3.5 (Painless) Internet Marketing Economics

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In this video I discuss:

  • Very simple and easy-to-understand economics I wish someone had shared with me early on
  • What you should be looking for in your niche at a very minimum if you want to make money
  • Discussing commission percentage vs. total purchase value, and how they should guide your niche selection

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3.5 Transcript Below

Okay, let’s talk about what sounds very intimidating on the front end but that’s why I put “painless” on the front of it: internet marketing economics.

I think people see the word “economics” and they go, “Oh no.” But I promise this is going to be really painless and easy to understand.

At the end of the day, the reason I want to visit this right now is because these are economics that I really wish someone had called to my attention when I was picking a niche.

So the cheaper the product… we’ve talked about this already in past training… but the cheaper the products in your industry, the more you have to sell. And that can be a problem because that means you need more traffic and the more traffic you need, the less likely that it is to happen.

Because again, remember: the internet is going to have much fewer high traffic sites than it has kind of modest… what a lot of people would consider low-traffic sites compared to a site that’s getting a million visitors a day – getting a thousand visitors a day – is a pretty modest amount of traffic but much more achievable.

On the other hand, the higher the commission or the higher the commission percentage that you’re receiving for a product, the fewer you have to sell.

So if you’re selling something that’s $300, you’re much more likely to succeed and make decent income off of a lower amount of traffic than something that is $10.

Just look at it: if each one had a 5% commission, the commission on one is like $0.50? And then the commission on the $300 product is $15. Still not a really incredible commission but $0.50 compared to $15? You need to make a lot less of the $15 commissions to hit whatever goal you’re trying to hit than the thing that costs $10 and you’re only making $0.50 off of.

The other way to turn that on its head is a lot of digital products, for example, have really high commission percentages – like 50% to 75% of the sale so even though it may only be $30, your commission on it may be somewhere between $15 or sometimes even as high as $25.

So it’s a really important thing to keep your eyes on and we’ll talk about exactly how you do that later in this lesson.

But as I mentioned, the fewer conversions that you have to get, the better you’re setting yourself up for success than someone that needs a ton of conversions to kind of hit the goals that they want.

So a really simplified way to look at this without getting face deep… without just really diving in and getting lost in the weeds… and you know, just looking at all the different commissions and different kind of affiliate offers that are out there… you really don’t need to do that. You don’t need to go that in depth when you’re picking a niche if you’re following everything else in this training and it could actually just result in you feeling a lot more overwhelmed.

So without getting face deep in commission-hunting, general rule of thumb: sell digital products that have higher percentage of commissions or sell physical products that are $50 or more that have lower commission percentages.

So I would even say $100+ products would be even better because even though the commission percentage may be lower, you’re only looking at maybe 5% to 7% – some instances even less.

Great example is computer. A computer is going to cost someone at least $400 to $500, so your commission – even if it’s only 3% on a $400 computer – is $12. And it’s a necessity, it’s something that someone is going to buy so they might as well do it through you.

And it could range up to… In the virtual reality niche, I’ve sold $2000 computers. The only unfortunate thing is that the commissions there tapped out at like – through Amazon at least – tapped out at like $25. So you don’t get the full percentage. They kind of have a cap, they say, “Hey we’re going to pay you this much percentage up to a certain point and then we’re going to cap it.” Which kind of stinks. But whatever, $25 commissions were still decent. They were still decent. So just keep that in mind.

And there’s kind of a third tier here that’s not written and there’s no way to really know without just doing a ton of research. And again, I don’t want to overwhelm you. I don’t want to push you in that direction because it just makes things more and more difficult and adds even more moving parts.

But industries where you might sell leads or there might be free trial offers – and there are a lot of different industries everything ranging from movie streaming services to (I mentioned earlier) credit repair or insurance quotes, things like that – that you can refer people into.

And then like free trial offers for supplements, stuff like that, there are always monetization opportunities like that, too. Which probably costs the consumer – your website visitor – nothing. But if you refer them through your affiliate link and they submit their lead information, you pay $5 or $10 for everyone that does that or more.

If you get someone to complete a mortgage application… those are always really high paying affiliate commissions because they’re difficult to get someone to do online. So if you get someone to do it, sometimes the commissions on someone filling out a mortgage application is $100 or $200+ for every single person that does it. So there are always kind of options like that, too.

But as a general rule of thumb: sell things, sell digital products with higher percentage commissions or physical products that are at least $50 that likely have a lower percentage commission.

At the end of the day, don’t try to sell a high number of low percentage cheap products because like people say, “I’m going to monetize by recommending books. I’m going to review a bunch of books.” And at the end of the day, technically it’s a valid niche, technically it’s a buying audience, but you’re just going to need so much traffic to get the amount of commissions you need to make money in that niche – make consistent good money in that niche. It’s going to be very, very difficult and your odds of success are that much lower.

