How To Build an Empire on Free Information

This morning my best friend and I were comparing notes on the latest money making schemes that took our fancy. He shared how his newly launched thesis site made money selling dissertations. The upside of it was that it grossed him $8000 a month (there are tons of lazy students out there… even PhDs!). The downer was that it cost him $5000 to maintain. Writers, adwords marketing and hosting ate into most of the profit. He took home $3000 to show for  his hard labor- which more or less was what the janitor in our building made for less effort.

I, on the other hand, expounded on how my 4 year old online recruitment site kept on raking it in with advertising revenues despite it being free for employers and a large drop in pagerank. SERPs remained unaffected despite the same and traffic drove  adsense and affiliate sales through the roof. The downside came from the seasonality of earnings, with the site barely scraping through during the brrr months.

Three drinks into the gettogether, a third friend joined in and threw in a gem to our money-mining discussion. He shared how Instructables.com made him close to $1000 extra a month. We listened spell bound.

For the uninitiated, instructables.com is a relatively unknown how-to site. The visionary developers organized a repository of free information that focused on the theme of creation.

The site attracted innovative minds. Members joined in order to dissect in full color, video and text, methods of creating something new or doing something better. Think of it like a giant library that teaches one how to do things without emphasis on theory. Everything here is to the point. On site, you can find plans on how to create a more comfortable slipper, fashion a laser gun out of  DVD player and even wow your friends with a free energy robot that never runs out of steam.

My friend monetized all this in conjunction with ebay.com.  He simply searched the auction giant for in demand items, matched them with building plans from instructables and promoted a better item. Here’s how he did it.

• Check out What’s Hot. Ebay lets its members discover hot searches as well as wishlists. Currently, items like modified PSPs and novelty gadgets like low powered laser guns and sonic blasters command moderate interest.  Users either bid for these actively or post a request for the sale of the product. The trick is to identify these hot items and cash in.
• Scan Instructables.com for Plans. The next step is to obtain plans on the How-To site for building instructions. Once found, it’s a simple matter of building the device in small quantities depending on projected demand. My friend admits canvassing around other auction sites for demand. If the desire for the item is strong, he has the item built en mass by students wanting part time income. He’d pay about $10 to $30 for assembly depending on complexity.
• Market The Product. This is the easiest step. My friend didn’t even bother to learn copywriting. According to him, that would be reinventing the wheel. Instead, he scanned ebay and auction sites like atomicmall.com for listings that commanded a lot of bids. These, he called ‘Hookers’. Hookers draw in eyeballs and convert well. The plan is to copy the ad copy of the Hookers and make substantial modifications to preempt any complaints. He also plugs in numerous pictures that highlight the features of the item. Now, since the product is not the average off the shelf item, he levies a premium for customization. Prices like $300 for an item that cost $50 to build is not outrageous because people are willing to spend  a big amount on unique items.

My friend’s most recent product line includes an electronic zapper that kills bacteria in the body. He’s made about 6 sales selling it for $250. Cost of goods? $80. He found the plans for free and has made over a grand selling it.

Are you ready to be the next web maven?