Niche marketing, authority site, or selling your own product or service - which is the best when considering how to start an online business?
Choosing ONE direction is the hardest part of figuring out how to start an online business. New, aspiring internet entrepreneurs get so excited and inspired by everything they read online about starting a business that they "shotgun" their efforts across multiple projects, spread themselves too thin, and overwhelm themselves to the point of giving up.
That's exactly what I hope you don't do, which will save you a TON of wasted time and energy over most people entering the online business world. Laser focus will help you grow your business dramatically faster than the "shotgun" approach mentioned above, so today I'm taking your hand and walking you through the pros and cons of several popular online business models.
If you're an observant person, you'll notice at some point that I'm not Christene. My name is Ian Pribyl, and I'm lucky enough to call Christene a friend. In the internet marketing space I'm best known for my consumer protection site StoppingScams.com, and hopefully the information I am sharing today will be helpful for all of you, Christene's followers. In the 11 years I've been in internet marketing, I've experienced the ins and outs of every business model I'm writing about today. So what Kind of businesses are those, exactly? In this post I'll be covering the basics of each of the following, along with their most redeeming and least attractive qualities:
- Niche Marketing
- Building an Authority Website
- Cheating Google's Algorithms Using PBNs (private blog networks)
- Selling SEO Services to Local Business Owners
- Selling Your Own Product or Service
So sit down, buckle up, and prepare yourself for one heck of a post! If I've achieved my goal in writing this article, you'll have a really clear idea of what business model is best-suited to your goals by the time you're finished reading.
Option #1: The Pros and Cons of Niche Marketing
Anyone can start a niche marketing website. I think it's the most natural introduction to online business and, as a result, many of us start here. Take a passion, interest, or expertise that you've acquired over the years and hone it into a narrowly-focused niche website. A few examples of niche sites could be:
- How to grow lilies in the southern United States
- Best laptops for mechanical engineers
- How to care for leather couches
- Magic tricks for kids
- How to brew wheat beer
Notice how specific all of these examples are - that's what makes them true niche ideas. You're not talking about widgets. You're not even talking about yellow widgets. You're talking about yellow widgets for a very specific purpose. Once you hit that point in your idea, you have a true "niche".
Don't mistake a niche site for a micro-site. You shouldn't just produce 5-10 pages worth of content and then wait for the money to roll in. The more content, the better, and you always want to make sure your content is of the highest quality possible.
This is one of the main focuses of a product called Wealthy Affiliate. It's a program that I also recommend to brand new internet marketers, so if you're new to this industry, that's an incredibly good starting point (much better than the one I got 11 years ago). It has other applications outside of niche marketing as well, which I'll discuss a bit later in this article. You should read Chistene's Wealthy Affiliate review. It'll get you pointed in the right direction.
The Pros of Niche Marketing
Picture niche marketing sort of like blinders on a horse in a densely populated area. There's A LOT going on around you, and if you knew about it all, you'd probably get really overwhelmed, freak out, and stampede your way out of the area as quickly as possible (leaving your business and everything else destroyed in your wake).
Niche marketing prevents this from happening, and allows you to learn the basics of online business. Although it can still feel overwhelming at times, you'll be much better off starting here than any of the business models I'll discuss later.
Because you're covering one subject so thoroughly, you should achieve rankings in the search engines much faster than if you were trying to build an authority site. This provides some early encouragement that a lot of new internet marketers need. Delaying that "taste of success" too long is another thing that frequently causes aspiring internet entrepreneurs to give up. Working around the clock for months on end can drive even the most sane person mad, and niche marketing prevents that for the most part (unless you pick a really competitive niche).
The Cons of Niche Marketing
The income ceiling for most niche sites taps out somewhere a few hundred dollars. For me, this is the biggest drawback. Most niche sites will probably tap out somewhere in the $500-$1,000 because there are only so many topics you can cover and, as a result, only so much content you can produce before the well "runs dry".
Another big drawback is that Google's algorithms have been trending toward favoring authority sites over niche sites. This isn't due to an explicit Google preference as it is the inner-workings of their algorithm, but regardless, niche sites have taken a few blows over the years (and will probably take more as time goes on).
