Top Passive Income Online Business Models & How They Work [Part 4] • Income Prodigy

This session of the Online Business FM podcast is all about the best tips on how succeed at selling your own products.

Seven awesome tips you need to hear to get you closer to success if/when you decide to start building and selling information products.

Episode 7 here is like Side A (with Episode 8 being Side B) of the two concluding sessions of our series of episodes where we talk about the Top Types of Passive-Income Online Businesses and How They Work.

In these two sessions (Episode 7 and the next, Episode 8) we focus on a very exciting topic: Selling Your Own Products.

What You’ll Learn

Why you should bet on multiple traffic sources.
Why you should invest back into your business.
Best time to start selling your own products online.
Coming up with product ideas and validating them.
How to sell the right way.
Pricing & sales funnels.
Recruiting affiliates, making more sales.
And much more!

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Links and Resources Mentioned

Affiliate Disclaimer: Some of the following links below may be affiliate ones, which means I earn a commission — at no extra cost to you — if you end up purchasing anything after clicking through those links.

Transcription

My people… what’s going on?

Welcome to another episode of the Online Business FM podcast, the show that aims to give you the insight, knowledge and (why not) some inspiration and motivation to help you succeed in the online world.

This is Episode 7 of our podcast and “seven” is actually one of my favorite numbers.

I don’t know if you like soccer or not – I do, I love it – but usually the player wearing the number 7 jersey is one of the most influential players of his or her team by assisting strikers and scoring lots of goals themselves, too.

Think of… some famous players off the top of my head… that wear or wore that number on their back like… Cristiano Ronaldo, David Beckham, Eric Cantona, Luís Figo and many, many others.

The number “seven” is also considered to be a lucky number. A triple seven means “Jackpot” on the slots machines and there are many other reasons, as well.

In Today’s Episode

But… we are not here to discuss soccer or lucky numbers, are we?

Although you could perfectly build an online business around those kinds of niches and actually sell your own products, be it informational ones or even physical ones.

And that is exactly what we’re going to be talking about in today’s session:
selling your own products.

To keep it at our regular episode length and since I have so much to talk about concerning this topic, I am actually going to be dividing the content I have prepared for you in two sides. Let’s call it Side A and Side B.

Just like those old audio cassette tapes which came with two sides.

Those were really cool, by the way, and if have you ever own a ZX Spectrum Computer back in the day, you’ll love them even more… or… NOT. 🙂

Anyway, Side A will be about the general tips you can follow in order to succeed at selling your own products.

And Side B (our next episode) will focus on the actual types of information products you can build and sell to your audience:

eBooks.
Online courses.
Membership websites.
Software, SaaS (which stands for Software as a Service), plugins, add-ons, apps.
And productized services.

Obviously, also in Side B, I won’t forget to discuss the ultimate dream of every online business owner or internet marketer; that deeply desired pot of gold at the end of the rainbow which is recurring revenue.

Today’s episode (Side A) and Episode 8 (Side B) are the concluding sessions of our series of episodes where we talked about the Top Types of Passive-Income Online Businesses and How They Work.

Previously on Online Business FM

Whether you’re listening to our show for the first time, you’ve missed one of the episodes or you’d simply like to be reminded…

We started this series back in Episode 4, by describing the two options, the two different types of approaches or foundations you need to lay down first before setting up these types of passive-income businesses and aiming to reach success.

Episode 5 was solely dedicated to Affiliate Marketing, what it is, who is it for, the best practices to succeed at it and why is Affiliate Marketing the most popular monetization strategy.

Finally, Episode 6 (our previous session) was centered on Advertising and Sponsoring your online property, be it a blog, website, podcast or YouTube channel.

Today, like I’ve just told you, is all about the best tips for selling your stuff.

Let’s Get the Show Started

Really exciting things to discuss today…
If you’re like me, you’re probably eager to get to the bulk of things so let’s get going…

Ladies and Gentlemen… START YOUR ENGINES!

Selling Your Own Products

What’s the big deal with selling your own products, after all?

Well, my friend…

Success — and I mean, REAL SUCCESS — in Internet Marketing or Online Business really just comes when you start selling your own products.

If you do things right, the returns can be pretty huge and it may represent the difference between you being able to quit your day job or not.

Now, I won’t advise anyone to quit their job or not — that’s entirely up to you to decide, weigh all the factors, prepare whatever you need to prepare, get ready, measure everything up and then decide.

It’s entirely up to you to decide, not for me to advise you about it.

One of the Most Overlooked Monetization Strategies

So, getting back to our content here…

This “selling-your-own-stuff” thing is actually one of the most overlooked monetization strategies there are.

It requires more work up front from you and it also takes longer to make money from it.

