Crossing The FTC? Priceless

[Stephen Dean]

An "insane" but actually boring PLR bonus at the end of your sales letter? A $47 Value.

The "amazing" but off-topic software bonus you're "crazy" to be throwing in free too? A $97 Value!!!

Challenging the FTC to go after you for making up the value of your bonus? Priceless.

If you state that your bonus is a certain dollar value that it's actually not, the US FTC code says you're in violation. Check out the link above to make sure your sales copy is above board.

Cheers!
Stephen Dean

[Rezbi]

This should make things interesting.

[Ken_Caudill]

What's scary about it is that they happily assume that the cost of your goods is their business.

[Alex Cohen]

Originally Posted by Ken_Caudill

What's scary about it is that they happily assume that the cost of your goods is their business.

Laws passed by Congress under the Commerce Clause of the Constitution and upheld by the Supreme Court give the Executive Branch authority to regulate a wide variety of business matters.

Do you think the FTC is over-stepping its bounds by insisting that business people be honest?

Alex

[Ken_Caudill]

Originally Posted by Alex Cohen

Laws passed by Congress under the Commerce Clause of the Constitution and upheld by the Supreme Court give the Executive Branch authority to regulate a wide variety of business matters.

Do you think the FTC is over-stepping its bounds by insisting that business people be honest?

Alex

I believe what you pay your suppliers is your own damned business.

Is that dishonest?

[Alex Cohen]

Originally Posted by Ken_Caudill

I believe what you pay your suppliers is your own damned business.

Is that dishonest?

The topic of the OP is, "making up the value of your bonus". If you were talking about something else, I apologize.

Alex

[TigerUK]

Originally Posted by Ken_Caudill

What's scary about it is that they happily assume that the cost of your goods is their business.

riduculous, you're obviously peddling these plr stuff as was $97 or whateer, so you are being protective over it, advertising agencies have every right to regulate these markets to make sure innocent buyers arent beig duped.

[TigerUK]

Originally Posted by Ken_Caudill

I believe what you pay your suppliers is your own damned business.

Is that dishonest?

obviously never hired an accountant to audit your business and produce public accounts

[OnlineMasterMind]

For the record...

I think all these clickbank software offers are straight up lies and scams.

BUT, to me this is INSANE.

Makes me cringe just reading how in depth the FTC is regulating commerce.

So what? People can't put a value on what they believe something is worth, just because they have never sold it at that price? And people can't make their own decisions whether or not they want to buy something?

If the FTC wanted to actually do something to stop scams they would go after the ad networks who are really the ones responsible for big time, questionable offers.

But instead they are spending my tax money hiring people to research, study and enforce these silly "save the consumer" regulations.

OK, I'm gonna stop writing now - this is making me nauseous.

[OnlineMasterMind]

Pretty soon you are going to have to get your bonuses "appraised" by the Gov't

[davemiz]

i dont buy this one... just read the ftc thing.... they are using a product that is readily available anywhere... a pen.

a pen you can buy anywhere. it has a set price.

information, software is unique and not sold everywhere.... its only sold by you.

its apples and oranges...

[MikeHumphreys]

Originally Posted by davemiz

i dont buy this one... just read the ftc thing.... they are using a product that is readily available anywhere... a pen.

a pen you can buy anywhere. it has a set price.

information, software is unique and not sold everywhere.... its only sold by you.

its apples and oranges...

I agree with Dave.

As for prices of digital prices, you could have tested a higher price point and found it didn't convert as well as you wanted. So dropping the price (one option of tackling the problem) to attract more sales is a long-practiced business tactic worldwide.

In terms of bonus values... it boils down to believability. IF you're offering $500 worth of bonuses for a $7 paid ebook, that's not believable. If you're offering $500 worth of bonuses for a $297 digital product, then that's much easier to believe.

My 3 cents,

Mike

[Rezbi]

Originally Posted by OnlineMasterMind

For the record...

