| Why every Internet business should have its own product!
by Sunil Tanna, EBookCompiler.com
A fairly standard piece of advice you'll find on marketing web
sites is that Internet entrepreneurs must have their own product
because "you get to keep most of the profit".
However with some affiliate programs offering 20%, 30%, 40% or
even 50% commission rates, a lot of web businesses find
themselves wondering if that recommendation still applies.
Usually the thinking goes something like this:
"If the sell a similar product myself, I have to deal with
(a) additional work, for example customer service, (b) have
increased set up and running costs, and (c) don't have the
economies of scale of "big company X" so actually earn less per
sale."
But while this reasoning might be true, what it neglects, is the
benefits of having your own product go far beyond the profit
per-sale, and include:
 | Uniqueness: If you have your own product, you have something
that's unique rather than being one of a thousand or ten thousand
similar sites. Use this to your advantage, and it'll be much
easier to market to the public, and get press and media
attention.
| Control: Affiliate programs change their terms, companies go
out of business, or change their products. Build your site
around somebody else's product, and you're at mercy of somebody
else's decision processes. Wouldn't you feel more comfortable
with a great degree of control of over what is, in the end, your
business?
| You're the center. If you join an affiliate program there are
probably several thousand other affiliates in the same or similar
programs, all of which are, to a greater or less degree, your
competitors, and none of which will go out of their way to help
you. On the other hand if you have you're own unique offering,
provided you give other sites a good incentive to link to you
(like start your own affiliate program), you're going to benefit
from other sites marketing efforts too.
| You own the customer. Nearly every affiliate program says the
in small print that the buyer is a customer of the program
operator/merchant and not the affiliate. The reason why is
simple: provided a customer gets a satisfactory product and good
service, they'll usually go back direct to the merchant to buy
more later, and usually the program operator gets to keep 100% of
the profits from these sales. So if you're an affiliate you've
either got to find an endless supply of new customers, or cross
your fingers and hope that people will bookmark your site before
clicking on the affiliate link. On the other hand if you're the
program operator, you get the benefit of the additional profits
from repeat customers, and even if you only have 1 product, you
can still generate a highly profitable back-end by offering your
customers closely related products using affiliate programs or
joint marketing.
| Joint marketing. Run an affiliate web site, and your joint
marketing options with other sites are pretty limited - mostly
involving swapping links or ads with other sites, many which of
might be your competitors anyway. Offer your own product, and a
whole range of additional options open up, including allowing
other companies to offer your product (or a special version of
it), marketing other companies products to your customer base in
return for them doing the same for you, giving discounts to
customers of your preferred marketing partners and more.
| Focus. It's a fact of life that many affiliates flit from
program to program as new opportunities present themselves. Far
too often this is done on a whim, but sometimes, good short-term
business reasons can be behind the decision. It's hard to turn
down an offer which you know is going to make you extra profits
in the short-run even if it does nothing to build your business.
On the other hand, if you have your own product, it imposes a
natural discipline and focus to your business, this of course
being a key step on the road to success. |
| | | | |
Sometimes just one or two of these benefits can be enough to form
the foundation of a successful Internet business. Even if you
already have your own Internet store or your own products, it
might be worth creating additional products just to capture a
benefit that was previously beyond your reach.
When you analyze things further, and decide what product to
offer, you should concentrate on the benefits that you want from
your product. For example, if your main goal is to acquire
customers, provided you can develop and deliver the product
cheaply enough, you may even want to make the product free to
maximize your rate of customer acquisition. All things being
equal. a golfing store that gives away a million free booklets
of golfing tips is going to sell a lot more golf clubs that one
that just waits for traffic to arrive.
So to sum up, the marketing gurus are right after all - although
perhaps for different reasons than the main one that is often put
forward - offering your product really does put you in the driving
seat.
Copyright, June 2000 S. Tanna. The publisher of EBookCompiler.com:
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