As a small business, trying to play the low price game is a losing strategy, yet ironically that is the strategy so many small business owners start out with. This is a fear based strategy which is the first sign that it is the wrong one for small businesses. A flourishing business does not operate with a fear mindset. It runs on a plan of positive self expectancy and of wealth creation and charges full price for its value. By utilizing the following six steps your company can start to flourish too by maximizing your profit margins and not succumbing to the temptation of useless and many times dooming price cuts.

1. Don’t be afraid to charge what you are you worth.
The old saying, “You get what you pay for,” is a commonly held truism. And perception is reality when it comes to marketing your business’s products and services. A flourishing business centers its strategy on value, and value by its very nature has a high price tag. When people see a high value, they expect to see a high price. If you looked at a Mercedes and then saw an unusually low price tag on it, they would immediately think, “What’s wrong with it?” So, if you proceed to tout all the great benefits of your product or service, your superiority to your competitors and your high quality or service and then slap a low price on it, you are planting this same question in your customer’s minds. What’s wrong with it? Contrast that with using a high price to differentiate yourself in a crowded marketplace, causing you to stand out and have people thinking, “I wonder why they are so expensive, they must be really good.” By discounting your price, you are sending the message to your customers and potential customers that your value is that of a jalopy not a Mercedes.

2. People like paying for quality.
People do buy high priced goods. They even buy the highest priced goods. Think Dom Perignon, Tiffany’s, Prada or Gucci. People love to splurge. They like to buy the best and spoil themselves. Being the low price provider is certainly not the only way to go. Of course many people go for the lowest priced item, we’ve all done it, but sooner or later many consumers get burned. They find the quality of the low priced provider problematic and they get sick of it. Or they get fed up with bad service, and decide it is worth paying a bit and have a more enjoyable consumer experience. When you look at how other top brands have positioned themselves successfully you can see that coming in high on the price end is not always a negative. To some people it is in fact a positive. This is not just a business to consumer phenomenon; plenty of companies that sell to other businesses have also taken this approach as a way to gain a market leadership position. Law firms, software companies, manufactures, consulting firms and almost every industry has one smart guy positioning as the premium player in the space and charging high prices and really delivering. There are also a bunch of low cost players trying to undercut him and focusing their pitch solely on price. Do you think the premium player is worried? Heck no, he is laughing all the way to the bank.

3. Take your focus off price and onto to value.
The key is to find out what you can provide better than anyone else. Make your value worthy of a higher price and then find the right customers who will recognize the value that they are getting and be willing to pay for it. Rather than asking yourself how you can beat your competitors on price, ask how you can provide your customers more value. People are pressed for time more now than ever before. Despite technology’s claims that it was going to save us all time, we are now busier than ever. Anything you can do to save your customers time, provides them with more value that they are likely willing to pay for. To many people time is more valuable than money because it is finite. Combining other complimentary services as part of a bundle, adding in additional accessories, delivery and pickup can increase your perceived value. While you should remain constantly focused on providing a value that does not need anything extra, adding time saving accessories can attract more of your ideal value appreciative customer base. This is not true for everyone. There are plenty of people that will drive out of their way and stand in endless lines just to save a few bucks, but are these the people that you want as your customers? Do you want the ones that are always complaining about price and trying to haggle you down and will switch to someone else as soon as they hold a sale? I think you will find it is much more enjoyable to have a customer base that appreciates and is willing to pay for value than one that frequents the blue light specials.

4. Put the emphasis on quality and service and the experience.
A good strategy for a small business hinges on your ability to competitively differentiate. Low price and high quality are incompatible competitive advantages. They simply do not go together. Quality costs money; hence the intuitive connection between quality and price. Most small businesses cannot invest in good quality and service and sustain a low price advantage. The economics of it simply do not work. As a small business, rather than trying to compete on price, you should compete on quality and service and compete for a niche of customers who are seeking a level of quality or service that the big guys are unable to provide. Even the goliath discounters like Wal-Mart who do focus on price are ultimately selling on value too. Their value is to bring an enormous selection of goods under one roof providing a one stop shopping experience with a low percentage of stock outs through a well managed supply chain, as well as a friendly experience, through their greeter program. You should focus your sales and marketing strategy on finding your specific niche customers and then accentuating how you are different from your competitors and how worthwhile your value is for them.