So you’re not going to get everything perfect, right? I really want to clarify that. Don’t feel like you have to hit all of these nail in the head perfectly because if you line up at least the majority of these factors, you’re going to be much better off than someone that’s just kind of went into and picked a niche blindly based on half an hour of training – which on the surface seems like a lot. But once you dig in and now you see how much there is to picking a niche, you’re set up for success a lot better now that you’ve watched a couple of hours of training total on the topic.

And again, it’s just such a pivotal thing. I wish everyone taught it this well and this in depth.

So you’re not going to get everything perfect. Don’t worry. But the more you do – if all of these things line up perfectly – you’re looking at a really stellar niche. So the more boxes you check, the more likely you are to succeed.

So at the end of the day, don’t get too overwhelmed if everything is not lining up perfectly but just keep doing the best you can and I’ll talk at the end of this section about when it’s time to move on, when it’s time to just make a decision, et cetera. So don’t worry. I’ll equip you with everything you need before we move into Section 4.

But for now, that’s the end of this lesson. In the next video, I’m actually really excited because we’re going to do something called “Good Niche, Bad Niche” and we’re just going to basically go through example after example after example and talk about…. you know, kind of workshop some of these ideas. And I think that’s going to make so much more of these concrete for you because a lot of this is swimming around in your head and you may be a little bit overwhelmed. I think the best way to mitigate that always is simply by talking real world examples. Again, something I wish a lot more people in this industry did.

So, as always, if you have questions, feel free to post them to the Facebook group – that is free for registered members. And if you have any questions, I’ll see you over there. Otherwise, I’ll just see you in the next video.

23 thoughts on “3.5 (Painless) Internet Marketing Economics

  1. Hi Ian and as I go thru your course I have to compliment you in offering all this material for free. It is not often that you get a chance to learn something as important as developing an internet business. Look forward to listening to the remaining videos and increasing my knowledge for this business. Thank you again.

  2. Dear Ian , your training is insane , i am only up to third module but so much of value in this course , i have already burnt 3000 dollars on different course but all were crap and false promise , but this Free internet marketing course is worth taking time and learning every thing what Ian teaches
    God bless you

  3. I’m overwhelmed with these tons of priceless information.
    I always believe that if you want to receive …GIVE.
    And that’s what you are doing …Great Job.
    Thanks Ian.

  4. Thank you so much. I can’t even begin to tell you how many domains I bought without doing real research as explained. Now I have a bunch of useless domains on hand. I am encouraged.

    • That’s too bad, Lisa but I’m so glad you found your way here at FIMP. I sincerely hope the training helps you create a successful journey ahead. Best of luck!

  5. Someone, perhaps you Ian, said this course could have been sold for $1,000. Only having gone this far and previously “beta” tested your ideas on keyword selections
    (i.e., dig down for the “low-hanging fruit” or crumbs left at the table by the alpha males of the business), I am thoroughly convinced this training is not only worth more than that but that you have accomplished your goal of creating the best training on the net.

    It has brought back memories of being in grad school with one of my professors who had an international reputation as an iconic figure in his field. Well done.

    • Thank you for those incredibly kind words, Andre. I think this comment likely fueled me up for at least another week 😉 It makes me so happy to know that this training is impacting your life and online business journey.

  6. Awesome knowledge that makes things a lot much clearer than before, am a slow turtle my computer chip( Brains) has been cracked one times too many (sports) but you getting through loud and clear. Thanks Ian

  7. Hey Ian, problem viewing lesson 3.4 on android mobile. All these lessons have worked very well so far, but just not 3.4. I get a purple screen telling me I must be a member, and need to log in (which I am, and then do as instructed, but I still arrive back at the same screen without success). Just a heads up for that page. No biggie, I will catchup on my laptop 🙂

      • Ian, I’ve cracked the problem with the above mentioned issues (in case you have not). You are using a plugin called Learndash and it’s is trying to load before the page has finished loading. (i.e. it’s DOM Hierarchy issue).

        These are the symptoms:
        1) Appearing as logged out on the top black bar, and…
        2) The Section’s Progress bar ????????? image instead of progress, and….
        3) Attempting to play the video gets the purple popup (protesting for member’s only).

        The Solution:
        …count 1,2,3 and hit F5 to refresh the page and hey presto, it displays correctly.

        Q: Ian, why is this the case? What’s going on?
        A: Learndash module is loading too fast. You have to delay it from loading, until the page is ready for it. (That’s my best educated guess anyway). I suggest you just take the script calls for LearnDash and call them AT THE END OF THE BODY SECTION (instead of up top). But if that doesn’t fix it, then you’ll need code: In jQuery we use the document.ready function and in javascript we use window.onload function. Ask me if I can be of more help.

        P.S. Feel free to delete this message. Best of Luck!
        Cheers, Digi.

  8. Ok. So far I have learned few new things and confirmed that I was on the good track with some of the stuff… All in all this course is a very good so far. Hope to learn more good stuff on these much more fun parts 😉

    • I’m glad you’re finding that the training is holding up to the promises/commitments I made early on! And that’s GREAT news that your niche held up through all of these tests — a very, very good sign.

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