How to Start an Online Business

man running an online business from his laptop

Are you trying to figure out how to start an online business? In this guide, I’ll show you the easiest, fastest, and most profitable way to get started.

Introduction

My name is Tim Culpepper. I’m the founder/creator of Conexa.

My first attempt to make money online was way back in 2010. I had a full-time job. I had a growing family. I had lots of bills. I was making enough money to survive, but I definitely wasn’t comfortable with the situation in which I found myself. I had a lot of debt to pay off. And I wanted to start saving for the kids’ college as well as my own eventual retirement.

So I decided to start a side hustle. But because of my full-time job, I needed something that didn’t demand too much of my time.

I went to Google, and I searched “How to Start an Online Business?” I filtered through all the scams, and I found a few legitimate business ideas.

The business model that first caught my attention was an Ebay business model. I read about people having lots of success on Ebay. Many people were doing quite well selling items from their garage. Some of them were growing their businesses by specializing in a niche, buying products on the cheap, and reselling them.

I was intrigued, but I couldn’t pursue this model because. I had two significant constraints:

  • I didn’t have a lot of time
  • I traveled a lot with my job

Given my frequent travel, I simply wouldn’t be able to run an Ebay business, or any kind of physical product business, from home; it just wouldn’t be possible for me to consistently fill physical orders if I weren’t at home. So I needed another way to make money.

In order to start an online business, I needed something that could be sustained from anywhere in the world… a business that didn’t require a lot of my time… a business that didn’t require a lot of startup capital.

My search led me to 3 business models:

  • Affiliate Marketing
  • Niche Authority Websites
  • Domain Investing/Flipping

There are other models out there to start an online business, but these are the three that intrigued me the most. And all three of them were amenable to my unique constraints.

So I jumped right in (to all three). I spent the subsequent decade learning all about these three business models. I taught myself html, PHP, and WordPress. I set up website hosting accounts. I learned how to set up Pay per Click campaigns. I learned how to build email lists. I built audiences on social media. I launched forums and blogs. I bought and sold domain names. I tried it all.

I didn’t make very much money in the beginning, but each subsequent effort made a little more money. More importantly, I learned the pros and cons of each type of business model. I learned what was hard and what was easy. I learned what worked and what didn’t. I made a ton of mistakes. I had a LOT of failures. And I had some GREAT successes.

Eventually, my efforts paid off. Now, my online businesses enable me to live the life of my dreams. I can spend time with my family. I can work from anywhere. I can vacation whenever I want. And I don’t have a boss telling me I need to fix my TPS reports…

It’s an amazing lifestyle, and it’s one I’d like to share with others. That’s why I wrote this post. I want other people to experience the benefits of this lifestyle as well.

The goal of this guide is to show you how you can start your own online business… even if you don’t have much time… even if you don’t have much extra money. The goal is to help you create a passive income and then to grow it, so that you can eventually quit your regular job.

And the beauty of what I’m going to teach you is that it is infinitely scalable; there is no limit to how big your business can grow.

What is the best online business?

As I mentioned earlier, I really like the following three business models:

  • Affiliate Marketing
  • Niche Authority Websites
  • Domain Investing/Flipping

The focus of this particular guide is on the first business model, AFFILIATE MARKETING. I’ll write about the other business models in separate posts.

What is affiliate marketing?

Affiliate marketing is – by far – the easiest, fastest, and most reliable way to start an online business. For those reasons, it’s a great place to start. Also, it’s a foundational skill which is often used in other business models. So understanding this business model will help you tremendously if you decide to pursue one of the other business models.


Affiliate Marketing Definition:

Affiliate marketing is an advertising method for companies whereby, you (the affiliate) promote products/services (for a company) online (usually via a blog or via social media) using unique clickable links (provided to you by an affiliate network), and when people purchase the promoted product/service after having clicked on your link, you are rewarded with a commission.


So, for example, if you are a member of the Amazon Partner Program (Amazon’s affiliate program), then you can make money by promoting any product on the Amazon website.

Let’s say you are a photographer and you have a decent following on Instagram. Well, you could write a review of the camera that you use for your photography, publish it on your blog, and link to the review from your Instagram profile. In your review, you would use a special Amazon affiliate link that – when clicked – launches the camera product page on Amazon. Now, if someone clicks that link and then buys the camera in the subsequent 24 hour period, you will get paid a commission. And here’s the best part: even if that person does not buy the camera you recommended, you can still earn a commission… because if that person buys ANYTHING from Amazon in the next 24 hours, you will get a commission.

Here’s another – even simpler – method of affiliate marketing. Let’s say you want to promote informational products such as e-books or online courses. You could simply grab your affiliate link for the informational product you want to promote and share it on Facebook or Twitter. If anyone clicks the link and buys the product, then you will get a commission. It truly is that easy.

An added benefit of promoting digital products (vs physical products) is that commissions are much higher than commissions on physical products, often as high as 50% or more. We’ll talk more about that in a bit.

