I want to start todays post by thanking everyone for their comments last week. It was so nice to see so many people taking action. If this was not you you have no excuses, if you can find the time to read this Blog you can find the time to do some work. Remember, if you do nothing you will achieve nothing so do something today. And get into the habit of doing something each day.
So what have I done today? Actually as it’s Monday not a great deal. I have submitted another article and I have been working on my new project Resale Rights Blueprint. I had planned to launch this around the end of this month but I now know that will not happen as I am still working on the product.
Although it is finished as an eBook (this was the initial plan) I now want to make it into a full interactive multi media product with worksheets, video tutorials, audios and so on. I am going to break the product down into 7 workable days that anyone can follow. But I have put this on hold till the 1st of November as I wont have as much work to do on the Blog then and this means I can focus on getting the product right without any distractions. I also still have my newsletter to write for October and I plan to do that tomorrow, so once I get these tasks out of the way I can get started on completing Resale Rights Blueprint.
It is very important to stay focused on one product at a time and avoid any distractions and at the moment this Blog is a small distraction. Anyone who has read The 7 Key Elements Every Successful Marketer Follows will know what I’m talking about.
I also want to point out something that happened over the weekend that saw me make a lot of money on autopilot. I set Aweber to send an email out on Friday evening, (it was actually in the middle of the night here in the UK). The email was announcing the imminent price rise of Operation eBook. As you will know I promoted the eBook earlier on in the week. Here is the second email I sent out…
Subject: Time is running out {!firstname}
Hi {!firstname},
John Thornhill here.
You have just over 24 hours to get your hands on Operation eBook at
the discounted price.http://www.operation-ebook.com
But is Operation eBook for you?
If you have created your own eBooks in the past and have no
problems when it comes to creating an eBook from start to finish
then this eBook may not be for you. There are still some real gems
of info and even if you are an experienced eBook creator I know you
will learn something.However, this eBook is mainly aimed at anyone who has not yet
written an eBook or lacks the confidence to get it going. I assure
you that even if you can’t write, have terrible grammar or lack the
skills needed to create an eBook YOU WILL BE ABLE TO CREATE AN
EBOOK if you follow the instructions in Operation eBook.Listen! I have preached from day one that to be truly successful
online you need to be creating your own eBooks. As an example I
have 2 eBooks launching in October. I am living proof it works.So do yourself a favor and check out Operation eBook. It could be
your most important purchase this year. And at the discounted price
it really is a steal. But hurry, the price goes up at midnight on
Sunday when the eBook officially launches, you have been warned.http://www.operation-ebook.com
Until next time…
John
Did you note the call to action because of the imminent price rise? This is something we can’t help resist. I know I have bought products so many times in the past because the price was about to go up.
The email I sent above meant I sold around two thirds more than I did from the first email. So now you know why so many marketers tell you ‘the price is going up‘ or ‘time is running out‘. They do it because it works.
So next time you launch a product try and offer a launch discount. I assure you this will get you more sales.
I know when I launch Resale Rights Blueprint in a few weeks I will be doing something similar so watch this space.
So although I didn’t to a great deal today I still had a very successful weekend 🙂
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Nice move with the aweber email John.
Thats a great tip I shall put away for a rainy day
I’m putting a new book together John and would be rather honoured if you would contribute.
As I have always seen you as a expert in your field your comments would be appreciated.:-)
Its been launched on the WF today so its hot off the press
http://www.warriorforum.com/forum/topic.asp?TOPIC_ID=194131
Kind Regards,
Mick Menesse
http://www.Easyincome247.com
John I got my first sign up to my list to day, it’s a website update list, all it does is keep people up to date with new products on my list but can I promoting to people thats on that list?
Sorry about that, I had to get that out off the way, my first sign up, YEAH, OK, I’ll calm down now LOL.
Your Blog is very good and like you said, have to take action or nothing is going to happen, now all I have to do is make a sale on ebay or my website and that we be my week made!!
“So now you know why so many marketers tell you ‘the price is going up‘ or ‘time is running out‘. They do it because it works.”
Its also a scam. The reason behind why real prices go up has to do with demand and supply. When there is reduced supply, or the operating cost of producing the content goes up, then the sales price nominally goes up.
Here in Internet Marketing land there is no real scarcity of resource. An ebook is an infinite resource in that as many copies can be made as needed. So there is no real reason to have a price increase – its just an artificial tactic that scares people into buying a product they may not really have wanted to buy in the first place.
At some stage, these deadlines are going to be widely seen for the scam they are. They are completely artificial.
Isofarro – Putting the price of a product up is not scamming someone. Lets say I wanted to launch a product and price it at $67 but I decide to offer it to my subscribers for $37 for the first 7 days. How can this be scamming someone? Sure, I may do this to initially have a lot of sales but this is not a scam. It is a genuine offer to my subscribers.
If you believe it is a scam you either don’t get it or you may have been burned in the past. Either way you don’t have to buy any product that is pitched to you, the choice is always yours to close the page. But instead of dismissing marketing tactics learn from them to make your own business grow. Sure, if you don’t like doing something you don’t have use tactics that you don’t agree with but if you’re selling/promoting a quality product I can’t see the problem.
Maybe if you launch a product of your own one day it may make more sense.
But the cold hard facts are that having an introductory offer does lead to more sales. And that’s what I and I’m sure most readers of this Blog wants.
“Lets say I wanted to launch a product and price it at $67 but I decide to offer it to my subscribers for $37 for the first 7 days. How can this be scamming someone? Sure, I may do this to initially have a lot of sales but this is not a scam. It is a genuine offer to my subscribers.”
The way you word your argument inflects the possibility that the true price of the product is $67, and you are offering a benefit to subscribers by generously offering it for $37. As you well understand, this is neither economically accurate nor a fair reflection.
