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	<title>Mindanao Bob<title>&#187; e-Commerce</title>
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		<title>Pricing yourself for success</title>
		<link>http://virtualearner.com/content/2010/06/pricing-yourself-for-success/</link>
		<comments>http://virtualearner.com/content/2010/06/pricing-yourself-for-success/#comments</comments>
		<pubDate>Mon, 07 Jun 2010 03:39:39 +0000</pubDate>
		<dc:creator>Bob Martin</dc:creator>
				<category><![CDATA[Business]]></category>
		<category><![CDATA[Earning Money]]></category>
		<category><![CDATA[Entrepreneurism]]></category>
		<category><![CDATA[Making Money]]></category>
		<category><![CDATA[My Thoughts]]></category>
		<category><![CDATA[e-Commerce]]></category>
		<category><![CDATA[Virtual Earner]]></category>

		<guid isPermaLink="false">http://mindanaobob.com/?p=818</guid>
		<description><![CDATA[A lot of times, I hear from people who are planning to start up some kind of new business, usually something online.  Often, I hear from people that I really don&#8217;t know well, but who follow me through my various websites, but sometimes the people I hear from are good friends.  Usually people who write [...]]]></description>
			<content:encoded><![CDATA[A lot of times, I hear from people who are planning to start up some kind of new business, usually something online.  Often, I hear from people that I really don’t know well, but who follow me through my various websites, but sometimes the people I hear from are good friends.  Usually people who write to ask me questions are looking for business advice.  Sometimes they are just so excited about their new business idea that they want to share it with somebody.  I am always happy to listen, and I usually try to offer some kind of advice to these folks, trying to help them succeed.  Sometimes, they appreciate the advice, other times they actually get offended, especially if I think that they need to think their idea through a little more carefully.  Honestly, if I offer advice that they need to think it through more, I am only trying to help them out, saving them from frustration that they will certainly be facing in the future, given their plans.

One of the biggest issues that I see people facing is that they have improperly priced their product or service.  When you are going to offer a product or service, it is important that you consider all of the costs involved in offering the product that you have in mind.  Most people forget about many of the costs involved in their offering.
<div id="attachment_820" class="wp-caption aligncenter" style="width: 610px;"><img class="size-full wp-image-820" title="Making money online" src="http://virtualearner.com/content/wp-content/uploads/2010/06/online_money.jpg" alt="Making money online" width="600" height="285" />
<p class="wp-caption-text">Making money online</p>

</div>
Sometimes, I get e-mails from people who actually have really good ideas for a product that I believe is very good, but they have not thought through the pricing carefully enough.   I remember one time a while back, a fellow had an idea for an item he was going to sell online, and I thought it was an excellent idea.  He told me that the item cost him $10 to produce.  He was planning to sell it for $11.  I wrote back and told the fellow that he was going to lose money on every single sale.  Although this incident is 100% true, there is an old joke along these lines:
<blockquote>We lose a little bit on each sale, but we make up for it with the huge volume!</blockquote>
As any businessman would know, that statement is impossible.  If you lose a bit on each sale… the more you sell, the more money you will lose!  I wrote to this fellow and explained to him that he was going to lose money with his idea, but that he should consider raising the selling price to better cover his costs, and to also make a nice profit.  His product was unique enough that he could have easily sold the product for $20 or $25, and still sold a lot of them.  However, this fellow got angry at my reply and told me that I didn’t know what I was talking about.

<a href="http://virtualearner.com/content/wp-content/uploads/2010/06/money_wheel.jpg"><img class="alignright size-full wp-image-819" style="margin: 10px;" title="money_wheel" src="http://virtualearner.com/content/wp-content/uploads/2010/06/money_wheel.jpg" alt="" width="300" height="300" /></a>Well, let’s look at this.  If you have a product that costs you $10, can you really sell it for $11 and make a profit?

The first thing to make sure of is to figure out if it really costs you $10 to buy or produce the item.  Perhaps he was right, maybe it really did cost him $10.  Let’s give him the benefit of the doubt and agree that it really did cost him $10, and not a penny more.

He will still lose money.  How?  Why?

The reason that he will lose money is because there are other costs to consider other than just the cost of the unit.  This fellow was talking about selling his product online, on his own website.

