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In this video I discuss:
- The only four paths to wealth online
- The “Reverse Math” that all internet businesses can be broken down into
- The viability of high-traffic sites vs. low traffic sites, and which you should aim for
- Reverse math for service-based, product-based, and content-based internet businesses
- The ONLY three core competencies that any internet entrepreneurs use to make money
- A straightforward, easy-to-understand formula for building a profitable internet business
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1.2 Transcript Below
Okay, here we go!
We’re going to jump in with both feet like I said in the last video. I’m going to talk to you about the only four paths to build wealth online.
This is from the years of experience I have across multiple industries, multiple streams of income in my own business, as well as everyone I’ve known to make a full-time living in internet marketing.
Every single one of the businesses I’ve ever encountered fall into one of these four categories. It’s possible that there are more but I think this is pretty comprehensive. I think I’ve covered them all pretty well.
And the reason I want to lead out with this lesson is because when we talk, when we cover… by the end of this video – this is going to be kind of a long video, by the way. This is our first kind of lengthy video because we’ve got a lot to cover here, and admittedly, I can be kind of a rambler which I apologize for in advance. But I try to keep it in a minimum.
Once you know the four paths to wealth online – and it’s kind of an equation and by the end of this video, you’ll know the full equation – but once you know the four paths and you kind of know the core competencies and you get traffic, that’s all internet marketing is. That’s all making tens of thousands of dollars a year or hundreds of thousands of dollars a year break down to. Those are the core components.
And yes, it’s a lot harder said than done or a lot easier said than done, a lot harder done than said (which is gross, that sounds horrible). But at the end of the day, it’s important to understand these concepts and the entire process will be much less overwhelming if you have this framework in place as part of your foundation, which is why we’re going to cover it.
So please again, watch all of these videos, watch all of section 1 and 2, take note of any questions you have, and if you’re a registered member – which is again totally free – you can do it anywhere in this area. It gets you access to the Facebook group and you can post your questions over there and get support from the group and myself. I check in there as well every day.
So anyways, digging down into Lesson 2.
There are only four paths to wealth online as I mentioned.
You can create a content-based business that’s monetized through advertising so that means you’re getting paid every time someone clicks on an AdSense ad on your site.
And if I say something that doesn’t mean anything to you, don’t worry. I’ll teach it in-depth down the road. Right now, we’re just getting a high level overview of the industry.
So if you don’t know what AdSense is, if you don’t know what CPC – which is ‘cost per click’ – if you don’t know what that stands for, or CPM ‘cost per thousand’ impressions, or CPA which is ‘cost per acquisition’. If you don’t know what any of these things mean, don’t worry, we’ll cover them in depth later. Just try to stick with us as much as you can, alright?
So a content-based business is pretty much always going to be monetized through either advertising or releasing a digital product – which is one of the other four paths that I’ll talk about later in this video.
One of the other four paths to building wealth online is to create a service-based business.
That could be, say, you run a writing agency where you charge x amount of dollars per article. Either you’re writing your articles yourself or you have team members that you manage that write the articles for you.
Running an SEO agency where you charge a business owner a thousand dollars a month or two thousand dollars a month to get them ranked highly on Google using search engine optimization.
And you’ll know enough by the time you finish this course that you could absolutely do that and I plan on teaching it specifically down the road because local businesses are a little bit unique compared to kind of national or international affiliate websites – there are a few little intricacies. So you can absolutely do that.
Okay so that’s the second path to wealth: you can create a service-based business of many different kinds and create a lot of wealth that way.
You can run an eCommerce business where you’re selling physical products –whether you’re drop shipping them from another supplier, or you are shipping them out of your own house, or you’re using a fulfillment facility, a supplier of some kind to ship. There are all different kinds of ways to do it. But that’s the third path: is to create physical products and sell them to customers.
And then I mentioned earlier a lot of the times – this is technically a content-based business but I wanted to separate it out just for the sake of clarity – is selling your own digital products.
So where you create a training course – it doesn’t have to be in the internet marketing industry. I think that’s a common misconception. There are people that make great livings selling, like… once I read a story about a woman that was a librarian or she used to be an elementary school librarian and she started packaging up curriculum.