There is nothing genuine by introducing a false impression of scarcity with a product that has zero incremental costs. Ebook authoring is like software development – the development costs are upfront, and that cost is made back over the lifetime of the product. The incremental cost of a unit is 0 because it doesn’t cost you anything to reproduce the product.
Of course, there’s a useful advantage to offer a subscriber-based price, but the time period is completely artificial. It creates an illusion of scarcity of resource, and you know quite well that there is no such scarcity.
“But the cold hard facts are that having an introductory offer does lead to more sales. And that’s what I and most readers of this Blog wants.”
There is nothing revolutionary about this. Firstly its demand and supply econonics – the lower the price the higher the demand. But where you get extra sales is by creating a scarcity of resource — in the real world this is done based on economic factors like per item manufacturing costs, loss leading, warehouse and transit costs, product depreciation. Ebooks have none of these factors, so the introductory period is a falsity (there’s no economic sacrifice, but one is implied). Its deliberately done by internet marketers to create a false sense of scarcity which forces an increased demand before the ‘deadline’.
Who gains by this: you do. Your fellow product marketers.
Who loses: your customers – over time they will see through your cynical ploys and tactics. This false scarcity is nothing more than a cynical way of increasing short-term demand.
You may couch this as a way of rewarding your subscribers, but we know full well this is a cynical ploy for generating a short term income stream based on scarcity of resource rather than on a quality product. Its not the way to build trust with your audience.
Buy One Get One Free
3 For The Price Of 2
Act Now and Receive The Following Bonus…
Buy One Get the 2nd Half Price
Buy 5 Items and receive a Free Gift
Spend Over $100 and Receive Free Shipping
Introductory offer
These are all things we see every day. None are scams, they are just a way to get us to spend more money. I fall for these tactics every day. (In fact I just fell for the Mix n Match 3 for 2 offer at Boots)
I am a marketer, I market my products to the best of my ability and I try my best to help others do the same. If you see this a cynical or as a scam there is not really a lot I can do. But you are obviously not a marketer.
I will pull out of this discussion for now, maybe someone else would care to comment.
John,
Excellent blog by the way…great to see how it’s done.
I do have a question….why do you submit your articles to that particular site? It has Pagerank 3 compared to others that have 5 or 6?
Eric – I use an article submission service. I submit my article once and they submit my articles to 100s of directories. Including the page rank 5 and 6 sites.
I can see both sides of the argument, however I can’t agree that offering something at a pre-launch price is a scam.
I can see where you are coming from, however I think it’s important to differentiate between a pre-launch price that will be increasing to a new price and a product that is already on sale to the public that is also going to “Go up in price at any time due to xxx”
The idea behind a small pre-launch at a discounted price (like in this case) is normally to gather testimonials and feedback of the product before you offer the product to the masses. I think you’ve got to remember that the product in question was only offered to a very small, carefully selected set of people at the pre-launch price, it wasn’t available to the general public.
The product has now launched to the public and is priced at $37, the pre-launch price of $17 is now no longer available. I don’t think that anyone who purchased the product at $17 will in any way feel like they have been scammed?
I cannot see any false impression of scarcity involved here, at least not any of scam proportions anyway. All that is being offered is a limited time subscriber offer to the guys you help out or who read your newsletters and so on..
Sure a time limited introductory price will sell more products! Who wants to buy the product for full price when they can buy it for an introductory price.
Everyone knows that digital items can be reproduced for 0 cost, but can you put a cost on the initial time taken to create and value of the information you are receiving?
Anyway in my opinion it is a good marketing tip to chalk up a few extra sales and I believe it works for both buyer and seller.
Oh, one more thing. Why offer a 30 day money back guarantee if your scamming!!!
“The product has now launched to the public and is priced at $37, the pre-launch price of $17 is now no longer available. I don’t think that anyone who purchased the product at $17 will in any way feel like they have been scammed?”
Or do the people that are purchasing at $37, and have subsequently found this blog and thread, feel like they have been scammed because they were not able to get it at the $17 price?
That’s kind of like going to your favorite home electronics store and purchasing a product for $50 and finding out after the fact that two weeks ago you could have had it at $40. Is the store scamming you? NO! It’s called advertising. Is there a shortage of that product now that makes the retailer raise the price to $60 instead of $50? Absolutely not!
I don’t think the theory of supply and demand applies in IM. I may be way off base saying that, and if I am, somebody let me know.
Anyways…..my rant……and a blatant plug for my upcoming launch of my ebook site:
http://www.5star-ebooks.com
Thanks,
Ron
Hi everyone,
I recently booked a holiday to Greece for summer 2008. I won’t go into the details, but I was encouraged to do so by the price break I received if I ordered now.
There was an early booking discount that was due to expire soon, and so I took advantage of this.
All those who buy the EXACT same holiday after this point will pay a premium price. Is this scamming anyone? Of course not!
It’s good business as it encourages and rewards fast movers, and is seen frequently in the offline world.
When I launch a product I always offer fast movers a discount. Let me explain why…
1) It rewards my current subscribers and allows me to build a better relationship with them. It’s my way of saying thanks for sticking with me.
2) It gives my current subscribers a better deal, and so they get to benefit from their relationship with me.
3) It allows me to bring in more JV partners by offering their list a discount too.
Do I win from this arrangement? Of course I do! But good business is about motivating those you deal with by ensuring they win too.
My subcribers get a discount, and my JV partners sell more products, and they get to strengthen their relationship with their subscribers. This works because everyone wins, including the customer.
I’m going to be brutally honest here – I quit my job two months ago, and that simply wouldn’t have happened had it not been for my email exchanges with John, and for that I thank him.
This blog contains more value than most $997 ebooks, and I’d strongly recommend you read and absorb every word. I’m a full time marketer and I’m taking notes. If you want to run an online business then I’d start by watching and learning from John.
