Membership and Subscription Sites

Intro

Membership sites make up some of the biggest and most lucrative websites online and while selling membership takes a bit of effort and technical knowledge, the benefits are well worth the initial time investment.

How Much Can You Make?

The income potential of a membership site is unlimited. If your website or service is valuable and you have enough traffic then your monthly income can be enormous. Take a look at World of Warcraft for example. While not a website, it is a membership service. At $15 per month and with around 7 million players that’s an income of around $105 million per month, and the running fees are not that high.

A good example of a large membership site is RapidShare (http://www.rapidshare.com) which allows people to share their files with everyone and anyone. At around $10 per month with thousands of members, RapidShare is currently the 12th largest website on the net (according to Alexa) so you can bet they make a packet.

How Much Work Is Involved?

Setting up the technical side of selling membership and subscriptions on a website is relatively easy. PayPal has a built in subscription function which can be relayed to a script on your site which allows or refuses access based on whether the user paid the bill that month. Alternatively you could set up your own payment system and offer discounts for people who buy a years worth of subscription then simply store the values in an SQL database or whatever.

The real work is in finding a market and creating a service worth subscribing to. Tests have shown that people don’t like to subscribe, especially on the internet, and prefer a one off payment. However, if you really have something to offer or something that people need, then subscription can be an excellent approach.

While membership sites like RapidShare don’t involve any time or effort on the part of the administrator, many membership sites do. A common practice is to sell subscription to a blog or a section of a blog and to serve up content there on a continual basis. An alternatively ingenius idea is to rely on user interaction to sell membership. An example of this is Experts Exchange (http://www.experts-exchange.com) which worked in a similar manner to Yahoo! Answers where anyone could post a question and then other members could reply with their answers. However, only people who paid for a subscription could view the answers. This caused a lot of frustration for people who came in through Google and eventually Google cracked down on these sites, but they still exist and still make plenty of money. They rely on the users to create content that other people are willing to pay for and so the upkeep and maintenance of these sites is minimal.

Selling membership and subscription isn’t the easiest way to make money online, and does require a bit of technical knowledge as well as knowing the basics of how to make money online. If you’re familiar enough with selling products online then there are a number of options to sell subscriptions or membership online.

PayPal has a very nice Recurring Payments suite. Using it you can create a button or series of buttons where your users can pay set prices for set time periods of membership and PayPal even offer a built in trial period function. Setting this up requires that you use IPN to keep track of your users after they pay. IPN is simply a method whereby PayPal sends a notice to a URL of your choice with the details of each payment you receive. For example when someone buys a months worth of subscription the IPN sends out a notice to your page with the price, time period, email address, etc of the user. You can set up your page to interpret and store this data in a MySQL database or wherever, and give them access to a section of your website or a newsletter or whatever you have in mind. PayPal will continue to bill the person until they decide they no longer wish to subscribe, at which point you can simply drop them from your membership list and delete them from your records.

As I said this requires a little technical knowledge. If, for example, you wanted to offer moderator status for the forums of your website you would first need to create a sales pitch page with a few buttons offering membership for say a single month and a whole year, with a hidden field which holds the clients forum username (ideally they would only be able to buy subscription while logged into your forums). You would then need to set up a script that can interpret PayPal IPNs and have it update the data for the chosen username and set them as a moderator. Another function would also need to be set up where the user could stop their subscription and/or delete all their information.

This is a rough outline of how recurring payments for online sites works but using these basic steps you can set up subscription or membership for virtually anything you can think of. In most cases the products and services offered will be electronic and cost you nothing to issue or maintain, and so other than the minimal PayPal fees it’s 100% profit.

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