It’s Hard To Make Money On The Front-End

When it comes to information products, the math is usually like this …

“Ok folks … so we’ve got a $20 product which costs nothing to replicate so each sale brings a $20 profit. We convert at 1% which means that 1 out of 100 people will buy this product. By doing some simple math, we’ll earn $200 from each 1000 unique visitors to your website.”

This is the kind of logic usually found in a “biz op scam book” or manuals that promote unrealistic ways to earn money online. In reality that 1000 unique visitors may cost $500 to bring (or it may be free) and there is usually a 10 – 20% refund rate no matter how good your product is.

In reality, traffic costs money and a lot of it. In reality there is no free factor to IM. Yes, posting to a forum in order to get traffic it may be free but it costs you time. If you account for that time by working somewhere else or as a freelancer, you’ll see that 10 hours invested for 100 clicks may mean $1 per click for which you’ve got in return only $20.

This is why most entrepreneurs try to make money on the back-end. They tweak the machine to break-even on the front end (in other words the profits generated cover the costs, nothing less, nothing more, usually even at a 1:1 ratio) and then they back-sell, cross-sell, back-sell, promote affiliate offers and so on through their sales funnel in order to make a profit.

How does this work?

[$1000 per month to get traffic] -> [$1200 in income] -> [$200 lost in refunds] -> [$500 back-sell #1] -> [$750 – back-sell #2] -> [final profit – $1250]

Of course, I haven’t took the operational costs into account here but you can get the point. Break even on the front-end and make the profit on the back-end. Actually, many good marketers say that if you are earning money on the front-end, even one buck, money that is not reinvested into more traffic or better conversion, depending on which you need more, you are doing it wrong.

A second, more advanced strategy is even to lose money on the front-end. When PPC is used, the huge costs associated with it means that unless you are selling a $100 front-end ticket or so, it’s very hard to make a profit.

In a very competitive niche like weight loss, the cost per click can account to $2 and at $2/click and a 1% conversion rate, it would take at least 100 clicks to make a sale (which costs $100).

$100 is very high for a front-end product since a front-end is the entry into the sales funnel, not the goal itself. At $100 per one sale of $20 let’s say, it means that you need to sale an additional $80 in the back-end to break even and anything else after it to make a sale.

It may seem a lot or it may seem difficult but this is the strategy employed by most people. When you know that you can generate an extra $150 as an example from that particular client in the next 31 days, paying $100 to bring him on board is not such a big deal anymore.

Finally, I’d like to end with a tip. Don’t price your front-end product too high. There are a few psychological price barriers you should take note of. The first one is between $0 and $20. The second one is between $20 and $50.

And the third one is between $50 and $100. The higher the tier of the price, the harder it will be to sell. However, in theory and usually even in practice, it’s about the same to sell a $29.99 product as a $49.99 product, as long as you can justify the purchase by offering enough value.

Hired VAs Are Not Paid To Read Your Mind

Usually, money is like sex. When you have too much, it’s no big deal. When it’s very scarce, it’s one of the most important things to do.

This is why most folks when they try to outsource consider their money to be a little more valuable than others. In other words, someone who spends $500 on a ebook and $500 is all he has will usually have higher expectations than someone who spends the same $500 but has another $4500 in his account.

However, this is not how things work. Services outsourced are not customized based on how much money you have available or how much of a good or bad guy you truly are. Instead, they are based on industry standards and in 99% of the cases, your $100 will purchase the same thing as $100 from another person.

Why am I making this point?

Too many beginners expect way too much for something just because they’ve paid for it. They want the best quality money can buy, fast, easy, extra help and a lot more but for the lowest amount possible. Usually, they don’t get this.

This is the first mistake most beginners make when outsourcing.

The second mistake is simply leaving something on autopilot. I’ve seen too many, way too many folks acting like “here’s $500, write me a money making ebook”. It simply does not work this way. When you hire a ghostwriter for example, you hire him for his ability to write, not to take your decisions towards the development of the business.

Unless he’s also a consultant and he’s paid for this, he has no interest on researching the market and finding out what your book should be about.

