Have we 'shot ourselves in the foot' by selling products at crazy prices?

203 replies
Every now and then I stop by the WSO forum and take a look at what 'competitors' are offering. I saw one today that just made me sad -

I mean, don't get me wrong, it looks like a great offer; great product, from a trustworthy source - of these things I have no doubt.

But for 5-bucks! OMG!

I totally understand and get the "build a list / add an up-sell" yada yada yada, I do it myself of course... but 5-bucks ?? This is a product that would have sold for $47-$67 easily 2 -3 years ago.

What are we saying to these people? In the eyes of the consumer, does this devalue the overall product market?

Are we attracting the wrong type of customer doing this or are we just "filtering" the numbers?

If nothing else, I wonder if we're making it harder for ourselves to make a living selling online? What hope does this give to the newbie?

Your thoughts....

Paul

PS. Mind you, as a consumer I'm not saying the prices should go up (we know that would never happen anyway), because I, like anyone, LOVE a bargain
#foot #hot
  • Profile picture of the author DianaHeuser
    Paul,
    In the time that I was a Digital Scrapbook Designer, I saw the prices of digital scrapkits keep coming down for several reasons:
    1) The freebie hunters always complained about the price
    2) There was huge competition and most of the designers were below standard so they sold their kits at rock bottom prices.
    3) Designers lost their sense of self-worth and so dropped their prices in a panic to try and retain market share.

    With my new business I have decided on a policy of adding great value to my product but I will not undervalue myself or the contribution I made to the product. It might mean less sales but at least they will be quality sales from people who are serious.

    Di
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    • Profile picture of the author valmillercorl
      Originally Posted by DianaHeuser View Post

      Paul,
      In the time that I was a Digital Scrapbook Designer, I saw the prices of digital scrapkits keep coming down for several reasons:
      1) The freebie hunters always complained about the price
      2) There was huge competition and most of the designers were below standard so they sold their kits at rock bottom prices.
      3) Designers lost their sense of self-worth and so dropped their prices in a panic to try and retain market share.

      With my new business I have decided on a policy of adding great value to my product but I will not undervalue myself or the contribution I made to the product. It might mean less sales but at least they will be quality sales from people who are serious.

      Di
      Good for you! I have used digital scrapbooking and you are right lots of competition and substandard crud.
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  • Profile picture of the author Richard Van
    Hi Paul,

    I bought a WSO off a very respected member the other day for $5 and the upsell was just $17. I actually practise what he was selling and have done for a year or so now but was interested in what he had to say as I have a lot of respect for him.

    Personally the 40 page manual was worth way more than $5 and I mean way more, the upsell was easily worth $200 and I'd have paid more had this method been new to me.

    Having said that, from a feedback point of view and so many people using the WSO forum for testing products, it's probably a very good thing because I have no doubt he could very succesfully sell this for the prices I mentioned on CB all day long.

    Like you, I also very much appreciate a tip top bargain like that.

    Paul, if you decide to go down to the $5 mark, I'd appreciate it if you dropped me a PM . Having said that, as someone who got to review your Max. Success Uni, I think you've given me quite enough already.

    Out of interest where are you in Queensland? I'm out for a month from the middle of January visiting family in Sydney, it'd be good to do a few beers.
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    • Profile picture of the author Paul Barrs
      Originally Posted by DianaHeuser View Post

      With my new business I have decided on a policy of adding great value to my product but I will not undervalue myself or the contribution I made to the product. It might mean less sales but at least they will be quality sales from people who are serious.

      Di
      Di, Great points. I too would be concerned about undervaluing myself if I were to ever do this; however, perhaps as Richard suggests..,


      Originally Posted by Richard Van View Post

      Having said that, from a feedback point of view and so many people using the WSO forum for testing products, it's probably a very good thing because I have no doubt he could very succesfully sell this for the prices I mentioned on CB all day long.
      Which makes me wonder if they actually "do".

      A thought - release a "part-product" for (eg) $5 - $7; measure interest, get feedback on proposed direction - then if all points favorably, go ahead with full product.

      Very possible.

      Paul

      PS. Richard, I'm about 1000K's north of Sydney, Sunshine Coast -
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  • Profile picture of the author Robert Puddy
    If you price your products cheap your going to get cheap customers...Always amazes me when people aim their products at people with no money to spend.

