Entire books have been written on the subject of starting an online business and making money online - I have in fact written one myself - but we will give an introduction to the most common sources for revenue in this article.

Selling a product

The Internet is a wonderfully large and diverse place. By selling a product or service on it, you will instantly become exposed to millions and millions of potential customers. Some products and service are better suited for an online business than others. If you decide to sell a physical product that does not ship easily - like certain foods, pets, ice sculptures etc - you are unlikely to make much money on the Internet. Some products are however very well suited. Products which exist only in the electronic realm - like digital pictures, software, eBooks, electronic airplane tickets, music etc are ideal for the Internet as they can be shipped to anyone who has an Internet connection. Also, such products can be shipped automatically without human intervention. When deciding to sell a product online, you need to consider if the product you are offering is really ideal for selling online. Whatever products or service you decide for, you need to make a business plan, check out your competition, look into legal matters like taxation and return policies etc.

Affiliate programs

Affiliate programs are a type of partnership between a seller of a product or service and an advertiser. The advertiser - who is said to be an affiliate of the seller - sends visitors to the seller's website. For this the seller shares the revenue generated from sales originating from the affiliate with the affiliate. A seller typically has a large amount of affiliates. The percentage of the revenue given to the affiliate can be anywhere from a few percent up to as much as 75 percent. The benefit for the seller is that he or she needs to worry mostly about providing a good product or service and less about marketing since this is done by affiliates. The benefit for the affiliate is that he or she can make money online without having his or her own product to sell. Some affiliates have their own website, whilst others simply make money by placing ads on other websites, thereby directing visitors to the website of their choice. To make money online as an affiliate, you'll need to attract a lot of visitors.

Advertising online

Many websites rely on advertising as their only source of income. Ads come in many types and shapes and common for them is that they normally generate revenue when a visitor to the website clicks on an ad. In some cases, (a small amount of) revenue is also generated per viewing or a thousand viewings of the ad by a visitor. The revenue generated per click on ads is normally relatively low. Typically starting at a few cents, but up to even a few dollars for the right type of ads. Currently many website administrators rely on ads being provided by Google through Google's AdSense program. These are the types of ads shown next to the legend 'Ads by Google'. Google generates revenue for each click, and share this revenue with the website administrator. Ads are placed on webpages by contextual matching of the content of the webpage with the ads. Google reads the content of the webpage and provides ads which match this content. This means, that if the content of a webpage is such that advertisers are willing to pay a lot of money for the ads, Google will generate good revenue. And since Google's revenue is shared with the owner of the website, the owner of the website can thus make good money on content of the right kind. Determining which content is high paying is an art in itself. Currently, good revenue seems to come from travel services, various gadgets, recruitment and much more. As the revenue generated from advertising is relatively low and since relatively few visitors on a webpage click on ads, a large amount of visitors are needed to generate high revenue. With that, a lot of money can be made online this way.

In this article we have touched on the subject of how to make money online. We have described the options for selling a product or service, advertising and affiliate programs.

I wish you good luck.