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Ever considered buying one of those money-making products that claim you can earn hundreds per day online, with only a few hours work? So did I, and after reading one long sales letter after another, I finally broke down and purchased a few. Here's what I learned about making money online and what it really costs to get those fantastic profits you hear so much about.

Getting Started... First, Choose Your Product

I bought a popular package and paid $49.95, which is about average. For my money, I got a lot of sound ideas for generating Internet cash; almost too many. Do yourself a favor and take notes as you wade through the detailed techniques in these products. It'll help you set priorities for the tasks you'll need to perform.

When in Doubt, Start at the Beginning

Like many others, this product author offers a free website to jump-start your business. As with any website, you also need a hosting plan. The author recommends a hosting company that charges $4.95 per month. This is actually a great price, since it includes lots of high-quality features and a free domain name (i.e. www.your-own-domain-name.com.)

Your costs so far:

-- Product: $49.95, including free website
-- Domain name of your choice: $0.00
-- Hosting cost: $4.95 / month for hosting, paid 1 year in advance. Cost: $59.40
-- Total expenditure: $109.35

Ok, But How Do You Earn Income?

Let's assume you now have the complimentary website from the author under your chosen domain name. So, how does that make you money?

What you've actually got is a website with reviews for various money-making products, including the author's. You earn commissions when your visitors buy those products after reading your reviews. You don't sell anything directly; instead, you are an affiliate of the authors whose product reviews appear on your web pages. What does being an affiliate cost? Nothing... it's free! And, you stand to make substantial income if you can entice your visitors to buy the products you review.

For example, some packages cost $100 and you could receive up to 75% commission for sending a buyer to an author's web page, as long as they complete a purchase. Product prices and commissions vary, but the average charge for an information product is about $50 and the average commission paid is around 50%, so being an affiliate can be very lucrative!

Getting Visitors Fast

At this point, you've got the potential to make good, maybe even great money. But there's just one catch... nobody on the Internet knows about your website! You have no visitors and no buyers.

What can you do to get eyes on your site in a hurry? What else, spend some money! How much depends upon what you can afford up front and how well you understand pay-per-click (PPC) advertising.

What is pay-per-click advertising? Run a search on www.Google.com and take a look at the results page. On the right side of the screen you'll see a section called "Sponsored Links". These are the PPC ads, called Google Adwords, that people like yourself can purchase. Your ads appear when someone searches Google for the keywords you specified during ad setup.

Let The Bidding Begin

Here's how it works: You bid for position in the sponsored ads, but you pay nothing until someone clicks on your ad. For each click, you pay the amount you bid for your location in the ad results. Depending upon the keywords you pick, bids can range from $0.05 to many dollars.

But, it really doesn't matter how much you pay per click as long as you get a fair amount of sales from those clicks. Remember, you can earn an average of $25 and even $75 or more per sale if your customers buy through your affiliate program.

Pay-Per-Click Economics 101

Let's assume a cost of $0.25 per click and an average profit from each affiliate sale of $25. You must sell (or "convert") 10 products per 1000 clicks just to break-even. So, your "conversion rate" or the number of sales you make vs. the number of total clicks on your ad is 1%.

1% sounds like a low number, but it's actually considered a decent conversion rate on the Internet. But, you're just breaking-even. To start making money, you must lower your cost-per-click or raise your conversion rate. How? By selecting the right keywords for your ads and tweaking your website so it induces your visitors to buy, not just browse.

The Adwords Path to Profits

Ideally, you want your ad to appear in targeted search results, when the searcher is ready to buy. There's a whole science (and maybe some voodoo) behind picking the best keywords for your ads, writing a compelling ad and getting your prospective customers to make a purchase from your website. But, there are also lots of informative products out there to help you. Products which you can buy and then sell as an affiliate!

Ok, let's recap your business costs up to now... you've spent $109.35 on a money-making product plus web hosting. Add $250 per week for Google ad clicks (1000 clicks / week at $0.25 each = $250 / week.) So at the end of month one, you have a total outlay of $1109.35, with $1000 repeating each month for ad costs.

Now, let's look at your profit figures... at the original conversion rate of 1%, you break even each month after the first. Not so good, but... what if you enhanced your Google ad and picked some cheaper, targeted keywords for your ad raising your conversion rate to 1.5%?

Count Your Profits, But Keep Your Job

Good news! 1.5% of those 1000 clicks per week is 15 sales. At $25 commission per sale, you rake-in $375 per week. Subtracting $250 in Google ad costs, you just made $125 profit per week! Not enough to quit your job, but that's $500 a month you didn't have before. The best part is, this process repeats itself without any more effort on your part.

Make a Living from Your Website(s)

Now, let's improve your bottom-line. Imagine you have 20 affiliate websites selling various products that generate $125 profit per week through affiliate sales. That's an amazing $2500 per week or $130,000 per year! Makes you want to quit your job and devote even more time to creating websites, doesn't it?

Is this simple? Not when you first start out. In fact, if you aren't careful about your keyword choices and your ad and website content, you could be pouring that $250 in ad costs right down the Google drain!

Worth It or Worthless?

Yes, money-making products that promise Internet profits can actually work. Just be sure to follow instructions and take careful notes. It's also smart to learn as much as you can about keyword selection, ad writing and website design. Oh, and don't forget to take some time to enjoy your success!