    First rule of business...create a quality product thats aimed at a ravenous market with money to spend
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  • Profile picture of the author Ron Douglas
    WSO sellers are absolutely shooting themselves in the foot and killing the marketplace at the same time. Selling a product for $5, or even $17 when it's worth $197 is just bad marketing. Marketing 101 - research market value before slapping a price on a product or service.

    When you train your list to only buy products under $20, you're killing your potential profits and lowering your perceived value as a business owner as well.

    The IM information market has become more difficult to compete in for the average person because you have to constantly crank out low priced products to make ends meet.

    Running your business this way is not the 'Internet Lifestyle,' quite the opposite. Change your model or be stuck in front of a computer screen for 80 hours a week for the next 30 years.

    This is my opinion of course and I expect that lots of people will disagree.
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    • Profile picture of the author Steven Wagenheim
      Originally Posted by Ron Douglas View Post

      WSO sellers are absolutely shooting themselves in the foot and killing the marketplace at the same time. Selling a product for $5, or even $17 when it's worth $197 is just bad marketing. Marketing 101 - research market value before slapping a price on a product or service.

      When you train your list to only buy products under $20, you're killing your potential profits and lowering your perceived value as a business owner as well.

      The IM information market has become more difficult to compete in for the average person because you have to constantly crank out low priced products to make ends meet.

      Running your business this way is not the 'Internet Lifestyle,' quite the opposite. Change your model or be stuck in front of a computer screen for 80 hours a week for the next 30 years.

      This is my opinion of course and I'm expect that lots of people will disagree.
      Ron, I actually agree with you 100%. And I'm as guilty as everybody else
      who has caved in to the "I want it cheap, I want it now and I want a
      guarantee that I'm going to make a gazillion bucks with it" market.

      This is the main reason why I work very little these days, if at all. Yeah, I
      still put out cheap products, but hell, they only take me 4 to 8 hours to
      put together and still earn me, if you look at it at an hourly basis, well over
      $100 per hour worked. So who gives a f**k?

      If I sound jaded, yeah, I'm beyond jaded. Which is why I can't wait to
      chuck this whole business for good. Only reason I even put in the few hours
      a month I do now is because I feel guilty not working when my wife has to
      go to that miserable war zone infested high school day after day. When she
      retires in 3 years, I'm done for good. We don't need the money anymore. I've
      made my fortune and quite honestly, I'd rather be spending ALL my time doing
      other things. But if my wife still has to work (to get her full pension and IRA
      package) then I should have to work too. As it is, I feel guilty that I maybe
      but in 16 hours for a whole month, if that.

      You should see my Ebay bill for Magic cards these days. It's more than most
      people spend on their business.

      But I earned it. And yeah, I earned it by catering to the budget market. If I
      had to do it all over again, for starters, I would have never touched the IM
      niche and just put up a massive authority site in one of the desperate
      buyers super niches. Had I done this in 2003 when I first started (what the
      hell did I know) I'd be rolling in it today instead of just very comfortable.

      Yeah, I'm kind of letting my hair down in this thread. Why? As a message to
      others to NOT do what I did. Working 14 hour days, 7 days a week, just to
      make 5 figures a month is NOT fun. Repeat...NOT.

      I could have worked less and made more if I put together a completely
      different business model. No point in doing it now as I don't need the money
      anymore. But boy, if I could do it all over again.

      Anyway, sorry for the rant, but this HAD to be said.

      Fortunately, my stupidity didn't leave me broke.

      Yeah, I was lucky.

      The next guy who devalues his worth may not be so lucky.

      Take this as a warning folks...for whatever it's worth to you.
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      • Profile picture of the author Richard Van
        Originally Posted by Steven Wagenheim View Post


        Yeah, I'm kind of letting my hair down in this thread. Why? As a message to
        others to NOT do what I did. Working 14 hour days, 7 days a week, just to
        make 5 figures a month is NOT fun. Repeat...NOT.
        I agree with what was an excellent post but I think you're unnecessarily putting yourself down Steven.

        There are a huge amount of people that put in 14 hour days and don't earn jack s***.

        Besides, for all those regrets you still get to play that magic the gathering thing you play all day and you enjoy that, so it's pretty good really.
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      • Profile picture of the author oda
        Originally Posted by Steven Wagenheim View Post

        Steven, I could have worked less and made more if I put together a completely
        different business model. No point in doing it now as I don't need the money
        anymore. But boy, if I could do it all over again.

        Anyway, sorry for the rant, but this HAD to be said.

        Fortunately, my stupidity didn't leave me broke.

