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Build a Strong Foundation With Residual Income

What is ‘residual’ income? It is income where you make a sale one time and it generates income on a regular basis going forward. Residual income can even be earned on multiple levels. For example if you refer someone to an affiliate program, you make a commission for a percentage of the initial sale. In the future when your customer pays their membership fees for the program each month, you earn a percentage of that as a commission. With ‘multi-level-marketing’ you may also receive a percentage of the commissions when your customer makes sales of their own.

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So the idea is that you have income that continues to generate as a result of that initial sale for as long as your customer remains active in the program. This would also be true if you were directly selling a service, for as long as your customer continues to use the service.

Usually if you are selling products directly, these are considered ‘one-time-only’ commissions, as you earn money only one time when the purchase is made. Nothing wrong with this but it does take much more work to build and sustain your momentum to keep those one-time sales coming in on a regular basis.

It is a good idea to have a combination of sales types and the money all adds up to represent a substantial income. However it does seem like a brighter idea to have residual income – just in the way it is more efficient to plant ‘perennials’ that bloom every season after they are planted once, than it is to have ‘annuals’ that you must replant every year.

It’s fun that the plant analogy really does work so well when discussing residual income too – because for example when you have a perennial plant it will not only bloom each year in the same place, but the wind will carry the seeds and the plant may pop up in many different places.

With residual income it is the same in that you have contacted the initial customer who then contacts others, who contact others and before you know it you have built an ‘organization’ just from that one initial action that you took by ‘planting the seed’.

Internet marketing and in fact marketing in any industry is about generating lots of volume with your efforts. This is because the majority of people will not be interested and will not respond. It is a bit like the proverbial ‘needle in a haystack’ in that you must weed through all the people who won’t be interested to find the few that will.

Actually there are many that will respond over time – but just as a percentage of the human population on earth, only a few (million) are interested in starting a home business or working from home. Remember as well that it is believed that people do not usually respond to an ad the first time they see it. It is approximately the 5th or 6th time. This is another reason to always keep the volume of your advertising turned up to the max. This week someone may not be interested – but things are always changing and maybe next week they will change their mind and respond to your ad!

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The Importance of Choosing a Good Affiliate Program

Before spending your money on anything, of course you want to be fully aware of what you are actually buying into. You need to know if you can afford it, and if it meets your requirements. You need to be sure that you will be able to use it effectively (does the program include training, instruction and support). You need to know how it works and what is included (the basics as well as any resources available to members). Very importantly for any affiliate program, you need to be aware of any special circumstances that may be part of the compensation plan.

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There is usually a lot more to it than that you pay so much for the membership and you receive a percentage of the cost in commissions when you make a sale. The special circumstances could mean that you are ‘passing up’ a commission to your sponsor or giving them a percentage of each sale. In some really progressive companies, you could even be ‘spilling over’ your sales to your downline (those you sponsor) to help them build their organization ‘under’ you.

The compensation plan has to work in a way that you as a sponsor would get exactly the same compensation as your sponsor does. This of course may be dependent on you being able to reach the same ‘level’ as they have – usually the number of sales someone has made will dictate their level or grade in the program. This is fair and is the same as being promoted or given a raise in any corporation based on your performance.

With affiliate programs it may also be that you have purchased the products or services on the same level as you are able to earn commissions. This is a good idea because you should have a full understanding of what you are selling and to feel enough confidence in it to purchase it yourself. Likely you will be much more believable if you have direct experience.

Affiliate marketing is a very good way to break in to Internet marketing and having your own online business at home. Some people may not understand what they are paying for and feel that the membership fee in itself is a ripoff. When you look at it as a ‘job’, it is true you should never have to pay for a job. However with affiliate marketing you are actually part of the company – and you are working for yourself. The affiliate program is sharing their intellectual property with you and allowing you to legally profit from their business.

It is fair that you are charged for membership because the program has spent and is spending a lot of money to create a product or service, and to maintain the business. They perform customer service not only to you but on your behalf to your customers. They handle all the sales transactions for you as well as the accounting. They provide not only the product or service that you are able to earn commissions for selling, but also pay to maintain the website, member database, and the graphics and other advertising resources that are available to members. So you are saving maybe millions by spending a little each month on your membership fees.

To be especially diligent in researching the programs you should be wary of those that cost a lot of money to join, have contracts, and do not guarantee a refund. You really need to be careful with this and document everything carefully. Remember that using your credit card to purchase something gives you a little bit of a guarantee on your own, in that you can file a dispute if the company does not live up to their promises either to deliver or to refund. Your being able to do this does rely on you keeping solid documentation of everything between you and said company.

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Affiliate Marketing Programs

One of the best ways to get started with an online business is to try affiliate marketing. The primary reason being that everything is all put together for you and you can just sit down and get started right off the bat with learning how to market a business on the Internet.

affiliate-marketing

While some people may balk at the membership fees, they should actually be grateful that this is a small price to pay for all that they will be provided just by virtue of their membership. They will save untold hours and much more money in that again, everything is put together already.

There is no learning how to build a sales page because the affiliate program will provide one, encoded with the affiliate ID that is associated with the membership. When any sales are made from that page, they will be credited to the member. Additionally the affiliate program will handle the customer service for the member’s customers, and process the transactions. So here we see our affiliate is saving time and money again as they do not have to provide either support or a payment gateway which can be very costly.

Additionally the affiliate program may provide other resources for their members such as training in Internet marketing, banners and other graphics for advertising purposes, autoresponder messages, an actual autorepsonder system, and list building mechanisms.

It is actually a very fair exchange that a member pays membership fees to compensate the program for the expenses they had in creating and maintaining not only the membership system but the product or service provided by the company as well. This again, greatly reduces the time for a learning curve and development for the member in that they can just walk in and use what is already there, rather than to need to create their own system and product.

Affiliate program membership makes it legal for members to profit from the company’s intellectual property. It is a very fair exchange that the company may benefit from the advertising and marketing the affiliates do to promote their own businesses to earn commissions. This is why they pay the commissions on top of all they do. The relationship is definitely a win/win all around for everyone.

The key however is for the affiliate to realize there is nothing magical about having an affiliate link. They have to really work to make anything happen. They have to learn how to, and then they have to actually promote the link diligently in order to make any money. Nobody will ever see their link unless the affiliate does substantial marketing and advertising over time. They need to be very aggressive about it rather than lackadaisical (“lacking enthusiasm and determination; carelessly lazy”).

So if you are really serious about wanting to have an Internet business, try at least one affiliate program to see what it is all about; then give it a fair chance of at least 90-days where you consistently focus on developing your business. Even if you fail the first time, try another one. The more experience you have the more likely it is that you will succeed.

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