I think all these clickbank software offers are straight up lies and scams.

BUT, to me this is INSANE.

Makes me cringe just reading how in depth the FTC is regulating commerce.

So what? People can't put a value on what they believe something is worth, just because they have never sold it at that price? And people can't make their own decisions whether or not they want to buy something?

If the FTC wanted to actually do something to stop scams they would go after the ad networks who are really the ones responsible for big time, questionable offers.

But instead they are spending my tax money hiring people to research, study and enforce these silly "save the consumer" regulations.

OK, I'm gonna stop writing now - this is making me nauseous.

No, they can't.

Your supposed to put a price on something if that is actually what they're worth. Not what you want people to believe it's worth.

If you can't sell it at that price, it's not worth that price.

[Russell Barnstein]

If you actually read all of the provisions, you'll clearly see this is a good thing. The government is not "investigating" or "researching" whether or not you are using these practices. They are only a set of guidelines. That way, if you're a scumbag and you're doing scummy things, people can hold you accountable.

If the provisions are read and UNDERSTOOD, the only people who would have any problem with these rules are people who are engaging in shady practices.

Every product or service we have ever sold was priced based on actual market research, the cost to create it and a profit markup. Personally I think that if you're pulling arbitrary prices out of your A$$ for any product or service then you really have a lot to learn about business.

Ultimately, if you can back up the value of anything that you claim, you'll never have anything to worry about.

[OnlineMasterMind]

Originally Posted by Russell Barnstein

If you actually read all of the provisions, you'll clearly see this is a good thing. The government is not "investigating" or "researching" whether or not you are using these practices. They are only a set of guidelines. That way, if you're a scumbag and you're doing scummy things, people can hold you accountable.

If the provisions are read and UNDERSTOOD, the only people who would have any problem with these rules are people who are engaging in shady practices.

Every product or service we have ever sold was priced based on actual market research, the cost to create it and a profit markup. Personally I think that if you're pulling arbitrary prices out of your A$$ for any product or service then you really have a lot to learn about business.

Ultimately, if you can back up the value of anything that you claim, you'll never have anything to worry about.

lol... I guess I have a lot to learn about business then.

And I mean, A LOT.

Everything I know and that has worked in the REAL WORLD about price elasticity is clearly WRONG.

Maybe I should post all of my stuff here from now on and everyone can decide for me what the prices of my products should be and what the value of bonuses are.

Free market and satisfied customers? Forget that.

And you are so right Russell... Hype doesn't sell. Just look at Apple, Disney and WWE. Complete and utter failures, right?

You must have gone to a very prestigious business school.

[TigerUK]

Originally Posted by OnlineMasterMind

lol... I guess I have a lot to learn about business then.

And I mean, A LOT.

Everything I know and that has worked in the REAL WORLD about price elasticity is clearly WRONG.

Maybe I should post all of my stuff here from now on and everyone can decide for me what the prices of my products should be and what the value of bonuses are.

Free market and satisfied customers? Forget that.

And you are so right Russell... Hype doesn't sell. Just look at Apple, Disney and WWE. Complete and utter failures, right?

You must have gone to a very prestigious business school.

I don't know what provisions are in place by the FTC, but in UK retail, if you're displaying sale prices like was £50, now £40. If you get investigated by trading standards you need to be able to supply proof that the item indeed sold for that previous price.

The principle is similar, if you want to declare that this bonus is worth $97, it wont be an unreasonable ask, for the FTC to request that you supply proof that this product actually sold for $97 at some point.

I think it's a perfectly reasonable thing to ask for. And the FTC is protecting the public.

If you bought a £200,000 house, and the house was build on unstable foundations, and then half the house sinks into the ground after a few months of purchase. I'#m sure you'd be protesting to the authortiies for your money back or at least cost of repair, but the authorities.

[AdwordsMogul]

I think all this is poverty thinking.

