If you thought you were finished with homework when you finished school, unfortunately you'll have to reacquaint yourself with the process. Performing thorough market research on your product or service is the most important step in successful online business (remember that strategy we discussed?).

Look around at the products and services that are already available and similar to yours. Your market research should answer the following questions:

•    Who else is selling your product or service? (If the answer to this is "no one", this can be good news or bad news. You may have a unique product that many people will want—or there may be a good reason why no one else is trying to sell it. Your research will help you determine this.)

•    How much is your product or service being sold for, and can you offer yours for less and still make a profit?

•    What will you need to do to market your product? Are there identifiable venues and communities who might be interested in it?

•    Can you develop a unique selling proposition (USP) for your product or service? What makes you different from everyone else offering something similar? Is it enough to sway buyers?

If your research can't address all of these questions so that the answer is in your favor, you will need to go back to the beginning and try another product or service. The research process is typically the most time-consuming step of starting an Internet business.

You don't have to come up with the next best thing since sliced bread in order to be successful at Internet marketing. Your product or service must fill a void in the market, and must be unique in some way. That's all there is to it. You will have competition, but as long as you can top them in one or more areas, there is a customer base out there for you. Your products or services should be better, more unique, and/or a greater value than your competition.

Your customer service can also set you apart from the crowd. The Internet is an often faceless and impersonal market, and people who buy products and services online appreciate any business that goes the extra mile to ensure their satisfaction. Prompt, reliable service combined with a money-back guarantee or other customer-centric offers can also set your business apart.

Top Internet businesses

What sells online? Some of the most profitable online companies in operation now deal with:

•    Personal website development
•    Software
•    Proprietary information

The first two are fairly self-explanatory. Website services, from design to hosting to SEO (search engine optimization) agencies, are naturally a large part of the Internet. Everyone who does business online needs a website, and everyone is looking for ways to get traffic. Starting a business that relates to website development is an excellent opportunity if you can come up with a business concept that offers something unique, different, or of better value than what is out there now.

When it comes to software, you don't have to be a computer programmer to profit through software sales. There are thousands of affiliate programs that allow you to make a one-time purchase of a software program along with the right to sell copies of it yourself. This type of Internet business is sometimes called a turnkey program. Once you purchase the sales rights to the software, you can continue to sell copies at whatever price you decide to set, and you keep 100 percent of the profits. The challenge with a turnkey Internet business is effective marketing—because there are thousands of people out there selling the exact same product as you.

Finally, proprietary information is a hot topic for Internet marketing. What is proprietary information? A basic explanation is: any information people don't already know, but would like to find out. This includes how-to books, industry insider information, "secrets" to success in various areas, and more.

Typically, proprietary information is sold online in electronic form: e-books, special reports, white papers, and subscription websites. This type of business contains endless possibilities. Whether you already possess knowledge on the topic, or you have a strong interest in learning more and are willing to do some heavy research, you can develop your own proprietary information products to sell on the Internet. You can also choose from thousands of affiliate or turnkey programs that will provide you with pre-packaged products on topics you have interests in and/or passion for.

Perhaps the best aspect of selling proprietary information products is the profit margin. Once you have obtained or developed the product, you will profit 100 percent with every sale (unless you are joining a straight affiliate program, in which case you lose affiliate fees but still "take home" a hefty percentage). They are easy to distribute: you don't have to worry about packaging or shipping costs, because everything is handled electronically. Furthermore, e-books and electronic reports are fairly easy to create and reproduce.

Need some ideas for informational products? The following list is a brief sample of the thousands of possibilities this type of business presents:

•    Cooking
•    Gardening
•    Canning
•    Recipes
•    Entertainment
•    Novels
•    Photography
•    Digital cameras
•    Music
•    Self improvement
•    Health and fitness
•    Makeup and skin care
•    Weight loss
•    Parenting
•    Single parenting
•    Teen parenting
•    Child development
•    Romance
•    Dating
•    Relationships
•    Weddings
•    Marriage
•    Divorce
•    Internet research
•    Computer repair
•    Computer troubleshooting
•    Home decorating
•    Home remodeling
•    Home maintenance
•    Small appliance repair
•    Carpentry
•    Plumbing
•    Home financing or buying
•    Automotive repair
•    Automotive purchasing
•    Home business tips

Beneath each of these topics is a whole subsection of different types of businesses or proprietary information packages you can consider. These include:

•    Graphic design
•    Website design
•    Data entry
•    Spreadsheets
•    Copywriting
•    Article writing
•    Web content writing
•    Bookkeeping
•    Scheduling
•    Systems analysis
•    Collections
•    Research services
•    Transcription services
•    Translation services
•    Event planning
•    Menu planning
•    Life coaching
•    Virtual administrative services

The list is practically endless. All you need to do is decide on a subject that excites you, and then develop a product or service that the market will bear.