Lee McIntyre
http://www.Lee-McIntyre.com
If marketing is a scam….
Well I’m sorry to have to inform people this….
But the whole world is scamming you all.
It has been pointed out that ebook’s carry no continuing cost??
(I would suggest that maintaining a website, autoresponder, future product development etc all carry costs)
But leaving that to one side (and the fact that if I wrote a product – then I would like to decide how much I charge regardless of my cost to distribute the information)..
Just focusing on the ‘real world’ whre scarcity is supposedly formed by — well — things being scarce?
I find that a ridiculous statement when in reality nothing is really scarce – but as with all things – the get stockpiled waiting for demand etc.
Or monopolies (that don’t really exsist!!??) control the prices….
Take any software sold by pc world or even music CD’s – Films on DVD …. don’t these all cost less than a pound to manufacture?
So why the big price differences?….. why does The Disney coporation only release limited numbers of it films every 7 years?
Why does DFS have a sale every other fortnight – or so it seems?
It all has to do with 1) Marketing and 2) the product creators deciding on his/her price.
As John has said you don’t have to buy anything you don’t want to!
____
Well apart from mortgage insurance – where there seems to be a ‘Boys Club’ that fixes conditions and prices — why – because they can!
And there is nothing we can do about it – it’s compulsory!!
We still have to buy and pay whatever is quoted!
But no-one has to buy a single solitary thing online.
And without marketing Online or Offline – nothing would be sold – and the world may just come to a standstill
Now that would be an interesting experiment.
Another passing thought….. the cars of the rich and famous — High priced due to low numbers produced???????
OR low numbers produced to maintain high prices ?????????
Marketing.
NO – I agree – the whole world is scamming everyone in it.
And what about those religious organisations?
Only so many seats in the after life? — no money back guarantees there though ??
Or will I now be frowned upon – cos it’s ok to call marketers names – but one mustn’t mention religion?
And yet they market their goods and services all the time!
How come a wedding cost so much ? — A sunday service is free yet takes up more resources?
Oh… cuppa ready – must go ….reality – it will go cold …. scarcity factor at work….LOL
Randy
I apologise immediately if my last post offended anyone….
I typed and posted without thinking about what was coming out.
The basic point was that most things are priced at the lowest cost per unit to manufacture and sold at the highest price the market will bear.
Whatever your faith – I’m sure you get value from it – so I possibly shouldn’t have inferred that any religious organisation are scamming us.
As for companies on line or off – I think they all are – but hey – that’s the world we live in – and we have nowhere else to go live.
So it’s always a case of choice – we can simply choose NOT to buy, and accept that any company marketing any item would rather we made that decision quickly.
(apart from insurance companies – they do rip us off!)
Randy
“Why does DFS have a sale every other fortnight – or so it seems?”
They know your Mrs wants a new sofa 🙂
Isofarro, you mention in your posts over and over `an element of scarcity’. When I pre-launched Operation eBook, I never mentioned anywhere that the item was in scarce or reduced supply. Nor did I say anything like `only 50 copies left’ as many marketers do. There was nothing artificial about my deadline. I actually stayed up until 5 o’clock in the morning to do the price change, as I had stated in the sales page (some people said I was mad). I actually didn’t want anyone to think I was a scammer by not putting the price up. That’s not my style.
This product took me six long weeks of hard work to put together, not just the writing of the eBook, but all the other things that go into producing your own products, sales page, graphics, setting up the delivery mechanism, getting reviews, researching, interviews, promotion, outsourcing etc.etc. all the back stage stuff. So for you to say that a product costs nothing to produce is, at best naiive anda bit insulting, actually.
If had worked in Tescos for the number of hours that I’ve spent on this book I would, of course, have been paid. So why shouldn’t I expect to be paid for my work on this product.
I felt my product was worth $37 at full price and, of course, this was fully researched, I didn’t just pluck the number out of the air.
When I asked John to take a look at it for me before I released it, he was so impressed that he asked me if he could offer it to his subscribers, as he felt that they would benefit from the information. He also asked if he could offer them a discount. This is why so many people have stayed the course with John, because he always recommends good quality products and gets a discount for his subscribers.
Should I have said “no, sorry John, everyone pays $37 dollars”? As a marketer that would’ve been crazy. Who in their right mind would turn down loads of sales at $17 against much fewer sales at $37. This isn’t scamming anyone, it’s just good business sense.
When a new show opens in Theatreland, it opens first for previews, to get a feel of how things will go, the critics go and review the production and the price of a ticket is much lower than it will be once the show opens officially. All the producers get their friends, colleagues and contacts to go along at reduced prices. Is this a scam, that people can go and see a preview at half the price?
When a new product is launched in the supermarket, you often get it at a reduced price to try. If you like it, you will buy it again and again, even when the price goes up. Internet marketing is the same. All those who bought my eBook at the reduced price and who liked it will know in future what they can expect from my writing and are more likely to purchase my products again. I have had no complaints about the price, in fact I have had emails thanking me for offering the discount. As a side note, the product is also selling well at the normal price.
When I bought my new washing machine, the manufacturer did a deal (JV) with a leading washing powder producer and I got a free box – this in the hope that I would love it so much I would become a regular buyer.
Internet service providers give you the first 6 months at a reduced price before they put the price up and offer you all sorts of incentives to sign up with them.
So you can see, I am planning to be in this for the long haul – this is not a short-term thing for me.
Because an eBook or info-product is a not tangible item, you seem to imply that it doesn’t have the same value as a physical item. I am sure that many IMers will refute you on this. John and his PlanetSMS package is a case in point. It was the best few quid I ever spent, and I know that others will agree.
I and many other people have been one of John’s subscribers for a long time now as well as a subscriber to many other `lists’. All I can say is, he is the least synical person that I have ever come across on the net – and I’ve come across a few in my time. If anyone needs a model to follow then they won’t go far wrong `copying’ how he does things – and the great thing is, he actually wants you to copy him, he invites you to – he doesn’t give a damn if you copy him – how many marketers have that attitude?