It's like saying a Van Gogh painting should be sold for a maximum of $5 because that's what the materials cost and nobody had paid much than that in his time.

Deceiving customers?

Our whole economic system is a big deception. First of all, the banks and all other financial institutions including the government are designed to keep people in debt for buying stuff.

The school system teaches us nothing about money, and then they come after the few of us who learn how to make it.

[docsulo]

Originally Posted by davemiz

i dont buy this one... just read the ftc thing.... they are using a product that is readily available anywhere... a pen.

a pen you can buy anywhere. it has a set price.

information, software is unique and not sold everywhere.... its only sold by you.

its apples and oranges...

The real value or price is a moot point if you get sued by the FTC.

If you get sued they will value ALL OF YOUR PRODUCTS (information or otherwise) as "worthless." Every time. And your defensive maneuvers and explanations will not just fall on deaf ears they most likely won't reach anyone's ear other than your $350/hour attorney.

Just sayin'.

[Collette]

I'm not sure how this affects information products, particularly bonus items. The FTC example is of a physical product, and it's pretty easy to source the actual cost of the item for a physical product.

However, how do you source the actual cost/value of an information product?

Say, for example, you have an app developed in the USA vs outsourced overseas. It will cost $X vs $Y, based simply on what the app designer charges. So Seller A may charge $100 (based on his cost of development and bringing the app to market), while Seller B may charge $15 (based on the same parameters).

And, when it comes to information, the price/value becomes even more of a free-floating proposition. To the buyer, the value of information purchased - the exchange of intellectual ideas, knowledge, and concepts in exchange for a monetary amount - is purely a matter of perception.

Right now, I've got two books I'm reading. One is a 312-page hardback @ $24.95. The other is a 126-page paperback, selling for $11.95.

The hardback, although it originally seemed the more promising of the two, has proved disappointing - for me. Someone else may find the same information well worth their $24.95, and then some.

So, how would the FTC call that one, if I complained? I can't, for the life of me, see how they would be able to place a monetary value on knowledge.

[Stephen Dean]

Originally Posted by Collette

I'm not sure how this affects information products, particularly bonus items. The FTC example is of a physical product, and it's pretty easy to source the actual cost of the item for a physical product.

However, how do you source the actual cost/value of an information product?

The FTC isn't saying you need to value your bonuses based on the cost. They simply say that if you say it's a dollar value, then you must have tried to sell it at that value in the past. The price is completely arbitrary, as long as they deem you made a good faith attempt to sell it at that price in the past.

Disclaimer: I have no training on the issue and maybe wrong.

Cheers,
Stephen

[Russell Barnstein]

Originally Posted by OnlineMasterMind

lol... I guess I have a lot to learn about business then.

And I mean, A LOT.

Everything I know and that has worked in the REAL WORLD about price elasticity is clearly WRONG.

Maybe I should post all of my stuff here from now on and everyone can decide for me what the prices of my products should be and what the value of bonuses are.

Free market and satisfied customers? Forget that.

And you are so right Russell... Hype doesn't sell. Just look at Apple, Disney and WWE. Complete and utter failures, right?

You must have gone to a very prestigious business school.

Clearly you don't have much foresight. By stating "Hype doesn't sell," I am creating hype.

Just something I learned at this imaginary "prestigious business school" I supposedly went to.

And I never said anything that even remotely suggested that any person other than you has a right to decide how to price your products. I refer you to my quote: "pulling arbitrary prices out of your A$$" I think my meaning was pretty obvious, but I'll break it down for you: Your pricing should be based on SOMETHING. If you just make an arbitrary price up, then you clearly don't really know the true value of your product or service in your marketplace.

And if that's the case, then yes, you do have a lot to learn about business.

[Jamie Lewis]

Originally Posted by TigerUK

And the FTC is protecting the public.

Um.. yeah.. the protection worked wonderfully in 2008. LOL

How can you guys defend unconstitutional commissions and agencies of the US government?

