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Need Advice on Pricing + Pros/Cons to Sell MRR to a New Product

by TiffanyLambert
7 replies
Hey Warriors!

I got a request from someone asking about one of my new products - she wants to buy 1,000 MRR licenses to sell in her membership site.

The product is $67 - what would I sell MRR rights for and should I even do it at all?

Tiff
#advice #mrr #pricing #product #pros or cons #sell
  • Profile picture of the author John Rogers
    1,000 MRR licenses is going to significantly hinder your own ability to sell it. I would quote a price that takes into consideration what you have invested, and your expected net profit from selling it yourself. Then discount the price by the amount of time you're going to gain back by not having to market it yourself. Make sure you have something self-promotional within the product itself so you get some benefit from the thing being all over the net with MRR licenses.

    Then if the person accepts your offer, promote the hell out of it before everyone else does.

    John
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  • Profile picture of the author Gary King
    I agree with John... Make sure you price it so it's worth your while, because if she actually puts 1,000 copies out there, then it's a lot of competition for you (if you're still selling it of course).

    Maybe sell it outright to her?

    Have a great day!

    Gary
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  • Profile picture of the author Exire
    There's a few ways to approach this, depending on your circumstances.

    First of all, are you capable of putting out 1,000 copies of your product? If yes, then it's probably best to just do so and decline the MRR offer unless she's willing to pay $67,000 minimum for the MRR rights (which I doubt) because that's what the product is worth to you if you're able to get 1,000 of them sold.

    If you can't sell 1,000 copies (or it'll take you quite some time to do so) then you should consider selling the MRR rights. You could sell them to her at 10% of what you sell it for per copy and do quite well (i.e., you'd get $6.70/MRR copy for $6,700 total). Of course, 10% is just a baseline--you could always start high and negotiate down to whatever you're comfortable with.

    There's also the question of what kind of content is in your product. Specifically, do you have affiliate links in it? If so, you have a good reason to sell the 1,000 copies via MRR. Since she's requesting such a large number I assume she has distribution planned out already through her membership site. That would be 1,000 people who see your affiliate links. This also gives you leverage during negotiations on how much to charge her for the license. You can negotiate for a lower price and keep your affiliate links in the product (I am assuming it's an ebook or some other product that would make sense to have affiliate links in) thus getting you commissions further down the line for a lower up front sum. Or you can negotiate a higher price for the 1,000 copies if you remove your affiliate link--and possibly even a higher licensing fee if you remove your affiliate links and add hers instead.

    Like I said, it all depends on your circumstances but if you just have a plain ebook (or whatever the product happens to be) with no affiliate links in it, it's not proprietary information or something and you personally can't move 1,000 copies at full price then I would start out by offering her the rights at 25% of the regular price per copy. Negotiate down from there. I wouldn't take less than 10% per copy of what you're selling them for though.

    Now, before anyone says, "Who would pay that much for MRR rights!?" I'd like to point out that the OP is selling this at $67 a pop. If I have a distribution scheme set up and know for a fact that I can sell 1,000 copies for even $40 each--well, I don't know about you but I'd be willing to pay 25% of the OP's price per copy (i.e., $16.75/MRR copy for $16,750 total) in order to make $40,000. Just because it's a digital product doesn't mean you have to treat it like it's worthless and sell the rights for chump change. It's an asset. A commodity. It should be treated as seriously as you would any real world asset or commodity that had the potential to generate $67,000 over the course of 1,000 sales (as the OP's product does).
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  • Profile picture of the author Gary King
    Exire,

    Nice thoughts...


    Tiffany,

    What did you decide here if you don't mind my asking?

    Perhaps you could also do standard rights and have her sell them as an affiliate of yours?

    Or sell MRR as an affiliate at a higher rate and scale it? As she sells more she keeps more? Just trying to think of objections and possible ways to overcome them.

    Putting one MRR out there means your sales could be diminished. We all know most won't take action, but...
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    • Profile picture of the author Daniel Brock
      you could give your MRR rights to the product, then re-spin the product at a different angle so it's unique again - unique enough to warrant paying for both. Dont know if that is possible depending on how you set it all up.

