Products: Consumables Versus One-Time Purchase

There are some opportunities that sell consumable products; others sell one-time purchases. Which one is best for you?

Consumables are products that a person uses up every month or so. If they like the product, they have to come back to you for more. Examples include nutritional supplements, telecommunications services and skin-care products.

One-time purchases are items that a customer normally only needs one of. Examples are software programs and hard goods like appliances (yes, I have seen appliances).

The advantage of consumables is that if your products do what they say and are reasonably priced, you will build a client base that reorders regularly. As the weeks and months go by, you find your customer commissions mounting up. And if you are doing most of your selling on a replicated website, where the company processes the payment and dropships for you, that amounts to earning money while you sleep.

The disadvantage of consumables is that you might not earn very much per sale. Here's an example - an average order is $40, and you get 25% of that order as a commission. That's $10. You need quite a few people buying products to really make any money (or you need to find a way to increase the average order).

The advantage of one-time sales is that while the products typically are fairly expensive (over $500), many times you get a 50% commission. If your average order was $600, your commission is $300, and you don't need to sell all that many in a month to start making some good money.

The disadvantage of one-time sales is that you have to go looking for new customers every month. And also your customer base is more limited, as not everyone can affort to spend $600 for a one-time purchase.

So when it comes time to decide whether you want to go with consumables or one-time sales, evaluate your own skills and abilities first. Then make sure you find a company that offers a good product that is reasonably priced and has a commission plan you can live with.