As for me, I can only hope to attain the success he has by keeping my integrity, being up front about everything I do, creating good quality products that will help people, and, of course, trying to make a bit of money at the same time.
If you think that is scamming people then, of course, you are entitled to your opinon but I hope that you can manage to strike some great JVs when it comes time to release your own product.
Making money or trying to make money online is not a dirty word, as you seem to suggest.
Paula Brett
http://www.OperationEbook.com
P.S. And if anyone did miss out on the $17 discount price, drop me a line at my support desk http://www.PaulaBrett.com and I’ll sort something out for you – or is that being synical?! 😉
I am going to reply to this as i fell that the use of the word scam is totally unjust, do you when you go to a store to purchase something and see a new product on offer say “sorry i am not buying this at this price it is a scam”? not at all, if it is something you like you buy it, or would you wait till they put the price up and buy at full price? there is no scam here at all, that is silly, introductory offers are done all the time worldwide when a new product comes along, and if John or anyone else has the integrity to offer a valuable product with a discounted offer then good for them.
then people who want it can get it at a good price.
Anne
Anne
Paula says: “Nor did I say anything like `only 50 copies left’ as many marketers do. ”
Does any Internet marketer here find this particular tactic ethically or morally dubious?
Paula says: “So for you to say that a product costs nothing to produce is, at best naiive anda bit insulting, actually.”
You’d have a point if that’s what I said. Here’s my comment again (and for Randy’s benefit, once he’s wiped off the froth):
“Ebook authoring is like software development – the development costs are upfront, and that cost is made back over the lifetime of the product. The incremental cost of a unit is 0 because it doesn’t cost you anything to reproduce the product.”
Lee McIntyre writes: “This blog contains more value than most $997 ebooks,”
Wow – a conundrum! Lets break this paradox down it down a bit:
1.) This blog’s content is not worth $997.
2.) The pricing of ebooks peddled by internet marketers have a valuation that defies any rational basis.
No offence Paula (in terms of pricing, you are representative of Internet marketing’s approach to pricing), but why do you consider your ebook worth $67 per copy, when at that price you could buy a couple of real books off Amazon written by experienced authors? Do you really believe the value of your content and expertise is multiples bigger than a well established author in their niche?
Take into consideration that paper books have print runs, but yet are heavily saddled by overheads, distribution, warehousing and operating costs, so the actual value of the content is just a fraction of the shelf price – so in fact the value of your content is a significant orders of multiples bigger than a well established print author.
Perhaps, what Internet Marketing people are really saying by their pricing models is that print books are actually severely underpriced, and those prices need to be multiplied up to reflect their true value?
I note the comment that the price of internet marketing ebooks (which seem to be written by internet marketers, about internet marketing for internet marketers – bizarre!) are priced to what the market can sustain. Does that mean the Internet Marketer wannabe is just substantially more guillible than the general book buying public?
After reading all the posts, I just had to get in here. I am a relative newby to Internet Marketing and read all the comments with interest. One thought that kept slapping my mind is, “Why is Internet Marketing and offering a launch discount that will expire at some time such a nasty concept to someone wanting or trying to be an Internet Marketer?”
All sales, online, offline, late-night infomercials, car sales, groceries, whatever, are responsive to supply and demand. If they price it too high, no one buys it. So they drop the price to attract buyers. All marketers of any venue use the same tactics to get customers and promote sales.
They take into account costs for advertising, shipping, shelf space, labor…an endless list of cuts out of the sales price. Where is the difference if an ebook author spends weeks, or longer, researching writing the ebook, designing covers, web pages, setting up a maze of support tools, including affiliate stuff? There isn’t any difference.
So, Paula and most of the others here offer a discount to their loyal customers when they launch a new product. So What? The ethical Marketers state when and why the price is going to change and then they do it. The grocery stores have sales every week and state how many days the sale price is good for. Where’s the difference?
John, I think, said, “If you don’t like it, don’t buy it,” or something to that effect. I believe Dan and Randy echoed that attitude in their own way. I agree with them. Why would anyone buy something they didn’t need, want, or couldn’t afford?
Why would any Internet Marketer here even wonder about proven sales and marketing techniques if they plan on making a living doing the exact same thing?
Pat Graham
ghost-writer@charter.net
“Paula says: “Nor did I say anything like `only 50 copies left’ as many marketers do. ”
“Isofarro says: Does any Internet marketer here find this particular tactic ethically or morally dubious?”
Yes, I certainly do, it’s bullshit and that’s why I would never do it and that’s why I made sure that I did put my price up when I said I would.
“Isofarro says: The incremental cost of a unit is 0 because it doesn’t cost you anything to reproduce the product.”
No, but it costs me money to host it, promote it etc. etc. The idea is not just to have a big launch and then forget about it – grab my money and run. There is a bit of work involved in this IM lark you know. Anyone who thinks it’s all just a make `money overnight’ thing is sadly mistaken – or probably a scammer.
“Isofarro says: No offence Paula (in terms of pricing, you are representative of Internet marketing’s approach to pricing), but why do you consider your ebook worth $67 per copy”
You’d have a point if that’s what I said. Here’s my comment again:
“I felt my product was worth $37 at full price and, of course, this was fully researched, I didn’t just pluck the number out of the air.”
Touche LOL!
Maybe physical eBook ARE severely underpriced. I read physical books like a madwoman, they are my passion, I get through 4 or 5 a week. When a physical book is released in hardback, I rarely buy it, I wait for the paperback. I don’t want to pay 24.99 GBP/50 USD for it, I’d rather go for the `Buy one Get One Free’ in Tescos. But I bet the author and publishers make more money on that than the initial hardback – I bet there’s a huge strategy meeting about how it is going to be offered and publicised.