        Yeah, I was lucky.

        The next guy who devalues his worth may not be so lucky.

        Take this as a warning folks...for whatever it's worth to you.
        If you get bored in your retirement and would like to unload on someone I would just love to be that someone.

        That Comment "But boy, If I could do it all again" has me more curious than a bag full of cats.

        It seems with 16hours a month taken up you have a few spare hours for a beer, I'm In Australia so I would happily drink a beer with you at any time of day. I have a few bar signs I can put behind me so It looks like I'm in the pub on the webcam.

        GREAT Comment, This is my major flaw. I made a bunch of sales of a product at the $37 mark then for no reason other than wanting to see a better conversion percentage I dropped my price. (At least in analysis that is the conclusion I came to)

        I was chasing a conversion percentage rather than a sales number. Who cares if its 1.7% If you make the required Number of sales?
        Sure you could look at a lot of things to make your conversions better but the EASY way is drop your price.
        (After all, Who wants to admit to themselves the sales copy that they took 3 days to write is crap?)

        By reducing the price, I reduced the value, which reduced the sales and actually lowered the conversion rate. It was a Freakin disaster!
        Now the product is a free bonus and a giveaway on facebook.

        Killed my Own product about half way through its cycle.

        Its a mindset and its actually quite tough to get out of, that feeling of selling 1000 at $5 is nice (I assume), But I would prefer the feeling of selling 100 at $47 a Month.

        Thanks for the great comments on this thread I took a lot out of it.

        Cheers all

        Oda
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      • Profile picture of the author warriorkay
        GOLD, Steven... that's what this post of yours is worth!!!

        If only MOST will read it again and again until it sinks in!

        I know I will!

        I keep asking myself nowadays...

        How many WSOs does Allen Says bring out and sells for $5?!

        Of course none. He spent his entire time for MANY YEARS
        building just one AUTHORITY site. Look at it today. It
        brings him MANY thousands of dollars every single day...
        without losing his soul selling to thousands of people for $5.

        So, yes, Steve, you are right and I agree 100% with you. But
        what I have to say is that it's NOT too late to start an
        authority site. I am thinking VERY SERIOUSLY about putting
        most of my efforts in the coming months on just one or a
        couple AUTHORITY sites, outside IM, that can grow as big
        as this forum!!!

        And why not??!! We all know so much, even much more than
        the many people out there who are building AUTHORITY
        sites that become worth MILLIONS of dollars. The only
        problem is that we are spending MOST of our time creating
        and selling $5 WSOs... and dealing with the attendant issues,
        re customer support, etc that comes with it.

        Yes, Steven... not FUN at all, I agree 100%!

        Again, below is the link to Frank Kern's video that EVERYONE
        should watch, to stop this madness of selling $5 WSOs,
        regardless of the rationale behind it:

        http://frankkern.com/state-of-the-internet-success/


        Kingsley


        Originally Posted by Steven Wagenheim View Post

        Ron, I actually agree with you 100%. And I'm as guilty as everybody else
        who has caved in to the "I want it cheap, I want it now and I want a
        guarantee that I'm going to make a gazillion bucks with it" market.

        This is the main reason why I work very little these days, if at all. Yeah, I
        still put out cheap products, but hell, they only take me 4 to 8 hours to
        put together and still earn me, if you look at it at an hourly basis, well over
        $100 per hour worked. So who gives a f**k?

        If I sound jaded, yeah, I'm beyond jaded. Which is why I can't wait to
        chuck this whole business for good. Only reason I even put in the few hours
        a month I do now is because I feel guilty not working when my wife has to
        go to that miserable war zone infested high school day after day. When she
        retires in 3 years, I'm done for good. We don't need the money anymore. I've
        made my fortune and quite honestly, I'd rather be spending ALL my time doing
        other things. But if my wife still has to work (to get her full pension and IRA
        package) then I should have to work too. As it is, I feel guilty that I maybe
        but in 16 hours for a whole month, if that.

        You should see my Ebay bill for Magic cards these days. It's more than most
        people spend on their business.

        But I earned it. And yeah, I earned it by catering to the budget market. If I
        had to do it all over again, for starters, I would have never touched the IM
        niche and just put up a massive authority site in one of the desperate
        buyers super niches
        . Had I done this in 2003 when I first started (what the
        hell did I know) I'd be rolling in it today instead of just very comfortable.

