Profitable Internet Business
Many people ask me: “What do you recommend profitable businesses to start online?”
Having had different reactions after giving my answer, some positive and some not so, it seems advisable to explain what features should have a business to be considered “profitable.”
As defined by three different dictionaries, we know that “profitable” means:
- To produce enough income or profits (WordReference.com)
- To produce a benefit that compensates for the investment or effort that has been done (thefreedictionary.com)
- To rent, which produce income or profit, it’s worth. (Elpais.com)
As we can see, the common characteristic that these definitions is the relationship Effort / Investment Vs Profit / Profit. In other words: For a business to be profitable, will bring higher profits to the value of the investment.
A person who has started a business and have billed $ 100,000 in one year, you seem to be a profitable business? to respond, we need some very important information: What were the costs of production? because if to win U.S. $ 100,000 that person has had to invest more than U.S. $ 500,000, since then there has been a profitable business. But to earn that amount if invested, for example $ 5,000, then it has been a very profitable business.
The main advantage of online businesses have is that operating costs are quite low compared with most traditional businesses.
While on a business of “brick and mortar” (physical business – not virtual) have to pay for a room (either owned or leased), municipal taxes, installation and repair, online all these costs are reduced to the value of name domain, hosting and web development.
Only with this reduction in costs, and is an excellent proof that Internet businesses are more profitable than conventional business.
But now look at three examples of profitable businesses that exist on the Internet:
1. – Sales of physical products through the system of “Dropshipping”: Selling products online, either on its own online store, in auction sites (ebay, free market, among others) or even in classified pages, is entirely possible without having products in stock, without having products in stock. The system “Dropshipping” lets your customers buy the products you’ve decided to sell, you pay for them, then you come in contact with your distributor or wholesaler, you buy the product that your customer has ordered and the dealer or “dropshipper” sends it to your client directly, but he found out that you have not sent you. This is a very profitable way by the fact that you do not have to invest in Stock, or storage costs, import taxes, freight forwarding, etc.. Just find wholesalers willing to do dropshipping service, giving you the benefit of being able to sell products that you never have to deal directly.
2. – Sales of digital products such as eBooks, audiobooks, courses, etc..: The advantage of digital products, especially in this new era of technology we are living, is that production costs are extremely lower than those of a physical product. Create an audiobook or eBook (electronic book) will not cost you anything besides the PC / computer and software you’ll need to make them. If you consider you do not have the experience to create your own products, there are many writers who will gladly allow you to sell their digital content and you will receive a commission for it.
3. – Buy and sell domain names and websites: In the same way as in the real estate industry, where you buy a house at auction price because it needs some repairs and then sell it at a price two or three times when you’ve completely rebuilt, the same is possible over the internet. You have to be aware of the thousands of pages that are discarded every day, many of them even with a good traffic but just need someone to update the contents and give them a new air and thus be able to sell them or make them profitable advertising. There are people who purchase domain names (no website) up to U.S. $ 60,000 (although not as common – values most common are $ 100, $ 200, U.S. $ 300) to persons who have paid them more than $ 15. One of the most striking cases
recently (March 2009) was the purchase of the domain Toys.com by the toy company “Toys’ r us”, the value of 5.1 billion U.S. Dollars. As you can see, a domain that originally cost about $ 15, had a profit of over $ 5 million. I particularly have sold multiple domains and pages that I’ve developed with values reaching U.S. $ 1,000, earning a profit of about $ 950.
The important thing in any profitable business you decide to start, is to do the assessment as you will have to invest (in money, time and effort) and how much you will receive in exchange for it. To reduce costs, increase profits. This is the fundamental principle.
Very soon you will speak of other profitable business ideas online.
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