This post is directed 95% towards product sales online (not content based). You can earn an income with content based websites (blogs etc.) and we only touch on it for a second to make sure we hit all the forms of income. To emphasize these laws primarily refer to product websites.
Law #1 – There Are Two Markets: There are two distinct markets. The masses and the rich. If you’re looking to make money you have to make a decision on which market you will cater to. The masses will focus on anything that does not require them to do any work and the rich will look for status symbols. This is overly simplistic but it’s a good starting point. Trying to target both markets is extremely difficult as they have business models that are largely unrelated (an exception may be the shiny new iPhone). Products that sell to the masses typically have *lower* margins with high volumes while products that sell to the rich have *high* margins with lower volumes.
Law #2 – Sell the Dream to the Masses: If you go down the masses route you’re going to sell them with the following tactics: 1) external motivation like Tony Robbins – “Unleash Your Inner Beast with This Product” or “Fire your Boss!”, 2) magic pills that will fix their life – “This solution has doctors hoping it will be banned!” (modafinil/provigil is one of the latest fads), 3) minimal work for sudden riches – “work from home and earn $100K tomorrow with no work!” and 4) celebrity endorsements – “XYZ celeb uses it!”. The theme here is that they are not responsible for their own actions and there is always some “hack” to getting what they want (without building any skills). When you’re selling to the masses do not put anything logical in the sales pitch. Keep it emotional and make sure your product works. Sure you can get away with bad products but that just leads to non-recurring income.
Law #3 – Sell the Prestige to the Rich: Get rich by selling them on the status of the item. The product can be largely the same but it needs to be *exclusive*. The best example is black and white balls and other such “filters” for rich people to go and meet. The cost is practically the same just sell those tickets for hundreds of dollars a piece! Another great example is the classic “bottle service” experience. No doubt about it that pricing alcohol 300% above its market value is going to be profitable. Notice, these can be done online, offer exclusive “packages” to people.
Law #4 – Three Ways to Earn: There are three primary ways to earn money: Paid Traffic, Niche and Content. Paid traffic requires you to purchase traffic from Facebook/google and more importantly other sources (we can’t give you more than that). Niche websites rely on a specific product that has enough “keywords” to generate ~30K views a month (you’re selling a product). Content websites have an enormous number of ways to make money (selling books, ads, affiliate partnerships, consulting etc.).
Law #5 – Paid Traffic is a Faucet: It’s either on or it is off. There is no “time for money exchange” this is because you’re either paying to target a specific group and sending them to a website.. or you’re not. This is why you can go from $0 to suddenly making $10,000 in a day (or losing money!). Think of it as a faucet, you turn on the traffic and it converts or it doesn’t. Assuming it is converting you must keep the faucet on until it loses money. No customer left behind.
Law #6 – ~30K Monthly Views is a Living Wage: If you’re selling a product (niche, not a content website) then you should be able to generate a living wage off of 30K organic visits a month. Assuming you convert at 2% that would be 600 sales. If you’re doing 600 sales at just $5 in net income that is $3,000 a month. Sure it is debatable if this is a living wage in a place like New York but you can certainly live in many parts of the world off of a niche site doing $3,000 in net income a month. The key here is a 2% conversion rate.
Law #7 – If You Do Content Build a Brand: We don’t do content websites (this blog is a hobby) however if you want to do it you must build a full platform. You must build a massive following and never lose their trust. You can then expand your website into multiple directions (consulting, products, affiliate sales, etc.). The only problem with this (and why we avoid it) is you must constantly be “on”. Letting a website die will kill the returning visitors. If you go this route it is essentially for life since they are hoping to increase their interactions with you over the long-term. (others can chime in on the long-term strategies here since we don’t focus on it).
Law #8 – You Don’t Need to Be New: There are millions of products out there that are largely the same. There is no reason to create a product that is vastly different. Take an existing product make a couple of tweaks to the product and kaboom you have a new item to sell. This eliminates the need for a “light bulb” moment. 100% unnecessary for generating income online today. Coke and Pepsi are not that different and the gym equipment you see (45lb plates) are not different (slight change in shape).
Law #9 – Execution is Everything: If you have a solid product there is no need to make it perfect. We’d take a product that is the 3rd best on the market with the best possible sales and marketing over the #1 product in the market with terrible sales techniques. Logic never sells. Stick with having a clear execution (sales) strategy. Once your product is good you’re going to live and die from execution. The worst feeling is when you create the product and someone does it better than you later (after you give up). This has happened before and is a life lesson.