You dont even find that on the political boards, Democrat & Republican alike.

If they did implement real measures that actually help consumers not get ripped off they would put themselves out of business.

[Russell Barnstein]

Originally Posted by OnlineMasterMind

So you are acknowledging that you are stating something that you do not believe is true (i.e lying) in order to create attention.

Great.

Good luck selling your article packages Russell.

Not that I should have to explain anything to the likes of you, but personally I NEVER buy anything that is sold with hype. I think it's lame. However, I recognize that hype does get people's attention. So, in my signature I use hype to get the attention of my audience, then I put forth what REALLY sells: Proven success.

I never asked you to comment on my signature or the way I conduct business, and I certainly never said anything about YOUR practices or opinions. (Mainly because I don't care)

And I don't need "good luck" to sell my work. I have been in business for more than a decade and I support a staff of nearly a dozen professionals in addition to raising my family, all from selling my article packages. Luck had nothing to do with my success.

I see people like you come and go all the time. Your negativity and unreasonable harassment of others in this thread tells me all I will ever need to know about you. Fortunately, you don't frustrate or bother me at all.

In fact, I find you very amusing. Your childish behavior is quite funny, really. Perhaps you should take a break from the forum for a while and reconsider the way you are presenting yourself to the online community?

I'll keep checking in on this thread purely for the entertainment you're providing. But my guess is with your attitude and the apparent spare time you have to create such a problem within one single thread indicates to me that you're angry because you're not successful. And to me, that's hysterical!

I hope you're having a great weekend, but looking at your 3 quick little baby posts I'm pretty sure you're not. Which is also hysterical!

Keep it coming son.

[OnlineMasterMind]

Originally Posted by Russell Barnstein

Not that I should have to explain anything to the likes of you, but personally I NEVER buy anything that is sold with hype. I think it's lame. However, I recognize that hype does get people's attention. So, in my signature I use hype to get the attention of my audience, then I put forth what REALLY sells: Proven success.

Oh, that's how you justify it yourself?

How convenient.

So "hype doesn't sell" but you acknowledge you are using hype to sell. (Yes, "getting attention" is part of the sales process in case you were not aware of that.)

Fascinating.

And I find it sincerely amusing that you specifically state "presenting yourself to the online community"

Actually Russell...

YOU are the one who you should probably follow your own advice as you are the one who is promoting your services here, son.

[Collette]

Originally Posted by Stephen Dean

The FTC isn't saying you need to value your bonuses based on the cost. They simply say that if you say it's a dollar value, then you must have tried to sell it at that value in the past. The price is completely arbitrary, as long as they deem you made a good faith attempt to sell it at that price in the past.

Disclaimer: I have no training on the issue and maybe wrong.

Cheers,
Stephen

As far as I can make out from the language, that only applies if you're offering the product at a "reduced" price. So this would mostly affect those sellers alleging that the product is "usually" sold for $X, but now they're offering it for a "reduced" price of $Y.

So - as I read it - if the seller is making a first-time offer, and they place a value on their product or bonus, they can place any "value" they want - as long as the ultimate offer is not positioned as being a "reduction" from the "regular" price.

*Since I'm not FTC-trained, either, I could also be completely wrong about this.

[Russell Barnstein]

Originally Posted by OnlineMasterMind

Oh, that's how you justify it yourself?

How convenient.

So "hype doesn't sell" but you acknowledge you are using hype to sell. (Yes, "getting attention" is part of the sales process in case you were not aware of that.)

Fascinating.

And I find it sincerely amusing that you specifically state "presenting yourself to the online community"

Actually Russell...

YOU are the one who you should probably follow your own advice as you are the one who is promoting your services here, son.

You are correct, I probably shouldn't be bantering back and forth with you like this, but I must admit I've enjoyed myself greatly.

