What is Residual Income?
Well, before we cover that, let’s talk briefly about making money online. Internet business opportunities are advertised all over the place. Most seem to make outlandish claims and promise you the world. But just like a traditional nine to five, there are some legitimate opportunities in which you can make money from home. “Work at Home Moms” was once featured in Forbes magazine and discusses how successful they have become over the years.
Does it happen overnight? No way. But it can and does happen. This is what first gave me hope to step out of my comfort home and begin searching for some extra money on the “World Wide Web.”
Affiliate Marketing is likely the easiest concept for beginners to wrap their heads around first. Basically, just like traditional marketing prior to the Internet, you sell someone else’s product or service and gain a commission off the sale. The affiliate marketer brings the company producing the product or service to before the eyes of the customer. So, the customer obtains what they are looking for and the company makes a sale. Affiliate marketing is simply a service online marketers (A.K.A. affiliate marketers) provide.
The Next Level
Okay, so lets take affiliate marketing one step further. Onto Commission Junction, one of hugest online market places where website owners such as Dell, Hewlett Packard, Kitchen Aid, eBay and many others can go to enlist the aid of affiliate marketers. While these names are huge, their commissions are a bit shy in comparison to Clickbank. Unless you are able to move a large volume on Commission Junction, it’s a very tough market. Clickbank on the other hand, deals more in digital products such as ebooks (downloadable books converted to PDF), video training and “How To” instruction. There is much less overhead and the “publisher” or company website owners can afford to enlist a small army of affiliates to sell for them while they pay up to 70% commissions. YES, 70%.
But generally, the affiliate marketer takes his 30% and must make another sale and another to keep up that income. That means he or she will need to bring more and more new customers to their advertisements and eventually, the sales page owned by the company. This is the model of the one-time sale. But what if you could keep making money? Clickbank also offers a subscription-based service for companies to offer affiliates. The customer signs up and agrees to pay for a product or service monthly, because the company is providing monthly content or a monthly service. Thereby, the affiliate is making a monthly commission for a sale he only needed to make once. This is known as recurring or residual online income.
Residual Income is KING
This residual or passive income model is the king for online marketers. No, it’s not mult-level marketing or some pyramid scheme where you need to sign up someone and then someone signs up under you. These are legitimate services such as dog training or customized weight loss or bodybuilding. We call these “evergreen” products or services as they are always in need and people are willing to pay monthly for services that deliver fresh information in a concise and easy to digest monthly manner.
Clickbank has made some webmasters millions in the past decade. As you know, the Internet grows and grows and has become the de facto source for information. When I was a kid, we had to consult the Britannica Encyclopedia to find out about anything. By the time I graduated from college, we were actually able to cite websites in the bibliography (reference) pages of our research papers – thanks in no small part to Google and Bing (previously known as Yahoo Search).
The problem I ran into was that all the Clickbank affiliates are pretty much in competition with each other. Even though Clickbank is quite large, the marketing materials provided by most of the companies that use them are finite. At first I made quite a bit with a hypnosis training website. But then it died off and I learned that other online marketers were promoting the same thing.
Later I got a bit creative and learned to build my website in a different manner. But that led into search engine optimization techniques and tweaking and tweaking. The once “hands-off” website was costing me more time than I anticipated. So, my monthly income began to dwindle.
There are still some great residual income business opportunities available though. I still earn quite a bit providing advertising services for Google. The marketers end of this is known as Google Adsense. As you’re aware, many large companies (Dell included) pay Google to end up on their search results pages. Marketers build websites and reserve advertising space for Google to place ads on. When a website visitor clicks an advertisement, the company that paid them perhaps makes a sale. The affiliate marketer that built the website makes a small comission.
As I indicated earlier, more and more people come to the web to do their business. Companies know this and clients do as well. So, both parties are making the connections and we can all profit from this fantastic residual income online.