• Episode  39
  • Derek Gehl


This episode of Ask Derek is all about the golden question: what can I sell online? This is an incredibly important question so in this episode, we go over the four criteria against which I assess the validity and potential of new products, we talk about the four main online business models, and lastly, I share my answer to the question and explain to you my Hybrid Model. The Hybrid Model is what I consider to be the most valuable and sustainable business model, and using this model, along with meeting our four criteria, your product has the potential to be a total home run.

Transcript: What Can I Sell Online?

What can I sell online? What product should I sell online? What sells well online? Those are all the question we’re going to answer today on this episode of Ask Derek. Welcome to another episode of the Project Ignite podcast, the Ask Derek edition. If you’re listening to this on iTunes, you can also head over to my YouTube channel, youtube.com/derekgehl.

You can check out this podcast there, and I’ve got a little video up of me with my flipchart. If you’re watching this on YouTube now, remember to subscribe on iTunes or Soundcloud. You can also find me at Project Ignite.

So on this episode of Ask Derek, I want to answer a question that I get all the time from people that are just starting their business online, or are looking for a business to start online. Naturally, one of the first questions people ask is: what should I sell?

I want to shift that question from “What can I sell online?”. The right question is: what kind of business should I start? I’m never going to say, go sell this product. If I were to say that, I’d probably be telling a thousand other people the same thing. That’s not good. I teach people to start real, unique businesses that will create income for you over long periods of time.

What I want to do today is give you a framework to help you figure out which kind of business you want to be in and which type of product it is that you want to sell.

Before you decide, I have what I call decision criteria. These are the criteria that I look for that a business idea must meet before I say, yeah, this is something we should pursue.

So today, I want to go through this criteria.


Number one is profitability. It’s not about the size of the market, or the number of products I can sell per se–though that’s very important–I want to know how profitable a product might be in a specific market.

If I decide that I want to sell shoes online, I’ll be up against giants like Zappos. They’ll always be able to get cheaper products than I can, because I’m a small player. To compete, I would need to have very low profit margins because my profitability would be really low.

I personally don’t want to be in a business where I’m only making a few dollars on an order. If I’m selling a product for $30, and I’m only making 20%, that’s $6. How many sales would I have to make to reach $100,000? Well, it’s a lot of orders, and a lot of products, and a lot of costs that are associated.

I never want to get into a market where I’m competing on price. It always becomes a race to the bottom, and that’s not where I want to be.
What can I sell online?
So when I’m assessing a potential product, I’m asking, what’s the profitability? For each product I sell for X amount, how much goes into my pocket? I want products with high profit margins. If I can’t make a significant product market, it’s probably not something I’m interested in.

Price does come into that. If I’m selling a $10 product, and that’s all I can do in a specific niche, well, I can’t have a big profit margin because there’s not a lot of profit in there. I want a higher ticket item, with a higher transaction value, and a higher profit margin. That means I get to keep more money.

Profitability. That’s number one. That’s key.


Number two is lifestyle. I used to have a large company with 100 staff and two offices, I’d work 60 to 70 hours a week, sitting in traffic… And yeah, at it’s peak, we were doing $30 million per year in sales, which was fantastic. But I had no life. When we sold that company I decided that any business I got into going forward, lifestyle played a huge role in deciding what I wanted to do.

That’s the beauty of the internet. We can create these incredible businesses. In this day and age, if we do it correctly, we can run them from anywhere in the world from a laptop–wherever and whenever we want.

For me, when I look at a potential business opportunity, it has to have a high profitability, but I want a lifestyle of freedom. I never want to create a business that will tie me to a team, or to be dealing with clients constantly, something that requires an investment of all of my time.

I want something that scales. I want the freedom and flexibility, and the good news is, the internet allows us to do that in so many different niches and businesses today. When you’re looking at a potential product, ask yourself: am I going to have the lifestyle I want? Not only, is it going to make me enough money, but is it going to allow me the freedom to spend time with my family, or work wherever I want? Or will I have to have an office or a warehouse eventually?

If you decide that’s what you want, go for it–but always ask yourself that question. In five years, where do I want to be working? Do I want an office? If I don’t, then I need to be taking steps in that direction.


That brings us to our third criteria: risk. Again, the beauty of the internet is that you shouldn’t need to invest a ton of time to figure out if an idea will be viable or valuable. Nothing is a guaranteed home run. With more experience, the better you get at hitting those home runs, but before I ever invest a ton of money into a market or developing products, I’m gonna test it small and test it fast.

