Buy Through My Link And Get My Firstborn Child As A Bonus!

The firstborn child bonus technique is a technique used most often by Internet marketers trying to sell to other Internet marketers. When a big product launches, there are so many IMers clamoring to sell it that more than a few resort to the FCB technique in order to be heard above the din.

The premise of FCB is simple, and the heading above pretty much says it all: as additional incentive, I will send you a bonus if you buy product X through my affiliate link. It may not in fact be the firstborn child, it may only be the youngest child or even a niece of nephew — the size of the bonus depends entirely on the size of the affiliate commission.

Thus when products are launched that cost hundreds or even thousands of dollars, the bonuses offered by top-name Internet marketers can be quite astounding: piles of books and software, free telephone consultations, promotion of your own products to their lists, etc. The purported prices of these bonuses can literally add up into the thousands themselves, though of course it’s unlikely that someone would actually buy all of those products at the listed prices. Still, it makes for an impressive offer.

It’s extremely hard for the little guy to compete with the big guys on these kinds of offerings. You’re probably better off focusing your energies on other things while the top cats fight it out among themselves.

Distracted Marketers

The typical affiliate marketer is a distracted marketer. Their inbox overflows with messages from other Internet marketers promoting new money-making products and joint ventures. Those Internet marketers know that the distracted marketer is a prime mark, because he or she buys products and services based on hope — the hope of making money. They understand the reseller meta-market and know how to play off that hope.

The distracted marketer is, unfortunately, a poor marketer. Poor in both senses of the word, as in not a good marketer and not a rich marketer. And it’s not through lack of trying. It’s through lack of focus.

The Successful Internet Marketing System

Affiliate marketers are presented with new Internet marketing systems on at least a monthly basis, each claiming to be the “Next Big Thing” (NBT) in online selling. None of them work, however, without focus.

Let’s look at Affiliate “Project X” as an example. APX (as it is known) presents six different methods for making money by promoting ClickBank products. But only a foolish person would try to implement all six methods at the same time. Instead, the smart affiliate reads the e-book (at least twice — it’s a dense, though-provoking read) and then selects a method to follow. Once the decision is made, the affiliate must focus on nothing else. Or else no money will be made.

For example, let’s say an affiliate decides to follow APX’s “Workhorse” method. The simple way to describe this method is “write and submit articles that promote affiliate products”. But that simple description is deceiving, because it doesn’t really capture all the work required to be successful with article-based affiliate marketing. The APX author describes the “Workhorse” method as being “idiot-proof”, but only if the “idiot” follows these exact steps:

1. Find promising ClickBank products to promote.
2. Do keyword research around those products.
3. Filter the list of keywords to drop the duds.
4. Write articles around those keywords, with affiliate links (usually cloaked) embedded either in the articles or (most often) in their resources boxes.
5. Submit the articles to a select few sites. (APX recommends three sites specifically.)
6. Repeat ad infinitum.

Each step takes time, especially if done manually. (Hence the popularity of tools like Keyword Elite.) The first two steps also tend to be particularly distracting as you come across interesting products and keywords. Writing good articles takes effort and often seems very daunting. And, of course, you won’t see any fruit from all this labor for a good while, at least a month or two. It’s no wonder that many affiliate marketers abandon the process when they’re only partway through it, distracted by the latest trendy system for making money.

Follow Nike’s Advice

Really, the path to affiliate success is quite simple. All you have to do is follow the Nike Rule: just do it. Find an Internet marketing system you’re comfortable with and stick to it. (APX is one place to start; affiliate marketing newbies who prefer videos may find Dominating CB easier to digest, though not nearly as thought-provoking as APX.) Unsubscribe from all your mailing lists if you have to, but don’t let yourself get distracted by new opportunities, not until you’ve given your chosen method the full attention it deserves and have truly determined if it works for you. Don’t go fishing elsewhere until you’ve exercised the system to its fullest. Otherwise you’re just wasting your money.

Read Eric Giguere’s GeekAffiliate blog for insightful essays and product reviews on all aspects of online marketing. Be sure to check out his award-nominated AdSense blog.

Technorati Tags: affiliate marketing, Internet marketing, online marketing, Nike, ClickBank, Affiliate Project X, focus

Products sold in this manner suffer from a fundamental flaw that eventually works to the detriment of the purchasers and sometimes (but not always) the original seller: the inability to legally set a minimum price for the resold products.

