Making money online: 3 ways to earn a living on the internet

• Introduction and index
• Part 1 - Selling other people's products
• Part 2 - Selling your traffic
• Part 3 - Selling your own products (which is this post)

If you have enough web experience and some good products or services, a third way of making money online is selling your own products. These products can be home-made physical goods, like souvenirs, paintings, models, etc. Or they can be services, like web designing, programming code, corporate blogging, or marketing. They can also be "info-products", which are basically e-books that can be downloaded after payment, containing detailed information and solutions on a certain topic.

Let's take a closer look at these possibilities:

Physical goods
Since you are a home-based entrepreneur, these goods must be things you can produce at home. You may produce them on demand, that is, whenever you get a purchase order. You may also produce them beforehand (especially if the time and effort needed to complete one unit is relatively small), and sell out of stock.

Services
Obviously, these cannot be stocked. You will need to actively work on each project, even if you develop a "template" procedure with your service. Especially if you are providing a service that will need extended attention during the course of contract (like programming, where you will certainly be asked to fix bugs, even if your code is sharp and the bug is on the user), you must calculate your price very carefully. Try to negotiate a fixed fee, covering a certain amount of time, and then a variable fee for extra time spent.

Infoproducts
In my opinion, these provide the most profitable niche of our times. Not just for the producer, but also for the purchaser. Check out Amazon, and you will find many great e-books, at a price incomparable to the value they provide.

The secret is mass production. You, as the author, take all the time to create an in-depth collection of information, experience, and methods to approach and solve a certain problem. You do it once, yet you can sell it over and over again to many individuals facing the same problem.

Let's say you plan to sell 5.000 copies and price your info-product accordingly. Then each individual purchaser, will be more than glad to buy that information from you, at 1/5.000th of what it would actually cost them. It's a win-win situation.

Selling online
You will need a website that handles online shopping, and a payment system. There are many detailed and large solutions available on the market, but in the beginning, it would be better to minimize initial costs and maximize availability.

It would of course be nice (and wise) to be able accept secure credit card transactions, but most of such services need some sizable initial cost. It is of course up to you to decide, but if you're tight on budget, you might want to consider alternative "net-oriented" payment methods. The best known is PayPal, and is more cost effective compared to larger services.

Pricing
A very vital issue that is mostly overlooked. Your price must cover your costs (including time and effort, which we tend to take for granted as free), and must also leave you a margin of profit. You will also need to take into consideration the prices of similar products. You won't be able to sell much if your product is priced five times more than your competitors.

And despite you might get a sales boost, it's not really a good idea to price your product at a fifth of market average. Although you will enjoy some boost in sales, it will probably be not five times as much as you would at a higher price. If your price is very low, your quality will be under suspicion.