        Yeah, I'm kind of letting my hair down in this thread. Why? As a message to
        others to NOT do what I did. Working 14 hour days, 7 days a week, just to
        make 5 figures a month is NOT fun. Repeat...NOT.

        I could have worked less and made more if I put together a completely
        different business model. No point in doing it now as I don't need the money
        anymore. But boy, if I could do it all over again.

        Anyway, sorry for the rant, but this HAD to be said.

        Fortunately, my stupidity didn't leave me broke.

        Yeah, I was lucky.

        The next guy who devalues his worth may not be so lucky.

        Take this as a warning folks...for whatever it's worth to you.
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      • Profile picture of the author James Sides
        Originally Posted by Steven Wagenheim View Post

        Working 14 hour days, 7 days a week, just to make 5 figures a month is NOT fun. Repeat...NOT.
        I could not have said it better myself. I recently realized that while the money might be great I have NO time to enjoy it or my family.

        The days of working 18 hours straight or 100+ hour weeks stop now.

        Thanks for offering some insight from someone nearing the end of their journey instead of someone only in the midst of it.

        Best of Luck Steven!

        James

        P.s God Bless your poor wife...I can't even stand being inside a school for the hour it takes during school events. No one has any manners anymore.
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        "People will remain the same until the pain of staying the same is greater than the pain of change."

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  • Profile picture of the author Jerry Reily
    Are forgetting the law of supply and demand? Are we ignoring the demand factors when we stick to the price of our product up there? How long should we hold on to our ideal value if no one is buying the product?
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    • Profile picture of the author Rus Sells
      There is more demand then there are suppliers, so its the suppliers fault for caving to lower prices.

      Originally Posted by Jerry Reily View Post

      Are forgetting the law of supply and demand? Are we ignoring the demand factors when we stick to the price of our product up there? How long should we hold on to our ideal value if no one is buying the product?
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      • Profile picture of the author Henry White
        Originally Posted by Rus Sells View Post

        There is more demand then there are suppliers, so its the suppliers fault for caving to lower prices.
        And, of course, the corollary: you're competing against junk and trying to compete with their pricing, so don't act shocked when your product is automatically lumped with the worst of what's out there.
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      • Profile picture of the author wortell
        Totally agree... i think the issue i've personally felt is the "longevity" end of internet marketing, developing new tools/things for onliners, is to never give up / cave to the whiners - who always want it more featuresque (than functional), more tools (than they can even use) at the cheapest possible cost (minus $10 more dollars).

        Though not rich! ... Keeping to those scruples and invoking the "still in business years later" factor [which is a huge one btw] my prices have (if anything) gone up over the past 2 yrs - embarassingly so. My stress however has dropped to 'nil.

        (true story - i triple-charged for a product I was selling for peanuts, and literally tripled the sales... and reduced my helpdesk ticket overload from 100 emails and 50 tickets+ per week, down to 'nil)

        Point being... when price is the only commodity someone is leaning on there is a *true* absense of value (inherently) within the product itself. The same is true vv.
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    • Profile picture of the author Robert Puddy
      Originally Posted by Jerry Reily View Post

      Are forgetting the law of supply and demand? Are we ignoring the demand factors when we stick to the price of our product up there? How long should we hold on to our ideal value if no one is buying the product?
      Thats the point if the product isnt selling at your prefferred price the thing to do is move to another product choice. Not lower the price

      Like I said in another thread not every product is a winner, 1 in 10 will be a success. learn to drop products and move on. OR find away to add value to the product so it does sell

      Point is raise the value of the product till it sells, dont lower the price to make it sell
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      • Profile picture of the author Jerry Reily
        Originally Posted by Robert Puddy View Post

        Thats the point if the product isnt selling at your prefferred price the thing to do is move to another product choice. Not lower the price

        Like I said in another thread not every product is a winner, 1 in 10 will be a success. learn to drop products and move on. OR find away to add value to the product so it does sell

        Point is raise the value of the product till it sells, dont lower the price to make it sell
        This really hit me. Eureka! Thanks!
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      • Profile picture of the author Black Hat Cat
        Banned
        Originally Posted by Robert Puddy View Post

        Thats the point if the product isnt selling at your prefferred price the thing to do is move to another product choice. Not lower the price

        Like I said in another thread not every product is a winner, 1 in 10 will be a success. learn to drop products and move on. OR find away to add value to the product so it does sell

        Point is raise the value of the product till it sells, dont lower the price to make it sell
        If a product doesn't sell at $47, but makes regular sales at $37, it makes no sense to just drop the product and move on to something else that also might not sell at your preferred price, especially when we're talking about digital products.