Price Fixing is Illegal

Most resale rights include specific limitations on where, how and to who the purchaser can resell the product. Despite what those restrictions say, however, the seller cannot require the reseller to sell at a specific price. They are free to suggest a price, of course, but the reseller can price the product as he or she pleases.

The reason is quite simple: price fixing is illegal in most jurisdictions. Rather than go into the reasoning here, though, let me just point you to the extensive entry on price fixing in the Wikipedia.

Prices Trend Downwards

In the tangible world, products cost money to produce. These costs invariably generally set a lower bound for the retail price of the product. Few tangible products are ever sold at a loss, and even “loss leaders” are sold with the expectation that extra purchases (of other products) will make up for the loss.

In the infoproduct world, however, the rules are different. Although the first copy of a product costs money to create, each copy thereafter is essentially created at zero cost. This changes the underlying economics. The lower bound of the price is now zero. Even if a reseller purchases a product for $100, they can recoup their initial investment in the product by selling only 100 copies at $1 each. Everything beyond that is pure profit. (It’s true that I’m simplifying things slightly, obviously there are costs involved in promoting the product, processing payments, etc., but a good infopreneur will spend hardly anything on most of these.)

There’s a joke that goes something like this:

“Bob, we’re losing ten cents on each sale of our product!”

“Don’t worry, Jake, we’ll make it up in volume.”

If the product costs you essentially nothing, though, the joke isn’t a joke anymore… volume does in fact become more important than price… Even if you amortize the cost of the product (what you paid for the resale rights + whatever fixed costs you have for marketing it) over the total number of units sold, the per-unit cost approaches zero as you sell more and more units.

And with non-exclusive resale rights (which is the most common scenario), all it takes is for one reseller to price the product below the suggested retail price range to start the downward spiral. Once the product is out there at a low price, other resellers will follow suit. Eventually, the product will end up selling for several dollars on eBay. Don’t believe me? Check out the information products section on eBay.

Push It Hard, Push It Fast

If you purchase the resale rights to a product, you need to promote it fast and hard. The key is to get the product out at the price you want before other resellers flood the market with lower-priced offers for the same product. You could say that a resale rights product has a short shelf life.

Once a product is widely available at a very low price, the retailer’s profit margin starts to shrink considerably. There are different tactics to use at this point:

• Sell resale rights. If a product was sold with “master” resale rights, you have the ability (but are not required) to sell the resale rights to the product as well as the product itself. If you haven’t already done so, you can start selling the resale rights and not change the price. (This will hasten the decline of the market, of course.)
• Target a new audience. See if you can find a fresh new audience for the product, especially an audience not already flooded with emails from other Internet marketers pushing the same products.
• Setup a membership site. Resale rights products are perfect for membership sites like Mr. OverDeliver, especially those based on the Butterfly Marketing system. Products with resale rights appeal to potential members, especially if the membership to the site itself is free.
• Bundle products together. Create a “super-product” by combining two or more related resale rights products into a single bundle.

Many marketers will simply look for something new to sell, of course.

How the Creator Benefits

You might be wondering how the original creator of the product benefits from selling resale rights? Well, besides providing new income streams from tired products (many products sold with resale rights were originally sold without such rights), it also allows the creator to funnel more people into his or her backend sale system. It can be as simple as embedding affiliate links within a product, or offering free updates to the product if the purchaser registers the product with the creator.

Beware of Resale Rights

If you’re purchasing a product because it comes with resale rights, be careful. Do some research before proceeding. Is the product being sold on eBay? Can you find other websites promoting the same product? At what prices are others selling it? Is is available for free anywhere, like in the popular membership sites?

Don’t forget to look closely at the product itself. Is it a good quality, sellable product? Resale rights may just be the lipstick on an otherwise unsaleable pig.

Don’t get me wrong, it’s not that you can’t make money with resale rights products. But you need to go into the process with your eyes wide open.

Technorati Tags: resale rights, resell rights, affiliate, price fixing, membership sites, Butterfly Marketing

Recent AdWords changes are throwing this time-honored method into disarray, however. As documented over at Inside AdWords, the quality of a landing page now has a greater impact on the advertiser’s overall Quality Score. This is important, you see, because the advertiser’s minimum bid values vary with the Quality Score (QS). In short, advertisers with low QS pay more for their ads. If the price of the ads goes up too much then the cost of attracting eyeballs to the affiliate landing pages starts to outweight the profits generated from affiliate sales. For examples of how this affects affiliate advertisers, see the extensive posting by Michael Gray.

