online home businesses

[beachbum]

it seems like more and more people start online home businesses. i dont really understand the economics behind this kind of business. can anyone explain to me how someone can actually make as much money online as they do with a job?

[Leopardpm]

there is work which can be done solely from a computer, which could be anywhere including 'home'. Most home businesses are not just working at the computer though, they include a host of other duties, the most prevalent being SALES. So, most work at home jobs are just sub-contracted sales jobs... not too bad, but, it's not just sitting around in your PJ's and opening a paycheck every month.

[Stoner]

I think what BeachBum is referring to is these people who start a home-based business selling products like car audio equipment, flowers, t-shirts, etc... Some of these people end up doing very well. I watched an episode of Oprah one time (don't even say it) where she had on these people who quit their day-jobs and started up an internet company and ended up making millions.

[firefox]

I promote a few related services related to asset protection and privacy (see http://mpassetprotection.com/) and do OK. I also do marketing consulting for others. It takes work like any other career, but you do get lots of flexibility and control over how you operate. It's perfect for someone who wants to be a leader, but not so good for someone who wants to follow.

[sbannon]

beachbum, it's no different in theory than starting a non-home business. People need and want services and goods, they purchase those services and goods at stores and online. If you can provide a product online, and connect your offering with consumers seeking that product, you can do very well.

A very simple example of how the economics can work would be... let's say you enjoy video editing and decide you'd like to start your own business by opening a shop converting people's VHS tapes to DVD's for them. If you opened an actual store-front somewhere, you'd have large overhead to start with (rent, utilities, more insurace and etc.), and your customer base would be limited to the local area of your store.

However, if you decided instead to operate the business from your garage and use UPS or the postal service for the transfer of goods rather than a physical sales counter, your start-up and monthly overhead wouldn't include those additional rent, utilities and higher insurance costs, and your customer reach would be far greater.

Having the lower overhead you could charge a lot less for your services and still make more profit, which would off-set the shipping fees added onto your service.

Once you're up and running, it's no different at all than a non-home business in that you need to market your service to consumers who want it in an effective manner. If you can do that, you can have success.

This is just a simplified example, and I wouldn't suggest anyone read it and start thinking about starting a video conversion service online from home, it's a dying product at this point.

Another example of online businesses that people can do well with are advertising based web site properties. I do a bit of this myself and collect nice checks from Google, Yahoo! and several other sources each month.

The idea is to build web sites of informational or tool-based resource value for visitors, and then include advertising on your pages from one of the many ad serving companies out there. In this case, you aren't being paid by the visitor to your page, you're being paid (either on a per click or number of ad displays basis) by the ad server company for showing their ads to your visitors. The trick with this model is to get high quantities of targeted visitors to your web pages and then incorporate the advertising into your page layout in a manner that spawns a decent click-thru ratio. There are people making huge monthly incomes with this model.

The bottom line though, is you can't just jump online and make money. It's as hard--or harder--to do online as it is offline. Starting any business is like rolling the dice, the odds are never better than even. But, those who approach it with a goal to succeed and are willing to put in the work required can do very well for themselves.

[Truth_and_Power]

DF & Labrocca would be a good example of the advertising-based model.

Also, as an IT worker, you can do telecommute work, but it often takes either a single-proprietor approach or a good trusting relationship established with your employer. The nice thing about it is you have a fair amount of flexibility in the hours you work, the bad thing is that they feel free to call you at home any time!

[sbannon]

Yep, DF is an example of ad based earnings, though I've heard that the click-thru and earnings per click are horrid for forums, but I don't really work with any so that could be a myth.

As for the "call you at home anytime" problem, get yourself a toll-free number with voice mail capabilities and that problem is solved, plus you give employers/customers the ability to call you long-distance for free.

There's services like Kall 8 charging just a couple bucks per month for this so it's not expensive, and you can run it so that the toll-free number rings through to your home phone during working hours and goes straight to voice mail for non-working hours.

[Buck Laser]

My son's a software developer, and he works out of his home. He has done so off and on since about 1990. Before that, he telecommuted frequently, as does my daughter, who's a lawyer for Whole Foods.

If you sell phyical products, maintaining a physical store front is VERY expensive. When you shop online, you can find just about anything you might be looking for, and have it in short order. I do most of my shopping online, and have done so for at least 10 years.

On the other hand, there are lots of scammers out there who hope to make some big bucks off you by signing you up as a "distributor." I hope I'm never gullible enough to fall for one of those.

[jafar00]

Yep, DF is an example of ad based earnings, though I've heard that the click-thru and earnings per click are horrid for forums, but I don't really work with any so that could be a myth.


I run a forex related site with a forum and I get a few adsense clicks. Nothing major but it pays the hosting bill. This forum would have way more traffic but I don't know how many clicks DF gets. I get a clickthrough rate of 1.16% anyway.

[firefox]

I should get around to doing that too, Jafar. Some of the best marketing experts I've had contact with say that Adsense is *death* for your ROI if you're an advertiser due to manipulation by unsavory characters, low levels of targeting, etc. On the other hand, I guess it works if you're the one getting paid to show these crappy ads eh? BTW, I don't see your ads or the ones here as I use the AdAware add-on for firefox 8-). I actually forgot there were any on DF until now!

BTW, if anyone needs web design, ecommerce, or 'net marketing done, or just want some basic advice, I can help.