Lesson 5: The KEY to Online Success

First of all, let me explain the different between upfront income and residual income.

Upfront Income/Instant Income – This is the money you get instantly when you make a sale. This is a one off income.

Residual Income – This is the income you get month after month. For example, if you sell a subscription based service, you will get income every month from the same customer pool.

RESIDUAL income is the KEY for Long Term Stability.

UPFRONT income is the KEY for Survival.

CASHFLOW is KING!

Have you not heard people keep saying in any business, cashflow is king? Online marketing business is of no exemption. Of course if you are doing it part time and only want to make a small part time income and you are happy to slowly generate traffic using free marketing (which generally takes a lot longer), then this is of no relevance to you.

HOWEVER, if you treat it as a proper business. You want to earn as much income as fast as possible so you can quit your job and get out of the rat race, then you need to do PAID Advertising. And when you start doing PAID Advertising, that is when CASHFLOW and UPFRONT INCOME become extremely important.

Your UPFRONT INCOME needs to at least pay for all the advertising and with some to spare.

This is the KEY. If you can achieve that, you are able to survive the initial period, reinvest the surplus into more marketing and scale it up.

For example, let say you invested $1000 into advertising. You generated some leads and made some sales. You got $2000 worth of sales. You can then invest $2000 into advertising and generate $4000 worth of sales. Does that make sense?

With the Increasing Cost of Advertising, it is more and more important to choose your products carefully. You need to have a balance of good upfront income and a stable long term residual income.

Unfortunately, this is the main pitfall of most network marketing business as the upfront income is generally small and they focus more on residual income. If you choose affiliate marketing, you need a product which is relatively expensive and offers high commission percentage.

Look out for my email tomorrow as I will talk about the Hybrid Marketing Model.

To Your Success,

Dr Ket-Sang Tai

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  • John Maheu

    Great post man!