If you ask me, residual (also known as passive income) is the most important type of income of all incomes. Residual income puts money in my pocket without work and effort on my part. It is the right type of income to work for, indeed!

And this is the type of income you should go for as an Internet Business owner. You might not realize it but this is also one of the many fantastic reasons why you engaged in an Online Business in the first place. This is the right type of income you should game for!

For the same amount of work and effort you put into your business, you want to work effectively and efficiently.

In my experience, it is easier to sell to the same customers who bought from you before. This is simply because your previous customers trust you (if your customer service was fantastic, of course!). You have already built a relationship with them and there is no reason why they should not trust your next recommendation.

In order to build residual income or create back-end selling, you sell to the same customers.

Let's face it. You can only earn and spend so much from one-time sales. You can only buy as much as you can sell. Period.

The main problem with one-time sales is that very often, the income is a one-off. You do not get to spend it again and again. That is not a fun type of income to work for!

If you have realized that sort of problem, this may be the compelling reason why you loathe your 9 to 5 job. Your employer only pays you once for the work you done once. If you want to receive another paycheck, you will have to go back to work the next week or month! There is not enough leverage in this type of income.

Since you are going to start an Internet Business, please do not let the same drudgery take over your soul in the name of business! That is totally insane!

If you are reading this and have yet to realize what back-end selling is (or even know what residual income is for that matter), then read this carefully. It might just change your narrow perception on Online Business and you might want to e-mail me a thank you note for sharing with you the good news on the possibilities of earning the same income over and over for a work done once.

If you sell to one customer at a time, you will never make much money online besides profiting from only ONE profit stream. It is also expensive in both time and money to get the next new customer.

So since you can only earn so much from one-time sales, why not create back-end selling?

If you are selling Information Products such as E-books, you can create back-end profits. This could be done through your own products or products you are an affiliate for. Remember that anytime you are selling always create back-end sales items.

If you do not agree with me yet, let's review a case study below:

Assuming I sell a $20 E-book. I have sold 10 copies so I earn $200. Let's say I have spent $100 on advertising so my net income is $100. Not really interesting though it beats a good 90% of the people out there who are not even making any money on the Internet.

$20 x 10 sales = $200 gross income

$200 - $100 (advertising fee) = $100 net income

But if I were smart and with some (just some!) ingenious concepts applied, I built in say, 5 to 10 other offers (same theme as the E-book) for products and services I either own or am an affiliate for within the content of the E-book.

And also assume that I would earn $30 on the average for any one of the products or services sold. That is $30 a sale. If 2 of the same 10 customers buy just one of those items, I would have earned an extra $60.

2 x $30 = $60 back-end sales

I know that the figures are rather small but if the whole process is repeated over 10 times with the same conditions, how much will my income be?

Give me a moment while I use my calculator!

$20 x 100 sales = $2,000 gross income $2,000 - $100(10) (advertising fee) = $1,000 net income

I earn $1,000 net income as a result of 100 sales. If I have included back-end sales:

$1,000 net income + [2(10)x $30 = $600 back-end sales] = $1,600 total income!

That is an additional $600 in my income just by working smarter and not harder. Now do you see where the good money really is? Furthermore, there is no advertising expense incurred to include the back-end sales items within the E-book.

Of course this is just a mock-up case study. The results can vary depending on how respected I am, how good the quality of my E-book is, how I market my E-book and how compelling my sales letter is to get my potential customers to buy from me.

However, this method of creating back-end sales has been put into great practice by top Internet Entrepreneurs from around the world which is what makes them rich and TOP of the world!

If you are living on one-time sales from your products today, then you must do something about it SERIOUSLY. The figures get rather interesting when you count that you actually lose money often or just break even with your advertising expenses.

"So, how do I start?" you ask. "Simple," I say!

If you create your own digital product (E-book, software, template), include links to other relevant products you either own or are an affiliate for.

For example, if you composed an E-book on making vegetable soup and sell it for $20, you will want to include advertisements of the other E-book you composed on making chicken soup and sell it for say, $15. Since your customers trust the quality of your first edition, a fraction of them will probably be interested in purchasing your other E-book in the series!

If you do not have a product of your own and do not intend to create one, then you can source for products with resell rights that you can customize with your own affiliate links for a reasonable fee.

At this time of writing, this is the type of income I am receiving from. I resell other people's product and earn residual income as a result of the same customers purchasing access to a suite through my affiliate link found within the same product.

On the final note, a friend of mine who attends Business School once told me that the biggest expenses in life are taxes and interests. I shook my head and slowly told her, "No. The biggest expense in life is the money you do not make." Who do you agree with?

Copyright (c) Edmund Loh

About the Author: Edmund Loh is the author of the E-Biz Wiz Blog and Starting An Internet Business Special Report with over 6 years of web designing experience before he engaged in an Internet Business.