Internet Business - Finding the Right One For You (Part 4 of 5)
Both programs require a buy in or start up fee.
Most of them also require that in order to stay in the program, you need to pay a monthly or yearly subscription.
These investments are usually comfortably under $1000.
Affiliate Programs The way an Affiliate Program works is that you get paid a commission every time you refer someone to a website, and they make a purchase.
This is done via banner ads.
You purchase a website, which contains various banners for other websites.
These banners are html coded so that when a visitor clicks on one of those banners and then makes a purchase at that site, you receive a commission.
Your responsibility is to promote and drive traffic to your website so that people will click on the banners.
The advantage of Affiliate Programs is that outside of paying for promoting traffic to your site, there really isn't much else you need to do.
It is, arguably, a viable means for a passive income flow.
The down sides to the program are:
- You have no customer loyalty
- You get no captured information of those who visit and use your site
- You are in direct competition with those sites you affiliate with
- The commission per referral is relatively small
- Generating a steady high income is extremely difficult if not virtually impossible
- Little to none training or support offered or given
If you are considering this program, you need to take a hard look at ROI (Return On Investment) to see if it fits your needs and goals.
Internet Shopping Mall This is another popular business model.
The idea behind the Internet Shopping Mall is the old school mail order model of drop shipping merchandise to the consumer.
For all intents and purposes, you are an agent for the shopping mall.
As an agent, you purchase a website which becomes the landing site for your customers.
They then enter your virtual mall via, and go shopping.
We've all experienced an internet shopping mall.
Two excellent examples are Overstock.
com and Amazon.
com.
Your prime goal is to drive traffic to your site, which will then drive traffic to the mall.
You don't stock any merchandise nor do you do any shipping.
You simply sell the merchandise and take your profit.
This may seem like an ideal situation, but it does have some flaws in it.
The biggest one is that there is no customer loyalty.
People who shop online are shopping for the best possible price.
For this reason the price points are VERY tight, making the profit margins very small.
Plus, you are also competing with the internet retail giants like Overstock.
com, Amazon.
com, Target.
com, Walmart.
com etc.
These giants have massive advertising budgets.
Trying to compete against them can be a very steep uphill climb.
Once again, before you invest your money into an internet shopping mall, you should take a clear hard look at your Return On Investment.
Remember, your costs will probably be: Website hosting/creation, monthly or annual membership fees, Advertising, Search Engine fees, etc.
Let's now go to Part 5...