        Lowering prices is fine, to a point. Just because you prefer a certain price doesn't mean it's the correct price.
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        • Profile picture of the author Black Hat Cat
          Banned
          What do you consider is a reasonable price for a WSO up-sell?
          The correct answer would be, it depends on the upsell. There is no one size fits all price for all WSO upsells.
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          • Profile picture of the author Paul Barrs
            Often when thread clicks over to it's second page or more, rather than read every post I'll scan through and just read highlighted posts or or look for keywords that re on topic.

            Almost all the comments on this thread have are absolute gems. Fantastic.

            They themselves are worthy of packaging up into a coffee book for ever online entrepreneur - and recommended reading for all newbies (as well as more experienced marketers.).

            Here's some of my favorites that really highlight solid business wisdom:

            Originally Posted by Robert Puddy View Post

            Thats the point if the product isnt selling at your prefferred price the thing to do is move to another product choice. Not lower the price

            Like I said in another thread not every product is a winner, 1 in 10 will be a success. learn to drop products and move on. OR find away to add value to the product so it does sell
            Robert, some people don't see the true wisdom here. many of us are so much in love with our 'products' because we've invested so much time and passion in creating them that they are just as hard to let go of as a much loved relationship.

            But just as our relationships can go south, so too can our products.

            Jim Rohn said it best when he said, "The numbers tell the whole story".

            When a new consulting client comes to me and I ask about what's happening in his business, I don't want the life story of the product - I want to know the numbers. THEY ALONE determine whether or not the product is a potential winner.

            The numbers alone determine whether or not we should "let go" of a project and move on to the next.

            Originally Posted by JohnMcCabe View Post

            Depends on what you are selling, a commodity or something more unique.

            If all you're selling is YAMPs (Yet Another MMO Product), then you are looking at selling for commodity prices.
            John, great way to look at it. The "commodity" concept is a clear and simple way to look at today's marketplace.

            Originally Posted by Andy Fletcher View Post

            There's nothing wrong with selling a $5 WSO.

            It's an absolute crime if you don't have a backend to profit from after it.

            It's called a sales funnel and you should have one.
            Andy, agreed, of course - but my "jury" is still out on the price point of such - hence the poll attached to this thread.

            I'm also jaded over the number of "upsells" that some offer.

            The other day I was setting up a new client with Clickbank and they asked of me something that I hadn't been asked before.... for my DOWNLOAD LINK to be at the top of the "thank you / upsell page"... at the top ABOVE the sales copy for the upsell.

            Interesting. How much bad flack have they copped for people hiding download links after sales in preference for upsells I wonder (?)

            Originally Posted by owslaw123 View Post

            on a the opposite side however, i have seen the middle level products struggle much more in the recent years. the $67 info product has disappeared in favor of $7 reports and $297 courses.

            in my opinion, we are headed for a consolidation period in the next couple of years, when it gets harder for the people pushing bs products to continue to operate. they are shooting themselves in the foot and that will continue.
            Now that is interesting. Whilst I've not tracked these changes in my own business, I have to agree based purely on my 'gut feeling'.

            Good point.

            Originally Posted by Ryan David View Post

            You hear from a lot of people on forums that say "My product is worth WAY MORE" or "This advice I gave this guy was worth ".

            My thought is always, don't talk to me about what something is worth unless you're ACTUALLY selling it for that price.
            Ryan, yes. This is something that I've mentioned before... wouldn't be great if people had to "show" where else they were selling their product at it's "normal" price in their WSO - proof (so to speak) that it really was a "Warrior Special Offer", not just a shoot-em-low sales job.

            Originally Posted by Dennis Gaskill View Post

            One of the leading causes of low prices, IMO, is inexperienced marketers selling beginner products to beginners. I'd bet money if you took the WSO forum away from all the MMO sellers, half of them couldn't earn enough money online in a month to take their family out for a steak dinner.

            The WSO forum has turned into a giant garage sale.

            The garage sale mentality is just one step away from the entitlement mentality. They live in the same neighborhood. If you want to set up shop in that neighborhood you are placing a ceiling on your income. You are creating a job for yourself, rather than a wealth creation vehicle.

            Do you really want to build your business around the garage sale mentality?
            Spot on Dennis. I've become more aware of the same type of thing in the products themselves that are offered; more and more people offering products that can quite easily be found elsewhere for free - at low ticket prices of course.

