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Internet Entrepreneurship: First Step, Getting Started

First steps: choosing the business

When I was thinking about starting an internet business there were
a few things that were must have requirements.

The first one was that I needed to be able to get the business to profitability for less than $1600. In practice each site has cost more than that when you figure in the marketing costs needed to get it off the ground quickly. The silk tie retailing site was set up for less than $300 but when you factor in marketing spend, then I have spent almost $800 per month on marketing, mostly Google Adwords and Overture. It is only after month three that I have got close to breaking even. Anyway, near enough and if you are more patient and make less costly mistakes than me then you should be able to do it for less.

Secondly. The business had to need as little manual work as possible. I am after a business that I can start working part time and as am a management consultant and sell my time by the hour, for me time really is money. I am also not keen on hiring people if I can avoid it. The internet has the potential to offer some really virtual businesses and I wanted to use this.

For this reason as well as start-up costs this means that I do not want to stock or handle any products. I do a lot of supply chain consulting work so it was obvious to me that I could have a business that used other companies to buy, store and deliver the products. The easiest way to do this is by using dropshipping. Dropshippers are wholesalers that ship individual customer orders direct to your customers.

I am after a business that I can start working part time and as am a management consultant and sell my time by the hour, for me time really is money. I am also not keen on hiring people if I can avoid it. The internet has the potential to offer some really virtual businesses and I wanted to use this. For this reason as well as start-up costs this means that I do not want to stock or handle any products. I do a lot of supply chain consulting work so it was obvious to me that I could have a business that used other companies to buy, store and deliver the products. The easiest way to do this is by using dropshipping. Dropshippers are wholesalers that ship individual customer orders direct to your customers.

There is a lot of information on dropshipping online, however it has to be said that there are some terrible dropshipping companies where prices are too high or products too common to successful. Typical of these is Select which charges a fee to join, but once you join you find that the prices are often higher than they are being sold for on eBay and are widely sold with lots of competition. It is very hard to make good money from these sort of dropshippers. There are however some good companies out there with niche products where achievable margins are good.

The third requirement was that the business needed to have the potential to generate at least $1k per month in profit. That way with a few web businesses it could become my full time job. I decided that I was not trying to start the next Amazon, instead I was after a good profitable niche. Something not too competitive and with no house-hold names as competitors. This means that I have not gone into electronics even though it is the area I know the best, it is a very competitive market online and were competition includes Amazon and Dixons. To be successful in electronics you either need to find a niche not served by the big boys or spend serious money to get established and get good Amazon Reviews.

then started searching for business ideas. I read the get rich quick newsletters, internet marketing newsletters, internet business forums and drop shipping websites. I searched for dropship suppliers then when I found a product that I thought might be promising, did a search for it and checked out the competition. If after that it still looked interesting then I did a keyword search on Google AdWords to find out how many clicks I could get and at what cost.

While doing this I came across some sites selling ready-made business websites. Essentially they provide a shop template, a catalogue and a supplier of stock and off you go. These sell for between ú50 ($80) and ú500 ($800). I wasted a fair bit of money with a couple of false starts. I bid on a lingerie web business template on eBay with a starting price of ú99; my wife was a lingerie merchandiser for Marks & Spencers and so I thought she could help, then I saw a gadgets website from the same people and thought I would get that and see if I could find a gadgets niche and bid for that too. Trouble was I then did some more research and found that lingerie was very competitive online and that the supplier I would be getting had a limited selection of very tarty undies at rather high prices. I also found that the gadget supplier was the Select and as I have already said they are overpriced. I then found the tie web business and decided this was a better niche where margins really are 60% and bought that one from UK who have been very good. Unfortunately no one else bid on the two on eBay and I ended up winning them although I no longer wanted them. $300 wasted. Oops. So do your homework carefully before buying; look carefully at the sample sites and try and find some clues to the suppliers, check the competition out and make sure the margins are high enough.

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Link Building Strategies That Work

There are a number of ideas about what are the best ways to promote a website and about the best ways to attract more visitors to a website. In my opinion, it is important to start up a link building campaign to increase the number of websites which have a link to your site on their site. This is one proven method which has been successful in achieving high rankings for many different sites, however there are some important factors to keep in mind when attempting to build up this link network.

If you have a new site and are desperate to achieve top rankings on the top search engines such as Google, think again. Most of these search engines will probably not give your new site a high ranking until it has become established. This is where the age of the domain is important. You cannot in reality expect to be placed in a higher search position than a site which has been around for eight years and which has been building up links, during this period. This is where patience is required, you should see your site as something which is going to be online for a long time and hopefully in time, some of the other sites that you are competing with will have dropped out etc.

This is the same attitude that should be applied when building up the number of backward links pointing to your site. Going from only a few, to a few thousand in a short space of time may not be the best idea. Regular increases are in my opinion the way to go and quality is just as important as quantity. Decide the ways in which you are planning to obtain your backward links and try to ensure that you obtain roughly the same amount each month, where possible of course. Over a long period of time this strategy is sure to pay dividends and your search engine position should steadily improve. You will then have an authority site, which all new sites will be aspiring to compete with. Like many areas of life we do not really want to wait for our success and want immediate rewards, such as high rankings. On some search engines this may be possible but on most it will require hard work and this type of patience.

The links that you obtain should where possible be from sites which are in a similar industry or subject matter, to your own site. This is a lot easier said than done however. If your site is very well written, optimized and of use to a large number of people, you may well receive links on other sites without the need to request the link. This is of course exactly what you want and is why it is important to spend time thinking of how your site is written and presented.

A good way of obtaining a link to your site is to write a reference or testimonial to owners of other sites with which you have had dealings with. Offer to write them this testimonial which of course will be of great benefit to them, on the understanding that they will include a link back to your site at the bottom.

