Earning the first $1 is infinitely harder than earning $100. After that, it gets infinitely easier to earn more money; it’s easier to go from $100 to $1,000 and even easier to go from $1,000 to $10,000.
At the start, it’s important to clarify that in order to make money, you have to sell something, either a product or a service, for which you will receive a payment in exchange. You must have something that another party deems valuable enough to give you money.
Let’s say you have no experience with making money online and are looking to make your first $1,000.
What would you do?
Well, the first step is to figure out what exactly do you want to sell.
What’s your pitch? What’s your product? What’s your hustle?
That could be something physical; for instance, a physical product that solves a particular problem to a specific audience.
That can also be an informational product that provides certain guidance or instructions for getting something done, whether it’s moving to another country or building a specific business.
As they say, information is power. Useful information that comes by way of experience can help others save enormous amounts of time and money, allowing them to accomplish something much quicker and easier as compared to if they lacked this information.
When it comes to actually building something, there are two primary ways of doing so: build an online store that sells products directly or create an information-based site that helps visitors in some way shape or form.
An example of the former is an online store that sells something like mattresses or accessories. An example of the latter is a country portal about Colombia where people can learn about the country and then pay for further assistance in specific areas (e.g., help to find apartments or get a residence visa).
Obviously, it would be a lot faster to generate a profit by selling an actual physical product that people are already searching for and can’t wait to purchase. You simply show the product and people buy it.
On the other hand, when you’re creating a custom service, the prospective customer needs time to learn more about you and trust you before partying with their money for the service you’re offering.
Should you follow your passion?
During my many years of mentoring tons and tons of people, the first question that inevitably comes up is whether they should choose an area that’s closely connected with their passion.
So, if a certain person is passionate about a topic such as dog-training, they should build a site about dog training and then figure out ways of making money from it later.
My answer is that it depends. You definitely want to work on something you have some kind of interest in—at least be somewhat interested in.
Most importantly, however, you must pick an area that already has a sizable demand of people who’re looking for a particular solution to their problem.
For instance, fitness is an area with lots of demand. Same for building a business. Lots of people want to make money online and dump the 9-5.
Even if I’m very passionate about teaching my Yorkie Terrier various tricks (I don’t have one), it’s probably not an area I would choose to pursue and build a business because it’s just too small and constricting in size and scope.
On the other hand, let’s say I’m living in Argentina, and I’m super passionate about helping others move and get settled in properly in the country. In that case, that’s something I might pursue doing because of 1) I’m super passionate about Argentina and 2) I realize there’s a sizable demand of people who are trying to do the same.
I can’t tell you how many times I’ve seen people give up because they lost interest in the topic they chose to work in. As time went on, they realized it they weren’t interested in cat knitting or building a site about a little city in Nepal as much as they thought.
Now that you decided what is it you want to work on, the next thing is to figure how to get customers to visit your site so they learn about your products and services and hopefully purchase them as well.
Getting customers to your site
The first thing you need in order to make money is people who’re willing to give you money: customers.
Generally, there are two ways to get traffic: free and paid. Free traffic comes to you via places like Google searches (organic traffic), links from other websites and things like word of mouth.
Paid traffic is traffic that you “purchase” via advertisements. Popular advertising platforms are Google Ads (Adwords), Facebook Ads, and tons of others.
I typically employ both strategies depending on my goals.
If you’re tight with money, then free traffic is ideal.
On the other hand, if you know exactly how much you’re making and how much you need to spend on traffic to either break even or turn in a profit, then paid traffic can work really well.
Once you’ve discovered ways of getting people to your door, the next step is getting them to buy something from you. This process is called monetization.
Compared to finding a steady traffic source for your products and services, monetization isn’t very difficult. If you there are people who come to your site because they’re looking for a specific solution to their problem, and you have this solution to their problem, selling it to them won’t be very difficult.
After all, they’re on your site because you promised to help them, right?
While there are tons of different offers you can create, there are two primary ways to make money: sell your own products/services or become an affiliate for someone else’s products/services.
When you sell someone else’s product, you get a cut of the transaction (commission). That’s called affiliate marketing because you’re an affiliate for the seller instead of being a seller yourself.
Affiliate marketing one of my first huge online successes back in 2003. I was one of the largest affiliates for a particular site. If I referred someone and they signed up for the service, I received a commission. As I referred more and more people, I received bigger and bigger commissions (higher tier). As time went on, I ended up making an absolute killing in commissions.
The beauty of affiliate marketing is that you don’t need to build and support the actual product. That means no need to hire web developers and no need to handle customer support. All you really need to do is promote a marketing product or service while letting the vendor handle everything else.
One of the largest marketplaces to find products to promote is ClickBank. There, you can find all kinds of products to promote all kinds of different niches (markets for different audiences). You can also sort each product by how much money is making ensuring that you’re only promoting products that are selling and not some duds that no customer would ever purchase.
For instance, let’s say you’re promoting a product and they pay you a commission of $50 whenever anyone signs up through your link. That means you need to refer 20 users who signup for the service in order to make $1,000. If you’re referring just one paying user a day, you’ll be earning $50 per day. That’s $1,500 per month, a pretty comfortable sum for living anywhere outside the West.