If you're completely new to online business, a niche site is the right place to start. Yes, there are a few drawbacks and your income will likely max out at a few hundred bucks, but that's a few hundred bucks you don't have now. You'll also significantly decrease your chances of getting overwhelmed and giving up, which is probably the #1 reason I've seen aspiring online entrepreneurs fail over the years.
Option #2: The Good, Bad, and Ugly of Authority Sites
Now that you have a pretty good understanding of niche sites, we can talk about authority sites. Authority websites are the "next level" in the food chain of online businesses. Refer back to my examples of niche sites, and compare them to the following examples of authority sites:
- How to grow lilies
- Best laptops
- How to care for leather furniture
- Magic tricks
- How to brew beer
You're no longer talking about yellow widgets for a specific purpose - you're just talking about yellow widgets. Taking it one step further and talking broadly about widgets or the color yellow is a huge mistake. Don't do that - your budding internet business will quickly get sucked into the black hole that is the internet and never be seen again.
Seriously. It's a really, really bad idea and nearly impossible to gain traction if you go that broad. Similarly, don't make the mistake of creating a site that's about red widgets, yellow springs, and blue cogs.
A real-world example of this would be taking my "best laptops" authority site idea and instead creating a site about "best computers" (too broad) or "best laptops, cell phones, and tablets". These are not potential authority sites, these are just bad ideas!
It's probably not a good idea to build an authority site until you've gotten the hang of niche marketing. An authority site is essentially a niche site spread across several silos, which means more content production, more work, and more time to get it off of the ground.
The niche site idea "How to grow lilies in the south" could be a category on the authority site covering "How to grow lilies". The same would be true for all of the other examples I've given above, which is the easiest way to distinguish a niche site idea from a potential authority site idea.
The Good About Authority Websites
Your income potential will be considerably larger with an authority website than with a niche site - usually maxing out at thousands (if not tens of thousands) of dollars per month. You can create content covering a much larger breadth of topics, resulting in an exponentially greater amount of search engine rankings.
Contrary to niche sites, Google's algorithmic updates seem to favor authority sites in today's search climate. They're great sources of long-term, predictable income as long as you never break Google's "rules", which we'll discuss in Option #3.
The Bad and Ugly About Authority Sites
Time. It's the aspiring internet entrepreneur's #1 enemy when starting authority sites. They require a massive amount of time and energy, and it takes a while (usually 8-12 months minimum) before any indication of progress or success can be seen.
When creating new affiliate sites, this is my go-to "model" these days. But I really want to emphasize that they take significantly longer to establish than niche sites, and if I were teaching a close friend or loved one how to build an internet business, I would require them to build at least 1-2 niche sites first. You'll learn a lot of valuable lessons and make a lot of mistakes with your first couple of sites, which will ultimately be pertinent to your authority site's success.
Also, you'll get a good confidence booster knowing that you'll see results eventually, even if it feels like it's taking forever to breathe life into your new online business. The same training I linked to in Option #1 applies very well to authority sites as well, so if you're thinking this is the best option for your goals, check out Christene's Wealthy Affiliate Overview.
Option #3: Skirting Around Google's Rules
The most common way people are getting around the long waiting period for niche sites and authority sites these days is Private Blog Networks (abbreviated PBNs). So this isn't a standalone business method, this is a supplemental method used with either of the online businesses I've described above.
I can't emphasize strongly enough how careful you need to be when building your business if taking this route. Historically, loopholes like this have always been closed by Google sooner or later. Right now it's looking like a well-built PBN will be difficult to detect, but there's no telling how long it will realistically take for Google to update their algorithms. Once they nail it, the vast majority of PBN-leveraging internet businesses will go down. Your income could go from $50,000 to nearly $0 overnight if that's the case.
With that being said, it's a good option for some people's goals. You can get an authority or niche site established in 2-4 months if you know what you're doing, as opposed to 8-12 months playing by the rules. If you're one of those people that needs to get your internet marketing income jump-started quickly, this might be just what you're looking for. But be warned, this is the only method in this article where I'll list more drawbacks than advantages (for a very good reason).
