“So Old Dog, what are you doing these days?”
“Since I lost my job I’ve been learning the intricacies of Internet marketing.”
“Oh yeah; I have a friend who does that.”
I believe people when then tell me that; but I do not believe that they have any idea of what I do.
Selling books and guitars and baby clothes over the Internet is a slight shift on a paradigm that’s existed since Eve sold Adam on the apple idea. But there’s a whole new world of Internet marketing out there, and if you’re interested in making some extra money, or looking for a way to while away the time during your retirement, I encourage you to read on.
Let’s start with a quiz; how many of these terms can you define?
Search engine optimization, both on-page and off-page. Google AdWords. Google AdSense. Pay-per-click. Pay-per-view. Pay-per-action. Affiliate marketing. Affiliate network. Clickbank. FTP. Domain name. Website (I thought I’d throw you a bone!). Have you heard of ‘GoDaddy’? Do you have any idea what they do?
As you can see there is a whole new lingo that represents a whole new way of doing business.
And while I’m somewhat familiar with most variations on Internet marketing I’m going to focus on the one with which I’m most familiar, “affiliate marketing”. Let’s look first at the old way of marketing and then we’ll have a look at the way I do business on the Internet.
I’m a guitar player and I’ve built a website (http://electric-guitarlessons.com) to sell guitar instruction courses under this new paradigm we’re discussing. Here’s how to do the same thing the “old way”.
First you need to find a product or two; shouldn’t be tough, there are plenty of publishers and book wholesalers to help you find a few good-selling titles. Now you need a place where customers can come and buy your books. So you rent a storefront for, let’s just say, $1000/month.
You’ll be open from 9-6 Monday through Saturday and 12-5 on Sunday, but you can’t be there every minute of every day so you’ll need to hire some help. Let’s bring in a part-timer, say 20 hours/week @ $10/hour. That’s $800/month, and don’t forget that you’ll need to contribute 7.5%, or $60 of your money to her Social Security .
Then there’s the light bill, heat and AC, and don’t forget insurance; I’ll be conservative and estimate $500/month. You’ll need to bring customers through the door (that’s called ‘marketing’!); again, I’ll estimate advertising and marketing expenses conservatively at $500/month. So it looks like you’ll need $2410 just to open the door. With a typical wholesale>retail markup of 40% you’ll have to sell about $6000 worth of $20 mguitar instruction books to break even; at $20/book that’s 300 books, or 12 each day.
You will need some start-up cash, of course. There’s inventory to purchase, fixtures to buy and everyone who provides service to you is going to want a deposit in the unlikely event your business doesn’t fly. I don’t think $7500 is far-fetched at all.
All this expense is worth it to you, of course, because you know you’ll be one of the fortunate “two-thirds of new employer establishments [that] survive two years, and 44 percent [that] survive four years” (from the US SBA).
And no more punching the clock; no more answering to “the man”; no more “yes boss”, “no boss”.
Also no more time to play guitar or golf, no time for vacations, no time to play with the kids…you have a business to run, after all! I’ve worn the shoes of “business owner” and trust me; even in the best of times its like wearing a very large stone around your neck.
In Part II of “An Internet Marketing Primer” I’ll show you how I sell guitar instruction courses. I guarantee that you will be awakened to a whole new way of thinking about and doing business. If you haven’t already, I encourage you to click on that orange “Subscribe” button on the upper right of this page.