/DEA member, you use the products you sell.
So you’re starting with all the best pieces of the making a living online jigsaw: Superb products that you can be proud to promote and use yourself; Extremely profitable sales funnels; Residual income streams; All your tools and resources in one place; Ongoing training and mentorship The ability to use all of this to create multiple online businesses and income streams as you are not – like a franchise – tied in to one set of products.
If you’ve seen the logic of this and are serious about making a living online I’d recommend you check out SFM and DEA. Do so via their completely free intro video series by clicking the image below – or any image in this post.