These delay gratification and more upfront work factors make people prefer to bet on Affiliate Marketing or on the Amazon’s Associate Program instead.

Nevertheless, the income potential from selling your own products far exceeds what you can make from Affiliate Marketing or Advertising because you control everything from start to finish, from product conception to marketing and sales.

Besides, you don’t need a ton of customers to earn a good amount of money; even just a few hundred can help you do it.

ConvertKit’s $1M MRR

Just so you know and feel inspired (super inspired, actually)… ConvertKit, an email list and autoresponder service, has recently hit $1 million dollars in… (wait for it…) monthly recurring revenue.

Which means that they are generating $1 million dollars per month from their not millions of customers, not hundreds of thousands customers but from just… 18 thousand and around 850 users.

Not just a few hundred of them, it’s true, but we are talking about $1 million dollars of revenue a month here.

Why Are There More People Choosing the Affiliate Marketing Route?

But it’s no wonder why there are so many people who still prefer to go the Affiliate Marketing route.

One of the biggest and best reasons is that you don’t have to spend time and money to create your own products. They are already there, you just have to go and promote them.

And you don’t need to worry about anything else like customer service, tech support and returns.

So it’s much easier to start with Affiliate Marketing and it still yields a higher ROI (Return On Investment) than it is to build and sell your own products.

What’s the Disadvantage of Opting for Advertising?

As far as Advertising is concerned, it requires a huge amount of traffic to make real loads of cash.

I remember my viral-videos website that was monetized via Google AdSense. It needed hundreds of thousands of visitors a week to make real money.

So it’s either trying to drive millions of visitors to your website a month or being in a high-paying niche where the CPC (Cost per Click) on your display ads will make you earn much more.

I talk more about Advertising and Sponsoring in Episode 6, the previous session. You can listen to it by heading to onlinebusiness.fm/6.

Information Products

Let’s now talk about information products.

«And what are information products?» — you might be asking.

Information products are any of sort of intellectual property content that is stored in a digital format and is suitable for selling online.

That’s kind of the technical definition — so to speak – but to what does it actually translate?

Well, an information product can be anything from ebooks or PDFs to audio books, from membership websites to online courses, from software, plugins and add-ons to mobile apps.

Any digital contraption (oh… I love this word “contraption”) or any content you produce, save and distribute to sell on the Internet can be considered an information product.

Information products — or, rather, selling information products — is not a 100% passive income kind of business.

However, just like I explained back in Episode 3 of this podcast, there is no such thing as 100% passive income… which doesn’t necessarily mean it cannot be or become passive, in some or other way.

In the case in hand, when it comes to information products (and their not 100-percent-passiveness), you’ll need to worry about:

Book, course or product updates and always trying to better your product along the road.
Customer service, tech support and payment returns.
Improving your conversion rates by tweaking around and changing your marketing tactics, sales pages and sales funnel and email marketing efforts.
Driving traffic to your offer by betting either on SEO, advertising (Facebook Ads or Google AdWords) and maybe even recruiting affiliates to do the hard work for you.

Best Tips on How to Succeed at Selling Information Products

We’ll get more specific in terms of business types in Side B (the upcoming Episode 8).

But here are a few general tips that apply to all kinds of information-product types of businesses.

Tip #1: Bet on Multiple Traffic Sources

The first tip I have for you pertains to driving traffic to your website and generating sales:

Bet on more than one traffic source.

Some experts and gurus say that you should pick one traffic source, one product, one strategy and run with it; meaning that you should focus on just one thing at a time.

And they are RIGHT!

You should focus on just one traffic source first, try to understand how it works, get results from it and set up a process (which is just a set of repetitive tasks you need to do every time).

After you reach that stage, though, you shouldn’t stop there.

When everything is streamlined and running smoothly for that particular traffic source, you should look for another alternative and do the same:try to figure out how it works, get results, set up a process or take it further by setting up system (a set of processes that your virtual assistants or collaborators can also follow to save you time).

The general rule of thumb here is:

Find out where your audience hangs out the most online and focus on those platforms keeping in mind what I said earlier:tackle one at a time and when you’re comfortable with that one, move on to the next one.

For example, you could go beyond just focusing on SEO. You could try building an audience on Facebook or Twitter or Pinterest or even on iTunes and get lots of traffic from those platforms.

Driving multiple traffic streams (like 2 or 3) that originate from different sources to your website is really the best scenario.

Tip #2: Invest Back Into Your Business

In order to increase your performance, productivity, competitiveness and keep your business making money you should grab some of the money you’re already making and invest it back into your business.

Utilize it on outsourcing content production or repetitive tasks, maybe hire virtual assistants to help you out and get some tools to streamline your workflow and reduce your workload.

