• Section: Money Guide - Category: Online Business
• Written by John Platania

Every time you see an online advertisement inviting you to join in a program where a lot of money can be made selling a worthwhile product or service. Have you ever considered how many others are offering the same opportunity? With global marketing capabilities on the internet, it is easy to reach millions of people that might be interested in what you are selling and that can sound like a great plan. However, the company hosting this opportunity is also reaching millions of people promoting the same business plan, with whom you will be competing in a global territory.

Considering that online business have no geographic and protected territories you could be competing with others just like you from around the world or next door without knowing who the competition is. To get a better understanding of sales prospects for an online business, consider the advertising that is done by online dating services. Some of the larger companies advertise about the millions of registere

d users they have and while it may sound good, look deeper at the number for the reality of finding that perfect match.

For the sake of round numbers, consider a company that advertises that they have 20 million registered users. Only about half of that are paid members, meaning you can only get in touch with 500,000 potential dates. Of the paid members, consider an even split of male and female, reducing the number of possibilities to around 250,000. While that still sounds like a lot of possibilities to choose from, you have to ask yourself how many of those possibilities are you willing to travel long distances to meet.

If even half of them are located in the United States, that is only 125,000 potential dates that live in the same country. Divide that by 50 states, and you realize that there may only be 2,500 people living in your home state from which to choose. Then you have to break than number down by age group and ethnic background as well as how far away from you they live. Additionally, consider the number of them that may not be interested in your profile and you can quickly see how that one million potential dates has dwindled down to maybe a dozen.

With online businesses it is closely related. The first thing you will need to look at are potential customers. How many people are actually interested in what you are selling and from that figure, deduct the number of people who flat out refuse to purchase anything online. Now, remove the people who cannot afford to buy what you are selling and the total number of other distributors online offering the exact same thing for the exact same price and try to determine why they should buy from you instead of one of the other million or so distributors.

Companies that focus more on recruiting distributors more than they do on sales, it will not take long to reach the saturation point of having one distributor for every potential customer and that is when the opportunity fails to offer any potential.

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