4 keys to success in how to start an online business from scratch

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1.  Advertising is key.  

Online businesses can be understood in terms of money earned per page view.  Without a physical storefront that passively advertises you have to look into creating a digital one.  The number of page views to your online store can accurately be used to predict your store's revenue.  So the most important step to generate revenue is get views.

How do we get views?  Well of course it is important to generate views from your product pages themselves.  If you are selling leather belts you want your "leather belts for sale" page to have all the necessary keywords and common search phrases so when people search for leather belts they will find you.  The title is especially important, never use a keyword more than twice in the title and make it grammatically correct or as close to that as possible.  Google looks for keyword stuffing so if you make your title unnatural then you will get less traffic.

Once that is all nailed down then you are going to need to get the word out further.  Many people will use google adwords to advertise their product pages.  Others will use ebay and amazon and sell their products there to build a following and give customers coupon codes to their site so they move to your website store instead in the future.

Word of mouth is also important.  While not nearly enough to run a business in most cases, word of mouth can really boost your sales.  To maximize word of mouth you need to have free or good shipping prices, innovative products with mass appeal, and excellent customer service (think generous and easy to get a hold of).  Also having unique and well priced items will help tremendously.  Also being  open source and telling your customers exactly how it was made also boosts their confidence to recommend it to others.

Be your own advertising.  The easiest way to be your own advertising is to write articles on your website that generate traffic directly to your site.  Write about whatever you are passionate about, and current events don't hurt.  This means in addition to people searching for "leather belts" if they find your article on "the history of hip hop in america" then when they are on your site you will have the chance to convert them to a customer too.

Use social media.  Try to generate lot of followers and friends and post your articles and products to get people to visit your site.

Start a youtube channel.  Second to google, youtube is the next largest search engine in the world.  But better than google there is much less competition to get to the top of youtube results.  So we could say that youtube is the most valuable search engine in the world for advertisers.  Make youtube videos and advertise your products in your videos and link to your store in the description.  Make the videos on whatever you are passionate about, just direct users to your store without being too annoying about it.

If you can't beat em at youtube, join em. Consider paying youtubers to advertise your site/products.  A channel with 100,000 subscribers only brings in roughly $1000 a month in revenue from youtube ads but has a huge reach with roughly 10,000 viewers per day.  So for little money you could make a youtuber very happy to advertise for you.

Advertising all yourself will be a slow starter so you may consider traditional advertising like google adwords and paying other companies to advertise for you.

With a good store website you can expect to get roughly $0.10 per pageview, this is what this website generates and this is roughly 100x what you would get from google paying you to put ads on your youtube video's alone.  So this site with 100,000 views has generated roughly $10,000 in revenue so far wheras to earn that much on youtube alone your channel would require about 10 million total views.

2. Conversion is important.  

Conversion is turning a website viewer into a customer.  On this site that number is roughly 0.25%.  So that means with 10,000 views per month I get roughly 25 customers which spend an average of $37 each.  Getting views to your website won't mean much if people can't find the products you are selling.  Feel free to provide direct links to your sale pages or links to pages that have a list of all your products.  Here I have a health remedies tab at the top with a listing of basically everything I have for sale.

In addition to being easy to find it will help if your products are unique and impossible to find elsewhere.  If your items are a dime a dozen on ebay then chances are your customers will find that and won't buy on your store.  Here I invented all of my own products.

3. Improve your average earnings per sale.  

It's great if people buy things on your site but with only $1 average per sale its going to require way too many hits to your site.  Use free shipping as an incentive to drive that average price per sale up.  Being too aggressive with increasing the value of a sale isn't good though and will cause your conversion ratio to go down.  What I do is offer free shipping on anything but then upgrade the shipping if the order is over $33 which does seem to help encourage people to spend that amount.

Offering bulk discounts will also improve this.

4. Try to create repeat customers.  

Most important here is provide a quality product at a good value with stellar customer service.

If your shopping cart allows it ask if customers want to be put on a mailing list during checkout.  My cart doesn't so I just automatically put people on my email list if they purchase and provide an email.  Email your customers monthly if possible and give them an update on your site and products and give them coupon codes to encourage them to buy again if possible.

And thats pretty much it!  You don't want to rely too heavily on advertising, you want to "patch up any leaks" in your process in numbers 2-4 so that with minimal advertising you can get great results.  Advertising is the toughest one of all of these so consider creating your own "media company" by starting a blog on the website to pull in traffic and/or a youtube channel that doubles as an advertising place for your products.  This site has done both and after just a year and a half I have gotten to $500-1000 a month in site revenue.

Focus on product value, advertising, price per sale, and customer retention and you can start your own business too!  If you have a high cost of living to support you are almost invariably going to need to spend quite a lot on advertising but if you can live on little you can be much more self sufficient.

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