Why build an online business?
For many it is a dream to start their own online business and there are many good reasons for that. A digital business has many advantages which are listed below. However, there are also a few points that should be considered or can be negative in some respects. Here is an objective comparison or listing of all the pro’s and con’s.
First of all, the most important advantages and benefits of a digital business. They are the main reasons why more and more people tend to start their own online business.
The main advantage or reason why so many people want to build an online business is location independence. This has also resulted in a group of digital companies that travel the world and build companies at the same time. The so-called Digital Nomads or Perpetual Travelers. They all have a digital business and use this to travel the world at the same time.
More and more people strive for this independence and want to live / vacation in the most beautiful places in the world and enjoy a good income at the same time.
Another advantage of an online business is time independence. Because no matter what time it is you can theoretically always work. For those who are more productive at night and want to sleep in in the morning, this is a huge advantage. Studies have even proven that people have different biorhythms and can work better at different times of the day. Many are therefore not satisfied with the classic 9 to 5 job.
Scalability / Automation
The Internet and digitization enable certain business models to scale more quickly. An online business can usually be built up more quickly than a comparable offline business. In addition, many processes can be automated more easily. this in turn favors scaling or allows the business and cash flow to be more passive. Even if 100% passive income is very difficult to achieve in reality, you can come very close with a digital business.
Independence & self-determination
The feeling of being your own boss and being able to work independently is indescribable. Many people long for self-determination and and independence. Of course, a lot of responsibility goes along with it, but ambitious people need that to be able to lead a fulfilled life. Self-employment means facing new challenges every day and also growing from them.
Low barrier to entry
A huge advantage of an online business is the low barrier to entry and in many ways. Theoretically, it is possible for almost anyone to build a profitable online business. As long as there is a stable internet connection and you have a suitable end device (ideally a notebook or PC) it is possible to start. Thus, even people who do not have a university degree or other education can start an online business. Likewise, it is not necessary (but advantageous) to have start-up capital. You can even start an online business if you are in debt (not recommended though).
Likewise, age doesn’t matter and you can start building a business at a young age. Offline, it would never be possible to build up high-priced products at the age of 14 or 15, for example, because the trust in competence does not exist. Online, however, it does not matter as long as the quality of the product or service is right.
However, an online business is not free from potential risks and dangers. You should be aware of the following disadvantages before you start an online business.
There is no guarantee for the perfect online business and in entrepreneurship you are always exposed to certain factors which you cannot always influence. Of course, this can also be applied to offline jobs (the company you are employed by can go bankrupt at any time). But one should be aware that unforeseeable things can always happen which can develop into potential risks. (Google deindexes websites, YouTube deletes channels, competition increases, advertising accounts can be blocked by Facebook & CO, the internet connection / notebook no longer works, payment processors like PayPal, Stripe and co could freeze and much more).
High competition (Relative and depending on the niche)
Any business that has a low barrier to entry is usually a breeding ground for high competition. This is another basic entrepreneurial law that applies online as well as offline. You should be aware that if you find a way to sell products or services easily, quickly and profitably, that you will also be copied just as easily and quickly. can.
This can be countered with effective branding and labeling as well as brand protection, but more on that later.
Even though building an online business sounds very easy and many gurus promote their courses like this aka “build a 5 figure online business in 3 months” the reality is often a bit different. There are certain basic requirements which are always present in entrepreneurship, whether online or offline. You should have these skills or be willing to learn them before you start your first online business.
Many make the mistake of ignoring these basic requirements and are blinded by the reckless promises of many gurus and ultimately remain unsuccessful. Even if you are motivated at the beginning, you should always approach the matter with some realism and also look at yourself critically or the possibilities that exist.
One of the most important points is definitely the work attitude. The Internet has produced many, especially young, self-made millionaires. However, the work behind it often remains in the background. This has given rise to the myth or belief that the Internet and the business models that result from it are Get Rich Quick Schemes and that you can achieve financial success quickly and easily. In principle, this is true, as it is (mostly) easier to scale and automate, as already described above.
