How much money would you need in a year to live a comfortable lifestyle, one where you know your bills will be paid, you'll have a roof over your head and there will be food on your plate, plus a little extra for fun? $50,000? $75,000?
Let's just say you need $100,000 a year, just to be generous. To put it into perspective, the mean household income in the U.S. (the last time the survey was taken in 2005) was $60,528 USD.
If you sell something online for $30.00, how many units would you need to sell in order to support a $100k lifestyle?
The answer: 3,333 units
According to the U.S. Census Bureau, the population of the world as of November 9th, 2009 is 6,795,850,072 people. If you don't think you can sell something to 3,333 of those people, you're crazy. Seriously.
That's a fraction of a fraction of a fraction of a fraction of the world's population. Yes, I understand that the population count is skewed as far as who can vs. who cannot purchase things online (i.e. children, certain countries, internet access, etc.) but take those people out of the equation, and the bottom line is that you still have to sell to only 3,333 people to make $100k. When you really think about it, that's not very many people.
…and that's selling units at $30 a pop. What if you were selling something for $60? Then you'd only need to reach half, or 1,667 people. At $100 per unit, 1000 people, and so on and so forth.
The above example is how many people make a living online. The following is how “Ninjas” do it.
A Ninja will sell something for $30. Just for fun, let's say its a book entitled: “How to Be a Ninja in 30 Days.” He only sells 1000 copies in one year. (1000 x $30 = $30,000)
Of those 1000 customers, a quarter pay extra to get an upgraded course, entitled: “Super Secret Ninja Techniques,” which was not included in the original book. This costs an additional $60. (250 x $60 = $15,000)
Of those 250 customers, 10 pay for a two-day Ninja training course that is held live at the author's dojo. This costs each person an additional $1000. (10 x $1000 = $10,000)
Of those 10 customers, 2 pay an extra $10,000 for a 6-week Ninja apprenticeship. (2 x $10,000 = $20,000).
The Ninja has made a total of $75,000. And how many people did he sell to? Only 1000.
Oh, and he only worked 6 weeks + 2 days out of the year, and it's probably work he loves to do.
Here's what we can learn from our Ninja dude:
- If people buy from you once, they are more than likely to buy from you again. This is so true, and I've experienced it myself. Provide excellent content once to prove yourself, and many people will be all over any additional or new stuff you have to offer.
- Dollars earned per customer is important. There are two basic ways to increase the amount of money you make. First, you can focus on getting more customers. Secondly, you can focus on how much you can earn from each customer, not just from raising the prices of what you have to offer, but offering premium and upgraded stuff as well. Do both, and your income will skyrocket.
- You don't need a lot of customers to become successful. This was the whole point of this blog post. You don't need to reach that many people in order to earn enough to make a living online.
Here are two things that you can take away from this information:
First, you can enter a widely popular market, one that is fairly saturated with many companies, businesses, websites and/or blogs, and still do quite well. If you can take a relatively unique angle with your business that will appeal to a number of people within that market (again, it doesn't have to be very many), you can do quite well for yourself.
You've heard of “market share” right? Same idea.
Secondly (and this is the approach that I took with my LEED exam training business), you can enter a niche or market that is really narrow, one that is super specialized that doesn't really have much existing competition. You become the authority in that niche, the “go-to” person or website people find whenever they need information about that subject. Leverage your authority, and again you won't need very many people to purchase from you to succeed.
This is why doing business online is so cool. You have the opportunity to sell something to anyone in the world with internet access. There has been no other time in the history of the world where this was possible for people like us.
This Isn't Crap
I've gotten a lot of buzz from my last blog post, my Annual Passive Income Report. I've had a lot of amazing, really awesome comments from many of you, and I thank you for those, from the bottom of my heart. Some people, however, are still doubtful that what I've done was even possible.
I feel really bad for those people because they are not giving themselves a chance to see what's possible for them! I hope this post gives at least one of those skeptics a dose of reality. Times are changing, people are buying information online. Reach a few of those people, and you will see what can really happen.
Oh, and the estimated population of the world by 2040 will be 9 billion. Will you take advantage of that?
Here's to your success!