THERE ARE JUST TWO WAYS AND ONLY TWO WAYS TO MAKE MONEY

by John Wilkes 6 replies
I have been watching the forum for a while now and must say that I have seen some brilliant advice and some really questionable ideas thrown around, especially for newbies. Also, sometimes I get the overriding impression by their response to the answers that some of the people asking the questions are absolutely clueless.
Hey, we all started out like that but why should people leave this forum none the wiser?
So, why not join me in sharing some sound business basics for those that are new or those who have just forgotten. Let us hear those pearls of wisdom and to start the ball.

THERE ARE JUST TWO WAYS AND ONLY TWO WAYS TO MAKE MONEY

* Increase Sales* or * decrease costs*

The amount you can decrease costs is usually limited but, the amount that can increase sales is limitless.

So how do you go about increasing your sales? there are three main ways:

*Increase the price of each transaction
*Increase the number of customers
*Increase the frequency of the sale to each customer
ideally you should try for all three at the same time.

For example, lets look at the following scenario...

* You presently have 10 customers on your list
* The average transaction value is £10 for a Ebook CD package that costs you £3 to produce
* The average frequency of purchase by a customer is 10 times a year
* Fixed overheads are £200

Sales are presently £1000 (10 x £10 x 10), cost of sales are £300 (10 x £3 x 10) and with fixed overheads of £200 this leaves a net profit of £500.

If it was now possible to increase all three sales generators by 10%, we can increase sales to £1331 (11 x £11 x 11), cost of sales become £363 (11 x £3 x 11), and with fixed overheads still at £200, the net profit now becomes £768

So profits have now risen by £268, that is a massive 53.6% increase as result of improving all 3 generators by just 10%. This shows the power of working on all 3 areas at the same time to achieve maximum results.

Sounds good in theory but how do increase your growth in all three areas?

The traditional methods are:
Lead Generation - get good quality visitors.
Converting the visitors into Sales
Re-selling to existing customers

The real secret in increasing the number of your customers is not only how many you gain but how many you don't loose and this is totally reliant on the quality of your customer service. This is particularly apparent when you try to increase sales to existing customers.

Remember this is basic theory and in real life the effect of different changes in sales
generators will vary from business to business. To maximize your own profitability you will need to also measure the effect of changing prices on the volume of your sales.

BECAUSE YOU CANNOT MANAGE WHAT YOU DO NOT MEASURE
#main internet marketing discussion forum #make #money #ways
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  • Profile picture of the author pmore
    You raise some very good points and you make a lot of sense, but I think you mean that there are only two ways to make MORE money or something.

    There are a ton of different ways to make money, but I see where you're coming from.
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  • Profile picture of the author Lance K
    Originally Posted by John Wilkes View Post


    So how do you go about increasing your sales? there are three main ways:

    *Increase the price of each transaction
    *Increase the number of customers
    *Increase the frequency of the sale to each customer
    ideally you should try for all three at the same time.
    Somebody's been reading Jay Abraham's materials.
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    "You can have everything in life you want if you will just help enough other people get what they want."
    ~ Zig Ziglar
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    • Profile picture of the author Johnson Tay
      Originally Posted by Lance K View Post

      Somebody's been reading Jay Abraham's materials.
      You bet
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    • Profile picture of the author Ken Preuss
      Originally Posted by Lance K View Post

      Somebody's been reading Jay Abraham's materials.
      Or Dan Kennedy's stuff...

      Ken
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      Coming soon for all you IM junkies... The Internet Daily Show

      A Secret to Success: Making serious money online or offline is not complex unto itself - we're the ones who complicate it. Simply sell them what they are already buying.

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      • Profile picture of the author Lance K
        Originally Posted by Ken Preuss View Post

        Or Dan Kennedy's stuff...

        Ken
        Nah, Kennedy's stuff is solid as well, but the 3 ways to boost profits was made famous by Abraham.
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        "You can have everything in life you want if you will just help enough other people get what they want."
        ~ Zig Ziglar
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  • Profile picture of the author Takuya Hikichi
    John's theory is "Exponential Results" introduced by Jay Abraham or from one of his students. Oops I was too late, Lance already pointed out.
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