Selling a product on the web is slightly different than selling a service. Each has its advantages and disadvantages.

Products

Advantage: It provides an unlimited income potential, because you are not constrained by time as with a service.

Disadvantage: It requires stocking and shipping (or drop-shipping from a supplier).

Disadvantage: It generally requires filling large amounts of orders to make a reasonable living, unless you have a product with a very high profit margin.

Services

Advantage: It is easier to make a profit quickly, because the entire price of a service is paid to you (except for any overhead).

Advantage: Services can generate a great residual income, because the client may want to hire your services again and again.

Disadvantage: You are limited to a modest income because you can provide only so many services each day -- unless you hire employees to perform services for clients.

In my opinion, selling a product online has, by far, proven to be the biggest profit potential in the long run. Once you get a successful product, you can automate the system and move on to new products that will generate multiple streams of income.

If you need immediate cash flow, providing a service is the fastest way to produce instant income -- but the payoff will not be as great, in the long run, as selling a product with a high profit margin.

If you sell a service, think about how you can transform it into a product. One of the best examples I can think of is regarding the people who submit web sites to search engines. Because the competition became so fierce and their business began to suffer, some wrote and sold reports revealing how search engines work, tricks for getting sites listed higher on the lists, etc. The reports were priced from $20 to $100, and the entrepreneurs in our example found new markets to tap.