News – Hope you had some wonderful time off and are ready to get back to work. We’re working on Week four of our online tutor guide and I thought I would share some things with you about creating products for your business. Even if the only thing you’ve done so far in your business is tutor students, it doesn’t hurt to have some additional income streams. A reminder if you would like to order our tutor guide you can find it at the following url.
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Product Creation 101
We’ve talked quite a bit in the previous weeks about creating products and you should have some pretty good ideas about how that you’re going to earn money with the web site we created for you. I have used the following approach for products with several of my businesses and it has worked. If you look at the NCLEX case study, you can see how we’re going to use it in the ‘test’ business.
You want to create three different products.
An entry level product – this product is priced below $100. You want to provide the customer with exceptional value so that they purchase the second and third product.
Product 2 – Priced between $199 and $499 – this expands on the entry level product.
Product 3 – Recurring income product. This product contains something extra and generates a monthly income of between $19 and $49.
I won’t go into why you want to create a product, when really what you’re selling is a service (tutoring), but one of the big reasons is that you can create a product once and then sell it hundreds (or thousands) of times.
Product 1 – you’ll use all the income you generate from this product for advertising.
Product 2 – will be your profit.
Product 3 – you’ll reinvest half of that back into advertising.
Real world examples –
We’ll pretend for a moment that you’re a Math tutor, you tutor high-school Math.
Product 1 – ($79) How to survive Freshman Algebra – you want this product to be available during the first part of a student’s high school career. They can see how great you are at teaching Math, and they’ll want to buy your second product (and / or 3rd).
Product 2 – ($199) How to Make a 30+ on the Math Part of the ACT.
Product 3 – ($29 / month) includes Product 2, given to the student in bite size chunks and every weekend say Saturday Mornings and Sunday afternoons you provide them with an hour long ‘class’ and then practice questions, grading, and explaining how you got the answers.
Let’s run some numbers.
We’ll pretend you get 2% of the people who click on an add to buy Product 1. Each clicks costs you $1.00.
Five percent of the people that buy Product 1 buy Product 2, 5 percent buy product 3.
So if you get 1000 clicks, how much money have you made?
1000 clicks = $1000
2% of 1000 = 20 x $79 = $1580.00
5% of 20 = 1
$199
$29 / month
Total profit – $808.
Now imagine if that was for a month and you did that every month for a year. By the way the numbers I used there are very realistic.
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