How to build an affiliate marketing business

First, you will choose a niche. Then you will establish yourself as a trusted authority in your niche. Next, you will build your audience. Then you will recommend products/services to that audience using affiliate links. Finally, when people make a purchase after clicking one of your links, you will make a commission.

Note: We are not trying to make a quick sale; rather, we are working to build trust and to offer a legitimate service, connecting a consumer with a product or service he/she really needs.

This is the absolute easiest way to build a long-term, profitable online business.

What are the benefits of Affiliate Marketing?

  • You can pick an evergreen niche, so your business remains viable for the long term
  • You can pick a super profitable niche
  • You can connect consumers with products they really need
  • You can feel good about your business and the service you provide
  • You can diversify your income in a safe, effective and scalable way
  • You’ll have a passive income source

Step 1: Choose Your Niche

It’s time to choose your niche market. You may already have a niche in mind, but even if you do it would be a good idea to research it thoroughly. Research will help you ensure it’s a profitable niche.

There are many different types of niches, and the methodology for niche research can be significantly different based on the type of niche you choose.

Here are the different types of niche markets.

Desperate Niches – These niches are for customers who are desperately trying to solve a problem of some sort.

Passionate Niches – These niches are for customers who are involved in a hobby or sport or art (etc) for which they are very passionate.

Desperate niches are usually the most profitable, but they are also typically very competitive. They will require a bit more work because you’ll need to prove yourself to be an authority by delivering killer content that they can’t find anywhere else.

Passionate niches are also typically very profitable, but as with desperate niches, they are extremely competitive. The great thing about passionate niche markets is that half your market research has been done for you because you already know what your target audience is most interested in and is willing to pay for.

Pro Tip: If you are passionate about a certain niche, yourself, then this niche is a very good candidate for your affiliate marketing business. There are two reasons for this. First, you already know about the niche, so you won’t come across as a dilettante/poseur/newbie when you present yourself as an authority. Second, it’s fun to participate in a niche that you actually enjoy, yourself.

The next factor to consider: Is the niche “evergreen”? You want something that will always be around. For example, consider the Weight Loss niche. There will always be a demand for weight loss products. Don’t pick a faddish niche (like fidget spinners) that will die out in a year or two. You want all your effort to go into a niche that will still be around in five or ten years.

You can further divide niches into:

Information Niches – Information niches are those that involve digital products rather than physical products. An example of such a niche would be the “how to make money online” niche.

Physical Product Niches – Physical product niches are those that involve the buying and selling of actual, physical goods.

An important distinction, though, between digital products and physical products is this: affiliate marketers tend to make a MUCH larger commission promoting digital products than they do when promoting physical products. This is because digital products have virtually no overhead, and are available in unlimited supply.

Yes, digital products cost money/effort/time up front, but once they’re complete, and published, they have a VERY high profit margin.

When a vendor sells a copy of a digital product (an ebook for example) for, say, $40, that vendor just made a profit of $40. The vendor has no warehouse fees. There are no transportation/delivery fees. The product will never expire. And when the vendor sells one copy, another is instantly available; stocks do not have to be replenished. For these reasons, digital products have a very high profit margin; this means that the vendor can offer a 50% commission to affiliates and still make a lot of money. So when that $40 ebook sells, the affiliate and the vendor each make $20, and both are happy.

Physical products usually have much smaller profit margins. Online retailers have – on average – a 5% or 6% profit margin for physical products. So, they can’t offer affiliates more than that, or they would lose money. For example, the Amazon Associates Program offers 2% to 5% commission on most physical products (with a few exceptions).

So, keep that in mind when picking between an information niche and a physical product niche.

Step 2: Choose Your Affiliate Networks

There are many affiliate programs to choose from, but you don’t want to join every program under the sun. Unless you’re promoting a product that just isn’t available on any of the major networks, it’s best to focus your efforts on just a few big players.

What are the best affiliate marketing networks?

Let’s start by separating them into two main categories: physical and digital. There may be some crossover, but most networks fall mainly into one or the other.

Physical Product Networks

As mentioned before, you’ll experience lower commissions in the physical products category because profit margins are much slimmer, but you can still make a lot of money; you’ll just need a higher volume of conversions.

Amazon

>> affiliate-program.amazon.com/

First and foremost, there’s Amazon. The Amazon affiliate program doesn’t have huge payouts because their low prices offer very slim profit margins already, but the more you sell, the higher your affiliate earnings percentage. Also, as mentioned before, you’ll get a commission on any purchases made (within 24 hours) after someone clicks your link, so even if the customer does not buy the product you are recommending, you can still earn a commission. For example, say you are promoting an espresso machine… The customer clicks your link, sees the espresso machine product page and ultimately decides not to buy it. But the next morning, maybe this customer buys a brand new big screen TV. In that event, you would get the commission on the TV purchase.

The Amazon affiliate program also lets you earn money through its bounty program, which pays a fixed amount whenever visitors try out their services, such as Amazon Prime.

Rakuten

>> rakutenadvertising.com

Rakuten, formerly Buy.com, has around 100,000 products available from many different sellers. They are the largest e-commerce site in Japan and one of the largest in the world.

