Why Selling E-Books Is One of the Best Ways to Make Money Online

There are three basic models for making money online: sell advertising, sell tangible products and services or sell virtual goods and services. We’re going to focus on the last one – selling virtual goods and services because it generally offers the best “revenue potential to start-up cost” ratio. This means that an individual has the best chance of succeeding.

Some of the other models can generate more money but they typically cost more and take longer to start – conversely, they might be even less expensive to start but they don’t offer the revenue potential of selling virtual goods and services.

I want to be very clear here, I’m talking about creating YOUR OWN virtual product and/or service, not reselling someone else’s virtual product or service. That’s a different model. It’s actually one that we’ll use to our advantage once we define our own product to help promote and sell our product.

Why is it so important to have your own product or service? Just ask yourself this, “Would you rather be one of 1,000 people selling the same product and you make 10-30% of only the sales you make or have 1,000 people selling your product and you make 50-80% of the TOTAL SALES?” The numbers vary, but I think you get the idea.

There are people willing to pay you teach them about things that you already know or things that you’re interested in researching. Think about it, there are over 1.5 BILLION people online. With an audience that large, it only takes a minuscule fraction to create a profitable business.

We’re looking for niches. Topics where there are enough people interested but not so much that it’s flooded with competitors. A niche could have hundreds of people interested in your topic or it could have hundreds of thousands.

The price you charge will depend on the value you provide, the market demand and the competitive offers that are available. With this model, you can profitably sell your product for as low as $2 to $5 or as high as $500 to $1,000 or more.

So how do you sell expertise? Consultants, plumbers, electricians, designers, developers, cooks, writers, painters, instructors and people in almost every profession do it all the time. They charge an hourly rate for their service – their expertise. If you’re not sure what your expertise is, don’t worry. We’ll get to that.

The problem with the examples above is that there are only two ways for these independent professionals to make more money: (1) work more hours or (2) charge more per hour. There are only so many hours in a day. The amount you charge is somewhat limited because if you ask for too much the buyer may go to someone else or just decide that it’s not worth that much.

Some experts have found a way to scale the business of selling their expertise. One way is to write a book. It takes time to write a book but that time is the same whether you sell the book to 1 person or to 1,000,000 people.

Let’s say it takes you 20 hours to write a guide on how to do something. If your normal hourly rate is $50, you could have charged $1,000 for that time. Assume that in 20 hours you could complete the task itself 5 times. If you were doing this as a consultant, you’d charge around $200 to complete the task.

There are plenty of customers who would rather do it themselves (if they knew how) so that they could save money. There are many more that would like to do it but can’t justify spending $200 on a consultant.

Here’s the beauty of the guide. Even though you spent 20 hours writing it, you can sell it for far less than the $1,000 and even a fraction of the $200.

If you sold your guide for $20 (just 10% of what it would cost someone to hire you to do the job), you’d only need to sell 50 copies to make the same amount of money as if you did the 5 jobs as a consultant.

The thing is, you can sell 250 copies or 2,500 copies of the guide without spending any more writing time. The time that you spent writing can be sold over and over and over again. 250 copies would gross you $5,000 – 5 times the consulting gigs and 2,500 would gross $50,000 or 50 times the consulting revenue. Talk about a better use of your time!!

Fortunately, you don’t have to package your expertise in a physical book. That creates the problems mentioned in #1 of the business models section – sell tangible products. It would take a lot of time and money to create the book, get it on store shelves, etc. Plus you’d have to give up most of the profits to book stores, your publisher, distributors, etc.

We are going to provide ‘virtual’ products. In the case of a book, that means an e-book. You’ve probably seen these. Of course you have, you’re reading one right now! You can download them from websites or get them in email as a PDF file. Even best-selling authors are investigating virtual distribution of content.

Virtual products aren’t limited to e-books. Anything that can be delivered electronically is a virtual product. That includes audio files, videos, documents, templates, software programs, images and other types of files. Depending on the expertise that you choose to share, you can use a combination of these file types to best communicate, educate and provide value to your customers.

Another virtual product that we can offer with the files or even as a stand-alone product is online support. This could come in the form of a discussion board, an online knowledge base or even the ability to contact you directly for support by email, chat, video conference, desktop sharing, webinar or even voice using Skype or your own phone line.

The ultimate mix of virtual products will depend on the problem you are trying to solve for people and the elements that you can identify to add value to your offering. Now that you have an idea ‘what’ we’ll be selling (don’t worry if you still have questions, we’ll get in to a lot more detail later), let’s take a look at the ‘how’.

First, when it comes to ‘how’, we already know that we are selling a virtual product (as opposed to selling advertising or someone else’s product). There are two ways that we’ll sell our product – as a one-time purchase (someone buys our e-book) or as a recurring subscription (someone subscribes to our service which provides ongoing content and/or support on our subject).

The next part of ‘how’ is to generate leads for our product. We’ll cover the key ways to do this later in this guide. At a minimum we’ll need to have a page that describes the key benefits for users and a way for them to pay for the product and receive it. Some other things that we’ll cover later include methods to drive traffic to your page, how to enlist others to promote and sell your product and how to build up a list of interested people that you can continue to market to over time.

Maintaining the business and supporting customers are the other essential remaining parts of the business model. You’ll want to monitor the success of your business and excel at keeping your customers happy. You’ll find that keeping customers happy is your best way to generate more sales. Happy customers will tell others. Of course, unhappy customers will tell many more people – even more reason to make your customers raving fans of your product!