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Membership Site or E-Store?

Added by Kevin B on Thu, Sep 10, 2009, 05:15 PM

Many of our salespeople come across with the following question when they visit potential Clients

What is better? Setting up an e-commerce site or a membership site?

The answer is not so obvious as you may think. Many people would say, well if I own a retail store, I want an e-commerce site, but if I have some crucial know-how information, then I should get a membership site.

Well, there is a point to this approach, but let's define first what we are talking about here:

An e-commerce site is usually nothing else that an online store where many items (sometimes thousands of them) are available

So even when you have a small retail store that you run locally in your neighborhood, but you know some information that other people do not than you can really start looking into a membership site where your cusomers sign up and pay a recurring monthly fee for a service or for a new product for each month.

An example

Your store sells your grandma's most delightful spaghetti sauce that is worth dying for and it just flies off the shelves in your neighborhood store and everybody raves about it, but you cannot ship it because shipping is too expensive.

Selling spaghetti sauce or any other perishable or even canned food item on-line is quite hectic. You need

All these logistical costs make the sale totally unprofitable. So what do you do?

Why do not you just sell the RECIPE online?

We know, there are thousands and thousands of recipes are available on line for free. But not YOUR GRANDMA's. Who would buy a recipe? There are always people who are interested in trying something new and once they are hooked they would buy other things. What about that exclusive pizza dough that she was so proud of? Anybody cares for ice cream?

See you find many items that are exclusive and only YOU know and you create an online newsletter or a membership site that only members can access for a monthly payment. You only sell the know-how information that is electronically avalable for an instant download.

If you keep coming up with good stuff each month, your members will LOVE you and they will happily pay the month fees to access your site or read your electronic newsletter.

This way you do not need to worry about

and a host of other issues that can happen when you have an e-store that sells large items on a small margin in a very competitive environment. Yes the environment is very competitive because even though you would not have many online competitors, but you would have to compete with huge offline corporations whose brand names are already conditioned in people's minds. Big corporations still have not figured out the best ways of online marketing so even though they start moving online quite rapidly, you still have a good chance against them if you sell something exclusive through a membership site.

Moreover, when you have an e-store you would need to work a lot harder to make the same amount of sales every month than you have to do with your membership site.

We created a spreadsheet for you to illustrate the difference between a membership site and an e-store.

Download The Free Spreadsheet

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