The Four Components Of A Successful Online Business

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Note: there is no need to go out and buy a $5000 flashy wooptie do website. If there is no action plan behind it with no marketing, you are still a $5000 flashy wooptie do website just stitting like a grain of sand amongst the stars in cyber space.  I have friends who have a simple 1.0 website and make around a million profit a year . Work smarter not cooler. The "God  of Cool" doesn't pay the bills.

The Four Components of a Successful Online Business

Success on the Internet doesn't happen by accident. Many merchants post their website with dreams of easy money as their site climbs the search engine rankings. In reality, it takes several different components to achieve success, and while search engines can be a good indication of your success, a top listing is not essential for your site to be successful. This article discusses the true test of your site's success and the four essential components that your business needs to succeed.

The final test for your website is whether it brings in a profit, and nothing should distract you from that goal. As you begin the process of designing and promoting your site, you will learn several important statistics that measure your success, such as your conversion rate and your average order size.

The four components of a successful profiting website are as follows

   1. Product Demand 2. Fair Price 3. Optimized Website 4. Proper Promotion 

Measuring Product Demand

      The first component to a successful website is a market demand for the product or service that you sell. If there is a lack of demand for your products, your site will complete few sales. You can't sell something that no one is willing to buy. When selecting a product, you should research two different indicators of market demand: keyword search volume and the presence of competition.

      The term search keyword volume refers to the number of times that users have performed a search for a given keyword. After brainstorming for keywords related to your product, enter these keywords into a Reverse Search Tool or Key Word Tracker Tool. If you don’t have one get one! The tool will then display results that represent the number of searches done for that keyword during the past month. The tool also provides results for groups of words that include the keyword, known as keyword phrases. For example, performing a reverse search for the term “running shorts" might show that 19,000 people searched for the keywords “Running Shorts", and that of those 19,000, 2,000 searched for “Nike Running Shorts". It also might show that only six people searched for the term “running shorts with pockets". Some products show obvious demand simply through their keyword search volume. However, there may still be demand for some products with lower search volumes. A site selling expensive boat accessories may receive fewer visitors, for example, but make up the difference in better conversion rates and a higher profit margin. For a more complete estimate of product demand, you should perform competition analysis. The reverse search tool displays icons for different search engines to the right of each result. Click on an icon to perform a search on that keyword phrase in a specific search engine. Browsing through the top results can give you a better picture of the demand market. Continuing with the running shorts example, if you searched for running shorts on a search engine, the engine might list several different pages from different apparel sites. This would let you know that a site dedicated solely to running shorts might not do as well as a site with a broader range of apparel. As you analyze your competitors' sites, write down your impressions in your research journal. This can help you choose a product with sufficient demand. If, for whatever reason, you choose a product and demand drops, don't panic. Simply use this process to select a new product and update your website accordingly.

Determining a Fair Price

      The second component of a successful website is a Fair Price. A fair price is the price that generates the largest profit margin. This is not always the lowest price; in fact, if your site has the lowest price on the internet, you are most likely missing out on possible profit. Instead of focusing on price alone, focus on how price affects the balance between your conversion rate and your gross profit per sale, as demonstrated in the following table.

      When you raise your prices, you earn more money on each sale, raising your gross profits. However, the higher prices discourage some of your buyers, and your conversion rate goes down. When you lower your prices, the opposite happens; you have more sales, but you earn less money from each sale. To test a price for your products, select a price point and allow 100 visitors to visit your site. Select a period of time that has at least 100 visitors, and then click the display button. Note your conversion rate, then multiply that percentage by your gross profit per sale. This shows you how much profit you earn from each visitor. Continue testing price points with this method until you find the point that gives you the highest gross profit from each visitor. Price isn't the only factor that can affect your conversion rate, but you can determine whether a low conversion rate comes from price or some other factor. Another good way to test your pricing is to set your prices as low as possible while still gaining a profit. If your conversion rates remain low, then your problems stem from some other aspect and not from your pricing.     

Optimizing Your Website

      The third component is an optimized website. The main goal of your site is to sell your product, and every decision you make should work towards that goal. This principle is called Designing to the Point. Tracking how changes to your website affect your conversion rate and average order size will help you realize this goal. Your average order size is the average amount of money that a customer spends when they purchase from your site. Optimizing your site is a lengthy process, and several other tutorials go into detail on specific aspects to improve your site's sales capacity. Test any change that you make with at least 100 Visitors before making another change. This careful testing pattern ensures that you understand the changes that benefit your site and those that detract.

Proper Promotion

      The final component of a successful online store is proper promotional techniques. As with optimizing your site. Unlike the other components, website promotion focuses on generating website traffic, or increasing the number of visitors that come to your site. Once a visitor lands on your site, the other components determine whether that visitor converts to a customer.

      Every visitor to your website is different, and visits your site with a unique set of intentions. Visitors fall into three groups:

          * Visitors who plan on buying before they even visit your site

          * Visitors who decide to buy after visiting your site

          * Visitors who have no intention of ever buying from your site

Your promotional efforts should target qualified traffic, or visitors that will purchase from you. The first two groups listed previously make up qualified traffic. Promoting your website to unqualified traffic wastes both your time and your advertising money. One of the keys to generating qualified traffic is to be as specific and accurate as possible in your promotional efforts. Bidding on popular, general keywords may bring in thousands of visitors, but targeting qualified with a more specific keyword phrase will lead to more sales.

Conclusion--

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Understanding these four components of a successful website will help you focus your efforts on generating profit. Many of the other merchants on the Internet do not understand these principles and waste their time chasing the top search engine ranking. This gives you the competitive advantage.

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Brian Marshall

http://www.gaspricessave.com