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The easiest way to make money online is by selling a product that can be delivered electronically.  There are no shipping or fulfillment costs eating away at your revenue.  Electronic products are easy to produce and it is not necessary to get anything published.  Another great reason for selling products electronically is that delivery is instant and free.  Selling products online is completely automated or hands free.  So what type of products can you sell electronically. Selling software online is excellent because new software is always necessary.  Programmers at local colleges come cheap, if you have the funds.  If you do not have extra funds, cut them a profit for the first two years.  You will still earn more than your expenses. Writing an eBook is extremely easy.  People are constantly looking for information.  Finding a nicely packaged info packed eBook is so much easier than doing all the research yourself.  These eBooks sell like hot potatoes and you do not have to worry about printing costs or editors. Starting a newsletter on a highly popular topic will bring in a lot of people quickly.  You can have these people submit articles themselves too, which will add to your website content.  You just need to make sure the information they send is reputable.  Later, you can offer paid subscriptions, advertising, and product promotions on your website which will drive traffic and cash. Members only web sites offer the customer a service each month or week or day and charge them a fee.  As long as you are serving your customers with intensity, you will keep them happy for a very long time.  This is very labor intensive but the results are well worth it. So, as you can see, you could offer a service on your website, such as dog walking or wedding planner, but that would mean that you would need a lot of resources, employees, expenses, etc.  Selling an electronic product online is easier for someone just starting out as an entrepreneur.

When you are considering starting an online company, you want to make sure you find the right product.  What do you want to sell.  What is your passion.  What subject or topic do you have a lot of knowledge about.  Let me start by telling you that selling an information product online is easier than selling a service.  But, selling a service online makes more money with monthly memberships. Before you spend all your time working on a website and writing up eBooks, you want to be sure that your customers are going to be interested in what you are selling.  Do your market research.  Start by seeing how many competitors you have -this is a good sign.  Read through newsgroups, discussion boards, and chat rooms and learn about your target market customer base.  If you already have an email list, send them a survey to see what they are most interested in. Most internet marketers preach that there are three reasons why a customer will want to buy your product.  Your product has solved a problem for your customer.  Your product has made life easier or more comfortable for your customer.  You are very passionate about your product and it shows in everything you do. When researching your niche, you may want to use www.Amazon.com and find the current top sellers.  Find out what people are reading about.  You will want to research keywords with keyword tools such as www.wordtracker.com.  You need to discover which keywords are being searched for frequently. Doing a little poking around your competitors sites isn’t a bad idea.  This is one way to come up with ideas on what would make your company different or better.  Take a look at their traffic rankings and their related links.  By analyzing this information, you can see how many visitors they have each day and how profitable their company is. Once you find your passion, ask yourself does this serve my customers.  You want to provide an excellent service to each and every person that spends their money with you.  This cuts down on complaints, bad reputations, and, worse of all, chargeback’s.

Direct marketing campaigns are truly effective when you precisely target customers likely to buy from you. This is done by Profiling and Modeling prospects and clients. Dumb mass mailings are replaced with “surgical” campaigns that market to specific customers with accuracy using technology that is now available.  Today, it’s possible to collect an enormous amount of information about customers, but to use it effectively you use it in “profiling” and “modeling”. Both of these techniques are ways of applying external data to possible clients.  They can be used to prospect for business or to zero-in on existing customers for your mailing.  The goal is to predict behavior based on what you know about your customers. These two methods are not mutually exclusive, and marketers often use them together.  The difference is that profiling data is overlaid against an existing client database, and has a long life span. It can be used for several mailings, and in contrast modeling is used to sharpen the focus of a specific mailing. In profiling start with the premise that you don’t want to deal with a customer segment, but rather an individual customer.  Break up your client segment into clients who share similar tastes and buying habits.  Then use demographic and behavioral information to create a useful snapshot of the customer. Begin to gather this information from your existing customer database noting such things as frequency of purchases, buying habits, responses to marketing offers, and repeat purchases. Then start with your perceived prospects using alternate sources of data from purchased sources.  Use all this data to break your customers into clusters that share purchasing traits. Obviously, profiling and modeling add to the cost of your mailing project. You may wonder why you shouldn’t just stick to the old method of “recency-frequency-monetary” (RFM) analysis. The reason is that for RFM to work effectively you need data on the client’s purchasing habits, and that’s the rub!  It only works for your existing customer and is of no use in finding potential clients. What makes profiling/modeling cost effective is found in three current trends.

