Sometimes it takes a good swift kick in the pants to get your attention…

…and that’s what I got this week while reading some of my favorite blogs. This site started as a journal of experiences I encountered while living and working in a connected world. Looking back over my last dozen or so posts, it has been anything but and I need to get back on track. So here goes. Let’s talk about…

Building My Online Business

For the first fifteen years or so of my professional career I worked in a wide variety of businesses; an international natural foods network marketing company, the second largest telecom company in the country, a printing company, even commercial software development. One of the reasons I was able to move from industry to industry so easily was because the underlying principles of technology were not dependent on what kind of widget was being pushed out the back door. A similar principle applies here.

Just because I have moved my business online doesn’t mean that those same underlying principles of good business practices and monetization don’t apply anymore, in spite of the way some online entrepreneurs act. Take the recent purchase of one mans goal dot com for instance. The buyer paid over $10,000 for a website with no organic product, no long tenured customers, no established monthly recurring revenue… just a name and a quasi-loyal following of readers. That’s like paying $10,000 for a convenience store that doesn’t sell anything but they have lots of people come in and look around everyday.

So How Do They Translate?

Good question. Off-line business principles make good online business principles. Things like keeping a low overhead, diversification, and return on investment still apply. Some are easier than others, take low overhead for example. It would be very easy to run a successful online business with a laptop and a digital camera. Neither are cheap but they are one time costs that will last for years. And even with a somewhat larger tech base than that, my overhead costs are very low…pretty much just the cost of Internet access.

Another of those principles that very few online business owners pay attention to is diversification, or having multiple streams of income. Why diversify? Oh, I don’t know. Lets say you are one of the eBay entrepreneurs and you’re making boatloads of cash off their affiliate program. That’s great. Now what if they pull the plug on it tomorrow, or at the end of the month? Would you be able to replace that income in 30 days?

Diversification of your online business simply ensures sustainability, another solid off-line business principle. If you had an off-line business selling widgets and you depended solely on one supplier for those widgets, what would you do if they went out of business? You have to bring the same mentality to your online business ventures.

How Am I Diversifying

Like most folks who decided they wanted to make money online, I threw up a blog and slapped some AdSense units on it, sat back and waited for my check! And waited…and waited…OH, A CLICK…for 2 cents. I got frustrated and moved on to something else. Now, with the help of the three wise men, I am working my way toward a better understand of AdSense and developing it into a significant stream of income…and it is quite a learning curve.

So while I’m working on that, I’ve recently taken a pretty large bite of the affiliate pie and added eBay to my online business portfolio. Now this is not really new for me, I’ve been signed up with the eBay affiliate program for several months…posting links and banners for them all over the place. But two things happened in the last month that have totally changed my outlook on eBay and their affiliate program and the part it plays in my online business.

The first is that eBay has brought management of their affiliate program in-house and out of the hands of Commission Junction. Now, I’ve never really had any beef with CJ, they’ve just never done anything for me…not one red cent. So I’m kinda happy that things are moving in-house with eBay. That said, they are experiencing some growing pains during the transition but hey, its eBay! Nuff said!

The second big development was my discovery of BANS or Build a Niche Store. BANS is a software designed to be loaded on your server to publish a “store like” website populated with products currently listed on eBay. Again, in the interest of full disclosure, I bought BANS back in March and built my one little store and sat back and waited for the money to start falling out of my PC. Needless to say, that hasn’t happened yet (but when it does you can bet I’ll shoot a vid and post it on Revver! lol). Anyway, back on April 7th, Vic over at BloggerUnleashed.com challenged us to build 100 BANS sites. That really got me thinking and I took the challenge!

The next day was my birthday so I made my present to myself everything it took to get the 100 sites built. I can now say that I have added 103 BANS sites to my online business and will be adding a few more each week.

So What’s Your Point?

The point is this. If those sites only average $1 a day each then that’s $103 per day and almost $3,100 / month or about $37,000 a year added into my online business coffers. Do I have your attention now?

Am I sitting back now with a bigger bucket waiting on money to start falling out of my PC? No, remember diversification? Now that I have the 100 BANS sites up, I’m working to improve my AdSense results, I’m looking for other affiliate programs, oh, and I’m getting links all over the freakin Internet!! And on the off chance that all of those options might not pay-out…I still have the bulk candy vending machines!

The bottom line is that an online business is still a business and you have to treat it that way. Its not a cool way to get to stay at home and work in your shorts, t-shirt, and flippies (but if you need any of those things, be sure to check out BloggerUniforms.info!) Seriously, you have to work like your next meal, or the light bill, or the cell phone bill depended on it.

Ok, I know this has been an epic post like you’d find on How To Make Money from Griz so I’ll go ahead and knock off here…but don’t stray too far because I have lots more online business tips to share. Things like getting a reseller account versus a regular hosting account, all the fun I had setting up BANS and at least one more post on some nifty little tools to help with all those sites.