Whilst I never claimed to be Stephen King, or J. K. Rowling, and I don’t profess to know anything about spooky stuff or Wizards, I dont’ suppose they know much about internet marketing.
I know for a fact that a lot of stuff that I have written has helped a lot of people understand stuff that they didn’t know about before. I certainly don’t consider my readers or subscribers to be gullible. It’s only easy if you know the answer. If you don’t know the answer, to pay a few quid for something that will teach you what you want to know about is well worth it.
I’m delighted for you that you know all the answers and you don’t need to pay to be shown how to do something. I wish I could say the same for myself.
Why is internet marketing any different to any other marketing in the `physical world’? People create and sell things to solve problems, to meet demand, why does it seem so `dirty’ to you, when it happens online? Aren’t all things `priced to what the market can sustain’?
Paula Brett
http://www.OperationEbook.com
Hi Everyone,
That was a long thread to read!
I’ve bought the launch price editions from several people in this thread and special offers are not any way scams.
One reason to have a reduced launch price eg $17 is because we buy directly from the author.
If the item is later released on Clickbank eg at $37 affiliates get a big chunk of the money and Clickbank charge fees. Two more expenses. I end up with about 40% from my clickbank ebook.
(I make more than that on my physical products – sometimes 80% I hope I’m not scamming anyone!)
This method makes sense to me and I expect to use it myself in the future.
Thanks
Keith
What fun this has all been. It does my cynical heart good to see cats and dogs at play.
I sell e-Books – but I never read them. Why? Simple, because they are all grossly overpriced re-hashed half truths and deceptions put together to sucker the “newbie”into buying more half-truths and re-hashed fluff.
I used to read them, until I caught on that I could never learn a single thing from any e-Book and the general rule of thumb is that the more it costs – the less value it is.
Most ‘gurus’ don’t even write their own e-Books – you know who I’m talking about, you out there. LOL
They are ghost written for a couple of hundred quid. They put their name on them and make thousands. Possibly without even reading them.
Selling cheap and raising the price is NOT a scam.
Telling people that they can, and will, make $10,000 a month IS!
The Grumpy Old Chef
“may the forks be with you”
Paula asks: “Aren’t all things `priced to what the market can sustain’?”
No. The monopoly pricing model tends to apply to organisations that have a monopoly or quasi monopoly. Monopoly pricing largely disregards what the true value of the product is, and prices products as high a value as they think they can get away with.
When the situation of a competitive market gets converted into a monopoly what you see happen is the price of the exact same commodity rise – largely because of the lack of competition, and the lack of alternatives or substitutes.
The XBox and Xbox 360 weren’t priced at at a price the market could sustain. The XBox undercut the current market price in a loss leader strategy, taking millions of dollars worth of losses in the gamble that the games sold would make up for the loss on each console. The Xbox 360 most certainly wasn’t priced at the price the market could sustain, because demand outstripped supply – and that is the key indicator that the product was priced below the level the market could sustain. Demand and supply.
quips Paula: “You’d have a point if that’s what I said. Here’s my comment again:“I felt my product was worth $37 at full price and, of course, this was fully researched, I didn’t just pluck the number out of the air.””
This is the sentence that appears on your sales pitch page/site:
“This is valuable stuff, and at $67 this eBook would be a steal.”
That indicates a belief that your book is worth at least that price. The wording suggests that you are offering the book below its true value, and reading the page, the minimum value seems to be $67. You then go on to justify why you are accepting a below-par value of $37.
So again, I ask you (and others that follow this practice) as a typical representative and adherent to the internet marketing pricing model, what makes you think your content is worth at least $67?
Paula, I commend you for not falling into the worthless bonus rubbish that pollutes the vast majority of internet marketing dross. There’s one positive sign of integrity in this particular conversation.
Paula notes: “I’d rather go for the `Buy one Get One Free’ in Tescos. But I bet the author and publishers make more money on that than the initial hardback”
No. Two for one offers are a mechanism for reducing stocks in a most expedient fashion, and in line with demand/supply logic. Paper books aren’t printed incrementally, publishers have print runs, which vary in size from a couple of thousand copies to a couple of hundred thousand copies. They do this to minimise printing costs by taking advantage of economies of scale. This print run forms a chunk of the pricing of the book, which determines (once profit margins are adjusted) into the cover price of the book.
Wholesalers, like Tesco, buy in bulk, and negotiate discounts which cut into the profit margin of the book. Tesco then have to store these books somewhere, and that storage entails extra costs on Tesco. So over time, faced with a stock that’s not moving quickly, the costs of storage incrementally eat away at their current profit margins since they accumulate over time, its in Tescos economic interests to move this stock off their warehouse floor and out. Hence the specials are a way of moving their excess stock out of their warehouse before the accumulated storage costs completely eat away their profit margins.
People seem surprised at the low prices the last Harry Potter book got at supermarket chains like Asda. They didn’t make a loss on the book, they just forced the publisher or middleman to give up a large chunk of their profit margin. And with that pricing, Asda were able to move their stock off the warehouse floor before storage costs became an issue. Demand and supply.
It’s funny, people are talking about the value of an eBook.
If I learn ONE THING from an eBook that helps my business make an extra $100 per week how much is that information worth?
Think about that…
John: “If I learn ONE THING from an eBook that helps my business make an extra $100 per week how much is that information worth?”
You’re supposed to be the expert in pricing here – why don’t you answer this question?
Here’s a more direct question: How much did you, John Thornhill, pay for Paula Brett’s ebook – the copy of Operation Ebook that you read that prompted you to write the testimonial that appears on her sales page?
“You’re supposed to be the expert in pricing here – why don’t you answer this question?”
I have never claimed to be an expert in anything. That is for others to decide.
