There's one thing that's sure-fire guaranteed to ruin your profits on resale rights products more than anything else - price cutting. It has become the scourge of information product sellers everywhere and it seems there's not much that can be done to stop it.
The number one culprit in this is eBay. There are some information and software products on sale on eBay that have starting bids as low as one cent! The reasons that it has got to this stage of undercutting on eBay are:
1. More and more people think it's easy to start an online business and eBay provides the quickest way to get started.
2. No website required, you can have an online business in an hour for less than a dollar.
3. Here's the real kicker - most newbies selling on eBay don't even know what resale rights are. They assume that if they buy an ebook for $2 they can sell it five times for a dollar each time and make $3 profit. They'll undercut the guy they bought it from and make a bit of a profit but they don't realize that in most cases they do not actually have the right to resell the product themselves. If it's pointed out to them they will generally stop if they have sold the product in blissful ignorance, but by then their five customers have the book up for sale again at $0.50!
To maintain your profits and keep you in business, your product must maintain it's perceived value. If you obtain the resale rights to a product valued at $47, don't be tempted to sell it for $17 on the assumption that the lower price will generate more sales. You would need to sell almost three times as many copies at $17 than you would at $47 to generate the same income. It is a myth that more people will buy because it's cheaper, the lower price is seen as a direct reflection of the quality of the product so potential buyers assume that it is less valuable than a $47 product. People will buy good quality information products whether they cost $47 or $17, it just needs to be valuable info that solves a problem, educates or makes money for the buyer.
There's an analogy here with pedigree dogs. Say you are a dog breeder and your dogs normally sell for $500 each but business is slow and you would like to raise some quick cash. You advertise the dogs at $200 each for a quick sale but get no takers. Why? People know that the price of the dogs should be around the $500 mark so assume that if you're selling them off cheaply that there must be something wrong with the dogs. The perceived value of the dogs is high because they are pedigree dogs, people just know that's what they need to expect to pay. It's the same with information products, if you sell a $47 product for $17 it is simply seen as a $17 product - less valuable.
So don't fall into the trap of undercutting prices, nobody wins in the end!
Article by Ian McIntosh. For resale rights to over 20 fresh top quality resale rights, software products and FREE lifetime updates that you can resell, take a look at http://www.resalerightsgold.com.
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