Sarcasm aside, I'd enjoy myself even more if this thread turned positive rather than continue down the path it's currently on. I'd like to offer you one free professional article. Not written by a staff writer or editor; I'll write it myself. You send me a keyword and a URL to target, and I'll craft you a smashing article about whatever topic you wish. No obligation, no sales call.

Why? Just trying to make your day man.

[hitesh93]

Originally Posted by davemiz

i dont buy this one... just read the ftc thing.... they are using a product that is readily available anywhere... a pen.

a pen you can buy anywhere. it has a set price.

information, software is unique and not sold everywhere.... its only sold by you.

its apples and oranges...

Even this is somewhat incorrect. A pen can be worth different things to different people. In a dire situation, a pen could be your only survival tool. By etching a pattern in its lid, you can use it as a screwdriver, when thirsty and lost, it can be used to create an initial opening to dig out from to capture condensed water, if needed, it can be used to jam into eyes of a wild beast attacking you AND you could leave messages for rescue teams if you were stranded somewhere...I bet the value of that pen is much greater to me in that situation than usual.
As such, the government has no business telling anyone what 'value' of an object is. The free market competition defines the price of a thing based on supply and demand which hinges upon 'perceived' value.

[JasonParker]

Lighten up peeps.

If someone gets down to the nitty gritty and puts the blood, sweat, and tears in to hone their craft then that's already enough to deserve your respect.

Anyhow... I think we need an attorney to look at this and tell us what's up. I know there are a few on WF but can't think of who they are.

Guessing what this stuff means could be just as dangerous as guessing what your prospect is like instead of knowing.

[Stephen Dean]

Originally Posted by Collette

As far as I can make out from the language, that only applies if you're offering the product at a "reduced" price. So this would mostly affect those sellers alleging that the product is "usually" sold for , but now they're offering it for a "reduced" price of .

So - as I read it - if the seller is making a first-time offer, and they place a value on their product or bonus, they can place any "value" they want - as long as the ultimate offer is not positioned as being a "reduction" from the "regular" price.

*Since I'm not FTC-trained, either, I could also be completely wrong about this.

I think you'd be right if you were selling the product for that price, but you're giving it away "free" as a bonus. Or you may be right altogether, but my interpretation is that if you list the value then it should have been for sale at that price at some point.

And that's a pretty easy thing to fix.

Cheers,
Stephen

[Old Copy Dog]

Came across this and had to comment - especially since I see a lot of younger copywriters here trying to find their way.

For any smart marketer this FTC reg is a non-issue, and not even a new one.

If you have bonuses with specific values on them, set up a store on your site and sell the bonuses individually at the valued price.

This has several benefits:

1) It makes getting your bonuses for free feel like an actual deal - it gives weight to your offer.

2) It keeps you compliant with the FTC - this is not a new issue, they've never liked the tactic of B.S. prices on bonuses, who would? (Yay! You're not a fraud!)

3.) You'll find people will actually buy your bonuses at the valued price - and that gives you the chance to upsell them to the full package by telling them they can apply the purchase price of the bonus towards the main product where they get all these other bonuses etc.

PLUS; you start to see what bonuses people actually want because they'll buy them as standalones - chances are those are the ones that have selling power in your offer. And will lead to all kinds of insights into what your market wants you to sell them.

Offer a guarantee too. The best bonuses are WORTH the money they're valued at. Especially if you're building a long term business where things like keeping customers matter to you.

You can then ditch unwanted bonuses as you replace them with ones with real value that people actually want - improving your offer even more. (More sales - yay again!)

4) Same goes for using a nominal price that you discount from in your promos. On passive pages that are not your primary sales page, like a store, you SHOULD offer the product at the nominal price. Or, if you use deadlines, have the product selling at full price after your deadline is over.

When you do offer the price break, it'll be stronger.

Then, to manage your customer relationship with people who buy at the nominal price just in case they see the lower priced offer, you should send an unannounced bonus "gift certificate" for the difference between the nominal price and the sale price that they can apply to the purchase of another product you have - ideally you have products that cost more than the difference so you're using this to motivate the 2nd sale.

