Membership Sites - The Key To Leveraging Residual Income

Ever wonder how people can make $50,000 or more a month with their business? In almost all cases it is because they leverage the power of residual income. They sell a product or service that continues to re-bill every so often. Each time it rebills they get paid for the initial sale again and again and again.

Definitely beats having to get new sales each month to generate your income.

Now you still need to continue to sell people but if you add new people into a residual program each month your income increases from that same effort.

For example - You sell 5 memberships a month that cost $40 a month and pay a commission of $20 each. This nets you $100 a month of ongoing income. The next month you sell 5 more but you get $200 because the first 5 re-billed and you get the commissions on the new sales on top of that. Each month it continues to grow and pretty soon you could have a $1000 a month income from those same 5 sales a month.

Now it will not double each month in a straight line Not everyone will continue to keep their subscription but you can get a sizable number to do just that.

To be realistic, a 50% retention rate for any re-billing would be very doable. At that retention rate instead of a growth rate that doubles each month $100 - $200 - $300 a growth pattern of $100 - $150 - $175 will be what you will get. Keep more people than that and it will grow faster. Either way it still continues to grow each month if you continue to feed the system with new sales.

Sure beats having to increase your sales from 5 a month to 50 to do that with a one time sale of the same price to reach a $1000 a month income.

Developing residual income in this way is one of the keys to generating a stable income. Knowing that you have a base income each month and spending your effort growing that is how the big players expand their income so quickly.

Having a membership site is one of the easiest ways to do just that. The other is to promote membership sites of others. The downside of promoting others sites is that you do not control the site and if the person running it decides to shut down you can lose a big chunk of your income at one time.

(Been there, done that, have the t-shirt and coffee mug.)

The big advantage of having your own membership site is the ability to add an affiliate program. This allows you to leverage others to increase the growth of your site. Unlike being the affiliate you will make a percentage of each sale of each affiliate.

Using the earlier example and having 5 affiliates that each make the same 5 sales as you will now allow you to add 30 sales a month. On 5 of those sales you keep the whole $40 and on 25 sales you get $20 and the affiliate gets $20.

Your total would be $700 the first month and if all continued would continue to expand by that amount each month. Now in the real world that does not happen but if only 50% continue each month the numbers would still continue to grow exponentially.

Instead of growth like $700 - $1400 - $2100 you would still be able to get growth like $700 - $1050 - $1225. Fifty percent retention is a realistic projection and extremely doable.

You can see the power of residual income and a membership site is one of the easiest ways to harness that power.

Article Source: http://www.urarticles.com

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