Of course, you also need to provide the traffic. That can be done either via free sources (Google SEO) or paid sources (Google Ads, Facebook Ads).
While dropshipping is all the rage these days, I have been doing dropshipping back in 2005, so I have quite a bit of experience in this area.
Dropshipping is attributed to ecommerce. You set up a store that sells physical products. A customer visits your store and places an order. But instead of going to your own warehouse, picking out the item and shipping it, you’re asking another supplier to fulfill the order by shipping it directly to your customer.
This way you never even see and touch the product.
Dropshipping is very similar to affiliate marketing. Whereas in affiliate marketing, you’re a middleman for an informational product or service, with dropshipping you’re a middleman for a physical product.
There’s a lot of negativity about dropshipping, but these people don’t understand what dropshipping is. Dropshipping isn’t “positive” or “negative”; it’s simply a logistics model of product fulfillment. So, instead of you fulfilling your orders, someone else does it on your behave. There’s nothing inherently negative about that.
Selling physical products online (ecommerce) is one of the fastest ways to make money. The main reason is that you don’t need to sell the customer very hard on the product. The customer sees the product and they know right away whether they need this particular product or not. They know whether this product can solve their problem or not. This is different from an informational product where the customer needs to be persuaded that this particular product will solve their problems.
The business model with ecommerce is slightly different from affiliate marketing. First of all, you have the cost of the product. So, if you’re buying a product for $25 and selling it for $50, your profit is not $50: it’s $25.
There are other expenses such as the cost of ads (if you’re buying traffic and not getting free organic traffic).
Still, even with all the expenses and overhead, it’s easy to become profitable very quickly if you find a good quality product that solves a problem. And when you experiment with various products, you develop a “sixth sense” for knowing when a product will sell or not.
For instance, let’s say you’re selling a product that you can source for only $5 (you get volume discounts because you’re a high volume seller). It costs you another $5 to ship the product to your customer. Then another $10 for ads. You then sell the product for $30. That means your expenses are $20, so your profit is $10.
In ecommerce, it’s very common to have profit margins of around 15-30% as opposed to 100% when you’re selling an information product that doesn’t cost you an additional amount to produce (e.g., selling another license of software or access to a course).
So, if you can sell 100 of these per month, you will make $1,000 in profit. That’s only 3 items per day, not an impossible feat by any measure.
Building and selling your own product
When you’re an affiliate, you’re getting a cut of the commission (typically 25-75%), but when you’re selling your own product, you keep the entire profit for yourself.
If you already have a certain website up and running and a steady supply of traffic that comes to your website and loves the content, then the next step is creating your own product and service. When you do that, you won’t need to split the profit with anyone else; you pocket 100% of the profit.
The disadvantage is that not only do you need to spend ample amount of time creating this product, but you’re also responsible for all kinds of customer support issues.
If someone signed up and they’re having problems, you must deal with the customer. If your server is down, you must fix it. If your product isn’t being displayed properly, you must fix it.
Unlike someone who’s a mere affiliate who sends the customer over to a third party site, as someone who owns the product, you have a lot of responsibility to handle everything.
I have tried both approaches and there are pros and cons to being an affiliate for certain products, but also creating your own products as well.
The decision comes down to expertise. If you run a website that you’re very knowledgeable about, it shouldn’t be much of a challenge to create products and services that your audience would crave. On the other hand, if you somehow have access to traffic of an audience you have nothing in common with, then it might be wiser to become an affiliate for a third party product instead of creating your own from scratch.
For instance, I have no problems building products in areas I’m an expert in such as digital marketing, making money online, dropshipping and learning foreign languages, but I would never build products in areas I know nothing about like knitting or woodworking.
The right mindset to start
The most challenging part of making your first $1000 is believing that $1000 is somehow a lot of money and making that much money would be difficult if not outright impossible. That’s the wrong mindset to have.
The right approach is to ask yourself the following question, “What can I do right now that will allow to me sell one thing to one person?”
Is it selling a physical product?
Is it helping someone obtain a second passport in Brazil?
Is it teaching someone how to bench press 2.5X their body weight or helping them lose 30 lbs before Christmas?
Is it becoming an authority in a specific area and then consulting companies via your knowledge and expertise?
Now, combine the above question with a group of people who need this problem solved. Congrats: now you have a product, an audience, and a business model.
I still remember that fateful day when I made my first dollar online. That was over 15 years ago. Of course, the Internet was very different back then. Facebook Ads didn’t exist. Google was an up-coming niche search company.
Nevertheless, the principles are still the same. What worked back in 2003 still works in 2018 and will work in 2033 and beyond.
At the core, any business is really about people. It’s about forming connections. And when a useful connection occurs, money is usually exchanged.
When I think about entering a specific market, usually my first question is, “How can I add value?” or “What can I do to help a particular person or group of people” or “How can I make their lives better?”
This answer to this question usually becomes a product or service that, when combined with an enticing offer, is then presented to the prospective customer. They purchase it.
After all, people all over the world are hungry for various solutions to their problems. And, as a person who happens to have answers and solutions because of an extensive experience and knowledge, it’s your duty to solve these problems for them.