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Why Savvy Internet Marketers are Scrambling to Build Membership Websites

Before I explain why savvy marketers are building membership sites, I have a confession to make. Membership sites are not something new. They have existed for more than 10 years -- or since the Internet started to become popular in the mid 1990s. However, membership site software was expensive and internet users held the belief that everything on the Net was free. This dramatically held back the popularity of membership sites.

Things started to change in 2000, in the aftermath of the dotcom crash. The survivors decided that if they want to stay alive, they had to make money from their online endeavors.

A little Internet money making history

The first attempt at making money online were sites were the ecommerce sites selling products such as Amazon, and the broker type sites like ebay. Then sites started publishing advertisements to make some extra cash. These two streams of revenue are still popular, often being used in combination.

Now large numbers of internet marketers are turning to one more source of income -- paid membership and subscription sites. Many sites that used to be free are either introducing a dual model (paid membership in addition to free services), or are going directly into the paid model. In a breathtaking example, sites like Consumer Reports have over 1 million subscribers, each of them paying $19-26 a year!

So are membership websites just a fashionable trend or is the explosion due to something deeper? Since so many Internet Marketing gurus are scrambling to build paid membership sites, there must be some money-making potential in them.

Membership sites money making potential

Membership websites have not just some, but a ton of money-making potential. First, billions of global users are now using the Internet. This is a huge market. Second, users are no longer reluctant to pay for services or content. Third, many reliable and very low cost payment systems are now available and internet users are increasingly becoming comfortable making purchases online.

Let's do some quick math: Assume you charge a membership fee of $19.95 a month. The fixed costs of setting up and operating a site could be as little as $100 a month. How many members would you need to break even? How much to get a profit? Now this is month after month after month!

In the rare case when you don't make profit from the subscription fees, you have already gathered a community to which you can sell other goods and services. In most cases, subscription fees alone can be enough to make a site profitable, far in excess of the potential of ad income.

The simplicity of building an Membership site

Because of the membership systems now available, building a membership site does no longer requires much effort. For the tech savvy, there are systems you can download and install yourself. For the less knowledgeable, you can use a turnkey system that requires no technological ability.

Leverage your existing membership base

If you have an existing clubs or community group why not go online? You already have an active user base, you just need to make the site and accept their payments. Many newspapers and magazines used such a subscription based model to rapidly turn their offline readers into paid online readers. Even an inexperienced Internet marketer will notice the possibility to make money from the existing user base.

Paid membership subscribers are better buyers

Internet marketers have smelled another opportunity that free membership sites don't necessarily offer -- the better quality of members. This is especially true for dating and networking sites where the quality of other members is a major differentiator. The explanation is as simple as that -- if you pay for something when you can get it for free, this something must be really good.

Finally, paid membership makes members more responsible and helps to filter out the occasional visitors from those who are really serious about learning your information. These customers are more likely to apply your information, succeed with it, and tell their friends. In this way, paid membership can help to improve the image of the brand., thus opening to door to many more marketing opportunities.

For more information on how you can set up your own membership site, visit Membership Academy. At Membership Academy there are comparisons, reviews, forums and videos on membership software and payment systems. You can also Discover How to Start-Up and Run Your Own Profitable Membership Site.

David Moskowitz is the owner of several profitable websites in the US and Japan. Born and raised in New York, David came to Japan in 1997. He currently lives in Osaka. http://www.membershipacademy.com/

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