If you haven’t realized the importance of value until this point then I recommend checking ‘What Is Value’ post to get a better understanding of the subject discussed today. Like it has been mentioned earlier any process of money acquisition consists of two important parts which are the value of the product you sell, the service or the experience you provide and the act of delivering of this value to the customer.

How brick-and-mortar business works

Until recently, say they last 15 years before the Internet became public medium created to facilitate the exchange between individuals, all businesses conducted their operations the following way. A company produces a product, for example, classic books. It does this by employing workers who operate the printing machinery that cuts the paper and puts ink onto it. The books are then packaged by another machine or department of labourers and sold to the client which is a store that distributes the product to the customers. To deliver the final product to the store warehouse the company has a fleet of trucks operated by team of company drivers and carriers who help to shift boxes if the load is large. The value is created and delivered. The process is complex and requires a large work force to do it.

How online business works

Now let’s see how Internet has simplified this process. A writer still takes time to write a book, but instead of publishing it in the conventional form he decides to distribute it over the Internet. This time not only it costs him less to put the book into production, he now simply doesn’t need printing company to publish his book anymore. Instead he needs writing software and a hosting provider where the book will be downloaded from. Both of these are relatively cheap nowadays. The product still carries the same value, as book content hasn’t changed, but is now cheaper to distribute, which means the cost of the book is lower making it also affordable to the wider audience.

How to use this knowledge

Because a web site requires no man power to operate, except for occasional maintenance, the product can be enjoyed by unlimited amount of people at virtually no extra cost to you. You really need to grasp this concept if you are going to make money online! Once you create a value, which could be a review, an article, a blog, a picture series, anything and put it online it can be delivered effortlessly. A pretty good deal when you compare it to the cost of distribution of a real world item.

The process of making money online is often referred to as ‘passive income’ in the articles and self-help books written before the Internet Era. Read books or come back for the explanation of ‘passive income’ which I will write in my future posts if you want to learn more about it.

As before, I encourage you to post your opinions and questions in the comments section below when something needs to be clarified or added. I am learning just like you do and appreciate the feedback.