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Why every Internet business should have its own product

by Sunil Tanna, EBookCompiler.com

A fairly standard piece of advice you'll find on marketing web sites is that Internet entrepreneurs must have their own product because "you get to keep most of the profit".

However with some affiliate programs offering 20%, 30%, 40% or even 50% commission rates, a lot of web businesses find themselves wondering if that recommendation still applies. Usually the thinking goes something like this:

"If the sell a similar product myself, I have to deal with (a) additional work, for example customer service, (b) have increased set up and running costs, and (c) don't have the economies of scale of "big company X" so actually earn less per sale."

But while this reasoning might be true, what it neglects, is the benefits of having your own product go far beyond the profit per-sale, and include:

  • Uniqueness: If you have your own product, you have something that's unique rather than being one of a thousand or ten thousand similar sites. Use this to your advantage, and it'll be much easier to market to the public, and get press and media attention.
  • Control: Affiliate programs change their terms, companies go out of business, or change their products. Build your site around somebody else's product, and you're at mercy of somebody else's decision processes. Wouldn't you feel more comfortable with a great degree of control of over what is, in the end, your business?
  • You're the center. If you join an affiliate program there are probably several thousand other affiliates in the same or similar programs, all of which are, to a greater or less degree, your competitors, and none of which will go out of their way to help you. On the other hand if you have you're own unique offering, provided you give other sites a good incentive to link to you (like start your own affiliate program), you're going to benefit from other sites marketing efforts too.
  • You own the customer. Nearly every affiliate program says the in small print that the buyer is a customer of the program operator/merchant and not the affiliate. The reason why is simple: provided a customer gets a satisfactory product and good service, they'll usually go back direct to the merchant to buy more later, and usually the program operator gets to keep 100% of the profits from these sales. So if you're an affiliate you've either got to find an endless supply of new customers, or cross your fingers and hope that people will bookmark your site before clicking on the affiliate link. On the other hand if you're the program operator, you get the benefit of the additional profits from repeat customers, and even if you only have 1 product, you can still generate a highly profitable back-end by offering your customers closely related products using affiliate programs or joint marketing.
  • Joint marketing. Run an affiliate web site, and your joint marketing options with other sites are pretty limited - mostly involving swapping links or ads with other sites, many which of might be your competitors anyway. Offer your own product, and a whole range of additional options open up, including allowing other companies to offer your product (or a special version of it), marketing other companies products to your customer base in return for them doing the same for you, giving discounts to customers of your preferred marketing partners and more.
  • Focus. It's a fact of life that many affiliates flit from program to program as new opportunities present themselves. Far too often this is done on a whim, but sometimes, good short-term business reasons can be behind the decision. It's hard to turn down an offer which you know is going to make you extra profits in the short-run even if it does nothing to build your business. On the other hand, if you have your own product, it imposes a natural discipline and focus to your business, this of course being a key step on the road to success.

Sometimes just one or two of these benefits can be enough to form the foundation of a successful Internet business. Even if you already have your own Internet store or your own products, it might be worth creating additional products just to capture a benefit that was previously beyond your reach.

When you analyze things further, and decide what product to offer, you should concentrate on the benefits that you want from your product. For example, if your main goal is to acquire customers, provided you can develop and deliver the product cheaply enough, you may even want to make the product free to maximize your rate of customer acquisition. All things being equal. a golfing store that gives away a million free booklets of golfing tips is going to sell a lot more golf clubs that one that just waits for traffic to arrive.

So to sum up, the marketing gurus are right after all - although perhaps for different reasons than the main one that is often put forward - offering your product really does put you in the driving seat.

Copyright, June 2000 S. Tanna. The publisher of EBookCompiler.com: Create your own E-Books that you can give away free to drive traffic to your web site, or sell for profit. Visit today EBookCompiler.com

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This Page Last Updated:
 October 05, 2004