A winning product mix strategy for
2016
Times are changing, and so is our product mix strategies. In this article I lay out the direction we'll be following and why, plus I list the kinds of products we will be developing.
A few years back, I
published A Winning Product Mix for 2009,
in which I wrote about the product mix strategy that my wife and I would be
focusing on to reach our income and lifestyle goals.
In that article, I
listed these as being the winning product mix:
- Subscription Websites
- DVDs
- Autopilot Web Sites
- Domain Names
- Software Products
- Private Label Resell Rights
- Training Workshops
That mix worked
extremely well for us, reaching and exceeding the income goals we set.
But times are
changing. The product mix that worked five years ago may not work now. The
economy has changed, the internet has changed and consumer demographics and
desires have changed as well.
For example,
according to a recent study, a majority of Americans have less than $500 in
savings and are one paycheck away from being homeless. ((See http://www.marketwatch.com/story/most-americans-are-one-paycheck-away-from-the-street-2016-01-06).
For this and other
reasons, we've re-evaluated our product mix and have made adjustments.
Since you're
probably in the same kind of business we're in, I thought you might be
interested in seeing what we plan to do.
Our 2016 to 2019 Product Mix
- Writing and Publishing Books for Kindle - After testing this market with one non fiction book and five novels, I've learned that writing the right kind of books and publishing them on Amazon can produce a significant five figure monthly income stream.
- With Amazon, you eliminate most of the hassles and expense of running a business. There is no need to have a merchant account, maintain product inventory, take orders or ship products. You don't even need a web site.
- You just have to write and publish books and cash the checks Amazon sends each month.
- My strategy is to publish at least one novel a year for the next five years and at least one (and likely more) how-to book each year. The how-to books don't earn as much as the novels, but are easier and quicker to write.
- Monetized YouTube Videos - With our monetized YouTube account, we've seen our YouTube earnings sometimes exceed $5,000 a month. I believe that with a little more focus, we could easily double that.
- As with Kindle publishing, a major advantage of monetized YouTube videos is there is no need to have a merchant account, product inventory, take and ship customer orders or deal with product returns.
- This creates a truly hands-off kind of business. Just create, upload and monetize videos and cash the checks YouTube sends month.
- Domain Names - I've found that registering and then selling quality domain names is an easy, almost no risk business with very high returns. But to successful, you do have to buy the right domain names and get them inexpensively (under $4.00).
- While the income we generate from domain name sales is usually less than $8,000 a year, it does add to the product mix. We will continue to do this in the future.
- Subscription Websites - Operating a subscription website has be a significant part of our business for the past fifteen years, and we expect that to continue for the foreseeable future.
- Subscription web sites are an ideal web business as they can be operated by one person, yet serve tens of thousands of customers.
- We plan to continue our subscription web site and work to see its continued growth.
- Templates - One of the surprising potential income areas has been the free templates we offer on our site to visitors. These templates attract thousands of new visitors and I often see our templates being used (and even sold without my permission) on other sites.
- Since creating certain kinds of templates is relatively easy, I might put together a package of several of them and sell at a relatively low price.
- Since this would be a digital download, delivery would be easy and the sales could generate several thousand dollars a year.
Dropped from our Product Mix
If you're read
previous articles about our product mix, you may have noticed we have dropped a
few things from the list. These include:
- DVDs - In the past, we often sold 300-500 DVDs a month, and in some months, we shipped over a thousand. But due to changes in consumer preferences and the wide availability of free videos on YouTube, the demand for DVDs has fallen way off. A recent article in USA Today, said the era of the DVD is over, and they might be right. Consumers are no longer buying DVDs like they used to.
- While there is still demand for certain how-to topics on DVD, the demand is not great enough for us to focus our efforts in that area. So we won't be producing any new DVDs.
- Auto Pilot Web sites - We've created a number of auto-pilot web sites that we filled with content from eBay, YouTube and Amazon. These sites would generate affiliate income when visitors clicked links that led them to products on ebay and Amazon.
- We've seen the income from these sites fall off as changes in search engine rankings meant fewer visitors and changes in the commission structure at Amazon and eBay meant lower per click earnings.
- While I won't be shutting down any of my existing auto-pilot sites, I won't be creating any new ones in the future. They just aren't generating the income we want from them.
- Software products - As the developer of MemberGate, eShowcase Pro, Pubster, OrderDesk Pro and several other software packages, I know that developing and selling software can be lucrative. However, it can be hard work and can be quite draining to focus all your time and energy on developing and supporting just one product.
- With the advent of multiple mobile platforms and millions of free and low cost apps available, it becomes increasingly difficult for individuals to make a profit from selling software. That said, it still can be done, especially if you use a strong affiliate network and can reach millions of people with your promotion.
- But for us, this is not the direction we want to take.
- Resale rights - While there seems to be a constant
demand from individuals interested in purchasing resale rights from us, we
no longer have any rights to offer, so we are out of this business.
Our evolving product strategy
Our main strategy
is to use the big three (Amazon, YouTube and Google) to handle the mechanical
side of our business (order taking, packaging and shipping of physical
products), while we focus on the creative side.
By letting Amazon,
YouTube and Google worry about the coming changes in the credit card industry
as well as problems associated with dealing with taxes on internet sales, we
can focus our efforts on supplying them with the products and content that they
are happy to pay us for.
Addendum - One of the big benefits of the above plan is it allows
us to significantly reduce our business operating costs as well as the
equipment and space needed to operate it.
In years past, we
rented office space (even entire buildings) to house our video studio, cameras,
recorders and have desk space for employees and room for inventory storage and
an area for shipping.
With our current
product strategy, we can operate the entire business from a small laptop
computer. No office space or expensive equipment is needed. No employees
required. No need to stock any inventory. No worry about merchant account or
payment gateway expenses.
This means much
less time, money and stress needed to operate the business and a huge savings
in business overhead.
So we significantly
reduce operating costs while increasing income - which is a proven strategy to
business success.
A Flexible Mix
Our strategic
product mix is always a work in progress and is likely (and expected) to change
as the world around us changes.
But for now, the
above is our plan. By relying on Amazon, Google and YouTube, we eliminate the
risky and most costly aspects of operating a business in a global economy,
while taking advantage of the marketing power and resources those three
entities offer.