Because my wife used to be a schoolteacher before she was able to quit her job thanks to my internet marketing business. And she was a high school English teacher and she would spend so much time preparing her curriculum.
I mean, for her to be able to buy curriculum for three or $400 somewhere would have been a bargain because it would have given her hours back every week times whatever it is 36 weeks out of the year or however many weeks they work.
So we’re talking about hundreds of hours that would’ve saved her. Spend $300, $400 – easy peasy.
So there was a woman that used to be an elementary school librarian, she packaged up curriculum, every year she released new curriculum, and sold it for like $300 a pop.
She makes six figures a month, okay? So that’s a digital product.
So there’s all different kinds of digital products – not just eBooks and digital courses – which can span any different industry. They’re really common in the industry like make money online, business opportunities, health and wellness, all that stuff. But they are also totally applicable to a ton of different industries.
But those are the only four paths to wealth online. In time, we’ll break each one of these down, but for now, we’ll just go ahead and talk about the most important thing to take away from this video because if I get into the nitty-gritty of each one of those four… how you make money and monetization models for all the different… like we’re going to get, we’re going to scratch the surface on them, but it’s going to get really really messy really quickly and I think it’s going to really overwhelm a lot of people if I just jump straight in there before we talk strategies and how all these different things work.
So the most important thing to keep in mind for now is that every internet business breaks down into “reverse math” and this applies on a kind of a couple of different tiers.
The first tier is reverse math in the sense that if you want to make x amount of dollars per month, you need x amount of customers at so much value per customer – okay, that’s it. It’s a formula. Every internet marketing breaks down to that. Every internet marketing business breaks down to that.
And you may have heard this quote elsewhere and for some of you it’s really obvious at this point. I’m not saying I’m the creator of this. Don’t get me wrong. But it does make this industry a lot more approachable and easy to understand. Much more palatable, so to speak. But I will go deeper than this and I’ve never seen anyone really really dig deep beyond examples.
But I do want to make clear that this is true for all four paths to wealth online. That formula applies to all four of the paths we just discussed.
It applies to a content-based business, to a service-based business, to a physical-product business, or a digital-product business. It applies to all of those. I’ll talk about that more as we move on.
The first… what I want to say right now though is don’t freak out.
I’m going to teach all of these step-by-step in the future, in future training – that is what some of these sections are all about. Right now we’re just talking concepts, okay?
It could get a little bit overwhelming, just stick with me the best you possibly can, and we’ll work out the kinks as you go through the rest of the training and we can supplement it with the Facebook group if you have questions. And if you’re a registered member, you could access to the free Facebook group too and people can help you out there.
So don’t freak out, alright? We’re about to really jump in.
If you get overwhelmed, know that it’s perfectly normal, it’s okay. I can’t tell you how many times I’ve been overwhelmed in this industry. It does not mean that you’re not going to be successful, you just have to push through it. Alright? So just do the best you can to stick with me here.
So reverse math for a content-based business… and I promise that all of this is going somewhere. I’m not just pointing out really obvious math over and over again. I really want to drill it into you so that as we get there, as I start making these deeper points towards the end of this training video, they really connect.
So if you want to make $10,000 a month in a content-based business, you can achieve that multiple ways.
A lot of people try to do it through Google AdSense and they think that that’s a really good way to make money in internet marketing. Well, it’s typically not.
Typically, most websites are never going to get enough traffic to make remotely close to a decent chunk of change from Google AdSense. But you could. You could make a dollar per click – every time someone clicks your Google AdSense ad on your site, you make a dollar. If you’ve got a dollar earnings per click times 10,000 clicks per month, you’d make $10,000 a month. Right? Makes sense.
Now what that means though and this is why the math for Google AdSense doesn’t really work out: most sites are lucky to get somewhere between one and 3% click-through rate (CTR) is really really good for a Google AdSense site.
So we’re just going to say 1% because I think that falls somewhere towards a high end of average. If you’re getting 1% click-through rate and you need 10,000 clicks that means you need a million visitors to your website per month. That is a very very difficult thing to achieve. You have to have a lot of traffic coming in which means you need to have… typically that has to be done through search engine optimization which means you need a metric crap ton of content and you need just visitors coming in just hand over fist over and over and over again. It’s hard. Even just to make $10,000.