“Here’s a more direct question: How much did you, John Thornhill, pay for Paula Brett’s ebook – the copy of Operation Ebook that you read that prompted you to write the testimonial that appears on her sales page?”
I paid nothing for it. You see, Paula selected a group of people to read the eBook and give their honest opinion. I thought the eBook was so good I promoted it.
It happens all the time. It’s called marketing.
But I probably spend about $500 per month on Information products and I buy a lot of home study courses because I like to learn and that’s how I have made over quarter of a million this year. A lot of what I learn and teach I have ultimately learned from an info product of some form somewhere else.
What I can’t understand is if you feel so strongly about what we do why are you here?
Interesting discussion going on here and it’s great to see that people are trying to view this from both sides.
I don’t claim to be VERY informed, but being a student of economics, I’m inclined to try and find a demand and supply relationship in IM.
Someone mentioned that the incremental cost of producing an ebook (every additional unit) is ZERO. This is NOT correct if you take into consideration the hosting, domain, advertising and other costs. What part of the price goes to paying for these things PER EBOOK is a different matter and the profit PER ebook is certainly increasing with each sale.
One important point to note is that when you are paying for an ebook, you are not only paying for the information contained there in, but also the convenience of having it delivered right at your desktop AS SOON AS you buy it (instant gratification). Many people are ready to pay more for this kind of “delivery”, rather than going to the local bookstore and buying physical books.
Is there a demand for ebooks – YES. Is there a supply function acting in IM for ebooks? YES. There is a demand and there is a supply as well but the price is not decided by them alone but also by a lot of other factors. Remember, the demand and supply function assume this: All other things being equal. This is certainly IMPOSSIBLE in any market – especially a market as dynamic as IM.
And charging a low price to the fast action takers is NOT cheating. It is simply offering them a BENEFIT for being fast.
Warmest Regards,
Sagar Mehta
Isofarro, so are you also calling coupon codes a scam? Since you could say that they offer a discount…
I’m only going to say one more thing…
…And that’s The Butterfly Marketing Script.
If I’m right in thinking, when it was launched, the price was around $500…it has then gradually inceased over a short period of time, and your now expected to pay $1,500 for it now!
Is this scamming? I don’t think so, and reason why I say that, is because I remember reading that Mike Filsaime actually made more money from when the price was higher.
If this doesn’t have anything to do with what you are saying, then fine! But maybe you should try this Inetenet Marketing for yourself.
That’s all I’m going to say at the moment…I want to know what other people think.
Thanks
Mark
“Isofarro says: So again, I ask you (and others that follow this practice) as a typical representative and adherent to the internet marketing pricing model, what makes you think your content is worth at least $67?”
It is worth any price that a buyer will put on it if the information contained inside is valuable to them, surely?
Of course, I sweated over the book, so to me it’s my baby and it’s worth loads. But, I’m not daft enough, nor even up my own backside enough to think that I’ll make loads of sales selling it at that price – I would make more sales selling it at a lower price, therefore making it more accessbile to the majority of people.
e.g. I love reading physical books, I spend a lot of money on them. My husband thinks I am mad, as far as he can see, it’s a total waste of money. Because I love books so much I think the money I spend on them is worth it.
It’s all relative. If you don’t want or need information on how to write your own eBook, then the book obviously isn’t worth $17 or even $1, and you wouldn’t bother to buy it because you don’t NEED that information. But if you do want that information, then the book is worth every penny.
My husband spends a fortune on fishing equipment and bait. I get cross as I think it’s a waste of money, I am not interested in fishing but he is – to him the money he spends is worth it.
Thank you for your commendation. I like to think that I have integrity.
You sound much more educated in the subject of economics than I. And your point about Tescos and warehouses and floor space etc. seem to make sense. But answer me this, if Asda negotiated a deal with the publishers for, say, 10,000 Harry Potter books and sold, say, 1,000 at 20 quid, making 20,000, wouldn’t it make more profit lowering the price, to, say 10 quid (which is what they actually did) and have more people grabbing them cos they were more affordable, so they sold 8,000 copies making 80,000 at a tenner?
Yes, they don’t want to lose money on the extra costs for storage, but surely they also take into account that selling a greater number at a lesser cost makes more profit than selling fewer at a larger cost?
I note your interpretation of two for one offers but what is your interpretation of the reasoning behind new products being offered at an introductory price?
Paula Brett
http://www.OperationEbook.com
Hi all,
Carrying on the debate with regard the comments made about scam/marketing!!! I also see the points that most have made, we are all aware that how you market a product is going to have an effect on weather it sells, and we all have to test the water so to speak! And if you subscribe to other marketer lists you will at one point have had a product pre-launch were the product is offered to you for a discounted price, if you buy at the discounted price and a few weeks later you see the product at the full price! Don’t you feel good, because you got a bargain!
Margo
Newbie Marketer!
http://www.hitlinkdata.com
Isofarro,
There is one flaw in your highly articulate argument.
But it is a global flaw, and thus fractures the foundation upon which the subsequent pragmatism of your opinions rest:
VALUE of Information.
It does NOT cost any more for Seth Godin to travel to Google to deliver a motivational speech than it would me,
(logistics being equal).
However, Google will happily pay him $25,000 for the afternoon and do him technical favors I couldn’t buy.
On the other hand, I’d be fortunate to get a tiny honorarium, dinner and a room in exchange for my presentation.
Why? It cost Godin NOTHING more than traveling downtown.
Because the information contained/delivered is valuable.
Paula’s ebook holds real value.
I understand the appearance of dubious value of bits streaming to my computer, where I use my own paper to print (or not), any “e-book”.
But this document is actionable, with specific data, indeed even a read on the culture and reality of online commerce, which I would not have possessed without it.
What do you think the average consumer spends in lifetime equivalent for the constant river of television ads in their home?
And they gain what? The opportunity to Spend.
