Another day another waste of time
You know things are getting bad when you starting seeing ads for “cashback websites” on primetime TV. The latest one I’ve noticed are “quidco” who are a UK firm (where I live btw) who offer you money back if you buy certain products/services through their site, it’s essentially a big affiliate program. Don’t get me wrong you can in theory earn some money with this but the idea of making back £5 on £1000 life insurance policy doesn’t exactly get my pulse racing. I have visions in my head of happy consumer’s spending money on sub-par products just for the cash back, don’t forget:
You still have to buy the product!
Also bear in mind that you’re handing your personal details over to these guys who will most likely be spamming you to death for the next 100 years until you finally tap-out. Am I a born sceptic or just hard to please, I can’t tell but my view on these “free for all” systems that allow anyone to make money has never really changed, it can’t work, it doesn’t work and it never will.
One thing I will say is you can’t really lose anything with these cashback schemes apart from your time, this is different from the daily “stock market secrets” eBook that gets pedalled to my junk folder. The real scams always involve some crazy up-front investment with promises of millions down the line, I wonder how many people get sucked in, probably more that you’d think.
So is it possible to earn real money on the web?
Well yes it is but as mentioned many times before it always involves time and effort. Sometimes it’s in research of the idea/concept and sometimes it’s just 100% application. My main money making “scheme” is web-development and internet marketing which in a nutshell is building websites and getting as many people too them as possible (like how I summed up a few years work in one sentence?). Well actually it’s not going to take years but at the same it’s not like you’re going to get to a certain level and quit, its lifelong learning and not in the pretend university way.
The Idea that I have a system is also a bit of a misnomer, I have concepts and ideas that are never set in stone. The web is constantly changing and how people are finding websites is too, just look at the rise of social media companies like facebook and twitter. Traditionally seo people are terrified of social media but I think it just provides even more opportunities, ten years ago if you wanted to reach a few million potential customers it would cost you thousands. Now with a good idea and some effective viral marketing you can do it for about a £10!
Still you’re not going to see any of these money making ideas that actually work in the mainstream any time soon, its way to complicated to fit into a 30 second TV spot. Until next time…
There’s no out of the box for making money
I hope this isn’t one of those posts that repeat’s something I’ve already made clear, even if it is it’s probably worth saying again. So we all know that there’s loads of get rich quick scams on the net and I suppose to an extent most of us are immune to them (I hope). However the question remains, is there a way to earn money online out of the box? Well the short answer is no for one main reason, out of the box implies easy with no work. If it’s that easy then everyone would be doing it, and by proxy it probably wouldn’t work anymore.
I’m not trying to say that everything needs to be complex to work but I can guarantee if its point and click it’s unlikely to produce results on its own. That doesn’t mean simple ideas can’t be part of a much larger money making plan, for instance:
- WordPress CMS, 5 minutes and you have a website.
- Cheap web-hosting that’s point and click to setup.
- Contacting other webmasters to promote your site, time consuming but simple.
The thing is I keep seeing people starting up these out of the box ecommerce sites selling the exact same products at the exact same prices as everyone else, why bother? Everyone seems to think that “internet” is a magic keyword that results in instant money. You look at some of the most successful net businesses and while the infrastructure they used was simple the concept and idea were unique and original.
I really think that in order to put together a collection of ideas that work you need to try a lot of things that don’t. This too is another stumbling block as fear of failure can be a major hurdle for anyone starting a business on the net.
Foundation 07 // Chris Sacca from Kevin Rose on Vimeo.
Also on a slightly unrelated note I wanted to post this great video by Kevin Rose I found. It’s one of a series where he interviews successful entrepreneurs and tries to decipher their methods. It’s quite long but I promise its worth a watch, only problem with these kind of videos is they can be quite addictive, information overload can be a real problem!
What is Pay Per Click? It’s not cheap and not easy
I promise this is going to be a short post, mainly because I’m not that experienced in pay per click and also its way too detailed a subject to explain in a single article. At a basic level PPC is where you pay a search engine directly for traffic that has searched for a specific keyword, the only difference between PPC and SEO is that you’re paying, it’s the same visitors searching for the same things. I suppose there is one other really crucial difference and that’s that you can lose money with PPC in a way that you can’t with just organic rankings. When I say you can lose money what I mean is that you could buy this traffic for any keyword but there’s no guarantee the traffic is going to convert into sales, it’s a risky business.