Risk is important. How much do you have to invest, and how long will it take to see a return? What is the potential return that you’re going to get based on the amount you’re putting into it? If it’s going to cost $25,000 in inventory and development, and it’s got the potential to make me $3,000 per month, is that a good ROI?

Is that worth the risk?

Probably not. It’s going to take me a year or two before I can make that back. I want to see the return quickly, and something that I can test small.


The last criteria is sustainability. I don’t think people think about this often enough when they get online. Sustainability means, when I find an opportunity, what is the long term potential?

There’s two kinds of businesses. There’s businesses where we’re creating an asset. We have real products and create real value in a market; with customers that we’re building relationships with and can return to with other products. That’s the kind of business I want to start.

For whatever reason, people get online, and they think, how can I get rich overnight?

If you ever find the “get rich overnight” button, let me know. Because as far as I can tell, to make money online, it takes discipline, it takes perseverance, and it takes work.
What product should I sell online?
You can get started in your spare time and with little investment, but at the end of the day, when you’re looking at an opportunity–because you are going to find all sorts of opportunities when you look into starting your business, including the get rich quick variety–but any time there’s a “hack” or a “back door strategy” or a niche that no one has tapped yet… More often than not, that will dry up eventually. It’s a short term strategy.

I’m not saying don’t do it, but if you’re going to start up an entire business by going black hat and violating the terms of service of a platform, know that you are walking a very fine line. That income could vanish any day.

If you’re playing by the rules and building an asset, you’ll have dividends paying year in and year out.

I’ve seen this countless times over the past 17 years. People used to arbitrage traffic from AdWords, basically buying traffic and reselling it at a higher price. Or someone would find a black hat strategy to fool Google’s algorithm. Sometimes it would last, and people would get comfortable with it–but because they weren’t building real assets with a real business and real products and real customers, when that income went away, they’d wind up scrambling to make ends meet.

Whenever I’m looking at approaching a product or trying a new strategy, I ask myself:

  • Will it be profitable?
  • Will I be free to lead the lifestyle that matters to me?
  • What is the risk involved in testing and until I see a return?
  • Is there a real sustainable business that I can grow and depend on?

These are the four criteria that I’m going to measure against.

Now that we know what those criteria are, let’s talk about the primary online business models that exist. In my books, it comes down to four big models.


The first is selling services online. If you have a skill that you can deliver virtually, whether it’s writing, administration, graphics, accounting–you could be online and generating income by the end of this week by going to sites like Fiverr and marketing yourself and selling services to people virtually.

Now, services can be a great way to start creating fast cash, but the problem is, you’re still trading your time for money. As an entrepreneur, we can never scale and create freedom and an abundance of money if we’re continually trading our time for money. Even if you charge a lot, there’s a cap.

The beauty of selling services online though is that it can create a nice lifestyle and be very profitable, and you can work from wherever you are so long as you have an internet connection and a laptop.

If you want ideas, go to Fiverr or Upwork and see what services are being offered. Maybe you have a skill that you didn’t even realize could be offered. You could potentially replace the income from a job you have, and start working at least at getting that lifestyle, working online, and then moving to products.

Physical Products

Our second business model is selling physical products. It’s a booming market and it’s growing at a remarkable rate.

This is because instead of going to the mall for products now, people are going to big e-commerce websites like Amazon or eBay, and buying stuff there that you’d usually pick up at Walmart. But I have to caution you. Although physical products can be very profitable, you have to go about it the right way.

Right now, there’s a whole movement of people getting really excited about sourcing cheap products from places like China, bringing them into the country, and leveraging platforms like Amazon to sell them.

If you’re primarily focused on getting a product, selling it, and you’re not planning on creating a long term business, you’re in for a surprise. You might make some money up front, but you’re not making long term assets in your business.

Again, physical products are great. There’s a ton of niches out there. Sourcing products is way easier with websites like Alibaba.com. But before you dive into that, you need to make sure you know what you’re doing and are learning from people that are doing it themselves.

Also keep in mind that all physical products are not created equal. On Amazon, people are constantly competing on price. If you’re creating iPhone cases, for example. There’s a ton of different iPhone cases out there. If you went and created a case, sourced it from China, and decided to sell it on Amazon today, it would be tough to be profitable. You have people that are buying huge volumes at low prices because they’re already established.


Let’s move onto the third model. Digital. What I mean by that is anything that can be delivered electronically. In my books, it comes down to information–which could be videos, trainings, ebooks–or software that people can download. Those are the two open, easy categories to get into.

For your first product, would I recommend software? I don’t think so. If you’re a software developer and you know what you’re doing, and you find a good product with a market, then you’re set. Away you go.

