Project Diary: Part 1 How to Create a Brand New Product & Automated Money Making Website

This is the first in a series of articles which, over the next few weeks, will build up into a complete mini-course showing you step-by-step how to create your own profitable ‘internet vending product’ And also how to create a simple web site to accompany it, so you can sell your new product automatically 24 hours a day, seven days a week.
I thought it would be useful to keep a diary of my newest project, so you can follow me along the product development path – right from conception through to the launch of a brand new product. I wanted to do this for a couple of reasons.
Firstly, by committing myself to writing these articles I will not be able to procrastinate about starting this new project any longer. It will force me to take action and get started. It also means that I will see this project though to the end. After all you are now expecting to see a finished website and product to go with it in only a few weeks from now… are you not?
Secondly, it will create a personal case study and ‘how to guide’ for you to refer back to as you develop your own products in the coming months. Notice I say ‘case study’ not ’success story’ – I cannot guarantee success. No product developer can do that, however with a little experience, you can pretty much tell which products are worth your time and which ones you should drop.
With that said, I have set myself some goals in relation to this project. Here are my goals:
* Generate at least $10,000 in product sales – preferably in the first two months
* Generate an ongoing income of $1,000 – $3,000 per month in product sales on auto-pilot
* Develop a product that requires minimal amounts of maintenance and support – 1hr a week maximum
* Develop a product that has a Short Start Up Time - 4 weeks maximum.
Firstly though, I think I had better answer a question I know you are itching to ask:
“Why have you priced this in dollars? We are Brits!”
Yes we are, proud of it too. But when you realise that the majority of Internet users are Americans, it means the US Dollar is still recognised as the primary or preferred currency of most Internet users.
Here’s another shocking fact: Most Americans don’t have a passport. The majority of Americans have never actually left their own State – never mind travelled to another country and needed a passport.
I can now hear another question:
“Nick, what the heck has this got to do with pricing your new product in Dollars?”
Well, since the majority of Americans haven’t left the USA, most don’t know the ‘worth’ of other countries currencies either… So how you can expect them to buy a product in a currency they are not familiar with? The answer is, you can’t! If you try to do this they will not buy from you. They will just leave your website – never to return.

The biggest lesson I have learned about marketing on the Internet is this – You need to price your products in the currency that the majority of your target market will be happy to pay you in. If you don’t do this you won’t make many (or any) sales.
Don’t agree? Okay then imagine this:
Would you happily agree to pay 74,762,650.00 Turkish Liras on your credit card to download some software from a Turkish webmaster… without checking what the conversion in Pounds Sterling was first?
No I thought not… by the way it’s only about £28.00 / $50.00 (at time of writing.)
Although the Internet has made the world a much smaller place and has given us the ability to chat and trade globally like never before; most American Internet users are still not used to purchasing from companies that are located outside the USA.
In fact you may even be fooled into believing that they still think British people still go round wearing bowler hats and driving Austin Mini’s.

