Any online business, for beginners, is a venture into the unknown. It's scary. There are a lot of options—some good and some bad—and a serious set of learning curves. Like any legitimate business, an online business requires patience and hard work.
At the same time, running an online business is a lot easier than many styles of brick and mortar business which you may be familiar with.
With an online business, you set your own schedule. They are also very cheap to start, since a domain costs just $15 per year and hosting about $20 per month. Plus, you can delve into subjects you’re passionate about, considering that you can essentially make a website on any topic imaginable, since the internet is open game for reaching a community of likeminded people from around the world.
So what exactly is an online business?
Simply put, it’s a business that you run online, usually from a home-based office. There’s no rent. No employees. In some cases, you don’t even handle inventory.
Still, there are a lot of different online businesses to choose from. There's not one single method of making money online. Actually, finding the best business model fit for you can be a lot of fun! In this article I'll share some online business ideas here, along with five tips for beginners starting your first online business.
Types of Online Businesses
In a fulfillment-by-Amazon (FBA) company, you have to find a niche or topic for your store and find goods you’d like to sell through Amazon's website. Like most retail stores, it’s a buy-low-sell-higher business model, so you have to be smart about sourcing and purchasing the goods you want to sell.
First you find goods that you want to sell and purchase them at as low a cost as you can get them. Sourcing goods can be challenging for newbies, but it's not that hard considering you can search for suppliers online, like any other product you'd otherwise search for.
Once they arrive, you’ll list them on your Amazon FBA dashboard, label them, and ship them to Amazon, where they’ll be stored in one of Amazon’s warehouses. They are then listed on Amazon's website, and Amazon takes care of the rest. As long as you are updating your listing and shipping goods to Amazon, they'll deal with the rest.
From there, you market the goods online and use Amazon’s streamlined system for packing and shipping them to individual customers.
This model has its own learning curves. You’ll need to be careful to obey Amazon’s Terms of Service and deal with refunds and returns occasionally. However, if you put in the time and effort, you can make a decent living this way. Some people are making over $100k per month with FBA. Here's a link to my favorite FBA course.
An Etsy Store is a good way to go if you’re crafty. Etsy specializes in hand-made items ranging from homemade cosmetics and cosplay costumes to music and art.
While you handle inventory with your own Etsy store, it’s inventory that you make yourself. You’ll also have to pack and ship your products and find the right price to sell them at so you can make a decent profit.
Every store has its own profit margin and sales information, so it might take some time to figure out how much money you can make. Some of the most successful stores took years to really get up on their feet.
However, you don’t have to source goods to resell, which means you can focus on creating the products. For many people, the freedom to create and then sell their creations is one of the best parts of running an Esty store.
An Ecommerce store like the ones you can set up at Shopify.com is another way to sell physical goods online.
It’s a little bit like Amazon FBA in some ways, and a little bit like Etsy in others. As with Amazon FBA, you’ll need to know what you want to sell and find a niche that you can fill. This means doing some research into what people want to buy. Unlike Amazon FBA, you’ll have to handle storing, packing and shipping the items as well as product development. Instead of leveraging Amazon's systems, you'll have to create your own to make sure customers get their products on time!
Like folks who sell on Etsy stores, people who sell on e-commerce sites like Shopify often create their own products. To get a feel for whether or not they can make money, they do best when they pre-sell their products, which means talking to potential customers in advance to see if they’d be willing to try out a prototype or buy the product. You don't have to create your own products though! You can also source products online, ship them to your home/office/warehouse, then ship to customers as orders come in.
Shopify and other Ecommerce platforms can make things easier, but there are usually monthly fees to pay for the service.
Affiliate marketing is my top recommendation for people who are just getting started in running an online business. There’s no inventory to worry about, and sourcing goods is more about sourcing the companies you want to work with since they handle all customer service, payments, and shipping.
Making money through affiliate marketing websites is about selling products for other companies. You do this mostly by writing good content about the items and targeting that content to potential buyers. When someone buys something because of the work you did to promote it, you get a percentage of the sale. Other times, you get paid for generating a lead even if they don’t buy right away.
Like all legitimate businesses, it takes effort and time to build it to the point that you can make a good income. However, once your system is in place, it can create a passive income for you even if you take time off here and there. Your website stays online 24/7, even if you aren't behind the wheel per se.
Another plus for affiliate marketing is that there are so many different ways you can do it. You can market through blog posts on your own web site, e-mails, or social media. You also get to sell around topics or niches that you are already passionate about.
Display Ads (Google AdSense)
Using Google AdSense to make money is one of the most widely used online business models. There are some great things about it, including that it’s easy to use and simple to understand.
Since Google decides what ads to show people who visit your web site, all you have to do is create as much web traffic as possible.
More traffic means more people who might click on the ads they are shown. You’ll get money on a pay-per-click basis, so the more people that click something on your website, the more money you’ll make.