            Mind you, not that there is anything wrong with releasing a re-packed widget if that widget has made something easier, better, more accessible than it was previously - that's what better business is all about -

            I'm just wondering if we're also losing out originality?

            Originally Posted by BIG Mike View Post

            I agree with everything you and many others in this thread are saying in principle, but from an economics perspective, it's not going to change.

            When I started online 10 years ago, almost all IM'ers were from the US, UK (or other western European countries), Canada and Australia. All of the products were comparably priced, because the economies of these countries were more or less on par with each other.

            Up until about 5 years ago, that was pretty much the norm - and by then, an explosion in web growth from less developed economies occurred. And it brought along with it an enormous disparity in economies that ultimately has led to the lower price model.
            Mike, I'm happy to say that your post caught me off guard - and I'm glad it did - this was something that I hadn't considered at all....

            Yes, look at all the people from Asian / African / Indian sub-continent countries that are now in the marketplace - HUGE NUMBERS - many of these people work quite happily for a day for what those of us in the "western world" would work for for an hour. Would that pay a week's wages for a single "eBook"? Not likely.

            So yes, consumer demographics has become a major contributing factor to the price shift in e-products that has taken place over recent years.

            Originally Posted by Black Hat Cat View Post

            The correct answer would be, it depends on the upsell. There is no one size fits all price for all WSO upsells.
            Yes, perhaps...

            I wonder if different upsell price points can also be tailored not just for different WSO's but also for different customer bases....

            ie: low entry price points attracts all; but higher mid-rage upsell attracts a totally different demographic - which of course leads to the final upsell later down the line - another demographics down the line.

            There's some great food for thought in this thread; I think I might print it out for further reading ... "creative thinking time".

            Thanks heaps to all -

            Paul
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            • Profile picture of the author Dennis Gaskill
              Originally Posted by Paul Barrs View Post

              Spot on Dennis. I've become more aware of the same type of thing in the products themselves that are offered; more and more people offering products that can quite easily be found elsewhere for free - at low ticket prices of course.

              Mind you, not that there is anything wrong with releasing a re-packed widget if that widget has made something easier, better, more accessible than it was previously - that's what better business is all about -

              I'm just wondering if we're also losing out originality?
              That is a question that could easily be the subject of another thread. The short answer is that originality requires original thinking, and original thinking requires some expertise, and expertise and thinking both require work. And we both know when "work" is involved ... well, you can see where I'm going.
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            • Profile picture of the author BIG Mike
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        • Profile picture of the author Robert Puddy
          Originally Posted by Black Hat Cat View Post

          If a product doesn't sell at $47, but makes regular sales at $37, it makes no sense to just drop the product and move on to something else that also might not sell at your preferred price, especially when we're talking about digital products.

          Lowering prices is fine, to a point. Just because you prefer a certain price doesn't mean it's the correct price.
          Wasnt talking about choosing between 37 and 47, the discussion was going in at $7 in the vain hope a silly cheap price will make enough sales to make you rich.

          lots of people out there that want first class and are prepared to pay for it, target those people.

          Most of my funnels have a free entry point, but the first offer is always $100 or more, because i want to know which of my members want and are willing to pay for first class.
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    • Profile picture of the author JohnMcCabe
      Originally Posted by Jerry Reily View Post

      Are forgetting the law of supply and demand? Are we ignoring the demand factors when we stick to the price of our product up there? How long should we hold on to our ideal value if no one is buying the product?
      Depends on what you are selling, a commodity or something more unique.

      If all you're selling is YAMPs (Yet Another MMO Product), then you are looking at selling for commodity prices.

      Before he retired, one of my wife's uncles raised barley on part of his farm. He had a choice - truck his barley in to the elevator in town and take the cash price, or demonstrate superior value and sell it direct to a brewer for three times that. He chose to sell to the brewer, thus making three times the return for the same growing effort.

      Build value into your offer and effectively demonstrate that value in your thread or sales page. You may move up on the supply curve, making fewer sales, but you won't be giving away $27, $47, even $97 products away for $7...
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  • Profile picture of the author Chris Worner
    "Whatsoever a man soweth, that shall he also reap." Bible, Galatians VI

    -Chris
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  • Profile picture of the author Raydal
    I learned that lesson from Dan Kennedy. Instead of lowering the
    price increase the quality and add more value. Your product
    will still be judged by what you are asking for it and it's hard
    to get away from that initial $5 impression.