They have a wide variety of products at good prices, and customers can earn 5% back on most items. This builds a certain degree of loyalty, making it easier to generate sales, especially from people who already know the Rakuten brand.

Ebay

>> partnernetwork.ebay.com

Another great physical product affiliate network is the Ebay Partner Program. You can make a commission by promoting just about any product listed on Ebay.

Digital Product Networks

Digital products are those that users can view online or download. This includes products such as ebooks, video courses, online training, and how-to guides. It can also include graphics, photography and illustrations.

Clickbank

www.ClickBank.com

ClickBank is the original digital product network, founded in 1998. The company has thousands of active affiliates and plenty of quality information products to promote.

Commissions are very high, and it’s not too hard to get approved as an affiliate, so this is a great network for beginners.

I do have one caveat though. Some information products are low quality, you will NOT want to promote these to your audience. If you do, your audience will lose trust in you.

Ideally, you should always buy the digital products you plan to promote so that you have personal experience with them and can write comprehensive, genuine reviews.

ClickBank used to pay monthly, but now they pay weekly for those who have set up direct deposit. Yes, weekly! You can also choose to be paid every two weeks if you prefer.

Here’s an article I wrote detailing How to Make Money with ClickBank

JV Zoo

>> www.JVZoo.com

JV Zoo is another popular digital product marketplace and affiliate network. Many affiliates like JV Zoo because they get paid instantly – after each commissionable purchase – via PayPal. Many people find this setup preferable to the other marketplaces, which often have a minimum payout amount and a delayed payment schedule. Also, JV Zoo is one of the easiest networks to get into so give it a try.

Pro Tip: There is an application process for each of these networks, so make sure you know how to get approved for these networks before you apply to them.

Step 3: Select a Product

Once you have signed up to a couple different affiliate networks, it’s time to start finding individual products to promote. The products you choose to promote can make or break you, so you’ll want to choose carefully.

One benefit of using a large network like Amazon is the ability to see reviews for most products. This makes potential buyers more comfortable when purchasing a product because they can see feedback from previous buyers.

As long as you look for products with a large number of reviews and an overall positive rating, you will generally be safe as far as the quality of the product is concerned.

If you are promoting digital products, then you will find useful metrics in most marketplaces that will help you choose which products to promote.

Clickbank, for example, provides a metric called “gravity” for each product. This is the number of different affiliates who have made a commission on that product (at least one) in the previous 12 weeks. The higher the gravity, the more popular it is. This is good and bad by the way. If the gravity is too high, then that means there is a lot of competition among affiliates to promote that particular offer. If you have an existing email list or an existing social media following, then this competition does not matter. On the other hand, if your method of promotion is SEM (Search Engine Marketing), for example, then the cost of advertising is going to be too expensive to promote (due to the competition). Similarly, if you rely on highly ranked (in Google) web pages, then you will be competing with a lot of other affiliates for that top spot in the search results. For all of those reasons, you may wish to promote lower gravity products (that don’t have as much competition).

The “Rebill” metric on Clickbank is also super useful. Rebills are subsequent recurring purchases made by the buyer of any given product. Rebills generate recurring commissions… High Rebill metrics indicate that a buyer is so happy with a product, that he/she is willing to pay a recurring payment. This is a great indicator of quality. Also, the compounding power of recurring commissions can be super profitable to you. So this is definitely a metric to pay attention to.

Step 4: How to Promote Affiliate Products

There three primary ways to promote products.

The first way is to use Pay Per Click advertising (Google, Bing, Fecebook, etc) in order to send website visitors to an affiliate offer. But I do NOT recommend this method for beginners. It is very difficult to find affordable keywords. It is also very difficult to get your ad copy exactly right. Save this one for later.

The second way is to create an authority website/blog and write quality content promoting products. Eventually, the search engines will start sending visitors to your website, and they will click on your affiliate links. This is a fantastic method, but it does take some time and effort. I’ll write more on this later.

The third (and best) way is to promote offers via social media. This is my favorite method of promoting affiliate products. I love this method because it’s easy to get started, and it’s not hard to learn. Plus it doesn’t cost anything. If this interests you, then check out the following articles:

How to Make Money with Pinterest

How to Make Money on Facebook

How to Make Money on Instagram

How to Make Money on TikTok

How to Make Money on Youtube

Conclusion

I hope this guide has been helpful. If you have any questions or thoughts, please post them below.

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Emmanuel404
Marketer
14 days ago

One of the best article I’ve read so far. It so much explains how to start business online. Keep it up.

Syed M. Umair
Marketer
14 days ago

I love how every bit is so thoroughly explained.

Abel Nyarangi
Marketer
14 days ago

Detailed Guide.. Thanks for sharing this

Kikuyugrasshut
Newbie
13 days ago

Excellent, detailed info! You know your stuff. I couldn’t get over the fact that I knew half of the affiliate companies you mentioned in the article, but your mode of explanation and expression about how they work, reset the misconception of everything I knew about them. Thank you for taking the time.

Last edited 13 days ago by Kikuyugrasshut
Rajni Rajput
Marketer
9 days ago

Best article and very informative. Great..

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