Work The Numbers to Make YOUR Internet Business Profitable!
By: Profitstation News and Offers
I get annoyed when people say or write "do the math," because what they are usually referring to is arithmetic--the most elementary branch of mathematics. It is usually addition, subtraction, and multiplication that they are referring to. Simple stuff...almost not worth calling it math, although it is technically correct. Well let us do some arithmetic about your business goals!
Imagine that your income goal is a modest $1,000 per month on a given product line. What do you need to do in order to achieve that?
Let us say that you are selling a product for $50 and your commission is $40. You will need 25 sales per month to achieve $1,000 gross monthly income.
So, what do you need to achieve that? Sales prospects! Many marketers will tell you that you can "close" the sale on a high quality product 10 percent of the time after following up 10 times or more. Do the arithmetic and you will discover that you need 250 hot prospects each month (25 divided by 0.10), you must have a high quality product/service, and you need to follow up at least 10 times to a potential customer that expressed an interest in that product/service specifically.
If you are running a conventional business, like a pizza parlor, you will need a list of names that may be interested in your pizzas. If you sell insurance, you will need a list of names of people that fit the profile indicating that they may need insurance. I think that you can see the pattern here. You need a list of people that you can sell your stuff to. Call them prospects. OK, what will it take to get 250 prospects? You have several choices depending on the type of business that you operate. If you run an Internet business, you will need TRAFFIC and lots of it. Most people buy the names or cold call people in the phone book or other sources.
That is hard under ANY circumstances. So how do we manipulate this arithmetic to our advantage? What do we do to give us even a tiny advantage?
-Sell something that is more expensive which generates higher commissions. Let us say that you have a product that will net you $600 commission.
Now do THAT arithmetic: You need about two sales per month to earn $1,200. That works out to 20 prospects per month (assuming you can close 10 percent) --or about 1,000 visitors per month assuming a two- percent response rate. 12,000 visitors a year is a LOT better than over a million!
Let us get conservative and presume that you can only close 5% of your hot prospects and only 1/2 of one percent ever ask about this particular product. Then you need 8,000 visitors per month--or 96,000 per year. Is that better? I think so, but still challenging. Profit margin has a great deal to do with your income potential. Not a surprising conclusion.
OK so what ELSE can you do to get the numbers more in your favor?
1. Establish multiple income streams. Books, domain hosting, list-servers, dealerships, various MLM programs, etc. You will find that as traffic goes up, you have much better shot at closing SOMETHING if you have multiple offers. And of course, with MLM programs and some excellent dealerships there is the potential of residual income, so you will not have to keep a hectic sales pace forever. You need to factor residual income into your calculations if this applies to you. Be warned, however, that successful network marketing companies have a BASIS in product sales, so this discussion does apply to Internet product sales even it they are marketed through multiple levels.
2. Increase your prospect numbers (warm market) by encouraging subscribers to your E-zine. Sales can be directly related to how often you present your products and services in a routinely published newsletter I can show you how to do this, and of course you get the listserver software FREE when you are hosted by my company at http://www.profitstation-isp.com Learn more about the listserver here: http://www.profitstation.com/listserver.htm
3. Close more prospects with higher quality and increased frequency follow-up. I use a superb company to accomplish this. Get FREE info here: mailto:webmaster@profitstation.com?subject=relentless-followup
If you have TWO quality product lines, you cut your traffic requirements in half. If you have TEN quality product lines, you cut the traffic requirements by TEN. It is not exactly linear, but statistically, it will be close. So, with a TON of high value quality product lines, logically arranged and presented, you have a MUCH better shot at closing SOMETHING than you ever could with only one pill, potion, or affiliate program.
Bottom line: You must do it all. You MUST increase your traffic and you MUST offer a variety of products and services in order to increase appeal and achieve more real prospects (thereby driving the number of visitors you need down by a considerable amount). And you MUST have relentless follow up. You simply cannot make the sales that you need without this critical ingredient. I know this by personal experience. You are DOOMED without an automated follow-up tool.
I will finish off with three questions. You can answer them yourself and determine if you have a workable plan:
1. What are your income goals? What is your product line and profit margin? 2. How many sales and thereby visitors will you need in order to accomplish that goal? 3. What are you doing about achieving the right number of visitors?
I can help you achieve your Internet goals whatever they may be. But I must hear from you. Email me TODAY (webmaster@profitstation.com). And be sure to give me your name and phone number and the answers to the three questions above. ........................................ Article by Mark Petersen-Overton, owner of http://www.profitstation.com enjoying over one million annual hits. Contact Mark for FREE traffic consultation and learn how to put a continuous stream of VISITORS on YOUR website!
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