I have benefited immensely from both electronic publications and bound matter.
Health to all,
Ed
A scam is when something is promised, and paid for, then something else (or nothing) is delivered.
Isofarro presents an argument based on traditional supply and demand economics. But we aren’t talking about something as easily definable as a commodity like guns and butter.
The market values what it value and value is a perception. If I value butter on my toast enough to justify the cost, I pay it. If my toast taste just fine dry, where’s the value?
Calling this a “scam” shows a level of ignorance in an otherwise reasonable argument. It’s not a scam at all – it’s what the business owner chooses to value his product at – a product I’d assume you can’t get elsewhere. It’s up to the market to pay it, or not.
It’s equally stupid thinking that has people who subscribe for a newsletter declare it as “spam”, when they opted-in and often double-opted in.
Neither is anything to get overly upset about. Just as supply and demand rules economics, stupidity defines the least common denominator we all have to live with.
There you have it.
X
(sorry John, I’m splitting my response into two separate comments. One to address the series of questions raised, and one to answer your specific question)
Paula asks: “But answer me this, if Asda negotiated a deal with the publishers for, say, 10,000 Harry Potter books and sold, say, 1,000 at 20 quid, making 20,000, wouldn’t it make more profit lowering the price, to, say 10 quid (which is what they actually did) and have more people grabbing them cos they were more affordable, so they sold 8,000 copies making 80,000 at a tenner?”
Depends on the cost to Asda for acquiring the 10,000 copies. It normally can be profitable, since Asda are seeking to move their stock before the cost of storage starts to significantly affect their profitability.
Paula, your point is well made – and I offer an unreserved apology to you for the incorrect accusation that what you were doing was a scam. Thank you for your time, your patience and contributions. I think you’ve added a great deal of value to this blog – and that’s one of the great pluses of blogging, the value is defined not by the original author, but by the conversations it creates, and the relationships it forms.
My argument – initially badly outlined – isn’t about a change in price. Its about the implied reasons behind the change of price (the implication that an ebook is a scarce resource, and that there are finite copies of it). You’ve been the only one in this conversation that’s picked up on that, with your earlier comment ‘Nor did I say anything like `only 50 copies left’ as many marketers do. ‘ – there you’ve hit on the purest example of what I strongly object to.
I note with curiosity that, apart from yourself, no other internet marketer has expressed a position on this. That in itself says nothing about Internet Marketers themselves, except that only one had the integrity to stand up firmly and clearly against this practice. I note that the argument about raising a price of a product has been vehemently defended multiple times by different people in at least two separate threads, so the disparity in volume is unusual.
Ed, your response is very interesting. What Seth Godin represents is a well known speaker on a speaker circuit. None of the people in this conversation are as well known on the speaker circuit as Godin, so I contest the value of ebooks being based on the fame of the author. Maybe Internet Marketing is so niche that its an isolated community?
Sagar, what you list are up-front costs that are independent of the number of ebooks sold. I’m interested that hosting costs have been brought up a few times – particularly because decent hosting is fairly cheap these days. You guys are buying cpanel accounts that allow multiple domains right?
(Seriously, if you are buying separate hosting accounts for every ebook minisite, you throwing money to the wind. A simple cpanel account should allow you to host your main site, plus enough domains to cover all your ebook projects to the extend that the outlay for a mini-site is very close to zero. Well, it costs me zero to host a new website right now, and has been that way for at least 5 years or so. Its not like your buying brand new hosting for an ebook – what’s an internet marketer without a presence on the web?)
Sagar, you make a great point on the instant gratification.
John Thornhill asks: “What I can’t understand is if you feel so strongly about what we do why are you here?”
I joined your mailing list after buying a product from you on ebay about June 2006. Don’t remember what it was, part of my fiver a week on something outside of my normal area of interest. I initially joined your mailing list with a different disposable email address mainly because I was interested in your customer-first approach, and because you were then starting to write about writing your own ebook. I didn’t classify you as an internet marketer before – well right up till this blog.
My interest lies in the authoring of ebooks – inspired by your own encouragement of others to “create their own products”. I have no interest in internet marketing, and I probably never will.
One ebook I have bought is Cameron Moll’s “Mobile Web Design” – to be particularly blunt, it surpasses every ebook I’ve seen in the Internet Marketing niche – in terms of quality, of presentation, of content. But then it focuses on a topic that’s closer to my profession. Price: $19 – from a mobile expert, a regular on the web standards speaker circuit, a freelancer – so someone acutely aware of his value, and perhaps the value of the work he provides.
37 signals self-published a book last year called Getting Real. They are a well known and established web application development team focused on building exceptionally usable apps. If you’ve ever heard the term ‘Ruby-on-Rails’, these guys are the pioneers of this framework – their application of quality cannot be denied regardless of the size of their egos. ebook price: $19. (No I haven’t bought this, or read the online version)
O’Reilly publish a series of ebooks called ‘Short Cuts’, which focus on a variety of niche web development areas. Each authored by an established developer (most of whom blog, for instance Shelley Powers). price $9.99 (I’ve bought several of these, and the quality of content matches O’Reilly’s paperback range, but focuses on small subjects and ideas)
It is this sort of ebooks I’m interested in producing – focused on improving the quality of web development (its in a very shoddy state currently, and has been for well over a decade). The web development area is big, getting bigger. There’s no substantial profit in writing web development books – that’s not the main reason for writing them. The reason, for me, is to solidify development techniques into a manual that can be used by people wanting to improve the quality of their web development. As an accessibility specialist, I have insights to offer which can complement existing paper books.
I’ve turned down three approaches to writing a real book with established publishers, partly because the weight of responsibility of such an undertaking I do not want to bear. Ebooks offers that same outlet without that responsibility. Self-publishing is an effective way, I do it at my own pace within my own timeframe. Ghostwriters, copywrighting, endlessly long sales pitches – I have no need of. Pricing/Licensing – Mark Pilgrim’s approach is one that fits nicely – its the GNU Free Documentation License.