5. Use your price point to cultivate your niche.
Usually the people who have gotten sick of poor quality are your ideal customers. They tend to have higher income, and they have started to demand better things. They tend to be loyal and place a higher value on quality and those extra touches that are valuable. They are okay with paying more as long as they can be assured that they will be satisfied with the product or service. Sometime paying more helps them to reinforce the self image they have of themselves as a rich and successful person, or a big company that always has to have the best of everything. If you can manage to delight these people consistently, they will be your customers for life. After a while, they will not even glance at the price tag.

6. Ask what you can do to add more value and listen.
Give your customers a mechanism by which they can provide feedback to you. Before you add a new product or service or a bundle of goods, test the marketplace to make sure the value perception is there. Remember that value is not an objective quantifiable thing; it is whatever people perceive it to be. Customers that like you and plan to continue to do business with you are more than happy to give you their opinion on what they would be willing to pay for. Give them a quick questionnaire the next time they stop in and tell them about some service offerings you are thinking of adding and the proposed price point. Make sure you add in a healthy profit margin. Or better yet start a dialogue with a customer. When they know that you are trying to do more to aid them, they will be happy to tell you exactly how to do it.

Providing the best value to a niche market at a worthy price should be the aim of any business. Your business is guaranteed to flourish when you figure out that you cannot be all things to all people and you decide to narrow your scope and demand a fair price for your value.

Contributing Guest Author

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Analyze the competition and ask yourself…

• What do they do well?
• Where do they fall short?
• What don’t they offer that you can?
• Can you use location to differentiate?

These are just some questions you should be asking yourself. Look for holes in the market that will help you differentiate your business from the competition and then jump right in and grab your piece of the pie. Hey, myspace came out ahead of  friendster, and facebook is a thorn in the side of myspace. Now you have LinkedIn, Twitter and Ning. What will be next?  There is always room for one more.

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Selling A Digital Product

Ok selling digital products is my favorite way to make money online. You have unlimited income potential and the start-up costs are very minimal.  The most common type of digital product anyone can sell is information in a form of an ebook.  You might be thinking, “ya right, me write a book?” Now wait, don’t get your panties in a bunch. Writing an ebook can be as simple as doing some research on a topic that interests you (or better yet, on a topic that interests other people so you can sell this info)  and then summarizing it all into your own words and packaging it into what’s called an ebook (digital book) Ok obviously there is more to it then this, more then I can cover in this quick overview of how to make money online….but the point I’m trying to make is that thousands of people do this and make a very comftorable living online. (The pros actually make millions creating information products) Once you get the hang of it, you can start writing ebooks covering a variety of different topics and build yourself an information/ebook empire   P.S. – I promise to eventually do a follow up post with more information on how to make money creating/writing your own ebook.

Are you a Web designer who wants out of the 9-5? Why not use your skills to design templates that can be sold over and over again. Templates are another form of digital product that can make you a ton of money.  The key here is to target a specific market and avoid trying to compete with templatemonster.com Some of the more successful designers jumped in early on the wordpress craze and have been making a fortune selling wordpress templates.  Wordpress is just one example, what other scripts have a large enough customer base where you can start designing templates for its customers? There are some hidden gems that are still open and waiting for a designer to bring them the goods.  Search hotscripts.com and see what you can find

Developers looking to get out of freelancing or working for “the man” also have endless opportunities. I just don’t get some of you guys, why freelance when you can develop your own product and sell it over and over again creating a passive income? On top of that, having your own product opens the door to even more income by providing customization services to customers who purchase your product/script. Hell, I’m not even a developer but I have released scripts in the past (through JV deals) that have brought in revenues of 6 figures a year NOT including offering customization services. If you’re not developing your own products, you really are losing out on some serious money. If marketing is not your game, and that’s all that is holding you back, then you can either JV with someone like me    or just dive in head first and learn as you go along. Get active in the forums and ask for advice from other developers who have successfully developed their own profitable digital products.

Sell A Service

Selling a service is a great way for noobies to get started online with literally no money needed. Having money helps, but I know there are some of you that just don’t have much to start with…so selling a service is where I recommend you start.

