With the online commission sales model, the earning potential goes up to unlimited. If you have work ethics and entrepreneurial spirit, a career in commission-based sales could just be the right fit for you.
However, the negative side is that there is no base salary to cover for you during the dry seasons. There are two ways out of it. Either make enough money when the tide is high. Or diversify your portfolio to maintain consistency in online commission sales.
There are multiple ways to go about recommending branded products that offer commission-based payments. Here are three effective commission based online business models you can use to make money online in 2021:
1. Affiliate marketing
Affiliate marketing is when the traffic from your referrals gets converted into successful transactions. And the band keeps track of sales through your affiliate link.
On the surface, the model seems simple. Recommend a product and make money when someone buys it. The trickier part is convincing someone.
Convincing power is what differentiates an average salesperson from an outstanding one. It is what differentiates one who is making 6 figures referring just dog food from someone else who might be advertising an expensive yacht but making zero earnings.
Usually, people use mediums like blog posts, website pages and email newsletters to recommend products to their followers using an affiliate link. Usually, a mix of multiple mediums seems to be an effective strategy.
The number of followers plays an important role too. It is often the quality over quantity. It’s better to have a thousand trusting followers who will consider the products you recommend, than a million followers who don’t take you or your recommendations seriously. There are many websites where you can find reliable affiliate products.
Companies that need advertising often find a listing website that publishes affiliate products of all categories. Shareasale, Amazon associates and eBay Partners are some of the most dependable brands you could start your affiliate marketing business with.
2. Direct Sales
Companies with a direct sales model often get mixed with pyramid scheme based companies. They have a bad reputation.
It’s common to face this hurdle during a pitch. If you’re opting to make a career out of selling a company’s products, you probably should start with caution. A background check of the company could be a good start.
The positive side of going for the direct sale model is that companies often offer a license to sell a category of products in your area. In that case, the only way for someone to get certain products would be through you. You become a sort of a distributor. And there is an exclusivity element in being a distributor.
When one buys a product from the company and finds it good, they are likely to buy more of them and even recommend you to their circles.
If you could find a good product, the repeating customers and recommendations make direct sales a very strong model.
Of course, selling comes easy when you believe in the product. If that’s not the case, you’re more likely to give up on your product.
So help others instead of selling. Build relationships. Provide free consultation. Try to understand problems that people are facing and try to resolve them through your products. And the golden rule of direct sales - don’t be pushy.
In terms of revenue, Amway tops the list. Brands like Amway are reliable and have been benefitting salespeople associated with them for decades.
3. Whole Sales
Wholesales is reselling products with sufficient margin.
Consider buying a set of Mi purifiers with a 30% discount. So you start by importing them from China and sell them at their retail price on your website. You make a 30% profit on each sale.
It’s a very profitable and scalable model.
There are a few challenges.
For most products, you would need a reseller’s permit to buy them in bulk from the original brand and a business license to sell them in your market.
Finding a supplier could have its own set of challenges. Not only would you need a willing supplier, but also a product with sufficient margin. No one wants to go through a big hassle for minuscule profit.
The tradeshows are the most reliable places to find a willing supplier. Tradeshows enable you to network with potential suppliers and match you with vendors.
Some websites offer a similar function. However, even in 2021, people prefer trade shows over online commission-based deals for wholesale agreements.
Once you find a business you want to partner with, you can apply for its products to sell. Each company has their own set of rules that you would need to abide by. It takes a lot of time and energy to find a good partnership, but it’s worth it in the end.
Once you decide on which commission-based business model you want to go with, there are few more rules you could follow to increase the likelihood of getting more sales. Here are four such rules:
4. Pick a Decent Product
The job becomes easier when you find a product you resonate with. On the other hand, if you don’t connect with the product, you might lose your enthusiasm to sell it.
In that sense, finding the right product is half of the job. There are few things you should consider before picking a product or service you want to recommend.
Firstly, you want to ensure if the product solves a problem for its customers. You need to check if it offers something unique that its competitors are lacking. And most importantly, if its appealing features differentiate it from its competition or not.
Secondly, you need to confirm if the demand for your product is seasonal or year-round. If it’s a seasonal product, which often is the case with most products, your earning might drop tremendously during the low seasons.
5. Know Your Target Market
Often, a salesperson starts by recommending products between family and friends. In some cases, that circle extends to their followers on social media. That’s about it.
In that sense, salespeople make their target audience.
This approach may not be very effective in the long term. The first obvious reason is that you might run out of people if you only distribute your product within your circle. For that reason, one needs to specify their target market exclusively based on their products.
Getting help from the parent company is recommended. Once you have a clear profile of your target audience, utilise all your resources to reach out to your ideal prospects.
6. Time Management
With a commission-based online job, you are your boss.
While such autonomy could be liberating, it is very essential that we develop a weekly schedule and religiously stick to it. Freedom imprisons and liberates depending on how we use it.
Effective time management is one of the essential features of a successful commission-based freelancer.
Micromanaging seems to be the only effective way to go about managing your time with online commission-based jobs.
There are various aspects to this job. You could broadly divide the job into four; prospecting, pitching, sales, and follow-ups. Each of the steps has its own set of tasks. Allot time slots to each of them.
7. Portfolio Management
We have discussed this problem earlier in the article. The dry seasons are real. Especially if what you are selling is seasonal. You may be thriving in March and could be broke by September. The most effective way to avoid, or at least manage, lean times is through proper money management.
The potential is unlimited. So saving is a smart idea when the going is good.
Adding to that, develop a budget. Predetermine a monthly and weekly budget, and based on that, save from every paycheck.
In 2021, there are many ways to make good money with online commission-based sales. All you need is a good model and a product that would get you started.
The best products are the scalable ones. The tech products like software or digital courses ought to be the most scalable in the market.
You make them once and sell them forever, with little to no management effort.
In the end, it boils down to how hard you work towards it. As Gary Vaynerchuk would say, how bad do you want it?
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Q. Are there more commission-based models apart from the three mentioned in the article?
Ans. Yes. There are many models available, but the given three are the most prevalent ones in 2021. The other model which is worth a mention is Drop Shipping where you resell products and services for a profit by listing them on your website without the hassle of carrying inventory.
Q. Out of all the mentioned plans, which is the most profitable?
Ans. All of the mentioned models have unlimited potential when coupled with the right product. However, the one that’s most prevalent in 2021 is affiliate marketing.
Q. What if you do not know how to sell?
Ans. If you don’t have a knack to sell products off the racks, you could always hire someone else to do that specific part of the job. You could set up a system where you divide the work between different professionals and instead work at managing the system. Many people who can’t sell are engaged in a commission-based model.
Q. What is the most scalable product in terms of commission-based sales?
Ans. As we mentioned at the end of the article, tech-based products are the future. And the most scalable products are usually the ones that need one-time investment and can be resold forever with little to no management. E-learning resources are becoming popular. Digital courses and software seem to be the right answer.