Online businesses are a revolutionary new development in the world of commerce. Just 15 years ago, the entire process of trying to sell goods was much more difficult, complicated, and expensive. To open a store you literally needed a physical storefront. You had to purchase inventory, hire a staff, and incur so many costs before you were even ready to make one sale.
Today, selling online can be as simply as opening up a $10 hosting account and buying a $7 domain name. Digital storefronts, drop shipping, and affiliate programs allow people to reach potential customers electronically, interest them in a product, and then leave the fulfillment of the physical goods to a third party. The result? Many people are making a full time living operating stores that have absolutely no physical presence at all, but still provide valuable goods and services to consumers.
While this is an exciting new business model, it has created a lot of hype and misinformation. People see an online business as a way to make easy money or get passive income. But most don’t understand that it still is a business and requires a lot of foresight. These are some of the most common mistakes made by newbies trying to start an online business.
1. Not selecting the right market. Many people just pick a product at random without determining if there is an online demand for the goods or service they will be selling. Keyword and market research is vital to making sure that you get visitors to your site, and making sure they are the kind of people who will be willing to buy something. A lot of people online are just looking for freebies; you want to make sure you are in a niche where people will actually open up their wallets.
2. Not understanding traffic. Many newbies select a decent market but do not know how to get traffic to their website. This is where many scammers take advantage of newcomers, promising “#1 Ranking on Google” in exchange for a fee. Search Engine Optimization is the process of helping your site rise higher in the ranks of Google and other search engines. But it is a complex process that takes times. Beginners should spend at least a couple of months learning about SEO before launching their sites.
3. Not understanding competition. Even if you have a decent market and good SEO, you need to make sure that you have a realistic shot of competing within that market. Trying to get on page 1 of Google for “Digital Cameras”, for instance, probably isn’t going to happen.
4. Not pre-selling customers. It isn’t enough to set up a website showcasing your own goods or singing the praises of an affiliate product. Newcomers need to understand how people buy online. They rarely respond to overt sales. Beginners should learn how to “pre-sell”, providing valuable information to visitors that helps ease them into the product or service they are selling; “warming” them up in essence before they reach their final sales destination.
5. Expecting to make money overnight. Running a business online is like any other business: it takes time to grow and figure out what works. Even though much of the financial burden of traditional brick and mortar storefronts is gone, you should still approach your online business like a real business. Do market research, learn how people buy online, and keep good records of all your actions and expenditures for tax purposes.
Bearing these tips in mind, there is no reason why you can’t run your own successful online business.
Seth Jared is a Blogger and Internet Marketer. He writes about web trends & financial issues such as credit cards for college students and web hosting comparison.