Quality Guidelines

If you’re an affiliate who depends on PPC to make money — it’s often the quickest way to get going with affiliate marketing — then the first thing you should do is carefully read these two pages:

• Google AdWords Landing Page and Site Quality Guidelines
• What is Google’s affiliate advertising policy?

The latter explains why most affiliate marketers use their own landing pages rather than directing visitors to the main product site — when multiple advertisers place ads whose display URL (the URL that the user sees in the ad) is the same, only one of those ads gets shown per search query.

The first link, though, is the one that really interests us, because it talks about what makes a good landing page in Google’s eyes as opposed to what it makes it good in the affiliates eyes.

Content is King

Once again, Google shows its bias towards quality content. Look at the headings for the three sections of the landing page guidelines:

• Provide relevant and substantial content
• Treat a user’s personal information responsibly
• Develop an easily navigable site

The simple truth is that most affiliate landing pages fail these three tests. Most just rehash the same content, the product’s sales page. Those that ask for user’s information (the typical squeeze page) present nothing more than a simple “we’ll never sell your information” privacy policy. And many landing pages are not part of the overall site. This is why such pages end up with low QS values.

So what is an affiliate advertiser supposed to do?

Pre-Sell the Product with Landing Sites

The solution is to place more emphasis on pre-selling the product. Instead of creating landing pages, create content-rich landing sites with this kind of information:

• Authentic and original stories, reviews and testimonials about the product. (You do use the product you’re pushing, don’t you?)
• Free samples, previews or demos of the product. Promoting an e-book? Try to get a sample chapter (ideally with your affiliate ID embedded in its links) to distribute. Or if that’s not possible, make up your own document describing the e-book in detail — table of contents, summary of each chapter, etc.
• Details about you and the seller. Put a human face to the site: let the visitor learn who you are, why you’re promoting the product, and why they can trust the product’s creator.
• Direct links to the order page. Many affiliates simply direct visitors to the product owner’s sales page, which is somewhat redundant and often self-defeating. After convincing the visitor to buy, make it easy for them to do the transaction.

It’s also good policy to avoid intrusive marketing gimmicks on these sites. You can’t put pop-ups on the actual landing pages themselves, but you’ll be tempted to put them on the other pages of your landing site — resist that temptation.

More Work for Affiliates

Building a useful landing site around one or more landing pages (be sure to watch out for duplicate content issues with the pages themselves — you might want to exclude the main search engine robots from those pages, though be careful not to exclude the AdWords crawler) definitely takes more work than building a good landing page, which is itself an art. But if you’re serious about increasing your QS and lowering your costs, it’ll be worth the investment in time. Besides, the more effort you make in pre-selling the visitor the more likely you are going to be able to convert that visitor into a customer.

It’s interesting to note that many AdSense publishers create mini-sites to build income streams from content pages. The same techniques they use to keep the visitor on the site and to encourage repeat visits can be used with affiliate landing sites. You could even explore AdSense arbitrage with your affiliate landing site, but that’s a tricky game to play and you’re probably better off to concentrate on getting visitor to buy the product instead of clicking ads.

Technorati Tags: AdSense, AdWords, Google, affiliate, marketing, selling, landing pages, content

Which brings us to today’s topic: resale rights. In my opinion, and without meaning to offend anyone of Asian origin or inclination, resale rights are the curries of online marketing.

Let me explain.

What Are Resale Rights?

Broadly defined, “resale rights” are the rights to sell a product that someone else created. Resale selling is different from affiliate selling because resellers interact directly with the customers — in other words, the reseller is the vendor. In affiliate selling, the affiliate is not the vendor and is merely acting as a sales agent for the vendor.

There are different kinds of resale rights. Private label rights, for example, allow a reseller to pass a product off as their own creation. PLR articles, for example, can be used to create content-based sites that make money via AdSense and other advertising programs. Master resale rights let you sell not only the product, but also the rights to resell the product. And there are umpteen variations that we can all lump under the general category of “resale rights”.

Resale rights are not unique to Internet marketing. Book and music publishers often sell resale rights to other publishers. And retail selling is perhaps the simplest use of resale rights that everyone understands.