So what your material offers is a little light towards that path. But the choice of tools could do with an overhaul (the ebook reader is just bad – 500K exe wrapper around an HTML file). There are much better tools around today: Open Office, for instance, offers a save as PDF. I’m playing with Pocket CHM as a way of producing CHMs – its quaint.
John Thornhill to me was just a guy who sells ebooks on ebay. Over the course of a year I’ve seen that change from someone who was strongly supported in customer satisfaction through to someone who seems more interested in leading affiliate rankings. Maybe its a conscious change he’s made, or maybe my initial impression was just naive. Unfortunately, my impression of John was going downhill before he started this blog (I recall recognising text from an autoresponder as being lifted almost completely out of his 90 day powerseller book) – his postings have only served to accelerate that concern.
Its one of the things about blogging – it paints a more accurate picture of a person, and in John’s case, for me, his blog has done him no favours. But that’s just my opinion.
And that means its time for me to unsubscribe from your mailing list.
A quick UPDATE! The post on the Warior Forum has now been deleted. I wonder why?
Isofarro said: And that means its time for me to unsubscribe from your mailing list.
I can see a tear in John’s eye about now…
The posts here have been quite interesting to read.
The bottom line as I see it:
Paula – produces excellent products – NOT A SCAMMER!
John – produces excellent products – NOT A SCAMMER!
Anyone here I forgot – NOT A SCAMMER!
I missed Paula’s intro price on Operation Ebook. My browser just kept stalling every time I hit the buy button. The price increased just as Paula said it would. Am I mad about the increase in price, or do I feel like I’m being cheated cause I have to pay more? NO!
Moral to that – don’t wait till the last minute!
Are some marketers scammers? – Yes
Do some marketers use crappy tactics to sell over priced, rehashed, crappy products? – Yes
They are out there waiting for you to hit their BUY NOW! button.
It’s your choice to buy or not to buy.
Isofarro, good luck in your future endeavours. Just don’t include IM
as one of them.
I thought on multiple occasions John says to use an ebook and split it up for your auto responder as help to New Marketers. I mean I could be wrong but why wouldn’t you practice what you teach?
This is not a personal attack on anyone but as someone who has followed John and purchased a few products from him it does appear he is trying to help. I believe even in this blog his main goal was to show people to, DO something… DO anything… JUST build your business.
Oct 25th ***I am doing nothing special, there is no real secret to what I do, it’s all about action. If I can give you any advice that means you can stop buying these $1000 courses and $97 eBooks it would be this. Do something each day that builds your business.***
Oct 31rst ****Are you starting to understand the concept of ‘Do a Little Every Day to Build Your Business’? You have watched me build my business in real time this month and there is absolutely no reason why you can’t do the same. Remember, if you do nothing you will achieve nothing.****
So when the comment is made “ blogging – it paints a more accurate picture of a person” just my opinion but the whole point was to show people that are scared to take the first step, that it’s really not that hard
You just need to take action, and do something each day that builds your business and if you don’t get to everything on your list, it’s ok but keep going.
Now maybe that is not the point to this conversation but that is what I got from the blog maybe I’m ignorant?
Jonathan
http://www.jonathanmcguire.com
For once I’m going to keep this short and not talk for England.
:)))
Some will
Some won’t
So what
Next
😉
Isofarro,
You’re VERY correct about the web space thing. I can now see your point MORE clearly. Certainly, if hosting cost (say) only $200 a year and you were already making that much with just ONE ebook, all other ebooks you host on the same account would have only UPFRONT costs.
Product pricing is always in the hands of the person who creates it. Irrespective of whether people buy at that price has nothing to do with what price he sets. You can set a price for your product (whether physical or digital) at $197. This is your NORMAL price. If people know that it is your normal price but don’t buy it at that and you REDUCE your price to $97 “for a very limited time”, it isn’t scamming. Just something to help the buyer make a quicker decision.
And thanks, I’m glad you liked the point about instant gratification.
Isofarro, thank you, apology accepted… and I’m not one to hold grudges 😉
Mark, apparently the WF thread you started was removed as it was becoming a bit of a love fest and may have been construed as me paying people to jump to my defence for publicity for my eBook, or even John paying people for a bit of exposure. Now that’s synical –but I suppose people have been known to do such things — sad!
Great thread, I’ve enjoyed reading it.
Paula Brett
http://www.PaulaBrett.com
Isofarro,
You missed my point. I’m not saying that Paula’s ebook,
the works of indeed any marketers present, (no offense all, but Seth is a giant), are of equal value.
I was using a simple analogy to respond to your earliest posts.
My point was simply that Paula’s time, and the content she authored, has REAL value to real people.
It is not a hardcover bound tome, true. But it has real value.
In fact if I can download it now, tonite, it has much more value to me than driving 26 miles to Borders to buy a hardcover on writing my first book. In fact, with gas, wear and tear and time, her ebook is almost free. 😉
My analogy with Seth was simply addressing your point that ebooks cost little or nothing to produce. Yet I believe the value is in the content.
Hey, you know what? If he got caught in a traffic jam, and the crowd was getting restless, perhaps my presentation value to tide them over for awhile would skyrocket.
Talk about scarcity!
Good Health to All!
Ed S
Comment or question? I’m not sure which. Being a complete newbie to everything, I may be off base.
Do some people join blogs just to play “devil’s advocate”
Don’t get me wrong. In my many years as a teacher, I have done this to get my students to think. In developing their minds or in approaching especially a controversial issue, I wanted them to look at all sides. When I made a comment or more frequently when I asked a question, it was designed to make them stop and consider all sides.
This thread seems “just to stir the pot” for the quest of showing off the “intellectual” abilities of the antagonist.