So it may sound quite simple so far, i.e. all you gotta do is give google some money and they display your ad on the search results, but it’s not so easy. For a start there’s a few mystery formulas that decide how much you per for each click on your ad. Google weighs up the quality of your site and your account history to work out how much they want to charge you (I told you it was strange). Another big headache is picking the right keywords because if you pick the wrong one (doesn’t covert into sales) then you’re going to be out some money. Also bear in mind that to do a proper test to see if a keyword is profitable you’re going to have to stick with it for a while, I heard on average £400 before you can call it a day.
As far as I know there are two basic forms of PPC for earning money that marketers are using. The first is where your selling something online directly to people and you want to increase both sales and awareness of your store. The second method is where internet marketers create landing pages for offers provided by affiliate companies, i.e. they don’t actually sell the product they just forward you on. I suppose the second method seems pretty simple but the reality is that finding traffic that converts can be very difficult and also expensive if there’s lots of competition. However I do firmly believe that when it comes to income the top affiliate marketers who work with PPC are the ones making the most money on the web out of all of us. I’ve heard stories of PPC gurus making upwards of £500,000 on a single offer!
One common theme I do see with all PPC people is they are stats junkies! You see the margins in pay per click can be very close, quite often people are relying on scale to make any money. For example if you have a campaign where you spend:
75p per click X 10,000 clicks = £7,500
Conversion ratio of 5% = 50 sales
Commission per sale needs to be £150 + before you make a profit.
As you can see there’s a few scary numbers there, the most important one though is your conversion ratio. Even a 1-2% swing can be the difference between a profit and a loss.
I suppose it’s the “loss” factor that has so far stopped me from getting into the PPC game, with organic marketing the most I can lose is my own time, and while that is valuable too I can live with it. So that’s all I have on pay per click for the moment, let me know if any of you guys are having success with it or thinking about trying.
Are you wasting time on the latest scheme?
I was reading an article in the times (paywall) at the weekend about how more people are trying to work for themselves at home in the downturn. It was interesting as they talked about a number of income opportunities and people’s experiences with them. One guy they talked to was a kleeneze agent which if you’re not familiar is door to door selling with those catalogues. The way it works is they sign up for a kleeneze pack which gets them all these catalogues and they’ve got to drive round to 100s (maybe 1000s) of homes dropping them off. Then they’ve got to go back a week later and pick them all up (hopefully with some orders). So this guy was an unemployed graduate (so had some brains) but after 3 months he had only made about £300, plus he had to take his costs for petrol out of that! Interesting forum thread here too.
So here’s the main problem I have with this kind or direct selling, you’re trying to sell people stuff that they’ve never asked for and people are naturally resistant to that. I suppose people feel if something needs that much “selling” to make money then it probably isn’t a very good product. You don’t see Microsoft or Apple calling people up and asking them to buy stuff. Maybe what annoyed me more about the article was they didn’t feature any internet businesses on there, it was the traditional work from home stuff. To me that’s weird as more people than ever are asking me how they can make money using the net, it’s become a daily question in my emails.
Another worrying factor about this “scheme” is that most of the money seems to be earned from singing up other people under you. Because you get a percentage of what that person earns you can in theory make much more money signing up other sellers than distributing the catalogues. Indeed when you see claims of people earning thousands of pounds in the sales copy it’s more than likely because they signed up 1000s of other people and not from distributing catalogues. Now the only question is if all you have is lots of people signing up other distributors and not selling anything isn’t that just a pyramid scheme?
On the one hand I do kind of feel sorry for these people, after all there getting off the sofa and trying to do something with them-selves. But you can’t really expect some carbon copy scheme they sell to 1000s of other people to make you rich, it doesn’t stand up to reason. Maybe it appeals because they claim all you have to do is put in the work, you don’t need to do any thinking for yourself, just keep paying for catalogues and signing people up and it’ll work out. The people that do make money with it though learnt one very important thing though:
“Scale”
They figured out a way to signup lots of other “sellers” cheaply, essentially they worked out how to scale better than everyone else who was just signing up their friends. But here’s the thing, it’s much easier to scale online than it is in the real world. Going from 100 visitors a day to 1000 doesn’t cost you anymore in terms of running the site but could result in £1000s more.
