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Include "Back end" Related Product Sales Opportunities

Note: Written in 1999 with Internet Marketing in mind, but still applicable to offline marketing. The current language is to speak about "multiple streams of income".

You will not make much money if all you do is sell just one of your own products.  Many experienced internet marketers recommend that you have at least some "add on" products or services and perhaps participate in "reseller" programs as well.

How much money can you make with one product? Let's first look at the income potential of having only one product.  Let's assume that you can get 100,000 visitors to your site, and 10% of them subscribe to your newsletter.  (You are going to have one, aren't you?)  Assume that 10% of those 10,000 subscribers buy your manual, and you make $15 gross margin per manual.  

The 1000 sales give you a gross margin of only $15,000.  That is not exactly chump change, but it won't make you rich either, especially when you think it needs to cover all of your expenses other than the direct production and distribution costs of the manual (these are including the cost of goods sold, in deriving the "gross margin". 

Getting 100,000 visitors is not an easy task for a new site either.  And a total 1% visitor to buyer conversion rate may be wildly optimistic. The efforts needed are way out of proportion to that measly $15,000.  If you multiply that by 5, you would need 500,000 visitors to achieve a gross margin of $75,000, which after expenses may not leave you anything to put beans on the table for your family.

You cannot expect to make sufficient profit with one product because there are relatively few products that will make significant profit by themselves. Unless you stumble across one of those rare products, you will need to offer a line of related products and/or services. The cost of acquiring a customer is so great that you need the opportunity to benefit from the gross margins of future sales to your customers as well.  See Lifetime Value of the Customer.

Your existing customer is far more likely to buy from you again than a simple prospect is. (Assuming that the customer is a satisfied customer, and you are going to provide value for the money customers will spend with you, aren't you?)  So, you will need to have a group of related products or services to offer, all related to the theme of your site. 

But don't make the mistake of selling a mixture of unrelated offers, appealing to different types of prospects, in various scattered markets. This lack of focus on a single theme spreads your limited resources too thin.  You will fail to reap the full benefits of offering more than one product/service, namely, turning more prospects into buyers, increasing the average size of each order, and converting more customers into repeat buyers.

Reselling others' products - associate or affiliate programs

In addition to your own proprietary related products or services that you offer, you should consider reselling others' products or services that you have handpicked for quality and value.  You don't have to be the creator of everything you sell. You can complement and expand your line by also selling products created by others. (If you have orders for other people's products filled by the drop ship method, you don't even have to invest in inventory.)  

These programs, whether they are called affiliate, associate or reseller programs,  can add to your bottom line and help your customers achieve their goals of making more money, saving money or saving time of having to do their own research and selection. These should not be the sole focus of your site, but they can add to your bottom line, while providing a benefit to your visitors.