However, some experience and know how is necessary to really achieve these successes. In addition, the attitude and work ethic of an entrepreneur should be just as present online as offline. Solution-oriented thinking, determination and the tireless drive to improve oneself and the business are the basic requirements for success from a personal point of view.
“Mindset” is a term that is already misused by every coach, but the mental attitude with which you approach the matter is ultimately decisive. Everyone started at 0 and the decisive factors are ultimately the aspects mentioned above.
Even if many advertise that they have come from financial misery (debt) to wealth through the Internet, this is not a recommendable starting situation. Often you can’t change that and if it is you should make the best of it but a financial cushion is definitely an advantage. Because a business usually requires investment right from the start. This investment is mostly time or working hours, but often also capital. Therefore, it is recommended to have some money on the side (amount depends on the business model).
It usually takes a few months to acquire the necessary skills and know-how to become truly profitable. Every beginner makes mistakes and these cost time and money. Therefore, you should plan a certain buffer (of time and money) right from the start and approach the matter in an entrepreneurially smart way. Overconfidence is the #1 reason why startups of any kind go bust.
TOP 5 Online Business Ideas
Here are the most popular and probably the best current business models you can choose if you want to build your first online business. They have proven themselves in practice and are also often promoted by online marketers.
IMPORTANT: This is the current list from 2021 and can probably change as soon as there are new opportunities we will add them to the list. Because whoever is an early adapter will have the most success and make the most profit. It is also important that business models are always adapted to the current market and opportunities. Successful entrepreneurs recognize trends and adapt.
Blog / Niche Page
One of the oldest and still most stable online business is building a blog or niche site. The goal is to create a blog or website with quality content in a certain niche to ultimately get organic traffic from Google. This traffic then reaches the respective posts or blog articles. In these articles are mostly matching articles which are promoted on affiliate basis.
The model is relatively simple but requires some research and know-how. The more you learn about SEO in terms of market analysis and keyword analysis the better and easier you can build profitable blogs or niche site. Specifically, it is about finding certain niches that are very forward-looking or are not yet too saturated. Then you position yourself with high quality content and rank it on Google through targeted SEO practices.
Monetization can take place in a variety of ways. Most of the time these are affiliate products which are linked to the articles. (Amazon, Digistore as well as numerous software providers have extremely lucrative affiliate programs). That’s why niche sites are often associated with affiliate marketing.
In addition, of course, you can also become a Google Display Ad Partner. Google then automatically displays ads from a wide variety of advertisers on the website. Here the payment is around 5-10€ / 1000 impressions.
However, if you offer your own products such as e-books, video courses or coaching / consulting, you can of course also market this very well via a blog / niche site. Usually, the profit is highest with own digital products.
YouTube has long since ceased to be a video platform where you can watch pointless cat videos or pranks. It is an incredibly lucrative business model which should be used. Numerous (especially young) people and entrepreneurs have proven that you can make a lot of money with YouTube. It’s sort of the modern way of blogging and is often considered a video blog.
The principle is very similar to that of a niche site. Basically, again, it’s about regularly publishing high quality content in a certain niche. With a little YouTube SEO and persistence, you can thus build a following in a certain niche and then monetize it in a variety of ways.
One of the main ways is direct monetization through Adsense (ads before, during and after videos). These ads usually throw off 1-5€ per 1000 video views. This may not be very much, but it is a start. Adense payouts also depend heavily on the content. Fun videos or “shallow” content are more difficult to monetize than, for example, content about real estate, investing, and wealth building.
In addition, of course, affiliate products can also be promoted on YouTube in the description as well as through pop-ups in the videos. Again, a classic example would be an info video on muscle building. In the description you can then link training programs, protein powder or other equipment. You can find them in the description of almost every YouTuber.