Advantages of Building a PBN
A significantly shorter cycle to success. You can build a website and have it ranking/making money within 2-3 months if you've gotten a lot of practice and know what you're doing. There are some serious players in online business making a killing using PBNs right now, but even they know the time will eventually come that these methods will get "slapped" by Google. The best of the best are constantly growing and evolving their methods to outpace Google's punishments.
Drawbacks of Building a PBN
They cost more money to build out, require a lot more technical knowledge and attention to detail, it's easy mess up (producing zero results), and the benefits are temporary.
In order to cover your "footprint" with a PBN, you have to have several hosting accounts and IP addresses as opposed to just one with niche or authority sites. This costs hundreds of dollars right off of the bat, which many aspiring online business owners simply don't have to spare. That's before you get into the software or services required to find high authority domain names, or buying high authority domain names from auction websites. The startup costs for a good PBN will easily run 5x-10x that of a legitimate site that's not trying to break the rules.
The amount of technical knowledge and things to pay attention to within a PBN are MUCH greater, and can get very overwhelming quickly. You need to track which sites are hosted where, which sites link to what, what words you linked to which sites with, how many links the site has total, how many links each post has, etc... to make sure you're not leaving a pattern - something you don't ever have to worry about when building a business that "plays by the rules".
Finally, Google WILL catch up to PBNs eventually. They've already begun handing out manual penalties, which shows that it's on Google's radar. Historically, once the Big G finds an offending site that's gone against their terms of service, they've been incredibly heavy-handed and unforgiving in their punishment. In theory, you could just remove the links to the site and be free of the penalty, but Google's shown with their Penguin and Panda updates in the past that it's never quite that simple.
Well-built PBNs are incredibly powerful right now, and there's likely at least a few months (if not a couple of years) for the industry's best to continue raking in money using this method. But it's FAR from newbie-friendly. If you want to know more about whether or not this would be a good path for you, consider checking out my L.I.N.K.S. training on StoppingScams' Free Internet Marketing Training page.
Option #4: Becoming a Local Marketing Expert
Admittedly, this shouldn't be anyone's first venture within online business, but if I were starting from scratch today, I'd pursue this route long before I pursued affiliate marketing using niche or authority sites.
If you've gotten the hang of building/editing websites, this would be my top recommendation for an online business. The competition is significantly lower, you can get revenue flowing much faster, and you can scale a local SEO business unlike anything I've seen in this industry if you put your back into it.
The publisher that turned me onto this business model makes just under $100k/month while working 30-40 hours per month. That's incredibly passive income. Of course it took him a great deal of effort to achieve that level, but at least 10x less than it would have taken to hit that level with most affiliate businesses.
The work consists of selling local business owners SEO services (yikes!) and getting them ranked while collecting monthly service fees. If you're particularly anti-social or socially anxious, I'm not sure I'd recommend pursuing this model. But you don't really need above-average social skills to be good at this.
I'm such a fan of this particular model that I teamed up with a close friend and fellow internet marketer to launch OwnYourPage.com, so I definitely put my money where my mouth is when recommending this business model. I've offloaded my other sites to a team that I manage and the vast majority of my time day-to-day is spent going to networking events, establishing a relationship with local business owners and professionals, and following up with contacts I've made at these events.
Even though it's time consuming, I put $3,900 of new business into my sales funnel just last week, and I'm not even established in my community as an expert yet. It would have taken me months of work to get to that level with any of the options I discussed earlier, but I'll continue piling onto those numbers this week, next week, the week after that, etc... There's potential to make a lot of money very quickly in this industry.
Pros of Becoming a Local Marketing Expert
The potential for massive income much quicker than anything else I've encountered in online business. You get paid from day 1 when you begin working, and as long as you do a good job, the business should grow on top of itself thanks to referrals and new business. In time, you can offload a lot of this work onto a team you train and just let the money come in as you focus on maintaining the relationship you have with each of your clients.
Cons of Becoming a Local Marketing Expert
I'd say the only drawback for most people considering this business model would be the sales side. Most people are intimidated by sales, but it's not that hard in this industry - honestly. The competition for local SEO isn't very stiff at all, and as long as you're confident in your ability to deliver, it shouldn't ever be an issue.
After 11 years in this industry, this is my favorite business model that I've ever encountered. I've made it my main focus for a reason, and if I'd done it years ago, I'd probably be semi-retired now at the age of 27.