Therefore, being lazy when outsourcing does not pay. Read this again – being lazy when outsourcing is a big, big mistake.

When you create something or when you have someone else do that for you, there are two factors you need to get right. These are doing the right things and doing them right.

The job of a copywriter, ghostwriter, traffic person, web designer, etc is to do things right, to follow your orders as close as possible and deliver what you’ve asked. Their job is not to find out what are the right things. They are not business consultants, they are service providers.

This means that if you want to outsource your internet marketing tasks, make sure you first understand what is the right thing to actually get done. If you want an website, you should first know how that website should look and act and on what platform it should be based. If you want an ebook, it’s best to come with an outline or at least a one page description on how you see the final product.

And only then, after you’ve drawn the right path for the person you’ve hired to take you can let him start work and put in the blocks, until you get what you want. The job to put in the blocks is his, the job to decide what to build is entirely yours and leaving this to another person is a major and common beginner mistake.

As a closing thought, freelancers don’t usually care if you are simply starting out or if you are a veteran of this industry.

While it’s common for veterans to pay more for quality and simply because they can while beginners will keep an eye on every penny spent, if you want quality, be prepared to shed out the money, with or without having a big bank account.

Website Traffic Is Usually An Active Thing

Classic scenario: guy builds site. Guy writes book. Guy writes copy.

Guy waits for people to come to his website and buy. Guy waits for JV partners to rush in.

Guy is disappointed since the world does not know that he launched a new website and even if it did, unless it appeals to their problems, they are not interested in doing it.

In other words, if you want traffic, it’s not enough to build something to sell. You must bring people, qualified people to actually see it and buy it too. Too many folks, especially first timers think that just because they’ve came up with a brilliant book, then the world will know this, just as his book was more advertised by it’s sheer brilliance better than Obama’s second reelection.

People do not know if you create a new product. The internet is so big and they are so busy that a new product is simply a blip on the radar no one cares about. This is first. Second, they do not care. Just because you’ve created it, this doesn’t mean that it attracts their attention.

If it’s the only solution to a burning problem, word will get around. If Google changes it’s search algorithms tonight and tomorrow a new book is out, the er number of people who want to rank their websites again will give this book a good chance.

However, unless what you target is an urgent problem and you are the only one who knows about this, chances are that there is no one or very few people looking for your website keywords or your book.

So stop thinking that if you build it, they’ll come. In reality, if you build it, they’ll not even know and even if they do know, they are probably too busy to do anything about it.

This leads us to our second thought, the fact that once you realize the need of traffic, there are two ways to bring it, passive and active.

Passive traffic is like a big billboard and usually it will attract only folks who are actively looking for what you have to sell. Banners, magazine ads, some forms of PPC is all passive. It’s in your field of view but it doesn’t involve you in any way.

It’s there. If it attracts your attention, then you can find out more. If not, you can simply move on.

Active traffic is the one that tries to get your attention in a active mode. A pop-up will get your attention no matter what you do. An email, a phone call, an advertisement on YouTube, smartly written PPC ads (the one that requires you to take some action and not simply act as a classified ad) will all make you focus on the ad for a few second.

And if the ad is good enough, you’ll take the next step. If not, you’ll forget it and move on.

When it comes to getting traffic, people are reacting less and less to passive advertising and more and more to active one. Passive advertising is still efficient if you try to sell retail but with info products, banner ads and stuff like that is simply inefficient.

Instead, you must get the attention of your market and then make them want to visit your website by presenting them with something that appeals to their own interest.

To end, a good example in the PPC field would be “Ebook About The Law Of Attraction” vs “Are You Putting The Law Of Attraction To Work? Free 15 Question Quiz Gives You This Answer + Free Guide. Click Here To Find Out More”.

The difference is that the first one is simply informative while the second asks the prospect to do something.

A Crash, No B.S. Course In Internet Marketing

My dear friend and reader, if you are like me, when you have first entered the world of IM, you’ve thought that everything is going to be easy. You have probably thought that it’s as easy as creating a website then you’ll have hundreds of people rushing to buy your product.