There are a few downsides, though. You only get paid pennies for each click, so you’ll need to generate a lot of traffic to get enough clicks to amount to much. You also won’t have any control over whether a competitor’s ads will be shown on your website.
If you decide to use Google AdSense, the best thing you can do is write a lot. You’ll need to consistently create fresh, high-quality content to keep traffic coming to your website.
5 Tips For Starting Your First Online Business
I hope you find the tips below useful. For those that are interested, you can also join my free 5 Day Affiliate Marketing Course to learn what your first steps should be to build your successful online business.
Your online business isn't going to build itself. You have to take some risks, do some work, and get ready to learn.
Tip #1. Set goals
You need a target to aim for, and even if you don't hit it, at least you can measure how far you were off. The more specific your goals are, the easier it will be for you to see how to achieve them, including how to tweak your business plan.
Your goals should be realistic. Setting realistic goals can really help with your long term plan, because you’ll be able to stick with your business even when it’s not going the way you want it to.
Lots of folks expect to be profitable in a week but most of the time that doesn't happen. Anything is possible, and there are unique stories, but be sure you check your expectations. Legitimate businesses usually take time and effort to build, even online. Expect at least six months to a year before you see consistent sales, especially if you are starting out as a newbie.
Also, set some time-related goals. You’ll get out of it what you put into it, so ask yourself how much time you can realistically devote to building your online business. Can you work on it every day for 2 hours, and do that 5 times per week? Can you devote at least 45 minutes every day for 7 days a week?
Focusing on time-related goals and meeting them gives you something to celebrate every week. Because it helps you stay motivated, it will pay off in long-term success.
Tip # 2. Make a plan
Now that you know what you're aiming for in terms of personal goals, you need to set up the steps to do it. Again, this will help with analyzing what went right and what went wrong, as well as how to do better next time. Most people won't succeed on the first try, but planning things out can increase your chances of success on the 2nd try. I failed with three or four websites before I made one that earned me some money.
Did you aim for 5 hours a day and fell short? Try 1 hour per day instead, and build up from there. Did you want to get 10 articles published this week but only got 8? That was pretty close! Maybe 8 is a more sustainable goal.
To make your plan, brainstorm a to-do list. It can include items that need to be done every day, big projects that will take months to complete and small, one-time items such as buying a domain name or setting up your home office. Once your list is complete, you can prioritize your items and fit them into a timeline, including your time-related goals.
Just remember to be realistic—you won’t be able to do everything at once, and some projects will require hours of research before you can complete them.
Update: I've got a very nice, FREE series of blog posts called the Beginner Niche Marketer's Guide that can help you with making your business plan.
Tip # 3. Take action!
If you don't do anything, then you won't make any money. Understanding the facts will get you no richer. Knowing how to start a profitable online business won't actually put money in your pocket. A dysfunctional, poorly maintained, embarrassing attempt at a business that makes only $5 per month is infinitely better than doing nothing.
A pro once told me that if you can make $5, you can make $5,000. I have found this to be true.
One trick you can use to keep yourself moving forward is to make sure you’re celebrating the little triumphs.
If you have a time goal of two hours a day and you work for those two hours without stop, reward yourself. If you get everything done on your to-do list for that work period, reward yourself.
If you’re terrified to put yourself into the online world but you hit the publish button for your first blog post anyway, reward yourself. Rewarding yourself for completing an action item is an action in itself.
This doesn’t mean you go out on the town every time you have a taste of success. It can be as small as a five-minute phone call with a friend or a brisk walk in the fresh air. The important thing is to savor the feeling of success so that you’ll stay motivated to work even when you’re not seeing results as quickly as you’d like to.
Tip # 4. Find a mentor, even if they don't know it 🙂
There are lots of questions you have, and having someone to show you the way will make the difference. The only trouble is that the people that are really making money online are busy, and most likely won't “mentor” you for free. Some charge big bucks, like $100-$300 per hour.
My suggestion is to just follow a couple blogs with people that produce good content related to online marketing in the business model you've chosen to follow. Listen to their podcasts, read their articles, and study their methods.
Pop a question by them from time to time and see if they answer. Many of the “gurus” in these spaces are very willing to help because it keeps people coming back to their website. More traffic = more leads = more money for them! Same goes for my website by the way 🙂
Tip # 5. Learn from your mistakes
It's highly unlikely that you're going to hit a home run on your first try. I didn't.
Learning from your mistakes means being willing to try new things. Not every idea you have is going to be profitable. Some ideas will fade away, but don’t be discouraged. When something doesn’t work out, that means you can set it aside. You’ll be free to try something completely new that you didn’t have time for before.
Also, the more often you fail, the more clearly you can see trends in the kinds of topics and methods that work and don’t work. You can tailor your future efforts to match the things that work best.
The most successful marketers I know are those that test, tweak, and make changes. Keep what works, ditch what doesn't. This is how you build income from $1,000 per year to $10,000 per month.