In part 1 of this series we covered how to make money online by selling a service, my preferred method for most guys. Now in part 2 I’m going to break down how to get paid selling products:
Selling products is harder than selling services and is not for amateurs. This is my fourth business and I’ve been working on various businesses for the last 7 years, all of which failed except RLD. I’ve had:
1) An online vice magazine clone
2) An online fashion site
3) A tech startup
4) An Amazon FBA business
All of them we’re failures for various reasons, I’ve made six figures in sales and in trading, but it wasn’t until RLD that I built a product based business that succeeded. Because the truth is, building a product based business is not easy.
However, it’s easier than it’s ever been to get one going, here are three major options:
- Blogging
- Dropshipping
- Amazon FBA
BLOGGING
Blogging is the sh*ttiest, slowest way to make money there is. I don’t recommend blogging for the vast majority of guys. Your hourly rate for the first 3 years will be worse than a Bangladeshi factory worker.
And you won’t see decent money until year four and that’s only if you’re able to make it to the top 1% of sites online, which means you’re getting 100,000 monthly visitors.
But to really make money online you need to get to the top 0.01%, that means 500,000+ monthly visitors, which means you really have to have an exceptional message, exceptional salesmanship and exceptional writing/presentations skills.
And I say presentation because audio and specifically video is the future. Young people don’t read anymore. And the internet isn’t what it used to be. Google doesn’t own it, they just own a platform: Google search.
People now get there content from YouTube and Amazon and Facebook and Itunes and Soundcloud
and Google Music and Spotify and whatever new platform comes up.
But what you’re really doing is building a personal brand not a blog and that means getting people to buy into YOU. And it means getting a ton of quality content out across all platforms.
And it means mastering marketing, SEO, writing, videography, podcasting, design, webmastering and on and f*cking on. And it means staying on top of all the latest trends or risk falling off.
And it’s for life, because you can’t sell a personal brand, because your brand is you, and no one wants to buy that business when you remove the most valuable property: yourself.
It’s a game for the obsessed and the obsessed only. But if you’re obsessed, and you think you have what it takes, blogging is a beautiful thing, especially if you only sell informational products like I do:
1) Passive income (you literally just wake up to money)
2) No clients
3) No customer management necessary (the products sell themselves)
4) Investment costs are non-existent
5) No inventory
6) You have a suite of perpetual products with next to zero cost to launch
7) No dealing with suppliers
8) Insane margins (I make back the cost of producing by the end of launch day)
9) Low expenses
10) Insane ROI
11) Easily scalable
12) You don’t have to sell your time for money
Here’s what to expect from blogging:
Failure Rate: 99%
1-3 years: next to nothing
4-5 years: low to mid five figures if top 1% of sites online
6-7 years: 75K to 100k+ if you make it to top 0.01% of sites
*exception 1: some very rare guys blow up faster
*exception 2: you can get to six figures quicker by combining the authority of your blog with the physical products as outlined below
*exception 3: you can get to six figures quicker if you combine the authority of your blog by selling services
Amazon FBA
Amazon FBA is Amazon’s Fulfillment service. The way it works is you buy your products in bulk from your supplier, your supplier sends it to Amazon’swarehouse, you set up the listing and Amazon handles the rest. All the shipping, refunds and bullsh*t is handled by Amazon, not a bad setup.
Of the three product based options, Amazon is probably your best bet, although I’ve heard Ali Express is the next move.
The move is to scour the site for an underserved niche with junglescout and try and get that money before someone comes in to slit your throat. Which is exactly what happened when I launched my FBA store last year. In the two months it took to launch, we had 6 or 7 guys in our niche dropshipping and slitting each others throats. We ended up losing about 5k on the deal total.
I think I could have hit a winner if I went back at it a few more times, but anything taking time away from RLD is not an option for me anymore.
Instead of a side hustle I can just drop another book that pays me passive income for the next decade. Also my instincts tell me I missed the window on Amazon by the way our niche got gutted before we even got to market.
With that said my man Nick is doing 10k off one store, so the potential to win is still there, but I’d rather see you do a service business. But if you’re deadset on products, and feel like I do that Amazon’s window is closing, I’ve heard that Ali Express is going to be the next thing, so you might want to look
into it.
Here’s what to expect from Amazon FBA:
Failure Rate: 60 to 90%
Investment per store: $5,000
Recommended Bankroll: $15k (to account for the probable failure of your first 1/2 stores) + savings/revenue coming in to support yourself
Estimated Profit per store: 1.5k – 3k per month
Dropshipping
Dropshipping is different from FBA in that you don’t have to place a bulk order to get started. All you have to do is set up your store and get a supplier to send your product to your customer. The course that most guys use, especially out here in Chiang Mai, is the Dropship Lifestyle course.
I’ve seen the course, and it’s legit, but I don’t recommend it due to price, better to get on YouTube to get that info for free. Or check out my man Brian’s stuff on his dropshipping experience.
The idea is finding your niche with a $200+ price point per product. This is key because it allows you to pay for adwords/facebook ads, my tech business flopped in a large part because our $60 product couldn’t cover the cost of online advertising.
Then you drill down on who your competing with, find their suppliers, steal their suppliers, and try and slit their throat through better marketing, branding, promotion, advertising, site design.
I know a few guys out in Chiang Mai making money off dropshipping but most of the young guys I met who built a successful store eventually sold it.
The major con compared to FBA is that the store takes a lot of customer service to maintain. The plus side is you don’t have to place a large order first and it’s easier to hide online then it is on Amazon where everyone is gunning for you with junglescout.
I’d plan for the same metrics as Amazon with dropshipping:
Failure Rate: 60 to 90%
Investment per store: $5,000
Recommended Bankroll: $15k (to account for the probable failure of your first 1/2 stores) + savings/revenue coming in to support yourself
Estimated Profit per store: 1.5k – 3k per month
Conclusion
Starting a successful product based business is harder then it looks. And getting to six figures is no joke. It’s why I recommend a service as your first business and then, once you own your time and have consistent revenue coming in to play, then maybe take a few shots at a product business.
What you don’t want do however is come out to a foreign country and try and start a business – no, no, no. I live in Chiang Mai, the nomad capital of the world and it’s a failure factory as Brian, Phil and I covered in our podcast on the “digital nomad” scene.
That’s not the move. If you want to become a digital expat and move out to Asia or South America, the right move is to solidify your business before you get out here. That means 2k a month in consistent income and 20k in savings. At those numbers you’ll have a very comfortable life and a large margin of safety. You want your exit from the matrix to be a permanent one.
As for why I chose to sell a product instead of a service: I found my mission in life. When I had the vision for RLD, I knew that’s what I was going to do for the rest of my life. I’m also 34, and I spent the majority of my 20’s selling to clients to make other people richer, and I’m very happy I don’t have to do that anymore.
But if I was 24 it would be a different story. At 24 I wouldn’t have the life experience to start a lifestyle blog and I wouldn’t be burnt out on selling because I wouldn’t have spent the better part of a decade making a hundred cold calls a day. If I was 24 I’d take my talent for sales into copywriting, kill myself for the first year, and try and scale up to six figures within 18 months.
If you recognize game, and still want to start a product based business, I say go for it, just do it with your eyes open. For most guys, the service based business will still be your best option.