And your copy should be written to be able to sell it at the higher price then when there's a price break (with a reason why of course) it'll just work better.

5) Random bonus stacking is a pathetic sales tool - the world of Direct response is full of tests where adding stupid bonuses lowered results. This is an area of your offer where you should apply creativity and marketing savvy to come up with credibile, exciting and believable bonuses.

The rule of thumb I use is your bonus should be something your top customers would gladly pay the full price of the product to get.

Just throwing crap up with a fake price and calling it a bonus isn't marketing, it's the blind following the blind.

The funny thing is; in most cases the honest, ethical strategy is more powerful than the lazy, half-assed B.S. marketing anyway.

I've seen “amazing" promotions kill businesses. Like one many "gurus" rave about because the gross sales were so high (and wannabe copywriters are probably holding up as examples of "how it's done") but the copy was so hyped, and the product so bad, the refunds were ridiculous (which, your merchant account charges you a % of so every refund erodes profits from customers who stick).

Worse, the customers who bought never, ever bought anything from that company again and the business withered and died on the vine. But, hey, at least the copywriter gets to promote how much his promo sold!

Just my .02

Just an Old Copy Dog

P.S. Food for Thought: These days many companies using extremely hyped up copy are getting average refund rates of 30%-50% on their promos so in order to fight the loss of profits from merchant account fees they're putting 10% refund processing fees into the fine print on their promos.

While, in the same market, other competitors are using less hyped up copy approaches, selling as much and more per promo and sitting on refund rates well under 10% on average.

Who do you think is developing a more profitable long term customer base?

You can make a lot of money using questionable tactics but you have to work a lot harder to do it.

P.P.S. Don't do anything behind the scenes in your business you wouldn't want published on the front pages of U.S.A. Today with your name plastered all over it.

[John Breese]

Originally Posted by Ken_Caudill

I believe what you pay your suppliers is your own damned business.

Is that dishonest?

Not in the least. I fully support consumer protection, but at the same time, since retailers reserve the right to tack their own price tag to any given item in their stores, I can't help but find this invasive.

[John Breese]

@Old Copy Dog:

"2) It keeps you compliant with the FTC - this is not a new issue, they've never liked the tactic of B.S. prices on bonuses, who would? (Yay! You're not a fraud!)"

Personally, I don't use value figures for bonuses in my copy, but some of my clients/copywriting friends do and I don't see them as frauds. To me it's more a question of style.

"P.P.S. Don't do anything behind the scenes in your business you wouldn't want published on the front pages of U.S.A. Today with your name plastered all over it."

This however, is very sound advice indeed.

[Paul Schlegel]

Originally Posted by Jamie Lewis

Um.. yeah.. the protection worked wonderfully in 2008. LOL

How can you guys defend unconstitutional commissions and agencies of the US government?

You dont even find that on the political boards, Democrat & Republican alike.

If they did implement real measures that actually help consumers not get ripped off they would put themselves out of business.

It's a bit better and they're going after harder cases, but IMHO, the bottom line is still that foundatinoally the FTC just wants easy cases they can win for the most part to try to make the marketplaces online/offline feel like/believe the FTC has real control and the ability to regulate wisely - call me cynical, but traditionally the FTC seems to have been about giving the "impression" of protecting the consumer - although with their shift focusing more to gatekeepers - if they actually ever really proceed against a major gatekeeper (i.e., some of the very worst cpa/affiliate networks that facilitate the propogation of scams from several non-U.S. countries well known for fraud and money laundering, & Identity & CC Theft, then they'll be actually doing something productive).

[Paul Schlegel]

Originally Posted by Jamie Lewis

How can you guys defend unconstitutional commissions and agencies of the US government?

Can you explain why you think the agencies themselves are unconstitutional? I can definitely see how their actions can be unconstitutional.