One technique I’ve seen many people using these days is selling resale rights to products as a one-time offer after you buy.
That is a good time to offer resale rights, because you’ve bought the product so you clearly feel it has some value. But you haven’t had a chance to evaluate the product yet, so if it’s going to be disappointing you won’t find out until after the one-time offer. Generally, for a product costing $47, they’ll offer resale rights for $199 or so (this post isn’t about products that come with resale rights by default, only those for which you pay extra for the resale rights).
When you buy resale rights, you get to sell the product for $47 and keep 100% of the profits. None of the money goes back to the original author. You think to yourself, “Just 5 sales and I’ve made my money back and everything else is pure profit!”, and jump on the one-time offer. And it does sound like a great deal.
So how does this increase the author’s profit if they’re giving away future sales?
The sad fact is that most people who purchase resale rights to a product don’t make anything from it. There are a couple of factors involved in this.
First, the original author has, if they’re experienced, created such an online buzz about the product before it goes up for sale that anyone interested in it buys from them shortly after it’s available. This leaves the people who buy resale rights selling to audiences that weren’t interested enough in the product to buy it right away.
Second, most people who buy resale rights aren’t that experienced, and don’t manage to make any sales. The product generally comes with a website you can setup, but then you have to advertise it to get traffic, and the original author will typically rank higher than a new site in search engines for the relevant keywords.
Selling resale rights to a product is a quick way for an author to multiply his profit on the product by three, four, or five times what he gets just from a straight sale. Since few of the people who buy resale rights will do anything useful with them, it doesn’t hurt his future profits.
If you think you can make sales of a product, rather than paying money for resale rights, become an affiliate for the product. You’ll get a commission from each sale, and make less than you would with resale rights. But you’ll pay nothing for the privilege of being an affiliate, so your risk is far less. And if you fail, you’ve used up less of your starting capital (hoarding starting capital is a topic that deserves a post of its own).
So, the next time you see a great offer to purchase resale rights to a product, think carefully about whether you will actually do anything with those rights or not.
On the other hand, if you’re selling a product, consider giving your customers an opportunity to purchase resale rights to boost your profits.