STARTUP/SUCCESS

Online Business Success is More Possible Than Ever — If you Can Avoid the Snake Oil

Before replacing your job with an online business, be sure your business model is based on providing real value

Are you looking for another way to make a living? If so, you’re in good company.

According to an article by Raj Vardhman in GoRemotely, seventy percent of the workforce is looking for a career change. Maybe you’re ready to leave your job and start your own business. It’s an idea that can take many different forms, for example, buying a franchise, starting a new venture from scratch, or launching an online business –which seems to be the number one choice of most of those looking for a new way to make a living.

And why not? You’ve seen the ads and read the sales pitch. All you have to do is throw together a website, establish a sales funnel with your book, training course, or other digital product, and then sit back and let the money roll in.

So How Realistic Are These Promises?

Can you really make big money online — at least enough to equal the income you make working for someone else?

If you listen to the hype being promoted by a large segment of online marketers, it sounds easy. They’ll typically talk about a huge pool of people out there who are just waiting to pay you for your skills and expertise — information you’ll sell in the form of a book, or a training video, or a podcast.

But before you buy into one of these online startup packages or spend a ton of money to attend a seminar on how to become rich and famous, let’s talk about how credible and practical these programs really are.

First of All, What Are They Going to Teach You?

Let’s break this down into three broad categories:

• Replication
• e-Commerce
• Personal branding

Replication is a “business” model based on learning how to do what the sponsor, host, or business guru is doing, and then offering the same program to someone else. For example, the big subject for replication today is podcasting.

“Buy my book, attend my seminar, or join my inner circle and learn how to become a successful podcaster!”

The pitch is often based on the three universal motivators — easy, fun, and profitable — and it usually goes something like this . . .

“Everything you see here today, including the exact methods I used to make a huge on-line fortune, will be revealed to you. All you have to do is duplicate everything I’ve done. Clone my business model and you can’t fail, because it’s tested and proven. It worked for me and that means it will work for you.”

And down the rabbit hole we go.

A Business Program Based on Pure Replication is a Red Flag.

For example, you pay someone a thousand dollars to learn how to launch a podcast, so you can sell a program to teach others how to launch a podcast. And you don’t even need to create the program material because it’s provided for you in the original material you paid a thousand dollars for.

In their most abusive form, these offers are nothing more than fantasy, based on promises of big money in a very short time window.

The typical commercial will feature a thirty-something male leaning against his two-hundred-thousand-dollar sports car, parked in the foreground of a huge mansion. The implication is clear: It’s all his, and he bought it from the profits he made by following a business plan he designed and implemented — the same plan you can buy for only a couple hundred bucks, or a thousand dollars, or ten thousand . . . because the more you pay, the more it’s worth, right?

The final part of the pitch usually suggests — or outright promises — that you’ll be able to put your new business on auto-pilot, allowing you to live anywhere you choose, and never needing to “work” more than a few hours a week.

What are the chances of a business based on pure replication becoming financially successful?

There’s a reason replication-based businesses are often called Ponzi or pyramid schemes — in their purest form, they can be outright illegal.

You run out of people to sell to.

For example, the widely-used multi-level business model provides us with lots of examples of those who were convinced they could build a financially successful business by recruiting others to duplicate what they were doing. Projected cash flow was based on selling products like soap, cosmetics, books, or vitamin supplements.

But the product was rarely the reason to become involved with the company. It was the “magic” of recruitment — finding others to become part of the same organization under your downline, and then profiting from their efforts and, in turn, from the efforts of those they recruit.

The central concept was about building a large downline, where others do the selling and you sit back and reap the financial rewards of being a great “manager.”

The typical result? Eventually, these “businesses” run out of people who can be convinced to join the organization. But not before each new “member” has bought the sample kit, literature, and duplication rights to use the company’s intellectual property.

Regardless of the quality or value of the product being sold, the real customer often turns out to be the new recruit, who must purchase the start-up kit and required upfront inventory.

(In full disclosure, there are a very limited number of MLM businesses that offer a viable business model. For example, Mary Kay, Avon, and Tupperware base the financial success of their representatives on actual retail sales to consumers, while compensation via recruitment is a secondary consideration.)

Let’s Look at the Second Category of Online Business — e-Commerce.

An e-Commerce business uses the internet as a tool to sell a product or service. Just about anything for sale from a brick and mortar business can be sold on the internet. For example, you can offer gardening equipment, toys, hobby and craft supplies, silk flowers, pottery, kitchen utensils, jewelry, original art, or the latest gadgets from Aliexpress or DHGate.

The distinctive element in this model is the fact that you remain behind the scenes.

Buyers may never know who you are and, in most cases, don’t care. Potential customers come to your site to buy products because of convenience, price, inventory, quality, and your guarantee and return policy.

If you decide to go this route, keep in mind you are the owner of an online store. And, like any store owner, you’re expected to keep your store clean, safe, easy to navigate, well-stocked, and a pleasure to visit.

What’s the probability of financial success with an e-commerce business?