If you don't like the sales side, partner with someone that's experienced so that you can focus on the technical side. If you hate the technical side but love interacting with people, find an SEO guy to partner with 50/50. This will also allow you to scale twice as quickly. It's not an exaggeration to say that I'm a huge fan of this business model, and I'd recommend it above all others to anyone that's experienced with basic web design/setup and at least somewhat social.
Option #5: Selling Your Own Product or Service
Similarly to Option #4 above, this likely isn't going to be the first business you jump into online. Although a lot of people want it to be their first business, I've never seen someone successfully launch their own product without spending some time working on Option #1 or #2 for at least a few months.
Selling your own product or service online is difficult, and you'll need to acquire a lot of skills to do so successfully. For those that put in the necessary time/effort, it's incredibly rewarding emotionally and financially. But it requires a great deal of experience in the fields of conversion optimization and email marketing, which are typically developed while working on niche sites or authority sites.
Do you think it's as easy as creating a product, launching a website, and then getting other people to sell it for you through an affiliate program? Think again. Unfortunately, that's far from the case. Decent affiliates that will ultimately make you a lot of money are hard to recruit, and they require statistics that demonstrate success and tools that only experienced marketers know how to put together before they'll consider promoting a product. As convenient as it would be to skip over all of these steps, it's impossible.
Advantages to Selling Your Own Product/Service
You have complete control of the sales process from start to finish. The income potential is one of the best in this industry, and once you have a proven sales funnel and product, you can recruit affiliate superstars to scale your business massively and passively. It's the height of most online entrepreneur's careers for a reason - this is the summit most people aim for.
Disadvantages to Selling Your Own Product/Service
It takes an incredible amount of know-how and experience to execute properly. It's the most intricate of all business models described here, and you'll likely pull skills from each of the models discussed in this article.
You also have to manage customer service and other aspects of the business that you wouldn't encounter with Options 1-3, and customer service will likely be dramatically more tasking with selling your own product/service than establishing yourself as a local marketing expert.
Finally, launching a product or service typically requires a lot of financial investment on top of all the additional hours it demands.
If you have a valuable product or service idea, this should be what you aim for throughout the rest of your online business career. Nothing will be more rewarding financially, and ultimately, it can position you as an authority within your space and set you up for retirement within a relatively short period of time (if that's what you desire).
Other Viable Options Not Discussed In this Article
There are other viable online business models that I haven't discussed here, largely due to the fact that I haven't experienced them in great enough detail to feel like a credible source discussing them. There are a great deal of people that make their living in drop shipping, eCommerce, and MLM/network marketing. Those aren't businesses I have much experience in, so I haven't discussed them here. But just because I haven't discussed them or explored them personally doesn't make them invalid - my personal journey just never took me in those directions.
Also, you'll notice that I didn't mention much about paid advertising in this article. Paid advertising is one of the best ways to scale quickly once you have a profitable sales funnel, but in my opinion, it's a "no-fly-zone" for brand new internet marketers. There are exceptions, of course, and if you have the money to burn, you can learn lessons a lot faster using paid advertising than attempting to grow your business organically using free traffic methods.
It's totally up to you, but based on my personal experiences (and witnessing the journey of hundreds of others over the years) I'd recommend getting as far as you can using free traffic. Once you're making money, don't hesitate to invest in your business or lose a little money learning the ropes of paid traffic. Doing so any earlier, however, can cause someone to give up long before they even get started.
Start Small and Evolve As Time Goes On
Your online business, just like any other, will move through multiple stages and have varying levels of success as you learn and grow. Don't forget to stop along the way and reevaluate what you're doing (even if you've been doing something the same way for years) and treat complacency as enemy #1. Similar to a shark in the ocean - if an online entrepreneur stops moving, learning, and growing, death could be lurking around the next corner.
What Do YOU Think?
So here I am, a few hours after setting out on writing this article for you. I'd love to hear your thoughts, comments, and questions about anything I've written above! I got into this industry to help people like you every way that I can, so please don't hesitate to comment below or contact me directly.
Best of luck to you as you aim to grow your internet business, and stay safe out there!
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