There are people that are millionaires from Google AdSense. Don’t get me wrong –it’s totally possible. It’s just a really really difficult path to make a lot of money in because most websites aren’t ever going to get more than tens of thousands of visitors a month – if that. A lot of sites won’t even come close to that.
So just keep that in mind: because of that, that monetization model is not valid for most businesses… for most internet businesses.
Now you could make $10 per free trial giveaway.
A free trial giveaway is considered a CPA marketing which again I mentioned earlier stands for ‘cost per acquisition’ marketing. And like Netflix did this for a long time. I think they still do. Freecreditreport.com is another great example where you give away something for free to your website visitor and you get paid. So it costs them nothing up front and you get ten to $15 a lot of the time.
There are also pay per lead. So like if you pass someone through for auto insurance quotes, you may get paid $5 for every person that requests more information on a website about auto insurance. Stuff like that.
So there are all different kinds of ways to monetize content. All different kinds of ways. But we’ll talk about those later in the training.
But if you wanted to make… again, going back to $10,000 a month. If you were making $10 per free trial giveaway: so you’re giving away freecreditreport.com, you’re making $10 for every one, now you only have to give away a thousand instead of getting 10,000 clicks. Okay?
And if you’re converting 1% of visitors… which you may go, “Hey Ian, how do I get from if I can only get 1% of people that click through my ads on Google AdSense, how the hell am I going to get 1% of visitors to sign up for a free trial?”
It all comes down to qualified traffic which we’ll talk about again extensively down the line in the training. But it is totally possible. It’s not unreasonable at all if you’re getting qualified traffic to assume that you could convert at least somewhere between one to 3% of those people. You just have to put the right systems in place and leverage the right strategies.
These are not outrageous numbers. These are actually… especially talking about 1% of visitors converting to something like this, I’d say that’s fairly low-end – if you’re good at conversion optimization which again I teach later at the course.
But anyways, that’s only a 100,000 visitors which is much more achievable. That’s over… that’s like 3,300 visitors a day basically, okay? That is much more achievable.
There are a lot of websites that get to 3000, 4000, 5000 visitors per day – in time. It takes a lot of time to get there, a lot of hard work. But it’s achievable as opposed to how many websites get a million visitors per month.
So a 100,000 visitors, 1% conversion rate, $10 per conversion – you’re making your $10,000 a month: Content-based business.
Or you could be selling a product – not your own product in this particular instance because that’s a different path that I’ll discuss later in this video – but a $100 in sales. Say you’re selling a $200 product, a $197 product and they have a 50% affiliate commission. You’re going to make a $100 per sale, now you only have to sell a hundred of them to hit your $10,000 a month.
Assuming the same 1% conversion rate, 1% of people that visit your site converts to that offer through your affiliate link, now you only need 10,000 visitors per month.
So it makes sense that as our commissions go up, as our earnings per visitor go up, the amount of visitors that we need go down. They have I guess a ‘negative correlation’.
So as numbers of visitors… or excuse me… as earnings per visitor goes up, the number of visitors needed goes down to hit your goals.
I probably said ‘negative correlation’, I should probably just stay away from scientific terms because I’m going to put my foot in my mouth when someone’s going to come along and, “Oh it’s not really a negative correlation, Ian. This—” Spare me, please. I’m just an idiot trying to teach people cool stuff.
So a service-based business reverse math… okay, so we talked about content-based and I want to keep moving through these.
Something that’s really noteworthy about most service-based businesses is if you have good customer service at all and you deliver quality, you’re probably going to have residual income.
That can be true for a content-based business too. Don’t get me wrong – there are a ton of affiliate offers that pay residual income but service-based businesses are much more straightforward as far as residual income goes.
So if same example you want to make ten grand a month: so you’re running a writing service. You manage a team of writers in the Philippines that you pay $3 an hour. Writing… if you want really good writers, you probably want to pay more like $4 or $5 an hour – which still sounds absurd if you’re still new to that concept which I’ll teach later so don’t worry about it.