      -Dan
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      • Profile picture of the author SusieJones
        Hi Tiffany and Exire Daniel and Gary,

        I was wondering the same thing - I have a lot of completely VIRGIN wedding etiquette ebook (155 pages) that I wrote and am happy to sell off the rights too, but am confused about which rights to package it with and how much to charge.

        Which leads me to my next question - does ANYONE still buy wedding stuff? I know it is evergreen - but do people still want new words?/

        I also have quality management, business management, OHS and Environmental packs 100,000's of words, great for offline consultants - is there any market for this?

        Your help is really appreciated! S
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        • Profile picture of the author Exire
          Originally Posted by SusieJones View Post

          I was wondering the same thing - I have a lot of completely VIRGIN wedding etiquette ebook (155 pages) that I wrote and am happy to sell off the rights too, but am confused about which rights to package it with and how much to charge.
          It really depends on what you're comfortable with as far as the licensing goes.

          You could sell it as PLR and let the buyers do pretty much anything they like with it (e.g., rewrite it, break it up into articles, resell it in part or whole, put their name on it, etc). You could do what Tiffany was thinking about in the OP and sell the MRR. This is basically just transferring all sales rights to the buyer (they can't change the content, but they can resell it at any price they wish--unless you restrict that in your agreement--and they can even sell the resell rights to those that buy from them). Or you could do RR where the buyer is simply allowed to resell the product but they can't change the content and they can't allow their buyers to resell it.

          These are just the "standard" licensing arrangements that you'd typically find for digital products. There's nothing to stop you from negotiating with the buyer and getting something unique to your product that you're comfortable with. For example, you might license just portions of the content as PLR and the rest of it as RR. Or you might license out the PLR rights to allow them to change the content's format but restrict them to only creating an audio version and they don't get PLR to the written content (i.e., they can turn it into an audio file but they can't rewrite the content and create a new ebook). Licensing is a really flexible option and as long as the buyer and yourself agree you can set it up any way you'd like.

          As far as how much to charge, I can't really give a definitive answer. Again, it depends on what rights you're licensing out, your ability to sell the content yourself and what the buyer intends to do with it. For example, if they want to turn your ebook into a video or audio product then you should charge more simply because video and audio have a higher perceived value in the marketplace. This means they'll earn more, thus they can afford to pay more.

          Generally you won't find someone that wants to buy the rights to X copies of your work. Usually it's an all or nothing deal: they pay you $X for the rights (PLR, MRR, RR or some mixture). However, licensing out the rights on a per copy basis is ideal but I wouldn't count on that happening online. You could certainly try to work out a per sale/copy deal.

          Which leads me to my next question - does ANYONE still buy wedding stuff? I know it is evergreen - but do people still want new words?
          I would have to say yes. There are numerous magazines that are published monthly that deal exclusively with weddings and related topics and publishing a magazine isn't cheap so there must be a market for it. Books are also published regularly which, again, isn't a cheap business to be in.

          I also have quality management, business management, OHS and Environmental packs 100,000's of words, great for offline consultants - is there any market for this?
          I believe you've hit on a great strategy, whether you recognize it or not.

          You could license out your content to offline consultants, businesses, professionals and anyone else that could use it. This is where you're more likely to get a per copy licensing deal anyway. For example, if you created some sort of Employee Handbook or Business Best Practices and licensed it out to a large corporation you could charge a licensing fee per copy (i.e., if they have 10,000 employees they might pay you $1/copy) and then, of course, you could update it every year for them and they'd have to license it again.

          Or you could license out an ebook version of the content and get paid per download (host it on your site so that you can track it, or talk to someone more techie than myself to see how else you would do it). For smaller businesses or professionals you could license out a hard copy version also which could be created through Amazon's CreateSpace program relatively cheaply (your licensee would pay for production costs, of course, on top of your fee unless you negotiate something different). You could also license out audio versions of your content to business owners or consultants. They could provide an MP3 version on their site or you could create a physical CD through Kunaki or other similar Print on Demand CD manufacturers. You would, of course, be paid per copy that they sell or give away. Or you could go for a flat one-time fee (which will likely be much higher than you'd get online) or even a monthly flat fee. Again, this is all negotiable with whoever you're licensing your content to, what they're using it for, what format it will be in and what you're comfortable with both financially and allowing them to do with your content.

          Your help is really appreciated! S
          I hope I helped. Feel free to PM me if I wasn't clear or if I can help further.
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