Here’s a simple test: If you plan to sell a product that’s currently sold through traditional retail channels and has high consumer demand, there’s an excellent likelihood of profit. If you’re selling digital entertainment, educational materials, or practical advice, the closer you can align your offer to a particular niche market in which devotees exhibit a high positive emotional response to buying and using what you’re selling, the better you’ll do.

For example, “preppers” (survivalists) buy freeze-dried food, water purifiers, weapons, protective equipment, off-grid energy sources, short-wave radios, and the list goes on. They don’t necessarily count the cost of these items as an expense as much as they look forward to how valuable they’ll be when “the big one” hits. Driven by the emotional need to survive, they buy equipment, books, and attend in-person training designed to teach paramilitary tactics and survival.

The Third Category — Personal Branding — is a Catch-all for Personality-driven Online Marketing Activity

The purpose of this strategy is to build notoriety, popularity, and credibility around a specific individual. In the personal branding business model, the product is you. Your presence is front and center on every landing page, website, and email.

The suggestion — or strong inference — is clear: Your opinion has value — because of your experience and influence. And of those two, influence is the more powerful motivator.

Influence is created from social proof.

The more you’re liked — the more followers you have — the more likely others will also want to follow you and pay attention to what you have to say. In short, it’s a popularity contest — and the more admired you become, the more influential you can be.

The format and theme of personal branding comes in many variations, but the most popular is to be an expert in a specific field, or to being recognized as a philosophical or psychological guru. This includes writers, pop-psychologists, fashion and cosmetic influencers, career coaches, health and fitness instructors, painters, photographers, and just about any other occupation in which a specific individual is sought out for their opinion, advice, and guidance–and coincidentally, the products or services they sell, endorse, or recommend.

In this model, your website, video, podcast, or blogging articles are marketing campaigns — content specifically designed to inform the market about your expertise and skill. You may show others how to solve a problem, improve a situation, or make a desirable change — usually done by demonstrating the effectiveness of the product you’re selling or endorsing, or by providing basic information about a subject, then offering a more extensive and detailed level of help delivered in the form of a judiciously priced book, video/audio content, or downloadable text file.

The key to building a large following (platform) of loyal and devoted fans is to create a sense of what I call, “the everyday celebrity.” That means being perceived as trustworthy, sincere, and wanting to help others. All three elements are essential in building a large platform.

Your audience must be able to relate to you as someone “just like them.”

Yes, they’ll praise you and shower you with compliments, often writing gushing testimonials to confirm what a difference you’ve made in their lives. And yet, through it all, you must remain humble, expressing how grateful you are to be able to help others with their concerns and problems.

I suggest reading that last sentence again.

Because the line between self-assurance and arrogance is a thin one. And if you ever cross it by suggesting you’re better than your audience, or that you’ve achieved such a lofty status you can’t relate to their wants and needs, you’ll find yourself being ridiculed and demonized — in effect, you’ll have committed influencer suicide.

Here Are a Few Final Thoughts

Regardless of whether you open a brick-and-mortar shop or go exclusively online, business success is still about the work. It’s about putting in the effort and dealing with demanding and often unreasonable customers — and then getting up the next morning, and doing it all over again.

Granted, an online business may reduce or even eliminate the actual face-to-face time you spend with your customer base.

But the internet is not magic. It’s a tool. And like any tool designed to increase productivity, the internet can help make your business successful — if you use it correctly. Just make sure the product or service you offer for sale has a recognizable value that’s separate and apart from the method used to market it.

While you’re in the process of analyzing what kind of business you want to start, always consider the picks and shovels behind any niche you consider. In the California gold rush, those who consistently made the most money were not miners — they were the shop keepers and equipment suppliers selling picks and shovels, wagons and horses, and disposable items like clothing and food.

Could you make more money, grow your business faster, and have less competition if you were somewhere in the supply chain as opposed to selling to the consumer? Instead of pitching a program on how to start a podcast, how about offering hosting or transcription services? Or what about a service that pairs podcasts with available guests?

And finally, don’t be hesitant to consider a more conventional business within an industry that’s been historically successful. It’s not unusual for a McDonald’s franchise owner to become a millionaire. I know there’s nothing sexy about selling hamburgers. But if financial independence and security is high on your list, it’s time to think rationally and get realistic about what’s possible. The best way to start is to dump the fantasies about overnight wealth that’s supposedly available to anyone with a computer and an internet connection.

Being Successful at What You Do Always Comes Down to Providing Real Value to Customers.

It doesn’t matter whether you’re selling baseball cards or Cadillacs, those who decide to do business with you must feel like they’re being treated honestly, they’ve received more value than they paid for, and if given the opportunity to make the choice all over again, they would do the same thing — which is another way of saying they will refer you with a positive recommendation.

That’s the way you build a following, a market, and a business.

© 2021 Roger Reid. All Rights Reserved.

Listen to the podcast of this article at Success Point 360

Roger A. Reid, Ph.D. is the author of Better Mondays and Speak Up.

Roger A. Reid, Ph.D. is the host of Success Point 360 Podcast and author of Better Mondays and Speak Up. A certified NLP trainer with degrees in engineering and business, Roger offers tips and strategies for achieving higher levels of career success and personal fulfillment in the real world.