I don’t blame you, especially since it is not your fault. It is not like your “IM Guru” AKA the person from which you’ve learned told you the entire truth. After all, they make sales by playing on your need to think that it is easy to make money online and they are not willing to ruin their sales appeal.

However, let’s take one step back here. I’m not saying that you can’t make money online. You can. I’ve seen 14 years old earning a few hundred dollars each week from their laptop and I’ve seen veterans making more than one million per year. You can do it but it’s not as easy as other people made you think.

Actually, it’s far harder. And now that you know that, you have two options. You can keep living in a dreamworld where you can make money online with no skill, effort or strategy and hate me for trying to tell you the truth (as most people will do, they would rather shut down their eyes than learn how things works) or you can accept the fact that you’ve been feeded a lot of things that do not necessarily work and learn how to do it the right way.

The choice is yours. If you’re going to read past this line in this article, this means that you’re interested in results, not in being right and in this case, I promise you that you’re going to find some very valuable, straight to the point resources to help you here – even if they are very different from what you’ve seen before.

So first of all, let’s determine how things DO NOT work online.

You can’t …

  • Buy cheap traffic online as it will not convert.
  • Create a poor sales letter and still have people buying because there are customers for everyone (actually, there are more products and services than there should be for a very limited marketplace, so everyone fights for about the same people).
  • Copy the competition and achieve about the same results (this includes PPC ads too. However, you can copy the principle that made them successful but that is another story).
  • Work one hour, two hours, three hours a day and achieve online success (IM is a full time job, 50 hours a week).
  • Get JVs with the big guys just because someone told that you can. Big guys JVs only with other big guys and will not burn their list to promote a start-up unless it’s one of a kind.

However, you can …

  • Launch a small product on WarriorForum.com and earn a decent income (even if not for a long time).
  • Develop in about 3 months a product on ClickBank.com that will bring you at least $1000/month.
  • Learn the strategies and mindset to earn more than $100.000/year in less than 3 years.
  • Develop the skills to earn more than $1.000.000/year in less than five years.
  • Launch a product, write sales copy even if you are not a writer and you don’t consider yourself good in writing.
  • Succeed in IM no matter if you are young or old, rich or poor, motivated or unmotivated as long as you’re willing to put in the work required.

Internet marketing to some degree is a science. This means that if you do x, you’ll most probably get y. It’s not the most accurate science but there are some proven principles that you can replicate to achieve about the same results.

Here are a few of these principles:

  • Human nature will never change. People will always want to look better, thinner, younger, richer, to be more respected and so on.
  • A good sales letter is just a greased slide to have your prospect buy and it’s not meant to be creative or cute or interesting. It must only sell.
  • You’ll earn 80% of all your income in the last 20% of your time frame. This means that if you work for one year, you’ll probably make close to nothing for the first 9 months and then achieve amazing results in the next 3 months.
  • It requires 10.000 hours of practice to achieve the master level in anything. This means that if you want to be like Frank Kern, you need to invest a minimum of 10.000 hours in studying and applying Internet Marketing.
  • People will not come to you just because you have something to sell. People do not care that you need the money fast or you’ve put a lot of effort into it. They care only if you can help them solve a particular problem. We are all selfish and IMers understand this best.

When it comes to launching a business in the IM niche, you have to focus on three particular things.

These are:

  1. a) Your product.
  2. b) Your marketplace.
  3. c) Your marketing.

You need a unique product that will deliver a reasonable value to your prospect. In order to get paid you need to provide value to the other side. It’s something for something. In order to have interest for your product, you need a marketplace. You need people with a certain problem that are willing to pay to solve it. You need a reasonable amount of them.

It will be easy to find people who want to lose weight but it will be a lot harder to find people interested in buying a book about breathing or some antique form of meditation.

Finally, you need to appeal to this marketplace through your marketing. You need to communicate with them in a concise manner and show them that your solution is what they need to fix their problems. You need to differentiate yourself from everyone else out there and you need to eliminate their skepticism that your solution will not work (which is the status quo, people think by default that what you have doesn’t work and you have to prove them otherwise).

Kind of a different vision over IM compared to the popular gurus out there? Don’t worry about it, you’ll get it and love it when you’ll see how good it works.