But if you want to make $2 per profit or if you make $2 profit per article, so let’s saying you’re paying them $4 per hour, they can only write only one article per hour – which probably isn’t true – you have to charge $6 per article to make $2 profit because you have to pay your VA.
So you could have her do 5,000 articles a month which sounds really overwhelming at first but if you over time got 500 customers that were ordering 10 articles per month – both very achievable numbers. Again reverse math. You could break everything in this industry every business in this industry down to these kinds of steps and build your way up to you whatever income goals are.
$5,000 a month is even more achievable, but ultimately, I think it’s a really common goal to get to $10,000 per month. I know it was for me for a long time until I achieved it.
So an SEO agency is another example. Really high value industry. If you can get people ranked, it’s very valuable to their business so you can charge a thousand, two thousand… there are some people that charge in really competitive industries $5000 per month per client then you only need ten customers for a thousand dollars per month.
If you’re charging $5000 per month for let’s say real estate agents – really really competitive and hard to get ranked – then you only need two customers to get to your $10,000 a month goal. So again, just reverse math.
Ecom and digital products… I don’t want to keep doing this because I know you get the point and I kind of want to make the really key takeaway points… so I’m just going to kind of keep on going through this really quickly: they break down the same exact way.
If you want to make $10,000, you need to sell 10,000 products at $1 profit per sale. If you’re getting 1% click through rate… that was supposed to changed, excuse me. So if you’re getting 1% conversion rate (it should be CR instead of CTR)… if you’re getting 1% conversion rate, again that means you need a million visitors per month.
But if you’re selling a thousand products at $10 profit per sale, you would only need a 100,000 visitors with a 1% conversion rate. So it breaks down the same exact way. You get the point: the higher your profit margins, the fewer visitors you need. And typically speaking, the fewer visitors you need, the more likely you are going to succeed in this industry. So just keep that in mind going forward.
So if you’re making a $100 a sale, now you only need 10,000 visitors at a 1% conversion rate… which is in eCommerce by the way, it’s not uncommon to see 2% or 3% conversion rates so just keep that in mind, too.
So again, these numbers are kind of low as far as how achievable they are. They’re conservative – that’s the word I’m looking for.
And if you’re making a $1000 per sale, you would only need to make 10 sales to hit your $10,000 a month goal and that’s a 1000 visitors at 1% conversion rate.
So again: your profit margins go up, the number of visitors you need go down. Alright? I guess the camera’s backwards so number of visitors go up… and or excuse me… you’re getting it… and amount of money per conversion goes up, number of visitors you need goes down.
So what does it all mean?
I promised I would make some really key points here and this is where I think this industry is going to become so much easier for you to understand now that we’ve talked about the math.
Everyone needs to know how to get traffic in this industry. All four of those paths to massive profit in internet marketing are combined with traffic and that’s a lot easier said than done.
Free or paid traffic? I plan to teach both in this members’ area in time. I’m going to start off with teaching free traffic because it’s much more approachable and possible for most people. Most people don’t have a couple of thousand dollars a month that they can spend on advertising or pay per click right off the bat. If you do: awesome. I’m going to teach it later but I think for most people, we’re looking to kind of bootstrap it all and shoestring it, spend as little money as possible to make as much money as possible in time.
So I plan to teach both in this members’ area. Everything from search engine optimization to authority outreach, to video marketing, pay per click advertising – all different kinds of stuff — there’s so much stuff I’m going to teach in this training. Don’t stress about that now. You will learn how to get traffic.
The important thing to know right now is that traffic is an essential component. Traffic + type of business/path to wealth – one of the four – and then something else which is what we’ll talk about here in a second.
So all four tremendously profitable paths to income online equal traffic plus one core competency – that’s it. That’s what this industry breaks down to.
Now you may say, “Hey Ian, that doesn’t mean a whole lot to me.” Well, that’s okay. Again, we’re about to dig into it.
So there are four paths to wealth online but those four paths to wealth online only require one of three core competencies. There’s overlap for one of them.