In addition, many YouTube work with sponsors who pay a flat rate for the placement of products in the videos. So no sales have to be generated and you still get money for the placement of certain products in the videos because of the reach. Again, protein powders or entire fitness brands are a classic example. Such deals are usually regulated by contract.
But just as with blogs, you can of course offer and sell your own programs and products (mostly digital at first). E-courses, e-books, and other digital products are extremely popular. But also merchandise and clothing can be marketed and sold very well.
Amazon FBA Brand
To find exactly these products (high demand – weak competition) there are numerous tools which can legally read the statistics of Amazon. For this we clearly recommend
. Through the simple browser extention one learns everything about demand as well as turnover and sales figures / tag of the competition.
After that, the goal is to buy these products (household products, gadgets, sporting goods, office supplies, etc.) cheaply on Alibaba. This Chinese platform lists a large number of manufacturers of various types. For almost every product, you can find a manufacturer that produces the corresponding product at a fraction of the retail price. After finding this and negotiating a good price, you buy the products in bulk and have them sent directly to Amazon and listed.
The effort is relatively high in the beginning you have to find potential products, contact manufacturers and create a listing. However, once this process is complete and the products are at Amazon, the company takes care of the rest. You just have to include some advertising budget to generate the first sales and climb up the Amazon rankings. Subsequently, the products can be sold relatively automatically on the basis of organic traffic.
Online Store / Dropshipping
Similar to the Amazon FBA business model, setting up your own online store is also very much in vogue. E-commerce is growing strongly and is definitely the future. By building your own online store, you have even more options and control over customers and products. The online business model that currently works very well is the creation of an online store and the dropshipping of the listed products.
In concrete terms, this means simply setting up an online store (usually with Shopify – click here for a free trial) and listing products from other manufacturers. However, these are not stored or shipped. You don’t even see the products. As soon as an order comes in, you forward it to the manufacturer and they take care of the storage and shipping (just like Amazon). Even more, the manufacturer also produces the products themselves.
So in the end, you are just an intermediary and operator of an online store. In the end, customers don’t have to know anything about it and can believe that you manufacture, store and ship the products yourself. But in the background, the products are shipped directly from the manufacturer to the customer. Many manufacturers are located in China and produce the corresponding goods there extremely cheap.
Mostly dropshipping is also called Aliexpress Dropshipping or Shopify Dropshipping because you can easily combine both platforms (Shopify = own online store provider & Aliepress = platform for manufacturers) to set up a fully functional dropshipping business within a few hours.
Online marketing agency
Finally, there is also the possibility of setting up your own online marketing agency. More and more companies are having problems with digitization, especially in terms of marketing and sales. Demand for service providers in this area is rising accordingly. Particularly in demand at the moment are:
- Web design
- Graphic design
- Social Media Marketing
- Paid Ads (Google, Facebook & Instagram)
- Search engine optimization
- Influencer Marketing
By setting up an online marketing agency, if you have the knowledge in the relevant field, you can help other companies in online marketing and of course charge money for it. However, you do not have to be in the same city or region as the company in question. As long as the performance and quality fits, customers/companies are also interested in buying the corresponding services online.
That’s why platforms like Fiverr, Upwork and Freelancer have also seen strong growth in recent years. Because the demand for digital services is enormous and the trend is rising. Primarily, just mentioned points in the field of digital marketing are sought.
The basic prerequisite for this is, of course, that you are also appropriately well versed in the areas. Know how, experience and corresponding results are crucial for the success of an online marketing agency.
However, the easiest way is to set up an online marketing agency specializing in social media marketing. Within a few days or weeks, you can already learn the most important things about social media marketing and offer services in this area accordingly. Many companies are happy when channels like Facebook, Instagram & Co are filled with content and actively operated.