In contrast Brits understand that it’s okay to buy in US dollars and have done so for some years now. I don’t know about you, but when I get my credit card statement through each month and look at some of the Internet purchases I have made, I’m actually pleasantly surprised at how little the items cost in sterling compared to how much I originally thought they’d be when I first saw the dollar price.
Since my new product will be aimed at a world-wide marketplace, I am going to be using the primary currency of the Internet – US Dollar. Of course it goes without saying that if I was targeting my marketing towards a niche UK audience, I would of course have chosen to use £ Sterling.
Let’s Take a Look at the Steps Ahead
Over the coming weeks each of the steps listed below will be covered in more depth, either on or following the days I spend working on this new project. For now though let’s take a brief look at the ‘product development template’ I am about to follow:
Step 1. Defining A Target Market – Working Out Who Your Customers Are Going To Be
It’s a good idea to work out who your customers are going to be before you choose a product. – The is the biggest mistake new product developers make: Coming up with a product before they find a market.
The danger is that no one will want the product you have just spent the last 2 months creating, worse still, there might be no one interested in the book you have just spent 2 years writing! No amount of money thrown at marketing will change this – you’ll just end up out of pocket.
When you have found your target market, you’ll probably want to narrow it down some more, until you find some customers with the following characteristics:
* They have purchased products online in the price range you are contemplating.
* They are easy to contact via possible joint venture partners and discussion forums.
* They have a history of buying numerous products within their interest area (multi-buyers).
In another article, I will discuss how to find this type of customer group on the Internet.
Step 2. Come Up With A Product These People Are Going To Want To Buy
After you have defined your target market, start learning their purchasing patterns and buying habits. Try to discover the problems that they are facing and start thinking how you could solve these. A great idea is to search www.google.com for discussion forums where you think these kind of people ‘hang out’ on the Internet.
Look down the threads of the forum for questions like:
“does anyone know how to…” and  ”I am having trouble with …”
To clearly understand the problems these people are experiencing, try to get involved in forum discussions and visit the same websites they visit. This will help you to feel the same joys and frustrations they feel, which in turn will give you the insight you need to come up with the kind of products these people will want to buy.
In my opinion the best products are still ‘information products’ and ‘light software tools’ This is still what my entire business is based around.
Step 3. Work Out A Suitable Price.
Before you work out too many of the finer details of your product, it’s probably a good idea to come up with some idea of how much you are thinking of charging. You are going to want to make a profit out of this after all.
In most cases product developers set the prices of their products way too low. Thus creating a situation where making a loss is pretty much guaranteed.
In a recent article, I talked about ‘how much a website visitor is worth to you’. If you read that article you’ll already know that setting your prices much below $50 would mean disaster, especially if you also had to pay for the duplication and shipping of a tangible product.
Again the biggest mistake is pricing items too cheap!
Step 4. Define & Develop A Product – Solve A Problem!
Once you have done your homework the real fun begins! To substantially increase your chance of success with your new projects, you’ll want to create, (or pay someone else to create) a unique product exclusively for you. Ideally it should solve one or more of the problems that you know your target market is currently experiencing.
As you can imagine, being the only person selling a “one-of-a-kind” product means that you have no immediate competition. And therefore will have more customers buying directly from you. This of course allows you to build a larger customer list, to whom you will be able to offer more products in the future (along similar lines of course).
Depending on the product defined it may be possible for you to create the product yourself. For example Books, eBooks, CD ROMs, Audio CDs can all be produced in house within a relatively short time span. In other situations where the product is more detailed or perhaps software based, it may be worthwhile paying someone else to develop the product for you.
You will be surprised at how quickly a ghost writer can produce a new book, or just how many days it “really” takes a programmer to create a software application.
Step 5. Choose A Suitable Name – Set Up A Website – Start Effective, Low Cost Marketing.
If you have carried out the research in steps one and two correctly, you’ll want to start concentrating on the presentation and marketing for your new product as follows.
* Choose a name for your new product. (and perhaps consider registering the trademark) The name you choose for your new product can have a huge impact on your sales so think carefully. The right name can help sales soar, while the wrong name can ruin a product before it is released. We’ll cover this in another article.
* Register a domain name; create a google.com optimised web page for demonstrating and showcasing your product complete with online demo’s, trial downloads, frequently asked questions, screenshots. Etc.
* Post in the discussion forums (where you researched and defined the product that there is now a solution available for the problem).
* List the product on eBay auction sites. Most product developers do not realise how important this can be. Here are two reasons for starters. Firstly eBay listing pages regularly turn up in Google’s search results because www.google.com crawls eBay just like any other web site.  Two: Millions of people searching eBay everyday would also find your product listing.
* List the product at www.Amazon.com If the product is a Video, DVD, or book, get it listed on Amazon. This is not as hard as you may expect and can only add to the public exposure your new product craves.
* Use Press Releases. Take a trip over to www.prweb.com and submit news worthy press releases for your new product. Prweb can submit your press release to thousands of press contacts around the globe.
* Set up a free affiliate program, and bid on www.overture.com and www.google.com  AdWords for paid traffic.
Step 6 Deliver Quality So You Can Build In Big Back End Profits
The secret to earning big profits and gaining numerous testimonials, reviews and life long customers from this business is to deliver a product that meets or exceeds your customer’s expectations. Always try to go the extra distance and over-deliver.
Never try to con or trick your customers. You will regret pulling the wool over their eyes when you realise a con comes back to haunt you more than twice over. Also at some point you will be asked for a refund. When this happens to you, make sure you provide the refund promptly.
It’s far better to have satisfied customers who think you sell fair products at a fair price and who recommend you to others (via discussion groups and product reviews), than to have dissatisfied customers doing their best to ensure that no one ever does business with you again.
Also bear this in mind. I read in a recent newspaper article that dissatisfied customers are likely to tell ten times more people how upset they are, then a happy customer is likely to tell people how good his experience was.
We will look at these steps in more detail over the next few weeks, and I will give you specific examples throughout. You will be amazed at how quickly a project can be rolled out.