Resale Rights for Online Products

Resale rights for many software and infoproducts are readily available today. On my hard drive I have well over a hundred different products with resale rights, most of them obtained from free membership sites like Mr. OverDeliver and MyFreeGiveaway. I’ve only been able to review a few so far, like Desktop AdSense Cash Machine (review) and Keyword Niche Power (review). It takes time to sort through all those products and find the ones that are worthy of a review.

Every day, more and more products with resale rights appear on the market. Sometimes it’s the same products you’ve seen elsewhere, but in different form — remember those private label rights? — but many are entirely new products. So why are online marketers so hot for resale rights? There are two reasons, one obvious and one not-so-obvious.

Reason 1: Back End Sales

You’ve surely come across free e-books and software before. Just recently, for example, I offered a free copy of Google AdWords Made Easy to my readers. These free products exist primarily to promote, directly or indirectly, other products, products that are not free. This is the “back end” of the sales funnel, so to speak. Give away a product, or sell it cheaply, and make money from the other things you sell to the customer. (For Google AdWords Made Easy, for example, the back end sale is a product called Keyword Elite, which I hope to review here at some point.)

Again, giving things for free in the hopes that you’ll become a paying customer isn’t unique to online marketing — how many free samples have you had at the grocery store? But the cost of giving away product online is basically nothing, so it’s much more prevalent.

The problem with free products is that there’s no money upfront. But with resale rights you can get some money immediately and then make more money later. You also get motivated sellers who get to pocket more of the profit from selling resale products than they would through normal affiliate programs. They can also (depending on what resale rights were acquired) market the product differently, set their own prices, add their own material, etc.

Reason 2: Switching the Market

Here’s the real reason so many products are sold with resale rights. Recall that in Understand Your Meta-Market I described the two online meta-markets: consumers and resellers. When you add resale rights to a product you are changing the meta-market. You’re not targeting the end consumer, but rather the reseller. You’re pushing the product out instead of waiting for consumers to pull the product. It’s a very clever model.

The Curry Analogy

And now you understand what I mean when I say that resale rights are the curries of Internet marketing. Want to spice up your sales? Mix in some resale rights to your products and your product will all of a sudden appeal to a whole different demographic.

The fallacy, of course, is thinking that resale rights will hide product flaws. Better you spend your time creating a better product than tempting others to resell a poorly-made product. If the dish isn’t tasty without the added curry, you’re doing something wrong.

Technorati Tags: resale rights, AdSense, curry, private label rights, meta-market, affiliate, reseller

The meta-market

For online businesses there are two meta-markets: consumers and resellers.

Consumers are the traditional meta-market, the end, er, consumers of a product or service. To sell to them you must sell them on the features and benefits of the product. Show them how it fulfills a need or a want. All the usual marketing stuff.

Resellers are the other meta-market. Resellers take products and sell them to consumers. Or, more likely, other resellers.

So which meta-market appeals to you?

An example

Say you wrote an e-book on dog training. It’s a good book, and you’ve got some promotional material written. So which meta-market do you target?

The consumer meta-market is actually very hard to sell to. These are the same people that most marketers — online AND offline — are chasing. Lots of competition. Lots of money to reach them. Of course, if you have a high-traffic site about dog training or you’ve built a large mailing list of dog lovers, your job will be much simpler. This is why building a reputation and a following is important if you want to be successful at consumer selling.

Or you could go after the reseller meta-market.

Resellers are always on the lookout for products to sell, either to consumers or (more on this shortly) to other resellers. If there’s something unique and appealing about your product, if there’s a money-making angle you can exploit, the reseller meta-market can be extremely profitable.

Primed to spend, easy to reach

There are two problems with the consumer meta-market:

• Consumers are hard to reach; and
• Consumers are not easily convinced to spend their money online

The reseller meta-market, on the other hand, is almost the opposite:

• Resellers are actively searching for new products to promote; and
• Resellers are eager buyers of online products

Even though the reseller meta-market is much smaller than the consumer meta-market, it’s a much easier sell. I touched on this before when I talked about turnkey AdSense site economics, but it goes way beyond AdSense.

So what’s your meta-market?

Understanding which meta-market you’re actually targeting is one of the keys to succeeding as an online entrepreneur. The strategies you use to go after consumers are different than the strategies you use to go after resellers. There’s a lot of overlap, of course — you must convince resellers that what you’re offering is of interest to consumers, or at least other resellers — but you focus on different things.

We’ll pick up this discussion later.