Start Online Business – Instruction
Here are the most important points to consider when building and starting an online business. These are independent of the previously mentioned online business ideas and apply to entrepreneurs of any kind. These points should be followed in any case and also carried out in chronological order to build a successful online business.
Create Business Plan
Whether offline or online, the first thing you should definitely do is write a business plan. This does not necessarily have to be 30 pages and resemble a scientific paper. Rather, this serves to seriously deal with the whole subject matter in order to be able to better assess the whole business. Often, when writing a business plan, you come across mistakes or details that can affect or even completely eliminate the entire project or idea.
Even if it is only a few pages on the following points that you write down. At least you gain more insight and this helps to avoid losing money and time. In addition, you choose a professional approach. This is especially important from a psychological point of view and helps to take the project really seriously. One holds oneself “accountable” and subconsciously commits to the targeted and professional implementation of the project.
Market analysis, niche selection & target group
The most important and first step which has to be done in the business plan and ideally even before is the market analysis. A thorough analysis of the target market, especially in terms of supply and demand, is essential. The better this analysis is done, the higher the chance of success. Because based on this information, you can properly position the business and the products and services offered.
A common mistake made by beginners and startups is entering a market that is already saturated. The needs of the target group are already saturated and the competition has too great an advantage. This should be avoided at all costs. Because such mistakes cost time and money.
For market analysis, tools such as:
- Google Trends
- Jungle Scout
The market analysis should not only consider the current status quo but also be forward-looking and take into account the corresponding potential development.
Step 2 is to set ambitious but realistic goals. These are essential because without goals you do not give direction to the company. The goals should be ambitious on the one hand and at the same time take into account the resources currently available. A healthy medium is usually the right choice especially as a beginner. Ultimately, however, the following applies: Only those who have goals can also achieve them.
Schedule / Action Plan
Based on the market analysis and the set goals, you should also write a schedule with concrete steps that you have to complete. Thus, you have a roadmap and know until when you have to take which steps. This is also important to keep control and make any adjustments. A written-down plan also demonstrably promotes long-term implementation.
Finally, all the theory must also be put into practice and the knowledge learned must also be applied. Even if planning is the be-all and end-all, it must also be put into practice. If you have gone through the previous steps cleanly and conscientiously, nothing stands in the way of implementation.
Improve, Scale & Automate
One of the most important aspects of entrepreneurship is to constantly improve and work on new solutions. Especially if you are not successful at the beginning, it is even more necessary to develop and not to give up. There is a solution for every problem, it just has to be found. Most of the time, the problems are not unique but thousands of other entrepreneurs have had them before.
If the business is already up and running, you should not rest but work steadily on it and try to scale it further. The advantage of online businesses is that they are relatively easier and faster to scale. For example, you can add new marketing channels, products, product descriptions, and more. test Testing is an important factor anyway when it comes to scaling the (online) business.
Ultimately, the goal is to automate certain (ideally as many as realistically possible) processes. Because a growing company needs more resources. To counteract this, certain processes should be streamlined, outsourced and ideally automated. However, this process is very different for each individual and depends on the business model and structure.
After we have presented the currently best and most lucrative business models for the first online business as well as a general action plan, there are of course things to list that you should avoid at all costs. They are mostly rookie mistakes and inexperienced entrepreneurs and happened to us the same way. However, you can avoid them very easily if you are aware of them.
The Late Adapter / Slow Copy Cat
Error #1 is the classic Late Adapter or Slow Copy Cat. These terms are very common but we have chosen them because they describe the error very well. In concrete terms, it is about entrepreneurs who recognize trends too late and also use them too late. They enter saturated markets and struggle with high competition. This is one of the main reasons why many fail at their first online business.
A classic example of this 2 years ago was Fidget Spinners. This trend has turned a handful of dropshippers into millionaires. Success inevitably came to light and numerous other dropshippers wanted a piece of the pie. However, 99% came too late and entered a market that was already saturated. Thus, far more people lost money with dropshipping. Only the first dropshippers were incredibly profitable.