OK, it will cost money to build and maintain the website.  The design itself, even if you do it yourself (which I generally do with my sites) costs money to make.  If not direct out of pocket money, your time has a value, right?

Next, it costs money to keep your website online.  You need to pay a hosting company for the space where you keep your website.  For a cheapie host, you will probably spend $8 to $10 per month for that.  If you have a serious business going, you might pay a lot more.  If you have a lot of traffic and need a dedicated server for your business, you might be paying $200 to $1,000 per month for the dedicated server.  I have, in the past, paid as much as $250 per month to host my websites.  That is serious money, and you must recover that money, and also you need to consider that as part of the cost of selling your good or service on the Internet.

Next, if you are going to be selling a product or service on the Internet, that usually means that you will be needing to accept Credit Card payments, or some kind of online payment.  This costs money.  It is cheaper if you live somewhere like the USA, although it still costs money.  But, if you live somewhere like the Philippines, like I do, credit card transactions cost serious money.  A mainstream credit card processor will not accept your business if you are not in the USA.  So, you have to find a service that will accept your business, and they will charge more, because they feel it is a higher risk dealing with a business in a country like the Philippines.  About the best you will be able to do is to find a processor who will charge you 5% of the price of the product, and also a “per transaction” fee, of around 30 to 50 US cents.  You have to pay these fees for every single item you sell.  Many processors, on top of the fees that I mentioned will also charge you a monthly fee just for using the service (or not using it, if you have no sales).  This could run $100 or more per month.  So, if you sell one of those items for $11, just the credit card fees alone will cost you $0.85 or so, perhaps more (and this doesn’t even count any monthly fee).

So, on that $11 sale, you just made a huge profit of 15 cents.  And, you also need to subtract off all of those other costs that I mentioned.  Also, you didn’t pay any employees to do the work involved – remember, there are office tasks, packaging, shipping and other duties that must be done to complete the sale.  So, even if you don’t even count the web hosting, and such, you made only 15 cents on an $11 sale.  So, lets say that you do $100,000 in sales per month (which I doubt this fellow would have even been close to), your profit would have been $1,300.  Can you imagine how much work you will need to do to successfully process and complete $100,000 in sales in a month?  My friend, add in the real costs of employees, web hosting and all that other stuff, and you just lost money by selling $100,000 worth of goods.

So, it is important to consider all of your costs in doing business.  If you don’t, you will lose money.  And, don’t forget that your time has a value too.  If you are working 8 to 12 hours per day, and not considering that time as part of the cost of doing business, well, you are not really being serious about business.]]></content:encoded>
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		</item>
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		<title>Internet: Business or Play?</title>
		<link>http://virtualearner.com/content/2009/11/internet-business-or-play/</link>
		<comments>http://virtualearner.com/content/2009/11/internet-business-or-play/#comments</comments>
		<pubDate>Wed, 18 Nov 2009 03:44:44 +0000</pubDate>
		<dc:creator>Bob Martin</dc:creator>
				<category><![CDATA[Business]]></category>
		<category><![CDATA[Earning Money]]></category>
		<category><![CDATA[Featured]]></category>
		<category><![CDATA[Making Money]]></category>
		<category><![CDATA[My Thoughts]]></category>
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		<category><![CDATA[Virtual Earner]]></category>

