Back when I was at school, one of the subjects I studied was Economics. And one of the concepts it used was called “perfect competition”.

It was hard to comprehend – we’re talking well before the days of the internet here.

The idea was that consumers had “perfect knowledge” of what things cost to produce and that the supply of people selling products would drive the cost down to near enough exactly the cost of production.

Skip forward from my school days in the 70’s and we’re pretty close.

Google gives us price information at the press of a handful of keys on our computers.

Lots of sites come up, probably including Amazon and eBay.

And the prices are stupidly low – some I really can’t work out like 99p travel adaptors that here in the UK cost nearly that to pack and post, let alone buy the product in the first place or pay the processing fees to accept payment.

And they can’t be relying on repeat trade or upsells.

Who buys another travel adapter until they leave the old one in a hotel room?

After fees, the affiliate is making more that the seller (who’s probably on less than minimum wage).

But Economics would say there’s a “barrier to entry” in that market – not much, but the vendor has to source and buy the stock, so there is a small barrier.

In internet marketing, it’s even worse.

There’s near enough no barrier to entry.

Anyone with a few dollars can buy hosting and a domain name.

And for a few more dollars, they can find out how to create a product fast like my course here.

So for maybe $30 and a few hours time, you’re in business.

OK, there’s promotion on top of that but if you’ve got time on your hands that’s not a cost or an issue.

Or you can buy in promotion for dirt cheap upwards.

Once you’ve created a product, the cost of delivery is close to zero. Maybe a few cents if you go over the trigger and cause your host to re-think “unlimited” bandwidth.

Which brings us back to Economics and perfect competition again.

The theory says that, with perfect competition, products get priced at (or very close) to their marginal cost.

OK, that doesn’t work with Microsoft (yet) – even though their cost of delivery is basically a computer generating a licence code.

But with internet marketing it certainly does.

Products that a few years ago would have cost hundreds of dollars are now available for single digits or even for free as a bonus for signing up to a list.

Products that a few years ago would have cost thousands of dollars are often available for under $100.

Yikes.

The trend is relentlessly downward.

Sorry if this is getting a bit negative – keep with me, I prefer positive spins if possible.

What can be done to reverse the trend?

At its most basic, nothing.

If you’ve got an affiliate site, you’re competing with thousands of other people in the world. Including those who’ve paid a programmer to produce clone sites like they’re going out of fashion.

Forget the few hundred sites a day that a $27 script could create if you could afford the domain names.

We’re talking serious quantities of sites, each of which are being treated much like “burn phones” are used by baddies in TV shows. Good for a few days or weeks until Google catches up with them, then replaced by the next wave that’s already being incubated.

To survive nowadays, you’ve either got to have deep pockets (Microsoft again, although that hasn’t cracked the search market for them) or sneak in under the radar.

Stupidly long tail keywords that aren’t targeted by anyone.

Each of which gets a handful of clicks a month – nothing like the thousands of clicks that shiny new product claimed but never actually delivered.

There’s nothing new (sorry)…

In essence, the course on YouTube marketing that your mouse finger is hovering over says this:

• Create a video, 1 to 5 minutes long
• Name it with your keywords then upload it to YouTube
• Write a description in YouTube. Maybe put a link at the start but if you don’t do that, make sure the link is visible before YouTube and Google cut it off
• Add in some tags (keywords)
• Maybe add annotations
• Maybe add captions
• Maybe drip feed some “retention” links, probably using Fiverr
• Maybe send a few cheap backlinks to it
• Rinse and repeat

There you are – you’ve just got the essence of a sub-$10 product for free.

How about another one?

Article marketing:

• Find a compelling, keyword rich, title
• Write between 400 and 2,000 words
• Write a compelling resource box
• Submit the article to a major site
• Maybe spin the article (ugh) and submit it to other sites
• Rinse and repeat

The essence of another $7 product, free.

And both those would live up to a “no fluff” claim.

Let’s go for full value.

A third free product.

Web 2.0 sites

• Create an account on various Web 2.0 sites (if necessary, use a proxy to hide the multiple accounts you’ve created
• Create pages that scrape past their automated checks and get published
• Social bookmark the page
• Ping the page
• Maybe send a few cheap backlinks to it
• Add comments to other pages on the same Web 2.0 site in the hope of links back
• Rinse and repeat

To succeed in internet marketing nowadays, you’ve got to keep ahead of the crowd.

Fortunately, the market is so big that you can almost hide in some of the numerous corners and still make cash.

Long-long-long tail keywords with “zero” searches per month in the keyword tools but that show up in the suggestions that Google gives.

And those suggestions mean that people are using those very phrases to search. Because, for once, computers aren’t making this stuff up.

The other place to succeed is by creating your own followers.

Dan Kennedy calls them a herd.

For good reason.

Loyal followers will do just that – follow you and maybe even pay for the privilege.

So put your thinking cap on and work out who you can help in near enough any subject under the sun.

Then help them.

Maybe initially without much expectation of money in return.

But with so much value delivered that they’re almost guilted into trying to find some way to compensate you.

It’s the way internet marketing is going.

Fast.

Very, very fast.

And you can either ride that tide or get drowned by it.

Feel free to comment on this article – I’d love to hear your thoughts.

And (shameless plug) you can get access to personal coaching to help you through to the other side by clicking here.