You've probably heard lots of people talking about how great membership sites are. Most people discuss the recurring income aspect, but not too many people break it down enough to show you the real power of this business model.

Let's look at a pretty conservative scenario.

You're selling an ebook at $19.95 to a customer. Let's say you are doing OK and sell on average 10 a day. So on average you have revenues of $199.50 a day or $4,189.50 a month.

Not bad, however, when you're having to pay to get these new customers all the time, you'll probably find it eating into your profits pretty heavily.

Now let's look at a second scenario with a membership site model. Instead of charging once, you create a membership site around a niche and keep adding content and value.

Let's say that you still sell 10 a day and they stay subscribed for 6 months before they cancel and move on.

Here's the difference. You're loading 10 people a day into a pool of people that will keep paying you $19.95 for an average of 6 months. So after 6 months when it hits its theoretical peak (so there are as many people leaving as coming in) you'll have 1800 people paying you $19.95 a month.

So that's $35,910 a month.

Sure you'll have to work a bit harder to keep people subscribed, but the initial subscription is usually not any more difficult. In fact it can be easier with $1 trials etc.

Even if you teamed up with an expert in your niche and paid them 50% of profits for them to create the content for you, you are still making $17,955 a month.

That's over 4 times the amount you're making selling your ebook. Plus, it's a reliable and consistent income that helps you sleep well at night.

Let's have a bit of a closer look at this business model.


What are the start up requirements?

The start up requirements are certainly more than a simple website, but not that elaborate. For almost all cases, you don't need a fancy set-up, all you need is the following.

1) A website to do the selling of the membership. We've just used a wordpress blog whenever we've done this.

2) Some software to maintain the memberships. I've hunted all over for good membership solutions. I've yet to find a perfect one, but aMember is definitely my favorite. You can get more sophisticated solutions like MemberGate, but they are super expensive and you get locked into their system that requires you to pay a monthly fee.

3) A website to deliver the content to the members. This can just be another wordpress blog in a protected directory if you like.

4) A way to take the money. A PayPal or Clickbank account will do. I like those two because they convert well. We've tried 2Checkout.com and the checkout process is terrible. Eventually you'll want to get a merchant account, but those are fine to get started with. They all integrate seamlessly with aMember.

The main things I like about aMember are its flexibility and features. You can integrate with so many different payment systems and websites to make it seamless with a single login. Even if you're running a forum on the membership site. The one login gets you into all places.

Plus, it includes integrated affiliate management and autoresponder in the one system.

For our new membership site, we're using this to drip feed content to people via email in an automated way so they stay subscribed for longer and we don't have to work as hard constantly producing new content.

What is the learning curve like?

If you're already running a website, you're almost there. I would warn you that aMember is a little complex to set-up initially, so there is a learning curve there. However, once you've got your head around it, you can see why it works the way it does.

So configuring the membership system is probably the biggest technical hurdle you'll have to face. The biggest ongoing task is content creation.

If you've got a little seed capital, it might be worthwhile paying someone to set up the site for you so you can focus on the content creation.


What are the risks?

In my opinion, the biggest risk in running a membership site is the selection of a bad niche. A bad niche can be:

- One where no-one is prepared to pay money for the information or service you're offering them.

- One that is highly volatile and is just a passing fad.

If you want to read up on ways to identify a good niche, take a look at the article I wrote here.

(Niche selection starts 1/4 way down).


What is the potential?

The potential of this really depends upon the niche you choose and your marketing skills. I know one guy who runs around 70 niche membership sites and make millions per year. He has the system down, and then just keeps rolling them out. I'm guessing he teams up with people for the content creation and he just puts it into a proven system.

It also depends on how you approach the market. You could for example have a really broad niche with far more potential, but also far more competition. Or else you might be happy to slice off a little chunk of a bigger niche with less potential, but also less competition

Some smart guys like Ryan Deiss are tackling big potential niches, but getting memberships by selling low priced ebooks on very niche subjects that relate to the larger niche. He pays for his advertising from the ebook sales (so makes no money on the ebooks), but fills up his membership sites on the back of it.

Who does it suit?

This kind of business really suits the same kind of people who are already into niche content sites. It's really just an extension of that.

What do I like about it?

There are lots of things I love about the membership site model. These include:

- You can create a business around something you're passionately interested in. Your hobbies can become your job!

- You are creating a solid business that is dependable and due to the recurring nature of the billing, you can sleep well at night.

- This kind of business is the sort that people love to buy due to its solid recurring sales.

- Can easily replicate the system into other niches and sub-niches to scale your income.


How do I get started?

The most important decision you'll make with a membership site is deciding what the content is going to be about. You don't need to be an expert in the field and can simply align yourself with other experts to generate the content.

Once you've decided on your niche you can simply build the site, develop the content and start marketing!

Next Step...

If this business model gets you excited, then I recommend first trying to find a niche to tackle. That's going to be the biggest hurdle you'll face. If you want to learn a bit more about this stuff, Ryan (as mentioned earlier) has created some good videos that explain the whole recurring (continuity) aspect of it in more detail.

He has 3 videos in the series that are promoting his Continuity Blueprint product. You don't need to buy anything to view the videos which are excellent.