		<guid isPermaLink="false">http://mindanaobob.com/?p=591</guid>
		<description><![CDATA[For some people, the Internet is the greatest entertainment medium that has ever come along.  For others, it is the greatest business tool that man has ever known?  Most of us probably sit somewhere in the middle of those two positions. For me, I am somewhere in the middle, although certainly closer to the side [...]]]></description>
			<content:encoded><![CDATA[<p>For some people, the Internet is the greatest entertainment medium that has ever come along.  For others, it is the greatest business tool that man has ever known?  Most of us probably sit somewhere in the middle of those two positions.</p>
<p>For me, I am somewhere in the middle, although certainly closer to the side of the Internet being a business tool.  In my days of using the Internet, though, I have been on both extremes as well.</p>
<p>When I first got on the net, in the early 90&#8242;s, the Internet was mostly an entertainment medium for me.  I used it a lot for educational purposes too, learning about things that I didn&#8217;t know much about.  Later, as I learned that you could actually make money using the Internet, I shifted my activities almost 100% to using the Internet as a tool for earning an income.  Today, I would say that I use the net about 80% for the purpose of making an income, and 20% for entertainment.  Many of the things that I do to make money, though, I also find entertaining, which is a nice way to make a living.  When you are doing something you enjoy, it&#8217;s like you are not even working!</p>
<p style="text-align: center;">
<div id="attachment_592" class="wp-caption aligncenter" style="width: 590px"><img class="size-full wp-image-592 " title="The Internet - Business or Pleasure?" src="http://virtualearner.com/content/wp-content/uploads/2009/11/www.jpg" alt="The Internet - Business or Pleasure?" width="580" /><p class="wp-caption-text">The Internet - Business or Pleasure?</p></div>
<p>I remember back in about 2003 or so.  I had a friend from the US who came to visit here in Davao.  I knew this fellow through the Internet, but for him, the Internet was 100% an entertainment medium.  He played lots of games on the net, traded jokes and pictures with friends, and such.  That was about all he did on the &#8216;net, although he spent many hours every day enjoying himself on the net.</p>
<p>At the time that he and is wife came to visit, my Internet Businesses were still rather young.  I only had one employee at the time.  My wife, Feyma, did a lot of leg work too.  I spend most of the day on the Internet taking care of my businesses, improving my websites and such.  When there was leg work to be done, Feyma did it along with my one employee at the time.</p>
<p>One morning, I was upstairs taking care of my work.  Feyma and our visitors were downstairs having breakfast.  My friend told Feyma:</p>
<blockquote><p>I can&#8217;t believe that you let Bob just play on the computer all day long while you do the work.  Bob should be ashamed of himself making you do all the work while he plays.</p></blockquote>
<p>What my friend did not understand was that I was not playing.  I was working.  When I was on the Internet, I was not passing jokes, playing games and the like.  I was working hard, making money.  My friend is a blue collar worker, and he could not understand how it was possible to actually make money while sitting in front of a computer on the Internet.  To him, I was being dishonest, because he could not fathom that I was actually doing the part of the job that made the money, while Feyma was merely taking care of the physical end of the business.  Without me doing the computer there would be no money.  Without Feyma doing the leg work, the orders would not keep flowing in.</p>
<p>I really felt insulted by my friend telling Feyma that she should not allow me to be lazy and just play all day long.  But, after I had time to think it over, I realized that my friend simply could not understand what was going on.</p>
<p>Yes, what I do on the Internet is business.  I don&#8217;t just play with the keyboard.  You will never come in my office and find me playing Farmville on Facebook, or Mafia Wars.  No, I don&#8217;t have anything against those who do that, I am sure they have other types of jobs and need an entertainment outlet in their lives, which the Internet provides for them.  When I am in front of a computer, though, I am working.  When I need an outlet for relaxation or entertainment, I do something else.  I certainly don&#8217;t do it on a computer, because when I am sitting at my keyboard, I feel that I am working, and that&#8217;s not an outlet.</p>
<p>So, you see, the Internet can be a medium for play or for work.  It depends on your personality, your knowledge, and your passion.  There is nothing wrong with using the Internet for entertainment&#8230; but there is also nothing wrong with using the Internet for your business either.  One thing, though&#8230; if you want to earn money from the net, you need to take what you do seriously, and give up the games and such while you build your Internet Empire.</p>
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		<title>It&#8217;s a business!</title>
		<link>http://virtualearner.com/content/2009/11/its-a-business/</link>
		<comments>http://virtualearner.com/content/2009/11/its-a-business/#comments</comments>
		<pubDate>Fri, 13 Nov 2009 04:00:46 +0000</pubDate>
		<dc:creator>Bob Martin</dc:creator>
				<category><![CDATA[Business]]></category>
		<category><![CDATA[Content]]></category>
		<category><![CDATA[Earning Money]]></category>
		<category><![CDATA[Entrepreneurism]]></category>
		<category><![CDATA[Featured]]></category>
		<category><![CDATA[Making Money]]></category>
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		<guid isPermaLink="false">http://mindanaobob.com/?p=585</guid>
		<description><![CDATA[In the past few weeks, I have read a number of articles on the net, on various blogs that had a similar theme.  Reading these articles really reinforced some things that I already believe, and helped me reconsider those thoughts, and as I reconsidered, I came to the same conclusion that I had already developed [...]]]></description>
			<content:encoded><![CDATA[<p>In the past few weeks, I have read a number of articles on the net, on various blogs that had a similar theme.  Reading these articles really reinforced some things that I already believe, and helped me reconsider those thoughts, and as I reconsidered, I came to the same conclusion that I had already developed in the past, which was the conclusion of the authors of the articles too.</p>
<p>Basically, the theme of these articles is about earning money online, and the fact that doing so is a business, not just a time to play around.  Many people start blogging, or some other way of earning money online, and they will put AdSense ads, or something similar on their sites, and earning a little money.  But, even if they get up to a decent amount of earnings, it would seem that they never quite make the leap to considering what they are doing as a business.  They never get serious about it.</p>
<p style="text-align: center;">
<div id="attachment_586" class="wp-caption aligncenter" style="width: 590px"><img class="size-full wp-image-586 " title="Business People, or Bloggers?" src="http://virtualearner.com/content/wp-content/uploads/2009/11/businesspeople.jpg" alt="Business People, or Bloggers?" width="580" /><p class="wp-caption-text">Business People, or Bloggers?</p></div>
<p>Think about this.  When you have a business, do you just &#8220;do it when you feel like it?&#8221;  No, usually when you have a business, you have a schedule of the times when you are supposed to &#8220;work&#8221; or be at the office, or whatever it is that you are doing as your job or business.  Same thing when you are earning online, you should have a schedule, and you should follow it.  Not just do it when you have the urge.</p>
<p>The first article that I read along this theme was from <a href="http://www.jimkukral.com/this-is-a-business-not-a-hobby/" >Jim Kukral</a>.  I always enjoy reading Jim&#8217;s blog, and he offers some good ideas.  In many ways, I feel that Jim and I have been on similar paths in our online earning over the years, so following what he is doing is something that helps me in my own quest to develop my business further.  One thing that Jim said in his article that really echoed with me was:</p>
<blockquote><p>We’re no longer bloggers anymore, we’re “publishers”.</p></blockquote>
<p>This was nice to read, because I have been saying the exact same words myself for about a year or more now.  I don&#8217;t consider myself a blogger, I consider myself a publisher.  One of the things that made me make that change in nomenclature is because my most popular site is one where I have about a dozen different writers who contribute to the site, so I don&#8217;t write everything there.  I publish it all, though.  So, I truly am more a &#8220;publisher&#8221; than a &#8220;blogger,&#8221; and being a publisher also tends to give off a more serious tone than being a &#8220;blogger,&#8221; in my opinion.</p>
<p>The next article that I read about this was written by Darren Rouse on <a href="http://www.problogger.net/archives/2009/10/15/the-1-reason-my-blogging-grew-into-a-business/" >ProBlogger</a>.  Darren points out in his article that when he finally decided to get serious about his blogging, that is when his success grew in multiples.  His wife gave him an opportunity that he could try out full time blogging for 6 months to see if he could make a business out of it.  If he wasn&#8217;t developing into a full time business (with full pay) within that 6 months, he had to go find a &#8220;real job.&#8221;  Well, that stimulated Darren enough to do the real concrete things that a businessman does to grow his business.  Instead of just doing what he felt like doing, he started taking serious steps to turn what he was doing into a business.</p>
<p>For me, until we start considering online earning as a business instead of a hobby, or &#8220;just something we do,&#8221; we cannot reach the level of success that we should.</p>
<p>Check back, I will be writing a serious of articles on this theme over the next couple of weeks.  Let me know what you think too, I&#8217;d enjoy hearing your thoughts.</p>
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		<title>Good news for e-sellers in the Philippines</title>
		<link>http://mindanaobob.com/2007/09/good-news-for-e-sellers-in-the-philippines/</link>
		<comments>http://mindanaobob.com/2007/09/good-news-for-e-sellers-in-the-philippines/#comments</comments>
		<pubDate>Sat, 29 Sep 2007 10:08:35 +0000</pubDate>
		<dc:creator>MindanaoBob</dc:creator>
				<category><![CDATA[Making Money]]></category>
		<category><![CDATA[e-Commerce]]></category>