You can use that money, as well, to improve your branding elements, communication and marketing and to build relationships with influencers in your niche or market.

Tip #3: Best Time to Start Selling Your Own Products

What’s the best time to consider selling your own products?

There are three things you need to have in place before considering building and selling your own products:

Have published a reasonable amount of content.
Drive a considerable number of visitors to that content.
Build an email list with a strong number of subscribers.

Basically, you’ll need to create good content on a consistent basis — ideally you should set up a content production system that keeps spitting out new posts frequently –, grow your email list by placing opt-ins forms on your blog posts, build your following and send your subscribers and followers back to your website’s content.

When all of that is kind of scaled up, that’s the moment you should consider start building and then selling your own information products.

Tip #4: Coming Up with Product Ideas

Before actually building your own information product, however, there are a few options to both think of potential product ideas and, at the same time, validate those ideas.

#1. Ask Your Audience

You can utilize your existence audience. By that I mean your list of subscribers and social followers. (that’s why you should first wait until you gather a considerable amount of them) and simply straight up ask them.

Run a survey — using a tool like Survey Monkey — and ask an open-ended question like “what are your biggest struggles regarding specific topic ABC or niche XYZ?”.

Actually, if you set up your email list autoresponder series the right way, in one of your first emails you should go ahead and request everyone who signs up to your email list to reply back to you with their answer.

That way you’ll be collecting those valuable pieces of information on an ongoing basis.

Using a tool like Survey Monkey just makes it easier for you to gather that kind of information and data on a centralized place and they do have a free plan that allows you to run your own surveys.

Instead of asking them to reply back to you, you could ask your list subscribers to answer the survey.

But it’s always nice and a smart approach to make your subscribers see that there is actually another person on the other side of your email address (plus it helps with open and click-through rates when it comes to your email list stats).

#2. Drive Cold Traffic to Your Survey Page

Another option is to drive cold traffic to your survey page through Facebook Ads (or other advertising platforms, although FB Ads might work best) and offer an incentive to get more people to take the survey.

That incentive could be anything from offering to pay a month’s or a year’s use of a popular tool in the space or an Amazon gift card to the winner.

While you’re at it, take the opportunity to add your survey takers to your email list. (Be sure to ask for their explicit permission before you do it, though.) After all, you will need their email addresses to send them their prices.

#3. Promote Similar Affiliate Products to Test the Waters

A great way to test the waters and getting a feel for what your audience wants and needs before coming up with your own product is to become an affiliate for products similar to those you might be considering building and selling.

Pitch affiliate offers that are potential solutions to your audience’s problems and see what works and what doesn’t.

Can you generate enough sales to justify creating a similar and, eventually, better product around?

This strategy here is useful to get product ideas and validating those ideas at the same time.

Tip #5: How to Sell

This next general tip concerns with knowing how to sell your information products.

Selling, or rather knowing how to sell, is actually one of the biggest reasons why people fail; people don’t know how to do it right or simply don’t do it at all.

If you think about it, it makes perfect sense.

Most of us are good at producing content, writing, making videos, podcasting, blogging, etc., not actually selling.

Nevertheless, here’s the general idea.

You need to set up a good sales page that focuses more on what people can achieve if they end up buying your product than on the list of features it includes.

To back that up, you have to show them something that proves that by adding a few testimonials from your previous customers.

If this is your first time selling that particular product, you should consider offering it to some people of your audience’s member (or selling it at a cheap price) in return for their feedback.

You have a community as one of your product features (like a Facebook group or a forum), there’s where you can collect some success stories from people using your product and use them as proof that your product actually does its job.

Also, don’t forget to make it easy to buy, include a money-back guarantee and facilitate refunds.

Tip #6: Pricing & Sales Funnel

Set Up a Three-Tier System

As for pricing, you can set up a 3-tier system in that your recommended best option — the third tier — seems obvious, right off the bat, that it is the most advantageous one to your customers.

Let’s say you’re selling an online course.

Your first tier are video lessons and costs $200, your second tier is the PDF version of same online course that sells for $100 and the third tier is a package that combines the video lessons and the PDF together and runs for $285 and includes access to a community where customers can interact with each other and ask questions to the course instructor.

It seems pretty clear which is the best option here, right?

Your third tier product should be cheaper than the other two combined.

Upsells & Product Upgrades

Or you can set up a sales funnel with the cheapest item as the front-end product (let’s say it would cost $20).

This cheap front-end item would sort of act like a tripwire where people who stepped on it would be offered more expensive upsells.

Your upsells should be complimentary products to your front-end product, of course, so it would make sense for people to also buy them. And in this example here they would cost around $100.

That’s how you turn a twenty dollar sale into a $120 dollar sale, or more depending on the price points you decide to use.