Thanks for sticking with me this far and since you did I want to leave you with a challenge. If you are serious about having an online business, write down your goals for this year and three concrete steps you will take for each goal. And if you want to share them with the rest of us in the comments, we’ll all be pullin for you! It kinda works that way around here.

Peace.

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I was sitting around tonight thinking about this whole making money online niche and something occurred to me…we’re working really hard to re-invent the wheel here! The very first rule of retail is this…if nobody is buying, I’m not making any money! The same rule applies online!

Look, if you owned a brick and mortar business you would do retail one of two ways. The first way is to be everything to everybody, always have what the customer is looking for. I’ll call that the Wal-Mart way. Alternatively, you could focus on a very small segment of the business and be very specialized. I’ll call that the Kiwi Stand way. These are not new principles, they are time tested over hundreds of years.

The real irony here is that because we’ve switched from brick and mortar to click based retail, we thing all those principles don’t apply any more. We’ve even introduced a new “principle” that I haven’t quite named yet. It mainly consists of standing there proclaiming yourself to be an expert at something and pointing people in “the way they should go.” Its kinda like the homeless guy giving me home buying tips. Wait…THAT’S IT! The Homeless Way!

Wal-Mart didn’t start out as the largest retailer on the face of the planet. They started small just like everyone else. They got to where they are by huge volume and taking advantage of suppliers. I mean come on. Don’t most mom & pop store owners have to ask their suppliers what a widget costs? Wal-Mart gets to tell their suppliers what they will be paid for the widget…and the suppliers are so desperate for Wal-Mart’s business (i.e. validation) that they agree…whatever the price.

Now the kiwi stand guy is willing to pay a little extra for his kiwi because he want the best. He is willing to invest in providing the best, most specific product his customer is looking for. In return he is rewarded with customers who are willing to pay a little more to get exactly what they are looking for. The kiwi stand owner is also the most likely to help out the store owner around the corner because he knows the value of a good relationship with fellow retailers.

And then there are the Homeless guys, who have neither the most, nor the best…hell, no product at all…but he knows where everything is and has no problem telling you where to get the best kiwi…for a dollar! Oh, and he know about all the fruits too so there’s no reason to ask anyone else…he is the final authority.

So what? What does this have to do with blogging or making money online?

Well, I’ll tell ya. If you haven’t already figured it out, I’m going to draw some parallels between these retail principles and bloggers.

First, the Wal-Mart’s of the blogging world, yep you guessed it. These are the John Chow’s of the blogosphere and his ilk. Doing massive volume and taking advantage of everyone that crosses their path. And while you may find a few really good items in the inventory, they are the exception. Most of it is just crap, and for some reason, people keep going back to get refills of the same crap!

Next, we have the Homeless bloggers like Caroline Middlebrook. No real experience, no real product, just self-proclaimed experts who, for just $99.95, will tell you everything you need to know to get where they are! (which, by the way, you’re probably already there!)

Finally, we have what I want to be, the Kiwi Stand Guy. If you’ve ever been to or lived in NYC for any amount of time, you’ll get this. Vic from BloggerUnleashed would be a perfect Kiwi Stand Vendor in NYC! You’re laughing but am I wrong? (“Hey, ya need a friggin kiwi?”) Vic along with Griz (How to Make Money Online) and Court (Internet Marketing) round out the Three Wise Men of Internet Marketing in my book.

I’ve been trying to get started making money online for well over a year and in the past six weeks of listening to the Three Wise Men of Internet Marketing, now I’m actually making some progress. Not a millionaire (yet, maybe never) but lets just say the months of $0.90 AdSense are over!

Vic, the vlogs are the best and it’s like I said in some comment the other day. Your stuff is golden but sometimes its like trying to get a drink from a fire hose! I’m glad I can go back and play them again. Thanks for all you’ve done for me and for the rest of the blogging community!

Court, you are the keyword master! Your latest on Keyword Sniping was actually a real encouragement to me, you know, finding out that even the master can get sandboxed! Thanks man!

Griz, wow, talk about pay it forward! Not only do you make it seem so simple, you’ve got no problem sharing and helping us noobs get started. You are one of the good guys.

If you don’t read these three blogs and you want to make money online, you should quit now. You may make a little money, but you’ll starve before you make any real income.

If you read these guys you will now understand my retail analogy and the Kiwi Stand.

You don’t have to have 100,000 customers a day that come in, look around, and leave. You just need the 10 or 20 who come in and BUY a kiwi! (remember…if they don’t buy, I don’t make any money?) Oh, and you need a couple of thousand cheap fruit stands that sell what people want to buy (kiwi, oranges, limes…whatever) on the the streets where Wal-Mart won’t bother to go.

Blog on Three Wise Men of Internet Marketing…and thanks!

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