Explode Your Online Business With Membership Sites

A cardinal rule of business, whether online or offline, goes something like this: It is ALWAYS easier to resell an existing customer than it is to find a new customer in the first place.

Almost every business spends the greatest amount of money and time attracting new customers (advertising and marketing), while viewing retention of existing customers and meeting their needs (customer service) only as a "necessary evil."

One of the fastest and easiest ways to exploit this business principle of reselling existing customers online involves setting up a membership site where customers pay you monthly for a service, updated information, or something else they want on an ongoing basis.

Let's look at the numbers to see just how fast the revenue can pile up when you add a membership site to your online business.

Let's assume you target a yearly revenue goal of $100,000 selling an ebook about how to buy seized cars at government auctions.

If you sell your ebook for $29, you must sell approximately $8,500 (290 copies) every single month to reach your income goal.

Assuming you spend $15 in pay-per-click, ezine, or text link advertising to obtain each sale, you will net approximately $4,250 each month.

Not bad - not great - but much better than flipping burgers because you would net around $50,000 per year with your ebook.

Now, let's assume instead of a one-time sale of a $29 ebook, you create a membership site that not only shows people how to buy cars at auction, but keeps them up-to-date on the latest sources to find cars, finance them, "flip" them for cash, and more things your customers really want.

Let's assume you charge $29 per month for this membership site. Let's also assume it costs twice as much in advertising to sell each membership ($29 in advertising).

So, following the previous example, let's assume you sell 290 members your first month. Since your advertising expenses doubled, you'll net zero dollars in profit the first month.

But, in months 2-12 you rake in about $8,500 per month profit because you carried zero advertising expense!

So instead of netting 45K the first year with a $29 ebook, you net over 90K with a membership site.

By the way, the previous example assumes you don't sell ANY more members after the first month.

Do a little extra math and see the profits you could generate if you brought in just an extra 30 new members each month in your first year.

One of the primary advantages of adding recurring revenue to your online business is that you can predict your income.

Most savvy marketers understand this enables you to service your customers better since you focus on producing quality content for them each month rather than strictly chasing new sales.

And, with the car auction example above, you could even budget in the help of a first-class, part-time research assistant for 15-20K per year to do much of the work for you and still net much more than the one-off ebook model.

Various types of membership sites popular online include: adoption, school classmates, hobbies, employment, dating, search engine optimization, social and business networking, and even clipart.

The choices rate as endless as the many and varied interests of the human brain.

If you want to start an online business, or expand an existing one, before you start marketing any product or service, think long and hard about how you can add a membership site, or some sort of recurring revenue to your business mix.

Also see: self employment opportunities

Author Notes:

Jim Edwards contributes and publishes news editorial to http://www.home-income-101.com. Jim Edwards is a syndicated newspaper columnist and the creator of an amazing new membership site that will teach you the latest tips, tricks, tactics, and techniques for growing a REAL online business!