Law #10 – No Partnerships: Pretty simple for online sales. There is no reason to have a partner. You can pay someone (a major company) to help you with practically anything you need. You can make hundreds of thousands of dollars (even a million) without having a partner (ever). Partnerships are only good when you’re not making any money and are awful when you start making money “Who’s pulling the most weight?”. This is human nature, so there is no point in doing partnerships for a basic online venture.
Law #11 – Singular Focus: If you’re serious about earning a living online, you cannot have multiple projects running at the same time. It is comparable to pouring water. If you pour water into 100 different swimming pools none of them will be full. The water will evaporate and you’ll be stuck with nothing. If you constantly fill one (maybe 2) pools with all the water you have (every single day), you’ll see progress and eventually it will be functional. Spreading yourself thin is death in online sales because someone else is going to be 100% focused on that market.
Law #12 – Debt Needs a Return: Debatable we know… But… We view debt as an immediate return profile. If you are going to take on debt for any venture you should see a positive return in the first month (immediate cash flow). If you borrow at 5% for a venture and don’t see a positive return every single month you’ve made a big, big big mistake. You’re going to be eating into your cash flow which will kill your long-term opportunities.
Law #13 – You Need Liquidity: The last thing you want is to be cash strapped. If you find out that market XYZ is giving you the best return… you want to buy as much traffic from that demographic (buy every single one of those users!). There is no exception to this rule (none). You must have cash on hand to throw at the right demographic otherwise you’re going to miss out on an opportunity someone else will jump on. For the Real Estate guys, this is like not having money for a deal that you absolutely would love to have. Someone else will find it and buy the asset before you get the chance.
Law #14 – Always Available: You need to have a system that tells you if something is going wrong. Lets say you’re set up to constantly run traffic while you’re sleeping because it is profitable. This is great… Until it goes negative. You do not want to be asleep for 8-10 hours while the traffic is giving you a negative return. Have an alert set up so you’ll be immediately woken up if the returns are largely negative for an extended period of time (lets call it 2-4 hours).
Law #15 – A Fool is Born Every *Second*: There is a never ending supply of fools in the world. The saying is a fool is born every minute but after years of seeing terrible (shady) campaigns work… We’re increasing that to every second. Those emails that say a “nigerian prince” is ready to send you money… They work! Yes people are still fooled by spam even in 2017. It’s amazing but true and we should never underestimate the number of fools in the world.
Law #16 – Always Build Contacts: Keep a soft touch relationship with anyone who can help you. While we recommend going solo, you’ll have questions and if you pay someone for the answer (and it works) you should keep that person in your phone forever. Continue to do this for years upon years. Never under any circumstances do you waste their time. A simple hey how is it going 1x a month is more than enough.
Law #17 – You Don’t Need to Be “Smart”: The vast majority of people are risk averse. As an example, people are “scared” to like our current Facebook page even though we get 2 million visitors a year. That is quite a lot for a hobby blog and we have no doubt every single reader is less than 2 handshakes away from someone else who has read or seen this blog. What does this mean? It means if people have a risk tolerance that is extremely low, the number of people willing to become Entrepreneurs is extremely low as well! If someone is risk averse but has a bunch of skills you need, you just pay for his skills… There are many people who get rich that are not bright, they just hire people smarter than them to do what they cannot do.
Law #18 – You Will Hate Loss of Freedom: The one thing that we’ve seen in common with people who earn a living online? They hate losing their freedom. Many people who make money online will say they would rather earn $40K alone online than earn $200K in a corporate job. They are not lying. This may be some sort of personality disorder but it is a personality trait we have noticed. People will walk away from a career that pays more in exchange for their freedom.
Law #19 – The $50K Rule: It costs about $50K to start your own item. That’s our own rule for keeping cash in a checking account at all times. We’re not sure what industry you’re looking to crack into, but… We’ve found around $50K is enough to go into a new direction. Under no circumstances do you put yourself into a position where $50K is not readily available in liquid cold hard cash (no revolver no nothing).
Law #20 – Everyone Will Hate You: No one will be happy for you. If you make $200K a year in a corporate position people will be jealous. If you make $200K a year working off your laptop? They will hate you. In the first position they can laugh behind your back and say “you’re still being told what to do”. In the second position… They will loathe you and hope you will fail. Live off that energy!
If we were to outline the most important items here it would be as follows: 1) if you are earning money you buy all of the traffic from the demographic until you have tapped it out, no sleep for you if it’s pouring in, 2) choose your demographic be it the masses or the rich, 3) niche sites are ideal for people looking to learn the basics, 4) do not work with anyone, partnerships end in tears, 5) you don’t need to be smart and 6) always have $50K in cold hard cash to go into a new venture.