THE KEY TO MAKING MONEY ONLINE
Sorry for the clickbait title, but this really is the key to making money online. Shit, it’s the key to making money offline also. It’s pretty simple, obvious, and yet so few people seem to understand it. Well, if they do they certainly don’t act upon it at least..
Making money online (or in any business) comes down to a simple formula:
‘The more value you provide, the more you earn.’
Pretty simple, right?
So, if you’re currently selling a product that costs $100, (and people are buying it), you’re providing $100 worth of value per customer. If you reach 10 customers per month, your value provided to the word is $1000 in total. 10 x $100 = $1000
Well done, but how do you earn more?
Well, there are 3 ways.
1. Reach more customers. If instead of just providing value (your product) to 10 people a month, you reach 100, then all of a sudden your income has gone up 10X! 100 x $100 = $10,000 p/month
2. Charge more. If you start charging $150 and you can still manage to sell your product to 10 customers, then congratulations you’ve just given yourself a $500 pay rise. Often though, if you increase your product price, you will have less sales. This all comes down to whether or not your product is price elastic or not (more on that in a future post), but increasing your price is something that requires testing.
Let’s say you increased the price of your product to $200, and your number of sales dropped to 8 p/month. You’d still be making (8 x $200) $1600! A $600 pay-rise.
Your product is worth whatever the market is willing to pay. It’s possible that you haven’t found the right price point yet for your product in the market, and don’t really know what the value you’re providing is worth. Shifting the price around will help you to find the optimal price point, and make the most possible.
3. Create more products. If each product you sell reaches 10 customers, the more (quality and in demand) products that you have, the more you will make. Let’s say you increase your number of products to 10. If each product is $100 and sells just the same as the first one does… you’ve just increased your income to $10,000 p/month. 10 products @ $100 x 10 sales each = $10,000
Of course, you can also use a combination of these 3 methods. You could increase your product price, reach more customers, and also release more products! All of that multiplies together and = more value provided, which = more money!
With every product you release, ask yourself “What value am I providing?”
If you’re selling a terrible product, you aren’t providing any value, and you won’t make money.
If you’re not reaching customers, you can’t provide customers to give your value, which means you won’t make money.
If you aren’t charging enough, then your sales won’t add up to much. On the contrary, if you are charging too much, you might not have any customers at all. Test different price points and find what works.
So that’s it. If you want to make more, ask yourself first “How can I add more value?”.
If you’re in Kindle publishing like me, you might need to add more books, and make them higher quality to increase the amount of value you are providing.
If you’re selling physical products, you might want to advertise more to reach more customers to provide your value (products) to more people in the marketplace. At the same time you could add more products to your store, and possibly even change your pricing!
It’s as simple as that, add more value and you’ll be making more. Find a way to add thousands of dollars of value to thousands of customers, and you’re set!
Simple stuff, but it’s very poorly executed in the marketplace.
Give it a go, and as always – keep crushing it!
Adrian IngramShare This Post: