1. Physical products
You might think your idea to start selling steampunk cosplay outfits on Etsy is amazing — but the truth is, the profit margins are incredibly low.
For example, we have a notepad that our designers created internally for the IWT staff. We debated selling it to our readers — UNTIL we found out that we would have to price the notebook at around $50 just to break even.
And after we shipped it to people, our profit margins would have disappeared completely — all for a tiny notepad.
I know there’s some money to be made with physical products — but the profits are much better with online products.
Everyone wants to create the next Snapchat or Instagram — and it can be even more tempting if you’re a programmer.
I mean, we’re always hearing stories of sexy new Silicon Valley startups getting billions after their company goes public — why would you NOT start drooling?
The reality is that this simply isn’t a viable option for a lot of us, though.
For most, we can’t even code. And I think I’d rather go play in traffic than figure out the technical stuff that goes into it.
And even if you CAN code, chances are you don’t want to deal with the challenge of marketing, distributing, and constantly upgrading your app.
Software and apps require you to absolutely nail it right away. Otherwise, you spent all that time creating a product no one will buy.
We’ve all seen (and been horribly annoyed by) this business model before — typically in the form of little advertisements a la Google Adsense on the sidebars of websites.
And they DO make money…kind of.
As you get traffic to your site, some people will click on the ads and when they do, you get a few cents — or maybe even a few dollars.
BUT they don’t really make that much money.
I tried this for IWT before — but quickly realized that I needed a HUGE amount of visitors (somewhere in the neighborhood of 50 million) per month in order to make good income on ads.
That’s a lot of traffic and a good way to fall prey to churning out pointless clickbait. No thanks.