I suppose in some ways this system is no different than the get rich online eBooks you see plastered all over the web, though probably the eBook will cost less in terms of time and money. I.E the guy in the article spent 3 months fulltime on this for essentially nothing. There’s no guarantees but if he spent that same time online learning the basics of internet marketing he would at least have some useful knowledge (that could be turned into money later). I admit it’s not an easy industry to get into with a million systems selling you a way to make money online that’s never been seen before. Still the knowledge is out there if you’re prepared to invest some time in finding it. That brings me back to one of my favourite words:
“Investment”
You see despite all these claims of working for yourself with a company like kleeneze your still working for them because you rely on them paying you and keeping the business model going. What happens if they go bust? This kind of money earning scheme is not an investment in the same way as building your own websites and experience is. You see for me I don’t just have one source of revenue online, I work with many different companies so if one fails to pay or does something I don’t like then its cya!
Investment in yourself can be scary though, what if it doesn’t work out? Well that can happen with anything, just look at the kleeneze guy, but he didn’t make an investment, he picked the simple option and saw pound signs. If I could say one thing though about where to invest yourself it would be to be able to solve a need or problem that people have, the bigger the problem the more money you can earn. You see these people receiving one of your 1000s of catalogues didn’t have a specific problem, you were just hoping to win with volume. Do you know how much easier it is to sell to people who come to you with a problem? There’s not a lot of selling involved.
So there it was, another Tuesday and another rant lol. I don’t mean to be too negative but I feel like in order to explain what I do I have to counteract the millions of other scams out there. There are lots of legit business opportunities online though and over time I’m going to be bringing some of them here to the blog. But don’t expect them to be plug and play systems though, it always requires thought, preparation and hard work, they don’t say that in the get rich quick ads.
Earning money with eBay, where’s the margin?
So a friend of mine recently mentioned that he wanted to get into eBay as he heard it’s a really good way to earn money online (him along with rest of world). So at a basic level what most people on eBay are doing is buying stuff locally and then selling it nationwide with the hope of making a profit. This in itself isn’t a revolutionary concept but there are a few key things eBay does really well:
- They have the site/system already built. All you have to do is upload the details of your products and they handle the rest (all technical stuff). You don’t have to worry about building your own site and taking credit cards and all that involves.
- They provide the customers. Ok so you can advertise your eBay listing on your own site or in other places but most of the sales are going to come from people browsing eBay and finding what you have to offer. Don’t underestimate this bit because attracting customers is one of the hardest things to do online, there’s a lot of competition out there.
- Trust rating/system. If you have a new site it’s really hard to get people to trust you and even harder to get them to hand over credit card details, after all you could be anyone! EBay provides a great system for customers to view the history of a seller and what other customers thought of them. It’s a great system that allows small sellers to compete with the big retailers. I will trust a small seller with over 1000 positive reviews over a big retailer any day, they have much more to loose by providing bad service.
So on the face of it earning money with eBay should be easy right? Well not really actually, even with all these benefits the margin on selling stuff on eBay is terrible. For a start you have all these little costs that eat into your profit:
- Listing fees
- Final value fees
- Payment processing fees (PayPal/visa etc)
Don’t forget you still have to post whatever it is to the person, the whole thing seems like a massive headache to me so far. Here’s the biggest problem though, the margin you can make on most items is really low, around 5% – 10%. I know there’s lots of stories about people becoming millionaires via eBay but it seems to me the only way to do it would be sourcing a product that’s not readily available in a local market and adding a big margin. If you’re trying to compete with 100 other people selling the exact same thing you’re going to be haggling with other sellers to see who can do it £1 cheaper.
To me the eBay idea is great if you really don’t have a clue at all about the online world and you just want them to handle everything from the website to the marketing. But realise they are going to take a big chunk of whatever you earn for doing this. Also realise that they directly list all of your competitors right beside you every time someone searches for what you’re selling, eBay doesn’t care about your business on an individual basis, only the collective success of their site.
The problem for someone like me when I look at eBay is that I just see how much easier it would be to do all of that stuff myself:
- Out of the box ecommerce solution like oscommerce
- Take payment with PayPal (no need for merchant account I think?)
- Some proper marketing of your site with SEO and PPC
The last point is probably a little over simplified but it is possible to do with time and effort. Once your there though and your generating your own sales on your own products you will realise how much bigger your margins are going to be.
So that’s all I have on the eBay thing, I have a feeling my friend is probably going to just plough ahead anyway, he’s stubborn when it comes to money like other people I know 