1. Rising mailing costs.
2. Computers able to compute mountains of data rapidly.
3. Higher quality customer data available.

In the past, direct marketers could mail out 400,000 mailings to find a strong market of 40,000 (1 customer out of 10 mailings was average).  The dramatic increase in the cost of paper and postage has made this practice prohibitively expensive. Computers today are capable of doing millions of computations per second.  This makes analyzing mountains of data possible and not unthinkable anymore. Higher quality customer data is more available today, and there are more sources available for obtaining it than ever before. The result is that you can afford to do a lot of number-crunching before you spend a penny on postage.  You can also weed out the useless names and mail only to your most likely prospects. There are 6 factors to consider when building customer profiles :

• Affinity profiling – analyzes current buying habits to better match customer to product. Knowing what kinds of product a particular customer is buying gives you the ability to build an “affinity matrix” showing what related products would stimulate more sales from him/her.
• Demographic and psychographic data is also used for profiling. Demographics tells you a client is a 29-year-old, unmarried, male who earns $45,000 and drives a 2-year old Lexus.  Psychographic data suggests that single young men who buy status-symbol cars are excellent prospects for other highly visible status products.  Combining the two types of data yields a customer profile to someone marketing, say, the latest cellular phone.
• Lifestyle Coding is used to enhance basic demographic information.  Simply put – people in certain demographic categories will likely have similar hobbies and other interests.
• Mapping is another useful tool in building customer profiles.  Census data, topographic information, geographic coordinates, and zip code+4 postal data can be fed into a computer yielding maps that can be color coded to certain characteristics of consumers in particular neighborhoods.
• Cluster Coding is a popular means of grouping people by lifestyle characteristics.  Remember hearing the terms “Urban Up-and-Comers, Settled In, and White Picket Fence” used to describe market segments?  These are known as “clusters”, each given a score according to affluence, social position, activities, and aspirations.
• Survey data – can be used to enhance demographic, lifestyle, and other data to build a profile.  This is collected directly from your customers via application forms, surveys, and credit histories.  This provides a more personal portrait of the customer than merely census or demographic data.

The Direct Marketer of today has become more of a “surgeon” than a “shotgun hunter”.  It’s no longer cost-effective to shoot at 400,000 prospects to get 40,000 clients, and with computers it’s easier to slice-and-dice data today.

Coding advertising is not the big secret or the involvedprocess many would have you believe. A great many firms sell reports on how to code your advertising for $3 or more, when it's nothing you can't learn with a little study of a few mail order publications. Coding advertisements is simply a means of determining where your orders come from, and in cases where you don't use coupons or separate order forms for several different products, a method of double checking on what the customer actually requested. For the purpose of demonstration, let's assume you have a company called JONDO COMPANY, your name is JOHN DOE, and you market publications by PRINTCO and PUB-GUYS.  You decide to run ads for different products in three publications and teaser ads for your catalogs in two others, one for each publisher's catalog.  Coding  the latter two is easy. For simplicity, where you put the name and address of the company when offering Printco's catalog, mark the name as PC JONDO, ADDRESS, ZIP CODE.  When the envelope arrives and no indication is given of what was requested, you can tell at a glance what was requested. Now Printco and Pub-Guys sound and look alike, so for the second ad, mark it JONDO-PG.  If you're advertising the same catalog in three different magazines, use different codes for each to see which one gives you the best response, for example JONDO-PG, JOHN DOE PG AND P.G. JOHN.  You can easily separate them as you receive them. The permutations are endless:  P.G. DOE, P. DOE, G. DOE, DPG, JPG, JDPG, and if that's not enough, code the address, perhaps BOX 99, DEPT. PG, BOX 99-PG, BOX 99 DESK PG, BOX PG-99, and so on. The person ordering wants to be sure you get his request and almost always faithfully reproduces whatever is listed as the correct address right down to the last comma.  You can never run out of ways to code.  PG is the obvious code for PUB-GUYS, but you could use an arbitrary number code chosen by you and in fact, number codes are invaluable codes for making dates on the ads, to see how many trickle-in orders you get long after the ad stops running, and what months and season are most  productive for selling your products. Date coding involves using numbers in sequence to indicate magazine issue number, sequence number, or date published. This coding is virtually essential in later campaigns.  Once you've got a fair-sized mailing list, it will be far easier to use advertising codes to indicate their interests than to keep a complete ledger of every person and what they purchased.  It also makes computer entry a snap, especially with a good filing program.