Getting the most money for your traffic which is conversion optimization at the end of the day. That’s what it comes down to, it’s finding high-paying offers too… but that’s not really a skill that’s pretty easy to do. So what it really comes down to is conversion optimization: getting the most money out of your traffic, the most money possible out of your traffic is content-oriented businesses and digital products sales. So that’s the core competency for those tracks.
So if you want to run a content-oriented site like a blog or a YouTube channel or I guess even an Instagram influencer account, your core competency that you need to get really good at is conversion optimization. Getting the most money for the amount of traffic you’re getting. That’s something… that was one of my first core competencies years ago. I’ll tell that story in another video. But that’s something I’ve become really, really good at and I kind of cut my teeth on these days.
Getting high quality labor for really cheap is going to be the core competency required for a service-oriented business. You can do it yourself in the beginning – don’t get me wrong. But if you want to scale, you need to learn how to get really high quality labor and the cheaper you get that labor, the more money you’re going to make, the higher your profit margins are.
So if you want to launch an SEO business, if you want to launch a writing service, you need to get really, really good at getting high quality labor for cheap, which again, I intend to teach in this members’ area.
The next thing is getting high-quality products for cheap. If you want to do eCommerce or physical products or drop shipping, falls under that same umbrella, those are all kind of the same thing, you need to get really good at getting high quality products for cheap – whether you are sourcing them yourself and having someone manufacture them for you, maybe you design the product yourself and you’re having someone manufacture it for you, or you’re just finding a product that someone else is manufacturing and you’re finding a market that is underserved and would really want that product.
What it comes down to is the cheaper you get that high-quality product, the higher your profit margins, the higher your profit margins, the fewer conversions you have to make to make your monthly nut that you’re aiming for – which what we’ve been talking about is $10,000 a month.
So bringing reverse math full circle… Don’t worry if you’re going, “Ian, that didn’t connect any dots for me.” That’s what we’re doing here, okay?
This industry can be really, really overwhelming. I guarantee if you stay on this track – and it’s not just my training, it’s any legitimate training in this industry – if you stay with it, you’re going to get overwhelmed probably multiple times along the way.
It’s perfectly normal, know to expect it, know that when it comes, you have to push through it. It just stands between you and success. It’s what stands between you and changing your family’s life.
So as you’re going through this training, you are going to get overwhelmed. There’s a lot to learn. But when you get overwhelmed, just take a deep breath and remember everything in this industry breaks down to one very simple concept: you don’t have to learn everything.
You don’t have to learn like I have. I don’t know why I did this to myself, I wish I had known this concept so much earlier. But you don’t have to get good at sourcing physical products and finding service for cheap and, you know, conversion optimization.
You don’t have to get good at all those core competencies. You don’t have to learn everything. You only have to know one core competency inside and out, combine that with traffic, and you’ve got a tremendously profitable internet business… potentially.
There’s a lot of hard work. It’s a lot easier said and done. It’s a lot easier in concept than it is in application. But that is what this industry breaks down to.
So every time you get overwhelmed, just remind yourself, “I don’t need to know it all.” Just take a deep breath and say, “I don’t need to know everything. I just need to get really good at one core competency and I need to get really good at one way to get traffic…” And there are dozens of ways to get traffic online.
So just take a breath when you’re overwhelmed and remember that.
We can talk about, you know, as you go through the training, you’ll figure out what core competency more aligns with your goals. But if you’re low budget – well, I’ll talk about that here in a minute. I’m getting ahead of myself.
So I plan to ‘teach it all’. I plan to teach all of these stuff, all four paths and all three core competencies and multiple ways to get traffic. I plan to teach all of it, okay?
But I want to talk first about what this project needs from you.
I know that sounds a little bit weird. We’ve been talking talking talking about all of these things, I kind of got ahead there of myself for a second.
I want to be very clear: this is not me getting ready to ask you for money or saying you need to pay for a subscription. This is free, this is free, this is free. I’m not going to betray your trust at any point but trying to charge you for it.
But I do need your help to keep Free Internet Marketing Project going. So before we really start digging into the hardcore stuff and set you off on building an internet marketing business, I need you to watch one more video about what you can do to make sure Free Internet Marketing Project not only stays up to date for you and keeps growing for you to keep building on your knowledge, but for everyone else in the future.