Thursday, December 4, 2008

The Only Three Ways to Make Money Online

Sure, there are infinite methods of getting someone to pay you money online, but when you boil it all down there are only three different, wholly original ways to make money online. The three root business models.

First of all, you can sell something online. It could be a service or a product, perhaps even a non-physical token representing hope. Selling businesses and Franchises fall into this category, as does anything else at all that could be owned personally.

This business model goes back to the days when commerce was invented. Cavemen used this business model and it didn't change very much when adapted to the internet.

At the far end of the spectrum, the second way to make money online is by being a publisher of advertisements. If you have any possible form of content online, you can simply rent out the Ad Space beside it. Advertisers, most notably the Google AdSense program, make it very easy for you to make money from Ads that you display along with your content.

Ever since the first newspaper was mass marketed, Ad space has been sold. It is still very big business in the offline world, but with the invention of the Google AdSense program in 2003, the online format got a major popularity boost and today there are few websites NOT employing this tactic in some form. Even our daily eMails have been invaded by this business model, and before too long someone will figure out how to include advertisements along with everything else we say, including the spoken word.

It is interesting to note that business models 1 and 2 do not play nicely together on the same website. For instance, if you have a web page that sells something for $29.95, offering AdSense ads on the same page is probably not a good idea because some potential buyers might see the ads and exit your site through one of them before you make your sale. So instead of getting $29.95, you wind up with a small amount like 6 cents, or sometimes nothing at all because too many choices can scare people away.

Finally, the latest contender to these ancient business models is affiliating. To sell for others and earn a commission. This can be done many ways online to earn a living, across a broad spectrum of appearance. For instance, you might develop a whole website based on selling one particular product, or even multiple such websites for the same product, each targeting different keywords.

On the far side of the spectrum, there is a very easy technique that most of the Internet Marketing community seems to thrive on. They simply post as many small Advertisments, email Ads, Blog, and even forum postings out there that they can with their affiliate links, sometimes using multiple affiliate links at the same time.

This business model can compliment either the first or third business models just fine. That's because it falls right in-between the other two on the monetary spectrum. Placing AdSense Ads along with affiliate links on a website is ok, as no matter what they click, you make money. Meanwhile, placing a few well-selected affiliate links on a sales website won't destroy your sales, it might in fact compliment them because you have such control over which products you affiliate for.

There are simply no other ways to make money online, and probably offline either that don't fit into these definitions. You've simply got to choose which one fits your mindset and resources the best.

Choosing which one is the overall best business model, however, is not practical. A set amount of effort can produce the same income from each. Let's look at this in another format:

Sell something for a living = few sales x big money

Affiliate sell for a living = Dozens of sales x medium money

Place Ads for a living = Millions of "views" x tiny money

They are all three directly proportional to the amount of work you put in. Even within the realm of Affiliating, if you make a single website that spends 10 pages preparing visitors to click an affiliate link, you should have roughly 10 times the success as a single page doing the same job... In the end you get paid X amount for the proportional amount of work you put in.

It didn't take the internet to discover this principle; it is all around us in the offline world as well. It just took the internet to make it obvious.

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