But, alternatively, if you’ve never been involved in software, my favourite category is information. Companies that I own have sold over $110 million in information products on the internet. If I look at the vast majority of those gross sales, I’d say over 80% was done through information marketing.

Information marketing is brilliant because it can all be done electronically. When I got started, I had tapes, and CDs, and DVDs to send out. Nowadays, not only do people not expect that, they don’t want that. they want something that they can consume electronically through their smartphones or computers.

So, this is a fantastic opportunity because information marketing is a massive market today. The information market globally is over $400 billion. It’s growing and growing and growing. I could explain why, but I’ll do that in another podcast. This is an incredible opportunity for people that are just getting started. This will allow you to create exceptional products while having a life and freedom. Once I’ve created my information product, there’s a huge profit margin there because there’s no additional cost in distributing.

If you look at places like Clickbank or Udemy, you’ll see hundreds of categories where people are buying into every niche imaginable. When people have a problem or a question, people go online to find answers. They will invest in your information if you know how to package it right.

Affiliate Marketing

This brings us to our last category. Affiliate marketing. I’m going to use this as a bit of a catch all here. It’s effectively getting paid for sending buyers to other people’s websites. So if I recommend that a visitor on my website goes to your website, and they buy your product, you would pay me a commission for sending that person. Through sites like Amazon and Clickbank, and individual companies as well, you can go out and send anything you want and get paid commission for it.

It’s a great way to test markets, and get started with your cash flow–making money on the backend as well. Affiliate marketing, again, if you’re just getting started and you don’t know what to sell but there’s a market, find a group of people, create a blog, create information and lead magnets, build relationships, educate visitors. And then, when you have that relationship, start recommending affiliates.

That’s probably the easiest way to start building income. From there, you can start building your own digital programs. I could be selling physical products, but I don’t need to build it, because I could just recommend another seller. Does it make as much money as if I were selling it myself?

No. Because there’s a middleman. It splits the pie up a little more. But I don’t have to worry about the things that come with physical products and that’s the beauty of affiliate marketing.

Lastly, there’s the advertising model. Effectively, you build a website or a platform that gets so much traffic that people want to pay you for advertising. This isn’t my favourite model. The reason I don’t want to talk about it a lot right now is because when you’re first getting started, building a web property that attracts enough traffic to make money from advertising–it’s pretty tough to do.

And so, our primary online business models are services, physical products, digital, and affiliate marketing. To wrap up this episode, I want to share with you what I believe to be the absolute best business model.

Hybrid Model

I can call this model the hybrid model. This is the most scaleable and sustainable model in my books. It starts like this.

You start with information marketing. Find a niche, and a market. Listen to what the people in that market are talking about–what they’re saying on social media, what they’re searching for in Google, and especially pertaining to problems that they’re having, and knowledge that they need.

You take that information and start creating your own information products: memberships, opt-ins, free checklists, blueprints–some you give away for free, but some, you sell.

You can leverage that information to do two things: you can use it to build your database of interested visitors’ emails, and once someone has invested in you and learned from you, you become their trusted advisor in that space.

If someone comes to you and says, I have a terrible slice when I hit the golf ball. You give them some exercises and videos that they can use to correct that slice and increase their drive, you can become their trusted advisor when it comes to golf. Then you can leverage that trust and start recommending other products, whether it be physical products, services–you can now have a long term relationship with these people that pays over and over again. You can also follow up with them via email. You can cost effectively follow up with hundreds of thousands of people.

Today, the number that people throw around, is once you’ve built a business with a sales funnel and a sequence of offers to follow up on customers that filter in, in their lifetime value, you’re going to make one dollar per email per month in your database. If you start a database, and a website, and start capturing email addresses, with sales funnels and other products, and learning the marketing skills to maximize your ROI–if you had 10,000 people in your list, you could be making $10,000 per month on that database.

Using any of these products! But it starts with information where you become that trusted advisor and you go from there.

When someone asks me, what should I sell online? My answer is this: Find a niche. Find a market. Maybe it’s in an area you’re passionate about, maybe it’s in an area you’d like to learn more about. Look for demand. Look for problems that people are having. Start building your database and give them free information. Then, move them up. Become their trusted advisor. Start selling information products. Start affiliate programs. Start selling additional products. Start generating that consistent income from that database every single month.

That becomes long term. That becomes a sustainable business. At the end of the day, even if Google changes and bumps your website from the rankings, you’ll always have that list. You can send out an email and start generating revenue while you start building up other streams.

That’s my answer!

I hope you learned something. See you next time.

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