If you are thinking about starting your own business, you’re not alone. It may be surprising to hear that 2020 was a banner year for new small businesses being launched.
While the year started slow, it ended with over 4.4 million new companies started. This was a considerable increase over 2019.
With social distancing and lockdowns rampant during this global pandemic, starting an online business has been a particularly attractive option.
There are various types of online businesses, and they definitely have some strong advantages over their traditional brick-and-mortar counterparts.
These days, anyone with a will and an internet connection can start a business.
Types of Online Businesses
There are four main types of online businesses. There can be hybrids of these types, but it’s a good idea to have an understanding of these basic variations.
* Digital Products Business
* Online Service Business
* E-Commerce Company
* Affiliate Marketing
Digital Products Business
This type of business can give you an amazing degree of personal freedom. In this enterprise, your product is simply information. An ebook is one example of this.
If you have a website, you might have ads for your ebook on it, and you can also place ads on other websites or paid search ads on search engines. You could even advertise on Facebook or other social platforms.
A person simply pays and then downloads your ebook, and you didn’t even have to run to the post office to ship anything. In fact, you could have been sitting on a beach in Maui throughout the entire transaction.
An online course/training is another great digital product. By creating an online video course, posting it, and teaching on websites like Udemy you get access to their expansive existing member/student community, plus you can make use of their tools and support in the course creation process. Alternatively, or parallelly, you can host your online training on your own website.
Starting and maintaining a blog is another example of making a living through digital products. Most of us have a subject that we’re very passionate about or that we have some expertise in. Share this passion and expertise with others through a blog!
As you build a subscriber base, you can build a relationship with them. Once they feel like they know you and trust you they will be happy to receive offers and suggestions from you.
And as the traffic to your website increases, you can start to monetize your blog by selling advertising on it.
You can also put your own affiliate links on your site. This is where someone else handles fulfilling any product orders, and you get a commission on each sale, but we’ll talk more about this in a separate section below.
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Online Service Business
Do you have a professional skill level in some service that others could benefit from? Perhaps you’re adept at balancing financial accounts, or maybe you’re a skilled graphic artist. Turn your knowledge or skill into a service business.
If you are knowledgeable in digital marketing or bookkeeping, you can offer to help other small business owners with your services. Most business owners want to be free to focus on serving their customers and are more than happy to contract out such support services.
You might have a service that you can offer directly to the general public. Is there a subject you are particularly proficient/skilled at? Have you been a math wiz since your early days in school, or do you know a foreign language? Offer your services as a tutor in whatever subject you have expertise in.
This is only a small sample of the services that you can provide online. Your imagination is the only limit to what you can offer.
Another good example is writing. Most people are not good at writing, more than that, they don’t like it. So they engage others to do this chore for them. It could be a blog post or even a whole book. It’s an open secret that many famous people (and not just them) have had their book, or books, ghostwritten by someone else.
You can check websites like Fiverr and Upwork to get an idea of what services are being offered online. You can also find out how to start offering your own services on these same sites.
With options like WordPress it is easy to create your own website to begin offering your online service or services, and let the world tap into your expertise.
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E-Commerce Company (Mainly Physical Products)
E-Commerce is what many people think of when the subject turns to online businesses. Whether you are selling through your own website or an online marketplace, such as Amazon or eBay, it’s basically retailing products.
You list your items that you either create yourself or order online from a wholesaler. When someone makes a purchase, you pick, pack and ship their order.
In keeping with the theme of service businesses mentioned previously, there are many companies that seek to make life easier for online retailers. These include drop shippers.
Basically, drop shippers let you list their products for sale on your website, and whenever you get an order, they get the item sent to your customer for you. Of course, you pay for this benefit either in terms of higher product prices from the wholesaler or a small fee for dropshipping.
Amazon also has a super cool program known as Amazon FBA. This stands for fulfillment by Amazon. It’s a program where you send the products you sell to Amazon, and then, each time an order comes in from your Amazon listing, they pick, pack and ship it to your customer for a modest fee.
Since you don’t have to be near your product inventory in order to ship it to customers yourself, this gives you access to the huge marketplace offered by Amazon while also giving you time and location freedom.
Not to mention that you can focus on what really matters, making sales, while Amazon takes care of the rest (shipping and handling). And let’s not forget that Amazon has a legendarily good shipping service.
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Affiliate Marketing
This form of business can involve marketing digital or physical products. Basically, someone else owns the product, and you simply put links for it on your website or in ads elsewhere on the internet. When someone purchases the product, after clicking on your link, you get a commission from your affiliate partner.
Amazon has a popular affiliate program, but there are many others available. In fact, most companies online (at least the bigger ones) have affiliate programs. Just type a search for the company’s name you are interested in followed by “affiliate program”, and you should be able to find information about their affiliate program and how to join it.
Then there are affiliate marketplaces like ClickBank where you can explore many products, mostly digital, from various vendors, and choose to promote the ones most suitable for you.
The commission you will get as an affiliate, once you make a sale, is usually a percentage of the amount paid for the product. It varies greatly, depending on the product/company. It’s usually bigger for digital products, and smaller for physical ones.
Affiliate marketing is a great way to get started since there is no need to create your own product. All you have to do is find a quality product that fits your interests and/or the type of business you’d like to create, and promote it. That’s why you can get started almost immediately.
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Benefits of Starting an Online Business
There are numerous benefits of an online business when comparing it to the brick-and-mortar variety.
Lower Starting Cost – Depending on the exact type of online business, you might be able to get it started for as little as the cost of a website (it can be as low as a few dollars per month for hosting). There are online website builders (e.g. WordPress, which is popular, convenient, and free) that make the process of putting together a good site fairly simple and inexpensive.
Access to a National and Global Marketplace – Depending on the type of traditional business you start, you may find yourself confined to selling to people in a constrained geographic area. This is particularly true of local service businesses that involve going out to people’s homes or them having to come to you. There’s only so far you can travel before the costs start to exceed the benefits.
Lower Operating Expenses – A brick-and-mortar store’s physical location will mean you have a recurring monthly lease to pay. You might also have employee salaries to pay and utility expenses for the business location. In contrast, by starting an internet business from your home, you can spare yourself these expenses. A good example is Amazon, instead of having to pay for main-street store locations, they pay for any-street storage facilities and they ship all their products from there. That’s a huge cost difference.
Time and Location Freedom – When you run a business that’s in a fixed retail location, you’re locked into being near that location. If your manager doesn’t show up for work, you may have to go in. This is where an online business really shines compared to a traditional one.
If you are making money from a monetized blog, affiliate marketing, or through an e-commerce dropshipping program, you can be anywhere while the money’s rolling in. This is why certain online businesses are considered to be “lifestyle businesses.”
Do you need to pick up the kids from school at a certain time? Want to get away from it all for a week or two in Hawaii? Many online businesses can enable you to do just that. And did I mention you don’t need to ask for permission by anyone? That’s pretty nice too.
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Easy to Get Started
Perhaps the best part about starting an online business is the amount of knowledge and training that’s available to help you on your journey to success.
If you’re tired of having to put up with a boss, you don’t have to anymore. Leave the rat race behind. Be your own boss.
Through online training like the one we provide at Liberation Project Online, you can learn to build an online business around your interests. One where you are in charge of your destiny and building a future for yourself and your family.
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