    -Ray Edwards
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  • Profile picture of the author sal64
    Yeah,,, but the WSO thread is price druven. Everyone knows it's a bargain basement outlet.

    If you're going to sell for $5 then only offer a basic product.

    But as someone said, you are getting the bottom feeders.
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    • Profile picture of the author E. Brian Rose
      Originally Posted by sal64 View Post

      Yeah,,, but the WSO thread is price druven. Everyone knows it's a bargain basement outlet.
      I wasn't always like that. "Special Offer" used to mean discount from the regular public price. Now, it means whip up a short report and get affiliates to mail for it.
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  • Profile picture of the author Andy Fletcher
    IM prices have dropped due to basic economic laws. If every seller agreed not to lower prices then everyone could charge more but then any seller is incentivised to drop their prices to make the sale now. Good marketers fight the urge and add value but plenty of people want the fast buck and just lower prices. Over time this price erosion reduces most markets barely profitable commodities.

    Now-a-days you need rather more game to profit from the low ticket price merry-go-round.

    There's nothing wrong with selling a $5 WSO.

    It's an absolute crime if you don't have a backend to profit from after it.

    Run a $9.95 with a $17 upsell WSO, pay 100% (or more!) commission and generate a load of leads.

    But don't just feed those same leads back into other $9.95 WSOs sell them on high value items, coaching courses, memberships.

    It's called a sales funnel and you should have one.
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    • Profile picture of the author Ken Leatherman
      Originally Posted by Andy Fletcher View Post

      IM prices have dropped due to basic economic laws. If every seller agreed not to lower prices then everyone could charge more but then any seller is incentivised to drop their prices to make the sale now. Good marketers fight the urge and add value but plenty of people want the fast buck and just lower prices. Over time this price erosion reduces most markets barely profitable commodities.

      Now-a-days you need rather more game to profit from the low ticket price merry-go-round.

      There's nothing wrong with selling a $5 WSO.

      It's an absolute crime if you don't have a backend to profit from after it.

      Run a $9.95 with a $17 upsell WSO, pay 100% (or more!) commission and generate a load of leads.

      But don't just feed those same leads back into other $9.95 WSOs sell them on high value items, coaching courses, memberships.

      It's called a sales funnel and you should have one.
      Andy makes good hard sense with his post. However the best part of his post in my opinion is:

      But don't just feed those same leads back into other $9.95 WSOs sell them on high value items, coaching courses, memberships.

      It's called a sales funnel and you should have one.
      If you continue marketing to your list in the "low dollar value" they will go into "sticker shock" when you market a very "high value" product with an appropriate price tag. Just ask me I can tell you all about it.

      It took me over a year for my very active list to get over "sticker shock", but once they did, it began to pay off big time for me. Consequently, I developed a list of buyers that were willing to step up to the pump.

      However, I make darn sure that what product I recommend or my own product of is of value. And when they experience it, regardless if they pay a high price tag or low price tag they know darn good and well they received their monies worth. My proof of that comes from a very, very low refund rate over the last 5 years. It is almost non existent.

      One point should be made though that often times a low price Volume Sales can make one heck of a profit and a long term business; which just keeps growing and growing. Bringing in huge pay days month after month. This is where the trust factor comes in, because each time your new product comes out it's better than the last one. It solves a problem for folks who need a solution and is priced at the Sweet Price Point. (This is called knowing your clients".

      And now it's time for me to go send out an offer to my list and give them what they are looking for.

      Ken Leatherman

      The Old Geezer

      P.S. Thanks folks for making this an interesting and informative thread for all Warriors.
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    • Profile picture of the author John P CAT
      Hi Andy, I agree with you, but I have a question: did you ever try to begin with a $97 product? If no, why?
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  • Profile picture of the author David Keith
    i think one thing that people need to consider is that the wso market is a discount market place. when you sell in any discount market place the number one factor to consider is price point.

    i do agree with the op and many others about the idea of competing on price alone. thats a hard model to make money with. but you have to take into account a sales funnel.

    that means that for many they are getting more $7 buyers and some will move up to the $47+ or higher product price range.

    on a the opposite side however, i have seen the middle level products struggle much more in the recent years. the $67 info product has disappeared in favor of $7 reports and $297 courses.

    in my opinion, we are headed for a consolidation period in the next couple of years, when it gets harder for the people pushing bs products to continue to operate. they are shooting themselves in the foot and that will continue.