No website, no problem. Wth the many freelance marketplaces online, you can now take your skills and sell them globally without needing a website. Obviously you can’t take your massaging skills and sell them through the freelance marketplaces, but if you take a look at www.elance.com, you can see some of the services that sell well in an online freelance marketplace.  For more information about selling your services online using freelance marketplaces, I suggest taking a look at elance university: http://www.elance.com/p/elanceuniversity/index.html

Other popular freelance marketplaces

www.Elance.com
www.Guru.com
www.ifreelance.com
www.odesk.com
www.GetaFreelancer.com

These are just a handful of places. Doing a search on google for “freelance marketplace” or “freelance website” will give you hundreds maybe thousands of more options. Don’t forget to also search for freelance marketplaces that cater to specific types of jobs. Example: if you’re a writer, search for “writing freelance marketplace”

Once you have built up some cash-flow, you should really look into re-investing your profits into having a website designed. This will give you a more professional and trustworthy image. It’s also the only way to grow your business and start finding clients using other marketing tactics. Oh, and let’s not forget about that portfolio. Having your own website to showcase you work will also help land those larger clients with deep pocket books.

The Henry Ford Model

Don’t have any skills? Don’t let that stop you from selling services online. Did Henry Ford know how to build a car? Not a chance, he employed people with the  brains to build them for him.  Using the Henry Ford model, you can seek out freelancers and reseller their services through a website of your own.  Mark up the price, land the sales, and simply outsource the work to your freelance contacts. By becoming the middle man, you can take on much more work. There is only so much work you can take on being the actual “worker”  Outsource the work and concentrate on driving those sales.

Money Through Selling Ads

You can make a fortune selling advertising, but without a high traffic website, no-one is going to purchase your ad space. Therfore, this really isn’t a topic for the noobie who is just starting out. Either way, I’ll give you a brief overview how this is done…

First you obviously need a high traffic and popular website. The next step would be to put up a page that specifically talks about the ad space you have available for sale. You must also include all the statistics like the amount of unique visitors and page views your site receives, length of time spent on your site by the average user, demographic of your visitors, etc.  The more information you provide, the better.  My opinion is that you should set-up an email form with autoresponder if people want to know the ad rates. Anyone looking for more information can submit their email address and your auto responder will deliver the details. Reason behind this is you can build a list of potential advertisers that you can market to later. You never know when you might have unsold ad space available you want to sell at a discount. Having these emails allows you to announce this special to people who already showed an interest at one time or another.

Lastly, if you don’t have adspace sold, you can always check out Googles adsense program where they will pay you to show ads on your site on a per click basis.  If this interests you, Google has all the details. Go to Google.com and click on the “Advertising Programs” link

Affiliate Programs

I should have probably talked about this first, but my #1 suggestion to all noobies is to start here. In affiliate marketing you have nothing of your own to market. And you are not offering any goods or services for sale. What you are doing is placing advertisements and links to other businesses or websites, on your own site or blog. You will usually write a few words about the product or service to arouse the interest of the visitors to your site or blog, and encourage them to click on the advertisement or link.

The trick here is to be able to make the visitor to your site or blog want to know more about the product or service without actually sounding like you are selling it – you are trying to attract people without looking like a salesman which often puts people off.  A common and very effective way to make money as an affiliate is to start a review site where you review the products you have affiliated with. Example: You can review hosting companies and the different hosting packages they offer. When someone comes to your review site looking for more information about hosting, they will read your reviews and click to visit the hosting companines you have affiliated with. If you did your job successfully, and your affiliate partner can turn that visitor into a sale, you will make earn commision

How do you know how much money you made? Well, your affiliate partner will use software to keep track of how many visitors to your site purchased their service or product, and based on your agreement, you will be paid a commission for every person who followed the link from your site and placed an order. Usually this information is available to you 24 hours a day and in real time.

Affiliate marketing is a great way to start learning how to make money online. Low risk, low start-up costs, and the ability to earn an unlimited amount of passive income from the comfort of your own home make this my top pick for all noobies.