An important strategy to use here is to offer your upsells or product upgrades during or right after checkout making sure they are one-click-to-buy items so that your customers get charged right away without having to go through the checkout process once again.

This strategy alone will boost your conversion rate dramatically.

Offer a Free Product

Alternatively, you can offer a free product (like an eBook or a free course) to act simultaneously as a lead-magnet to incentivize people to subscribe to your email list and as the first stage of your sales funnel where you would then try and convince people to buy products from you.

Recurring Subscriptions

Depending on the product that you’re selling, you can take things further by offering recurring subscriptions.

This works best for SaaS (software as a service) and membership websites.

Higher-End Products

For higher-end products that cost over $2,000 or $1,000 you should make it more accessible for people to purchase those products by dividing that amount by several monthly installments where they would pay $200 or $100 a month instead of the whole price all at once.

$1 Trials

As you’ve probably seen already, there are also some products that are being offered as $1 trials for some days and then charge customers the full amount.

It could work in terms of convincing more people to try and buy your product, but I’ve heard that this approach generally comes with a ton of problems and a high-refund rate.

People get attracted by the incredibly low price and fail to read that at the end of their trial period they will be charged the full amount.

You need to be careful, then, if you opt for using this approach; you want to keep your customers happy and avoid chargebacks at all costs because those can get you in trouble business-wise.

Scarcity

A great marketing technique to increase your sales page’s or sales funnel’s conversions is to use scarcity.

This basically means setting up a special offer that’s either limited in quantity or in time, with the latter usually producing the best results.

The goal here is create a sense of urgency around your product offering and “force” (force here is in between quotation marks, of course) people to take action. I don’t know about you, but this is always how other marketers finally convince me to buy their products.

Simply adding a big countdown timer above your “Buy Now” button or other kind of call-to-action you have in place will do the trick.

Just remember not to be deceiving.

If you’re telling people that you’re selling your product at a discount price for a limited time, it better be like so.

The worst thing you can do in terms of trust and authority is to fool people into believing in something and then that not being true. And I’ve seen some marketers do that too. Of course, the trust I had in them was totally destroyed.

Evergreen Scarcity

A newer version of the scarcity marketing technique is the evergreen scarcity.

It works just like the regular scarcity technique except that for every person there is a unique countdown timer.

If you do things right and use the proper tools, it will be hard (mind you, I’m saying HARD not impossible) for anyone to cheat the system and so everyone will get an equal and fair chance to get your stuff at a discount price.

Tip #7: Recruiting Affiliates & Making More Sales

If you want to scale up your sales — and obviously you will — you should consider recruiting affiliates.

They’ll act as your sales force and that could mean making many more sales and increased exposure to your brand, at the same time.

To recruit affiliates you can join Clickbank and wait for people to start promoting your stuff.

Or, you can look for affiliates yourself by searching the web for bloggers or affiliate marketers that are already promoting similar products from your competitors and reaching out to them.

Impress them with your business numbers and explain why promoting your product would represent a better for them.

Bring a Few Influencers on Board

At the same time, bringing a few influencers on board would make a huge difference.

If you can convince one or two influencers to promote your product that would mean a lot more sales.

Solo Ads

Remember last episode when I said you could make money from “lending” or “renting” your email list for someone else to promote their products to your audience?

As long — I need to emphasize this part — as long as you, the email list owner, are not selling their email addresses, spamming them or going against what should always be your primary focus:putting your audience’s needs, wants and interests first and foremost before making money.

Remember that?

When you’re on the other end of deal, when you’re the one trying to rent someone else’s list to promote your product, that kind of thing is called “Solo Ads”. And that’s a good strategy to promote your product to relevant audiences and potentially make more sales.

As I mentioned in Episode 6 too, you could strike a deal with the email list owner where he or she would get a percentage of your sales (whether those sales come from a webinar or you’re selling directly through the emails you send) or earn an increased affiliate commission.

Conclusion

We’ve come to end of our Side A episode here but there is still a lot more to talk about concerning the types of information-product kinds of businesses.

That’s what I’ll be doing in Side B, the next session of the OBFM podcast, Episode 8.

Thanks for Listening

I hope you’ve enjoyed this episode here and I thank you for listening to it.

If you have any questions or would simply like to say “hi”, shoot me an email to louie [at] incomeprodigy [dot] com

I would love to get some feedback and know more about you.

Why don’t go and answer this question, for example, what are your biggest struggles when it comes to building and selling your own products online?

Show Notes Page

All right, that’s it for this week. To get this episode’s show notes head on over to onlinebusiness.fm/7.

Please tune back for our show’s future episode!

See You Next Time

Thanks again for being there and I’ll see you around!

From Lisbon to the world, this is Louie Luc and I’m signing off.

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