		<guid isPermaLink="false">http://business.auctiontopia.com/2007/09/29/good-news-for-e-sellers-in-the-philippines/</guid>
		<description><![CDATA[There is some great news for people who want to do business in the Philippines over the Internet!  Paypal is already available for Philippine merchants!  That&#8217;s right, now you can send and receive money with Paypal, even if you live in the Philippines. This has been a major issue in the past.  Remember a couple [...]]]></description>
			<content:encoded><![CDATA[<p>There is some great news for people who want to do business in the Philippines over the Internet!  Paypal is already available for Philippine merchants!  That&#8217;s right, now you can send and receive money with Paypal, even if you live in the Philippines.</p>
<p>This has been a major issue in the past.  Remember a couple of months ago, I was writing a series of articles about selling on eBay?  Well, the issue of how to get your money was the number one item that most people asked questions about or made comments about.  With Paypal now doing business here in the Philippines, this issue is now solved, or nearly solved.</p>
<p>I just went and checked out the Paypal site, and it is still not perfect for sellers in the Philippines.  They are still looking for a USA Bank Account to verify the account and to receive your money.  However, they are moving in the right direction, and it is pretty obvious that things continue to improve.  I believe that Paypal will only continue to improve for users here in the Philippines.  I believe that anybody who is really determined to get going with Paypal can now make it happen.</p>
<p>Good luck to all sellers who are ready to get started!</p>
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		<title>Who&#039;s going to be the Next Internet Millionaire?</title>
		<link>http://mindanaobob.com/2007/08/whos-going-to-be-the-next-internet-millionaire/</link>
		<comments>http://mindanaobob.com/2007/08/whos-going-to-be-the-next-internet-millionaire/#comments</comments>
		<pubDate>Sun, 19 Aug 2007 08:13:34 +0000</pubDate>
		<dc:creator>MindanaoBob</dc:creator>
				<category><![CDATA[Business]]></category>
		<category><![CDATA[Making Money]]></category>
		<category><![CDATA[e-Commerce]]></category>

