Peter asks: “I am new to this and really want to start making money online. Can anyone point me in the right direction? I have a niche. I just don’t know if I should create an e-book, put free content on a website and try and make money off of advertising, or create a membership website. I have material I want to use, just not sure in what way I should use it.”

Peter,

The answer may upset you, I fear. For, as you probably already know, the answer is YES to all three.

The odds are very high that if you don’t do all three in the niche, you won’t survive very long. Especially if you have more than 2 competitors.

You’ll want to do a test or two in the niche before investing heavily in product development. For example, use ads in the niche to send prospects to a survey page to understand what information they’re looking for (big questions and challenges) and what they’re willing and able to spend.

Once you’re sure this is the niche for you, create a page to sell the ebook. (You may choose not to write the ebook until you have a few sales — which is what I do. Just don’t charge any credit cards until you actually deliver the product. Tell the first customers they have pre-ordered and will get it the minute it’s available, within a couple weeks.)

If you can produce sales, get that product created. You have many options, including paying someone to write it for you (ideal) or writing it yourself (use a very fast method and outsource everything you possibly can). Many people waste their lives in this stage. You can’t because you have a lot more work to do.

Once the ads are getting ebook sales, you’ll likely going to find that for every $1.00 you invest in advertising, you’re getting back anywhere from $0.10 to $1.00. If you optimize and only take immediately profitable advertising opportunities, you’re going to collapse your business down to 1 sale a day or week — and that’s if you’re very lucky in a great niche.

This is where your membership website (or some other continuity program) comes into place. Figure out a way to deliver on-going value to these customers. Remember, nobody really wants continuity in 95% of markets, but 80% won’t cancel quickly as long as they are satisfied with what you deliver.

You may choose to do a CD, DVD or printed newsletter every month instead of a membership website. If you do that, though, you miss out on these opportunities:

1. Your membership website can have a mix of free and paid content, to generate interest from prospects at the same time you provide value to paying customers.

2. You can sell advertising space (and run Adsense or another publisher program) next to all content on the membership website — free and paid.

You did not mention the other tactic you’re going to need to incorporate in your sales process: immediate up-sell offers. Immediately after a prospect buys a copy of your ebook, you should offer an immediate upgrade option. This can be a printed copy (either self-publish or use http://www.Lulu.com), audio version, special DVD, bigger package, or even just a “bag of goodies” type of offer.

In many markets, marketers need to use two immediate up-sells after the low-ticket initial purchase just to stay competitive and keep their ads running.

Although every market is different, and you may have found a completely unexploited niche (good luck keeping it that way), odds are high that you’ll need to employ all of these strategies and more to keep yourself profitable year after year.

If you’re very lucky, you’ll make money on the up-sells. It’s easy to make money on the continuity, though, as long as you work hard to keep the members.

Seriously, my friend, I wish you the best of luck and I hope that my words here both inspire and encourage you to get started in this business. They may sound rough (read: a lot of work), but the worst advice anyone could give you at this point is: “it’s easy.”

“It’s easy” is likely to make you believe making a 20-page ebook will make you rich. It won’t. Worse yet, you may shut down the business early — before even $1 in profit — because it didn’t work on your first shot.

Enjoy the business creation process, Peter, and good luck on the journey!

-William Clements