What is a Backend Product?

Whether your business is an online or an offline business, backend products are important for you to figure out whether or not your profits are marginal or staggering.

Some businessmen fail to give importance to repeat customers. They merely focus on having as many customers as they can without giving much attention to reselling to the existing ones. What they don’t realize is how backend marketing can do wonders to their business.

Never confuse “backend” from “up sell” because there is a big difference between the two. Backend is the sale made after the initial sale while up sell is the additional product or service offered to customers while selling something and occurs before a sale is made.

Why is The Money in the Backend?

Backend concept ensures you unlimited profit because you no longer have to spend on customer acquisition cost. You won’t have to charge your customers higher prices either. That means you can cash in upon your goodwill and build strong and lasting relationships with your customers. This is going to be an advantage to you because studies show that around 35% of these customers will buy from you again.

Let’s say the original cost of a product is $30 and you’re selling it for $97. Regardless of how less you spent on that product compared to its selling price, you can’t be assured of high profits because you still have to spend on advertisement and promotion. Assuming you spent $600 for the ads and you got yourself ten customers. Your gross profit will be $670 [$97 x 10 customers) – ($30 x 10 customers)] while your net profit will only be $70 because you still have to deduct the ad expenses from the gross profit.

If you don’t apply the backend concept, your profit will only stay at $70. On the other hand, offering backend products or services to these ten customers will earn you more. If 30% of these customers avail of your backend offers at $250 each, you make another $750 for yourself. Add it up to your initial profit, you now have $820 for a profit.

Given that scenario, do you now see what the backend concept can do for your business? This just goes to show that even though initial sales may not generate that big a profit for you, your backend sale can help you make up for it.

Importance of Backend Strategy

When you are selling information products on the web, you will usually think that there is a need for you to create many products in variety and in different niches. But sooner or later, you will need to find another way to leverage your list of products when anyone purchases any of those.

So when you’re selling anything, you need to develop a backend product that is related to your front-end product whether complementary or an accompaniment. When you already have developed one, make sure to let your existing customers know about it. They will purchase for sure if your backend product is what they are looking for.

You should realize that you earn more from selling different products to the same customers rather than from trying to sell a single product to a vast number of different ones.

It is better to gain small profits from a steady circle of customers rather than making higher but one time profits from others. Remember, repeat customers serve as the foundation of your business. You should also create an efficient backend strategy that will suit your customers’ needs. Know their concerns and preferences for you to be able to do that. Creating a poll or posting a questionnaire will make it easier for you to gather information from your customers. See to it, though, that you still provide quality service and information to your customers while you’re at it.

These polls and questionnaires will also help you build your mailing list so you won’t need to constantly send sales pitches out. Since you have their addresses on your list, you can send them teasers and perks that will make them want to buy from you and gain further access to the information.

It is important to gain trust from your customers because once you have established your trustworthiness, it will be easier for you to make sales from them. These customers will be your key to making steady profit over the years so never do anything that will break that trust.