With hundreds of different business models online, it's easy to get overwhelmed and wonder which one is worth pursuing.
While all models have their advantages and disadvantages, there's only one that I consider to be nearly perfect. I feel I am in a position to say this because it's responsible for earning me a steady 6 figure+ income per month online for the last few years.
I am talking about running membership sites.
Since launching my first site in 2001, my sites have generated a substantial, recurring income for me. Month after month. I now run four membership sites.
Membership site benefits
You may be asking, “So, what's so good about membership sites?” Good question.
There are lots of great benefits to starting a membership web site. For example low startup costs, no inventory, no employees, and a steady (ever increasing) monthly income.
Another major benefit is that it's a true asset.
Investors have no problem paying several times your proven yearly earnings on the site when you wish to sell it. It makes sense for an investor. After all, they can see your proven financial track record with how much you have been making each month. They are comfortable knowing what the true value of the site is worth.
Reducing your online risks
There's another major benefit to running a membership site – it's much less risky than most other online business models.
Far too many online marketers are putting “all of their eggs in one basket” when it comes to income. All it takes is some changes in Google, for example, to wipe out many online income strategies.
Imagine going from tens of thousands per month to nearly zero just because some search engine changed the rules of the game. What would happen tomorrow if all of your leads from Google totally dried up? Where would that leave you?
If you had a membership site, you would at the very least have your recurring member base to keep paying you month after month. There are also many different ways to market and promote your sites. This leaves you much less vulnerable to sudden changes online.
The bottom line is that membership sites guarantee me a strong, ongoing income which isn't left to some other company’s control.
Multiple streams of income
The membership fees you charge are just the tip of the iceberg. In fact, a few of my membership sites have gone from my main source of income to one of my “front end” products.
Having a membership site automatically leads to a degree of recognition as an expert on your topic. Your subscribers are looking up to you for advice and they inherently trust your judgement.
The effect of this is typically a very responsive customer base. You obviously know what their interests are because they are telling you in your forum. You can then tap into this responsive list with backend offers, affiliate reviews, seminars, coaching… The profit potential can be many, many times above what just their membership income provides.
The million dollar question of course is “What is a good topic for a site?” One important element of that is the “passion” level of the topic. That applies in two ways.
1) How passionate are you about the topic? That can make a big difference in you following through and taking your site to its fullest potential. It's one thing to write an ebook about a topic you're not interested in, but running a full-fledged membership site is another story completely.
2) How passionate are the people interested in your topic? Uncovering a pool of passionate people who have shown a predisposition to spending money on their interests is a very strong formula for success.
For anyone interested in brainstorming, there are many great resources.
The next time you are in a book store, stroll over to the magazine rack. You are likely to find hundreds of titles in various niches. If those magazines have been around for a while, you can pretty much guarantee that they have enough interest in them to be sustainable. There are online research resources as well of course but those could fill up articles all by themselves.
No better time than now
In the years that have past since I began my first site, it has become much easier to get up and running with a membership site. What used to take months of hard work and configuring is now provided in “turnkey” software that can be ready to use that same day.
There's another big advantage to getting started now. Membership sites are gaining in acceptance by online consumers. People are finally getting comfortable with the fact that they may have to pay a few dollars for specific, valuable information.
A good friend of mine, Tim Kerber, is the support manager for a very popular membership site software solution. Tim has a unique (and enviable) position of being able to get “behind the scenes” of several hundred running membership sites. The interest in membership sites has never been stronger. Not only for starting them but for people joining them.
Best wishes to your online success,