		<guid isPermaLink="false">http://business.auctiontopia.com/2007/08/19/whos-going-to-be-the-next-internet-millionaire/</guid>
		<description><![CDATA[Have you caught it? You know what I mean&#8230;. the new reality show? No, it&#8217;s not on TV, this is a show on the Internet! It&#8217;s a one hour TV show that airs weekly, and it&#8217;s called &#8220;The Next Internet Millionaire.&#8221; The show is a reality show loosely based on shows like &#8220;The Apprentice&#8221; &#8220;Survivor&#8221; [...]]]></description>
			<content:encoded><![CDATA[<p>Have you caught it?  You know what I mean&#8230;. the new reality show?  No, it&#8217;s not on TV, this is a show on the Internet!  It&#8217;s a one hour TV show that airs weekly, and it&#8217;s called &#8220;<a href="http://www.1shoppingcart.com/app/?af=642971">The Next Internet Millionaire</a>.&#8221;</p>
<p>The show is a reality show loosely based on shows like &#8220;The Apprentice&#8221; &#8220;Survivor&#8221; and such.  A group of 12 people have been chosen to participate in the game, in which they will face challenges to determine who will participate in a Joint Venture with host Joel Comm.  Comm is a long time Internet Marketer who has built up quite a name in Internet Commerce over the years, and he hosts the show.  In the first episode of the show, the 12 contestants are divided into two teams of 6, and they are given the responsibility of coming up with two competing internet campaigns for one of the show&#8217;s sponsors.</p>
<p>It&#8217;s quite an interesting show.  Most of the stuff shown in Episode 1 was not a revelation for me, but there were a few things that caught my attention and think about the possibilities.  But, for somebody like most readers of this blog, who are not seasoned e-commerce people, they would probably learn a great deal from watching the show.  I do expect, and hope, that future episodes will be more advanced and offer new ideas that I had not considered before.</p>
<p>Who is your favorite competitor so far?  After just watching one episode, my favorite so far is Thor Schrock, but that could change as more episodes pass.</p>
<p>Take a few minutes, or an hour, and <a href="http://www.1shoppingcart.com/app/?af=642971">watch Episode 1</a>.  Tell me what you think of it!</p>
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