I hear a lot of people say that making money online is virtually impossible. Just yesterday, I was at a meeting of ex-pats living here in Davao, and I heard three different people there say that they have given up with trying to make money online. While these people are friends, I must say that I have to disagree with them strongly on this.
A month or so ago, I had an idea for a new product that I could sell online. There was a problem, though, this particular product was not approved by the company that I was using for credit card processing. They did not allow the selling of this particular product through their system. So, what could I do? Well, as I wrote about last week, I recently got a Paypal account all set up and working for me here in the Philippines. I checked with Paypal and found that they do not restrict the selling of this particular product. So, I decided to set up a store to sell the product and to use Paypal as the payment provider.
I just set up the store yesterday. It was completed around 4 pm last evening. As I write this post, it is 1:00 pm on the day after completion, so about 21 hours after the store was made public. The only thing I did to marketing this store was to send an e-mail to all of my customers from one of my other online stores (which has products that are related). I have a mailing list for that store of about 7,000 people. So, an e-mail announcing this new store was sent to 7,000 previous customers.
In 21 hours since the launch, how have my results been? Well, I have made 11 sales of the product, resulting in $408 in sales. My profit from those sales amounts to $187 after all of my costs are accounted for. Not bad for 21 hours worth of “work.” But, did I really work for 21 hours? Not really, I must admit. I worked for about 4 hours setting up the e-commerce site, and after that I had my employees take care of the rest. They probably put in a total of about 1 hour (maybe less) handling these 11 sales. And, my employee costs are included in the profit calculations.
So, as you can see, for just a few hours works, the money is already rolling in. And, I probably won’t have to work on this site anymore, at least not much if any. Let’s say that I keep up the same rate of sales day in and day out (it is a consumable product, the same people will come back and buy again and again). If I do $408 per day in sales, that is equivalent to $12,240 per month, or $146,880 per year. Honestly, I think that sales will be more than that from this site after it is better established. But, even if it remains just at the level where it has been today, that is a nice amount of profit for 4 hours work. Let’s say that I work 1 extra hour per week on the site (I don’t think I will work that much on it), that means that the payoff for my work is $935 per hour in the first month, which includes my initial 4 hours of work in setting up the site.
So what do you think? Is it possible to make money online?
A related question: That store has 7,000 subscribers. How do you keep track of them. It seems that much of what I have seen of your sites is based on WordPress. Is there a widget or something inside WordPress that llows that or do you use something else?
Hi Tom – for stores where I sell merchandise like this, I use OSCommerce shopping cart software for that. You can see examples of such in the links on the right sidebar of this site where it has the header “My E-Stores”