If you are the only one selling and distributing your product or service, just like in a job, when you stop selling so does your income. Selling is "linear income"; namely, you do work once and get paid once for the work you've done. Now yes, I do admit that selling can provide you with a very nice income, but it stops when you stop selling!
When you create Multiple Sources of Passive Residual Income you have "walk away" income. In order to do this you've got to create multiple points of sales. Rather than trying to get as many sales as possible you should focus on getting many people making a few sales each.
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EXAMPLE: Owning a Vending Machine
(*adapted from Jordan Adler's book "Beach Money.")
Let's say I sell you a vending machine for a $1000. The machine dispenses candy bars, nuts, and potato chips for $1.00 each. Every time some buys an item from the vending machine you make ten cents. Then let's also say that I will keep the machine stocked with candy, nuts, and chips and I'll also include life-time maintenance on the machine. So is this sounding good to you? |
I will also give you unlimited opportunity to collect this ten cents fee on multiple vending machines in multiple locations. All you have to do is get me as many locations as possible to place vending machines.
Each time someone makes a purchase at one of these machines you get ten cents. How's it sounding now? What if you had 1000 machines, or even 4000 machine all over the country?
Obviously your goal in this strategy is to have as many vending machines as possible in as many locations. You only have to buy one machine yourself. You have no product to buy, no maintenance costs, no accounting hassles – I do all that for you.
Your main job is to find other people who want to own a vending machine then you teach them how to do exactly what you're doing.
For this strategy to work you must focus on the distribution of the machines – NOT selling candy bars, nuts, and potato chips! As your network of machines and machine distributors grows, you get a percentage of the ten cents commission from each and every sale throughout your entire network.
This would give you some serious passive residual income (a.k.a. "non-linear income")! This same strategy of creating multiple distribution and sales points is how any direct sales business works.
The more distribution points you can set up for selling a give product or service the more money is made. Once it's all set up do you know what you have to do keep getting paid? NOTHING!
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If you're good at sales that's great, but it won't give you the "walk away" money I was talking about earlier.
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