How to Increase Profit Using Backend Products

Posted by Mike | November 11, 2007 .

In this post I’m going to use a real-life example to teach you the importance of back-end products. You’ll discover how easy it is to increase profit margins even while your traffic and number of sales remain static.

Regardless of the product or service you’re selling, if you want to increase revenue from sales you have only two options.

The first is to increase your number of sales. Obviously selling 200 copies of your product each month is better than selling 150. But you can’t expect sales to increase indefinitely. Sooner or later sales tend to level off. And when they do you’ll have to find a new way to increase profit.

The second option is to get the customers you already have to spend more money. One way to do so is by raising your price. But this may cause a backlash and your sales may decrease, wiping out any gains made by your price increase.

A better long-term solution is the back-end product, which is simply a secondary product (or products) you can offer your customers after they make their initial purchase.

All of the most successful internet marketers make use of back-end products because they know there is big money in them.

An example

After my first attempt at writing an ebook bombed, I mostly concentrated on building small niche sites to promote affiliate products. Affiliate marketing can be tremendously profitable, but I still felt that in order to build a long-term business online I needed to create and sell my own product.

So I thought about my strengths and interests and decided to launch a new site offering packages of articles with private label rights. There is a big market for quality PLR articles and sales have been good.

But there was a small problem. Since I limit the number of article packs sold to keep them from saturating the market, there’s a limit to how much I can make from each pack.

Each pack sold brings me between $3 and $17 in profit. Profit varies depending on the size of the pack and whether or not it was sold through an affiliate. To date I’ve depended on word of mouth and search engine traffic alone, so I don’t need to work paid advertising into the equation.

Now one way I can continue to increase profit from my PLR site is to continuously add new article packs for sale. But there’s a limit to how many I can create myself, and I’d rather not spend ALL my time writing PLR articles (I want a business, not a job!)

So in order to increase profit without spending countless hours writing article after article, I thought of some easy ways to tap into the power of back-end products.

Here are the 3 simple steps I’ve taken so far:

1. On my “thank you” page I set up an affiliate link for another PLR product (one with a $49 commission!) I didn’t even have to create another product from scratch. I just looked for another product in my niche that my visitors would find valuable and set up a simple affiliate link to the sales page.

2. I set up an account with Aweber and started collecting email addresses to follow up with prospects. After signing up on my home page, subscribers receive an automated email recommending yet another PLR product that earns me a sizable commission.

3. To entice visitors to subscribe, I wrote a short report titled Making Money With Private Label Rights. As an added bonus, there are a couple of affiliate links embedded in the report which give me yet another revenue stream.

These simple methods I’ve used did not take long (especially the first and second), and once set up they are completely automated. They’re now on autopilot, making me money day after day while I explore new ways to increase profit.

Now I want you to think about your own website and business model. Are you taking advantage of back-end products? If not, how can you do so?

If you’re struggling for ideas on what kind of product you can offer, check out some of your competitor’s sites and see what they’re doing. You may get some good ideas you can use to increase your own profits.