You have brainstormed ideas, asked around some experts, wrote a business plan, maybe hired some people here and there, and then finally launched your idea.
And you wait for results, day by day.
Then weeks passed, your venture doesn’t seem to move. Well maybe you have to wait longer.
You waited for months. You are not seeing results based on what you were expecting. You decided to make some changes, maybe change the design, offer discounts, increase your ad spending, etc., you know it.
But all of these didn’t seem to move the needle.
Your resources are depleting, you are losing time for the ones you love, and then here you are, miserable in your business.
In fact you could have done better without starting it in the first place!
You decided to shut it down, and wished it never happened.
Maybe you have gone through this scenario, or you are fearing that it will happen to you when you start your own business.
Business is a continuous chain of successes and failures, but we don’t have to have a lot of failures to be successful. Yes, I have mentioned that it’s trial and error; and successful entrepreneurs would agree that it takes failures to produce successes.
But you don’t have to fail big. It is failing small while winning BIG. Taking this kind of approach will seriously improve your chances of finding a winner.
It all starts with an idea
We all have ideas. In fact, we’ve multiple new ideas every single day.
Most of us never really implement a new idea, simply because we’ve too many and don’t know if the idea will actually work.
A great idea not put to work is useless.
A great idea put to work can make you millions.
This is very common among entrepreneurs and internet marketers.
I’m going to lay out an actionable 5-step plan that you can follow to determine the profitability of your idea(s).
Let’s breakdown how you can determine, with great success, whether an idea is profitable to pursue over the long-term.
Step 1: Know what you want
Always start with an end in mind. Do your homework and know what you want, and why you want it.
I always make it a rule to ask myself “why” five times before I start to define what outcomes I want in an idea.
Here is a little secret, if you want to sell your own product, there is no better way to test it than by going first into promoting CPA offers.
Think of it as a practice of something you would like to do someday, except that you are carrying other people’s products. Your main goal at this point is to generate demand, and the rest will be taken care of for you (ideally!).
For example, you’ve successfully promoted a CPA offer. You managed to find a high converting offer which you matched with the right traffic source. This resulted in $4,200 – $7,400 in monthly revenue.
But it doesn’t stop here. You can’t go out and celebrate yet. This is just the beginning!
Since you’ve made good profit on a monthly basis, you’re eager to reinvest some of your money to get your own offer. I.e. weight loss pills. You figure you can do a at least 20 to 30% better if you manage to promote your own offer. You no longer want to rely on the advertiser.
In order for you to get your own private label weight loss offer, you need to line up with a drop ship department that can do both private labeling and drop-shipping.
You also need an e-commerce site which you’ll use to sell your offer. Setting up an e-commerce site requires serious skill and is certainly not a task a newbie could ever implement. Basically, you need custom design for your product and integrate a payment processor to process your orders.
We’ve successfully determined what it is we want to test. Now it is time to look around you.
Step 2: Scan for past successes
With all the wealth of information available to us, it is very easy to find out if people really made money with it.
Continuing on our weight loss example above, you could do each or one of the following:
1. Do a keyword search via Adwords Keyword Planner
- Do not just type in the root keyword (e.g. weight-loss pill), type in a commercial intent keywords, for example “Buy+ Brand Name + Weight loss pill”. You can also do synonyms, like “where to buy safe diet pills”.
- Regarding search volume, you might get search volume of less than 5000, but don’t worry as you are searching for keywords that have informational and commercial intent.
2. Click those ads!
- Armed with ideas from your keyword search, type it in and find the ads that match your search. Take note of ads that are positioned above the fold, click on them and do your detective work!
3. Don’t forget Amazon
- Amazon is the biggest online retailers out there, and if it is sold on Amazon, most probably people are looking for it. Do not forget the auto-suggest tool in the search bar; like Google, it gives you a wealth of information on different kinds of products out there.
Step 3: Write down actionable steps on how to execute your idea
Writing it down seems to be the most boring part, but it is also where you push yourself to define it in words.
Continuing on our example of weight loss product, your plan could look like this:
- Contact drop-shipping companies. List down all the questions you want to ask, including of course price, delivery, payment, after-sales, etc. One tip, don’t let them know you are a newbie; aim to be as “experienced” and “professional” as possible.
- Look for two payment processors, in case anything goes wrong. Always have a backup plan!
- Buy a domain name. Take your time on this one as it should be something easy to remember, and associated with what you are selling. As always, buy two to three of the best domain names you can think of.
- Interview an experienced person. Think of a place where people hangout to look for work. Look no farther than freelance marketplace sites like Freelancer and Upwork. Create a job posting with your specifications and hire the most experienced person.
- Test out those bugs. You can’t afford complaining customers!
- Think of ways on how you can generate traffic. And test them out!
Step 4: Dedicate a test budget
What’s obviously important is that you’ve dedicated a budget for this whole project. Now that you know what is required work wise, you can put together a budget to get your site launched and ranked.
Here’s how it could look like:
Budget for two drop shipping departments and private labeling:
There usually is a one-time fee charged when hiring a company to do private labeling for you and the price varies. Ask for a quote; it should be between $100 to $300 for a few thousand bottles. Of course the price varies per volume.
Budget for getting lined up with merchant account services:
There usually is no cost when signing up to a merchant account provider. The only thing is that they might hold your money for some period to verify the legitimacy of your business and what you’re selling. Part of your funds might be frozen to cover charge-backs, if any.
You can obtain a new .com domain for as little as $11 on GoDaddy. You could buy an aged domain through their auction. That could be a good thing name-wise and history wise. A juicy domain name goes a long way in making money with your Ecommerce store. And if you can find a domain name with a solid backlink profile, then that’s even better.
Ecommerce Site Set-Up Budget:
$200 to $300 is a good budget for this. The more experienced people will most likely charge more money. You can find an experienced Ecommerce person for $200 to $300. It should take him a few days to get your site set up. Make sure you share with him your private label design and merchant account.
Backlinking is an ongoing process that requires time and money. Depending on what keywords you’re trying to rank for, you need X$ a month for costs related to copywriting, proofreading, tools, etc. It’s hard to say how much a “good” budget would be, because it all depends on what keywords you are trying to rank for, and the corresponding competition it has.
Step 5: Calculate your anticipated costs
When looking at our example, you can see that it takes about $400 to $600 to get your site fully set up and ready. Then there’s an ongoing cost for backlinking.
Once you obtained rankings, you’ll see how many conversions you’re able to generate from X visitors. It’s mandatory to have Google Analytics installed on your site so you can see which keywords bring you most of the traffic/conversions.
Cost per conversion is an important thing to focus on. If it’s close to profitable, you can get more traffic for different keywords to see if you can do better with other terms.
If it is already profitable, your goal should be to get as much traffic as possible to increase your revenues.
You can see this would be how you test your idea. You’ve to invest money to see if and how profitable it will be.
Well-calculated risk is the path to success and you can expect to make some good money when following the above steps.
This example was specifically on ecommerce. It’s quite obvious that budgets and circumstances would change should you go with a different traffic source. However, it also applies to other ideas, like mobile or web apps, or even services. There are three crucial stuff similar to idea testing: (a) objective; (b) plan; (c) budget. Once you have figured out how to work around these stuff, you will be on your way to win BIG.
Leave me a comment on what it is that you would like to monetize. I’d love to hear your ideas.