I personally concentrate on obtaining one-way links as I believe these to have the most value. One way I do this is by writing articles such as the one you are reading. There are a great number of benefits of writing articles which can be read at most of the article directories. I would certainly recommend it to other people who are thinking of starting up a link building campaign.

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Making Sense of Internet Marketing for your business profile

The key components of an Internet marketing program include Search Engine Optimization (SEO), Search Engine Marketing (SEM), Paid Placement, Affiliate Marketing and Viral/Social Marketing.  The goal of all of these is to increase a website traffic (number of people who visit) however each uses a different tactic to meet this goal.  An effective Internet marketing program leverages a mix of these components to maximize their value at a particular point in the overall program.

Search Engine Optimization (SEO) is an attempt to increase your website ranking in organic (non-paid) search results in Google, Yahoo! and other search engines.  Search engines use complex, proprietary algorithms to determine how a page ranks.  In general higher ranking is achieved by optimizing the actual website content to increase its relevancy to certain search words (keywords).  Additionally, SEO attempts to increase the website perceived authority by acquiring quality links to your website from other complementary sites (back links).  Finally higher ranking websites are highly visible to search engines meaning most or all of their web pages are indexed by the search engines.

Many aspects of a complete SEO effort can be outsourced, but some
aspects are more effective when controlled by those most familiar with the
product or service.   SEO generally has a
longer-term ROI than other Internet marketing methods because a websiteÆs
authority is generally built over time. 
It is important to know that SEO is never truly finished.  Competition and buyer preferences change and
evolve over time, therefore, the authority of a website changes and must be
re-evaluated routinely.

Effectiveness of a SEO program is measured in terms of search
result rank, search engine saturation and overall visibility.  Result rank is determined by how high a
website appears in organic results. 
Saturation is an indication of how much of a website is indexed by
search engines and overall visibility shows how many references are found for a
website.

Search Engine Marketing (SEM) essentially is a shortcut to increased search result rankings.  By sponsoring links in search engine results, advertisers can ensure that relevant links are displayed along with search results whenever certain keywords are searched for.  These are generally displayed above or in a separate column beside organic results.  In these pay per click (PPC) programs advertisers bid to determine ranking and only pay when links are actually clicked by a visitor.

SEM can be, and probably is best, outsourced.  Experienced SEM practitioners can maximize
the results of a pay-per-click program by increasing the quality of website
visitors.  Additionally, knowledge of the
bidding process and keyword selection can significantly reduce the amount paid
per click-through over time.

SEM has the shortest term ROI as resulting traffic is immediate
and measurable.  The ability to tightly
control expenses, all the way down to cost per click, makes the expense very
predictable.  Negatively, there is little
if any residual value effect of SEM beyond potential relationships with new
buyers.  SEM is predominately a point in
time exercise, although it can be very effective during a campaign.

Paid Placement is similar to traditional print or media advertising.   Advertisers pay a fee to have their add is played on a website or alongside search engine results.  Ads are often banners that include a marketing message that entices viewers to click the ad and be transferred to the advertiser website.  Paid placement also includes sponsored links on content pages, paid reviews or pop-up ads that appear before or on top of a content page.

Paid placement can include SEM tactics, but here the sponsored links appear on content websites rather than search engine results pages.  Placement is based on relevancy of selected keywords and the displaying website content.  The advertiser has limited control over where ads appear.  Ads on content sites generally rank higher for lower bids than on search engine results.

Direct placement of ads on specific content sites is generally
based on a set fee or per million impressions (displays).  Direct placement allows an advertiser to
specify specific website, durations and potentially exact placement on a
page.  This is most effective if a
product or service would appeal to visitors of a specific website.  For instance, Dell might place an ad on a
computer buying guide website.

Purchase and management of direct placement ads can be outsourced,
although it requires less expertise and oversight than SEM.

Affiliate Marketing allows website owners to resell products or
services for a percentage or set fee commission.  Commissions may be paid for sales, leads or
even website visit referrals.  Almost all
major retail stores support affiliate marketing programs and generally use a
third party service to manage the relationship with affiliates.  While affiliate marketing allows a product or
service provider to extend its marketing capability it is still responsible for
all aspects of distribution.

Affiliate marketing can be outsourced in part or whole.  Generally the affiliate marketer selects an
affiliate management provider to handle acquiring and managing new affiliates.

Although not an absolute, Affiliate marketing tends to be most
utilized by product or service providers who have a wide range of products to
offer.  This increases the likelihood
that content site owners are going to assign valuable screen space to a
product.  Alternatively the provider may
offer higher incentive commissions or target very specific content sites.

Friends holding up thought bubbles with social media concept icons

Viral/Social Marketing is similar to traditional word of mouth advertising although done through websites.  Marketers attempt create buzz about their products by leveraging social networks, emails, blogs, videos or other venues that allow viewers to easily spread the word. This form of Internet marketing is often associated with the term Web 2.0 because it tends to leverage more user driven venues and content rather than commercial content sites.

Viral/Social Internet marketing, much like SEO is an ongoing effort and similarly it is possible to outsource all or some efforts in this area.  Development of complex marketing campaigns would likely be outsourced to a marketing firm specializing in leveraging the Internet, however, smaller campaigns and the tactical aspects could be handled internally or by your SEO/SEM partner.

In closing, an effective Internet marketing program will leverage some or all of these components in a complementary way.  Each component brings visitors to a website through its own unique tactics, timeframe and cost.  If planned and managed properly, each component can be utilized by the next one to create even greater value.  A successful Internet marketing plan will consider the short-term, long-term and budgetary goals of the product or service provider, deploying the components that met those goals.