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Increasing Your Online Business Profitability

Aug 17, 2007
As an internet consultant, I have had the unique privilege of watching struggling online businesses grow. I have seen some other online businesses fail miserably. Profitability can be a major stumbling block for this type of business.

The Trap:

When individuals start trying to make money online, they almost always want to sell products. They do some searching and after time they find a few good drop shippers. Drop shipping allows them to sell a company's products without buying them beforehand. It's a nice idea in its concept.

Most people struggle to make this work! They find that there are hundreds of sites selling the same products. The companies that have bigger budgets will ultimately get their products at lower prices, so the start-ups are left with the scraps. Many times the newer sites are able to get traffic to the sites, but can't make any sales because they don't have the experience.

Pay per click campaigns become extremely difficult because there isn't enough margin in the items they sell. This brings up an interesting point. How do larger companies bid so much on keywords? Anyone that has an online business has probably asked himself this question a hundred times.

Most online marketers will continue do try the same stuff that has caused their failure, and that's the trap.

Companies that make more profit have more organization. They can bid more for keywords because they pay more attention to detail. Instead of copying the manufacturer's description of an item, they write copy that can actually sell. They take the time to learn about what type of language gets people to buy.

More importantly, bigger companies will sell to individuals again and again. Once a person buys, their email addresses are stored in a database. The person will be contacted with some type of offer once a month for the rest of their life, provided that they don't opt out.

Profitable companies don't bid to get sales - they bid to get customers. If you're not building a database of customers, you are wasting your time! This is the oft-overlooked key to internet success. If you're operating a business online, you must start building a database now!

Here are some ways to build your database. Start a newsletter today. Add a form to your site that people can use to sign up. Many will sign up, and you will start saving the email addresses. Take the time each month to write a good newsletter.

Your newsletter should contain healthy information. You can establish yourself as an expert in your field with your newsletter. At the bottom, give your readers a promotion code for five percent off. People are suckers for discounts!

Highlight a few of your products! Let's recap the 3 ingredients of a great newsletter, which are information, discount, and product. If you don't provide the information, your readers won't even open it next month! They will respect you if you give them what they signed up for.

If you're too lazy to write good newsletters, this might not be the right business for you! Marketing online requires patience, commitment, and writing skill.

Maybe your online business isn't profitable. Maybe you just want more profit. Either way, I'm sure that you can imagine the benefits of having a list of 50,000 email addresses.
About the Author
The HomeBizGuru helps people to start a successful home business
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