I’ve had a thought that was rolling around in my mind for several months now, waiting for complete formulation….
I was on a confernce call with Brian Clark and Jeff Walker recently. They were talking about partnering to help promote your products and build your launch.
Jeff has raised an enormous amount of money on the Internet. He started in the late nineties with an idea, no money and an even smaller email list and he’s grown his business to the point that his latest launch was one of the biggest in Internet history.
The call was very informative, gave me lots of great ideas about approaching potential partners to help sell my products, and soon launch this membership site.
The thing I was most struck by was at the end of the call when Brian and Jeff were asked about sharing profits with potential partners. They both advocated being generous, especially if you are hoping that your partner is going to be the main traffic generator. They thought you should roll out the red carpet — and offer them the lion’s share of the sale, with the payback of building a list. Their ball park ranged from 60 to 90% of the sale.
Click, went off the light bulb in my mind! How right they are. And, I’m so glad to hear them speak up about it. Don’t get me wrong, I love money too, and hate just giving it away. But, that old adage is true: It takes money to make money. If you don’t have any, then the potential of big money is what’s going to draw the Internet Marketers into at least considering partnering with you.
This really is what separates the amateurs from the professionals.
Here’s an example: Since I’ve been teaching and selling on eBay, I’ve been approached by several people with products. They come to me, tell me they have this great product and let me know I can get a cut of the sales — if I’ll do all the selling work. It seems that inventors don’t want to do selling — they’re too busy spinning their wheels. What really surprises me is that they put more value in the physical product than its ability to sell. Normally they offer such a small commission, and try to control the price and process so tightly — I pass. And what good does that do for them? They have a garage full of product, an empty bank account and one less sales channel.
I’ve seen this mistake made over and over again in my business career. I had a boss who, when his salesperson came in with a half-million dollar contact he refused to pay the commission because it was ‘too much’ — Guess what? The salesperson didn’t leave (I would have, but I have a shorter temper), but from then on he refused to sell any large contracts. Not only that, every salesperson on staff heard about it and refused to sell or court any large bids.
When I owned a ‘bricks and mortar’ store, we’d have armchair investors stumble into our store with their ideas in hand and expect us to sell these for them. But no, they couldn’t afford to give us a good margin. We just dismissed them. We knew if we purchased products through the distributor/manufacturer channel we’d be rewarded with a decent profit margin. The normal supply channel of physical products gives the distributor about 4% of the price/profit and the manufacture sometimes less. However, the retailer gets around 30%-40% margin. That’s because they are the ones with the customers and sales channel.
So, back to my point. It makes sense, if you approach an ‘A’ level Internet salesperson –expect to give them a bigger piece of the pie — but the good news is — you’ll be selling MORE and building a list of qualified customers for your next product. Of course, there is more price that goes into it, but we’ll leave that for another post.