Profits 101: Sustaining Your Edge via the
Internet
So you’ve started an online business. Well truth be told … the same business principles apply to the internet as the “brick and mortar” world except in a slightly different format.
Your profits reside in the following basic ideas:
Profits
Time
Scale
Frequency
In the most simplistic form: Your profitability comes from your return ($ profit on each item), how long you can maintain this profit margin, and how much money (or inventory) you invested in your store.
Ok …let’s relate this to the internet ….
Profits: Basically this is your mark-up … be it on eBay, at a Yahoo! Store, or on your site. This is the $$ amount that you sell your product over what you pay for it. The key components here are pricing your item(s) and what they cost you. You make your money on what you pay for an item (ie – buy low / sell high – or at least what the market will accept).
Time: This is how long you can sustain your competitive advantage – be it pricing eBay items or until increased competition forces you to lower your prices. The longer you can sustain your advantage … the more $$ you will make. In the internet terms, get a niche and dominate it. Go deep – not wide.
Frequency: This is traffic. On the internet, you must have targeted prospects visit your site or auction. The more focused your niche – the better quality of prospect.
Scale: You can do this big or small. The internet allows you to start small, appear large (or at least larger than you at a keyboard), and exponentially explode your business. Don’t kid yourself, an online business takes a lot work. Scaling also refers to the amount of exposure your website / internet business gets (this means blogs, search engine rankings, links, great content, and a targeted email list). No exposure – no traffic – no prospects – no sales.
Stay focused – Get a great niche – Scale up your online presence – and Dominate your competition!!
You can do it.
To your success,
Spencer White, MBA & Entrepreneur
