Sen Ze’s Business In Your Pajamas! Blog

Let’s talk about the Private Label sites that were so successful in selling their memberships, and their profit potential to see why they’re doing it.

If you’ve missed my Posts on those web sites, click below now:

The Private Label Concept

The Private Label Concept Part II

Imagine – the first Private Label site sells membership at $67/month and they’ve capped it at 1,000 members. Since it’s now sold out, the web site operators are making $67/month x 1,000 members which is $67,000 – each and every month!

Now they do give away 50% to their Affiliates who refer Customers to them. Assuming every single sale they get is through their Affiliates, this leaves them with $33,500/month. Which is a cool $402,000 a year!

Out of this amount, they’ll need to pay their team of writers to write those Private Label articles for their members to use.

Now I don’t know how much this costs them, but the operators can either pay them for each article produced, or hire them and pay them on a monthly basis irrespective of how many articles are being created by them every month.

Good writers can be hired or sourced pretty cheaply all over the world. If their writers are being paid for each article produced, those 500-word articles can be written from as low as $5 each.

Now if you calculate the operators’ costs using this figure – 1,000 articles will only cost them $5,000.

If it’s $10 per article, their cost is $10,000.

If it’s $20 per article, their cost is $20,000.

If it’s $30 per article, their cost is $30,000.

If you deduct $30,000 (the highest figure from the above example) from $402,000 – the operators are left with about $372,000/year.

If you deduct $5,000 (the lowest figure) – they’re left with about $397,000/year.

Now that’s not a bad chunk of change after all is said and done!

Of course, there are other overheads like hosting, equipment, premises, etc – but the operators can easily do this in their homes using their computers and their time, with inexpensive server hosting plans – which, all added up together, will likely cost only a few thousand dollars a year.

And the operators haven’t really fully realized their profits yet because they now have 1,000 paying subscribers – who can be sold other things to again and again in the future!

(Paying subscribers are much better Prospects for their other products than free subscribers, because the former have already demonstrated their willingness to pull out their wallets to pay for their membership.)

You don’t want to miss my next post on how the operators can easily realize their profits that you now see on paper – with some Business In Your Pajamas principles.

Sen Ze