Technorati Tags: resellers, consumers, affiliate selling, internet marketing, affiliate, online, marketing

And let’s be clear: these are customers we’re talking about, not “visitors” or “readers”. Don’t sugar-coat it: if they’re giving you money, directly or not, they are your customers.

Almost everyone engaged in affiliate selling exudes boundless enthusiasm and a “it-can-do-it-all” attitude in an attempt to convince a potential customer to push the Buy! button and hand over their money.

Desensitization

The problem, of course, is that potential customers then become desensitized to the whole sales process and view everything with a certain degree of skepticism. (As well they should.) With everyone babbling on exuberantly about how wonderful the product is and how it’s the cure for your problem and how it’s so easy and how only a few are being let in on the secret… well, really, is there any doubt that the conversion ratios — how many people see the message versus how many actually buy the product — are so low?

This is why, in a crowded arena of me-too sales pages, the negative review has a disproportionate amount of power. Not to dissuade potential customers from buying — the sales pages already do a good job of that — but to convert them into actual customers. Let me explain.

Idealism is inauthentic

Nothing is truly perfect in real life. Ideals are pursued, but never reached. If asked to describe your spouse’s faults, you can probably rhyme off a half-dozen without thinking. But so what? You know what those faults are and you’ve accepted them. They’re part of the price you pay to have that person in your life. The faults are outweighed by the positive attributes that drew you to him or her in the first place.

This is why the fear of saying anything negative about something you want to sell is counter-productive. It doesn’t seem authentic, to push a concept that Seth Godin espouses.

Negatives are relative

But negatives are not absolute. What you think is wrong with me (of which there are many!) my wife may consider attractive. Just because you think a book can’t teach you something doesn’t mean that it’s not useful to someone else.

Books are a perfect case in point. Look up any Amazon book that’s a bestseller — say in the top ten — in its category. Read the most recent customer reviews for that book. Which reviews were the most useful to you? The exuberant utterances of the personal (or paid) friends of the author or the ones that say “I didn’t like this book because…“.

Look at my last book: Make Easy Money with Google, about to celebrate its first anniversary, has now been reviewed by no less than 41 customers on Amazon.com. While I’m happy to report that it’s maintained a steady 4-star rating, there are several quite negative reviews. Here’s a sampling of them:

• Perhaps this book would be useful for a person totally inexperienced in just about everything, including tying their shoes.
• … this book is aimed squarely at the absolute beginner, who have no idea how to build sites, and who want in on the money race.
• Overall, valuable if you’re a novice that wants to get into internet publishing monetized by Adsense but worthless for pretty much anyone else.

Ouch! I can’t say those reviews thrill me, but they’re honest. They’re authentic. I’m sure they’ve put people off from buying the book. But I bet those people were never in my target audience. However, a novice looking for a good introductory text on AdSense would look at those comments and say Hey, this sounds right for me! and he or whe will buy the book.

To such a person, those negatives are actually positives, because they don’t want a jargon-filled book that they can’t understand.

Expose those warts!

Recently I wrote a review of a software product called Desktop AdSense Cash Machine. It’s not a perfect piece of software by any means, but it does an adequate job. I acquired resale rights to it and decided to sell it to anyone who wanted to buy it, but given its limitations I priced it low at only $10, not $37 or even $67 like some others do. Because I thought $10 was a fair price for what it actually does.

Now, I’ve not sold a ton of the product or anything, but I got some great feedback about my review. People thanked me for the detailed review (with screenshots) and for giving my honest opinion about it. It was like a breath of fresh air for them.

All I did was expose AdSense Cash Machine’s warts: here’s the product, it does this, it doesn’t do that, it’s worth this much, take it or leave it.

An opportunity for the geek

Luckily, geeks excel at negative reviews. They’re happy to deconstruct products and ideas and to tell you exactly why they won’t work and how to fix them. Where the marketing type wants to build, the geek wants to destroy. Well, maybe destroy is too strong a work. Deconstruct would be a better way to phrase it. And that’s where your skills (you, the geek reading this) come into play.

Does the thought of writing a sales page make you sick? Then don’t! Write an authentic review instead. Don’t just parrot the sales copy. Don’t shy away from exposing the warts. Describe what the product does and what it doesn’t do. Who will benefit from it, who won’t. How to use it, how to abuse it.

Don’t underestimate the power of the negative review!

Technorati Tags: affiliate, marketing, negative, sales, essays, AdSense