Within only 5 months, the entire market has changed or simply saturated, and as can be seen according to Google Trends, WORLDWIDE.
The Game Changer
Even though innovation is one of the most important aspects of entrepreneurship, you should not overreach yourself at the beginning. Products or services that are too far in the future are not suitable for beginners. It is advisable, especially in the beginning, to venture into projects that correspond to the current zeitgeist and already have a proof of concept in a certain way. This does not mean that you should copy others 1:1, but simply follow the concepts.
Whoever ventures into completely untapped markets as a beginner and thinks he/she has to revolutionize an entire industry will usually have big problems. Therefore, always use innovation with moderation and purpose and do not overdo it, especially as a beginner and newcomer to the market.
Personally, we had already taken the opportunity about 3 years ago in 2016 and built an online business. It was one of our first online stores and was an online store for vegan clothing. We built this on the dropshipping principle. In the process, we set up a store with Shopify and filled it with products from a well-known POD (Print On Demand) manufacturer. Starting with t-shirts, hoodies and tank tops, everything was there. Yet we had no storage costs or other work with logistics or shipping. As soon as an order was received, it was automatically forwarded to the POD manufacturer. The latter then printed the product, packed it and sent it directly to the customer.
As a rule, we achieved an average of +10K sales per month and even had a few days with several thousand sales per month. The profit amounted to about 25-30 minus all costs. Thus, the margin was large enough and the profit was comparable to that of a normal salary of an employee.
What does the year 2021 and the future hold?
“DROPSHIPPING IS DEAD!” – We’ve heard this phrase a lot, and not just since last week. For years, there are always pseudo news which make the rounds. Specifically, the issue is that certain business models have a supposed lifespan and they simply die out. After that, it is again a completely new business to be able to continue to earn money on the Internet. This setting is complete and could not be further from reality.
Neither dropshipping, nor affiliate marketing, nor Amazon FBA will die completely in the next few years, if ever. These are just umbrella terms for business models and they have been around for years and will continue to be around in the future. The only thing that needs to change is the mindset and the entrepreneur. Because the above model is constantly changing and therefore you need to adapt accordingly. This is the case in every area of life and also in online marketing and online business.
Ad costs are rising, competition is growing, laws are changing and much more. This does not mean that business models are dying, but that you have to adapt. At the same time, many opportunities are also created by globalization and improvement of technology (Cheaper & Faster Shipping, Outsourcing to low cost countries etc…).
For example, dropshipping is just as profitable as it was years ago, but the current trend is towards branding, private labeling and building a fan base. So as an entrepreneur, you have to adjust the way you run a store and continue to be profitable and not throw out the entire business model just because it changes. The same applies to affiliate marketing & co.
Fundamental trends for the future, which can be seen across all industries, include:
- Branding / Private Labelling
- Building a fanbase / community
- Specialization of competence, products and brands
- Internationalization & Globalization of Business
- Improved Shipping, Handling & Fulfillment
The dream of owning an online business has become reality for many people in recent years. The Internet has spawned many entrepreneurs as well as self-made millionaires. The possibilities have never been greater and more and more people are realizing this. However, there are some things that you should consider if you want to build your own online business. These include above all entrepreneurial thinking, perseverance and determination. Know how and experience are essential for success in any field. Nothing is free on the Internet and only those who do the work are rewarded, just as offline.
Currently the most lucrative and popular business models are dropshipping, Amazon FBA, blog / niche site, YouTube and online agency. These models are accessible and feasible for pretty much everyone, provided that the aforementioned prerequisites are met. It is also important to plan and strategically approach the entire process. Every business needs a business plan whether offline or online (financial planning, market analysis,
These business models will still exist in the future, but in a different way. It is generally very rare for business models to die completely. Most of the time, they just change and as an entrepreneur, you should always be adaptable. (survival of the fittest = survival of the one who adapts the best)