Places I recommend you find affiliate products to promote:

www.ShareAsale.com
www.ClickBank.com
www.Azoogle.com
www.MarketLeverage.com

Sell A Physical Product

Ok to be honest, I have never sold physical products online aside from a few transactions over ebay and craigslist.org  However I can still give you a very brief overview of how people make money selling physical products online (a very brief overview). With this method you find a product you want to sell, then contact a distributor/wholesaler to make arrangements to purchase the items at a discount.  The products can then be listed in an online store where people can purchase them through your website 24 hours a day. Another option to get your feet wet is to sell products without a website and use auction sites like ebay.com and classifieds like craigslist.org or kijijji.com  The downside to all this is you need to come up with the money upfront for the products you sell, and you are responsible for all of the shipping arrangments.  My personal opinion is that if you’re still new to all this, I would avoid starting an online business that requires a lot of captial to get started until you know a little more about the ins and outs of marketing your business online.

Another option which would allow you to sell a product online without the high initial investment is to find a distributor that offers drop shipping.  Using this method, when a person purchases a product from your website, you are responsible for handling the sale. You in then place the order with your dropshipper, and they take care of packing and shipping the item.  You will receive fewer profits for each item sold, but there are a lot fewer upfront expenses, and you never have to actually handle the product. The big downside to this is it could be difficult to compete with other more established sites online that can undercut your price point. They key to success here is to find a niche market that’s not overly crowded and where price isn’t going to be an issue. Do your research before jumping into dropshipping.

So there you have it, a quick overview of how you can make money online. For the pro’s that just read this, how about helping a noobie out by contributing your thoughts in the comments below.

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1.) Know what you want – What exactly do you want? What is your goal? Do you want to make $10,000 month?, do you want to build your membership to 50,000 members? Whatever your goal is, make sure you know exactly what you want. Simply saying “I want to make more money” or, “I want to have thousands of new members sign up this year” just doesn’t cut it.

2.) Stick It – Find a picture or pictures that represents your goal(s). Stick it right above your desk and stick another in your washroom so you can see it every day when you wake up in the morning, and again before you go to bed. Seeing your goal will help keep your ass motivated. If you can’t find a picture, then just print your goal out in big bold writing and stick it – the idea here is to keep your goal in your face and always on your mind.

3.) Your Plan: Put together an action plan. Rome wasn’t built in a day, and you won’t acheive your goals overnight. It takes time, dedication, hard work and working smart…. so, a well thought out action plan is a must if you’re ever going to achieve your goals and become successful. By making a detailed action plan and then by doing a little each day, I was able to grow one of my sites from 0 to 400,000 members making it a successful business on a limited budget. Remember, nothing is set in stone and your action plan can change. You just need to lay one out and do something daily working towards your goal. Don’t forget to stick this action plan right beside that picture of your end all goal.

4.) Stay Focused – don’t get sidetracked. My biggest problem is I’m constantly coming up with new business ideas. It’s like I have been blessed (or cursed?) with a mind that never sleeps. So anyway, what I did to battle this constant self disctraction was set-up a folder called “Future Projects” Now when I get a new idea, I simply write everything down and file it away in my “Future Projects” folder. It helps my mind relax and keeps me focussed on my current goal(s). Remember – STAY FOCUSED!

5.) Don’t Cry About It – Think positively and don’t cry about setbacks or bumps in the road. It’s not going to kill you and you can’t avoid them, just keep pressing on. Only the strong survive my friends, so don’t cry about it and let the fight continue until you kick ass & WIN!

6.) Reward Yourself – You can look at your action plan as a set of small goals that will lead you to your end all goal. So, as you acheive these small goals, reward yourself. Personally, I like to reward myself by taking the family away for a nice quick weekend get-away.

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1.) Make small achievable goals, have a plan, follow that plan, stay focused. Small goals are easy to achieve and will motivate your ass to do more.

2.) Put in a solid 8 hours each day of work (or more if you have the energy). Work smart but also work hard. If you’re doing this part-time, dedicate a specific amount of time each and every day.

3.) Work less on the weekends or don’t work at all (Relaxing away from the computer will keep you refreshed, your mind sharp and your body energized for the next work week)

4.) Make time for family, friends & yourself every day. Enjoying lifes simple pleasures will make you a happier person. There is no room for misery at the top.

5.) Workout 1 hour each day Monday – Friday. Working out will give you energy and make you feel like a million bucks. Your new found confidence will shine in everything you do.

6.) Be persistent and don’t let anything or anyone get in your way of becoming filthy rich.

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