    right now the wso market has change a ton from what it was. there are over 800 products being launched the last few months. now add in a few bumps from the ones launched last month, and products are only staying on the front pages a few hours.

    here is what that does. it make the natural traffic affect of launching a wso very low. dr mani made a post about this a few days ago. now, in order to drive big sales numbers you need productive affiliates. the natural market is taking the wso market right back to the old days of IM when it was all about the JV's. and to get good jvs and make sales you needed great products (for the most part)

    the guys that are not providing value to those $5 buyers / subscribers that they do get, or that are sending out an ad swap everyday are hemorrhaging customers and for the most part not being able to turn this into a business.

    the power and marketing control is and will continue to shift to those who provide value which will allow those to continue to demand more for their products.

    the wso forum is much like many other things in IM. its a bit of a fad. like most fads, the real big money from wso's is long gone. in todays wso market you need affiliates / jv's which means you need to network and build relationships.

    this undercutting of prices will always be around on the internet, but those that have a solid marketing funnel and position themselves as expert will have not trouble demanding good money for their products.
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    • Profile picture of the author KingOfMusic
      Originally Posted by Jerry Reily View Post

      This really hit me. Eureka! Thanks!
      Originally Posted by Raydal View Post

      I learned that lesson from Dan Kennedy. Instead of lowering the
      price increase the quality and add more value. Your product
      will still be judged by what you are asking for it and it's hard
      to get away from that initial $5 impression.

      -Ray Edwards
      That really makes sense. Eventually, if the product is crap, the customers would have no choice but to say, hey, it was only 5 bucks, and ultimately avoid your future products.
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      • Profile picture of the author Jerry Reily
        Originally Posted by KingOfMusic View Post

        That really makes sense. Eventually, if the product is crap, the customers would have no choice but to say, hey, it was only 5 bucks, and ultimately avoid your future products.
        I actually see this analogy with HP's firesale.
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  • Profile picture of the author Ryan David
    You hear from a lot of people on forums that say "My product is worth WAY MORE" or "This advice I gave this guy was worth $x".

    My thought is always, don't talk to me about what something is worth unless you're ACTUALLY selling it for that price. It's not worth what you could potentially save someone. It's worth what people are paying you for it. And if you're selling $5 WSOs because you have no other place to sell them, then that's what they are worth.

    In regards to WSO, people are either selling them there because they don't have anywhere else to sell their products OR because they are an efficient lead generation system for them. I'd suspect more of the former though.

    Competition drives down prices. It's the same reason I have to sell physical products on Amazon for 60% of the retail price that I charge on my website. My website better tailors to customers because I control it. Huge list, huge customer list, and lots of cross-sells. I don't have that control on Amazon, but I have the process to get them into my funnel, so it serves a purpose.

    That's another reasons why companies like "Internet Marketing Center" circa early 2000's attempted to insulate their customers from competitors so they could charge higher prices. And why large scale launches are all priced at the same price points.
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  • Profile picture of the author kindsvater
    Originally Posted by Paul Barrs View Post

    but 5-bucks ?? This is a product that would have sold for $47-$67 easily 2 -3 years ago.
    Soon you may look back say, free ??, but this was once sold for $5.

    .
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  • Profile picture of the author Rocket Media
    Depends how you look at it.

    I could write a wso on how I got 10 clients in the first 7 days of opening up for business and sell it for $5 and hundreds of people will praise me and thank me for selling it so cheap. Or I could sell it for $250 and after I make a sale or two proving that it is a great method and asking for testimonials and marketing properly.... Sales will speed up.

    It all depends on how you create the demand for your product. Just like we create the product we must create the demand. It's a lot easier to create demand when the price is cheap but the demand at a higher price is much more profitable.
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  • Profile picture of the author fitz10
    We're living in the .99 economy. Look at the way people are slashing prices on books, movies, music, etc. A few years ago, most books were $20, now they're $9.99 on the Kindle or even $9.99 at Walmart. It's really not that different here. Hopefully people are making it up in volume and backend sales.

    That being said, I do think the WSO section caters to a very specific crowd. I take part in some other marketing circles and I see people selling $497 products that would be $9 WSOs here. They're catering to a very different market though. If you don't want to sell $5 WSOs you don't have to, there are crowds out there that will happily pay in the hundreds, if not thousands, for quality information.
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    • Profile picture of the author Kevin Marshall
      Originally Posted by fitz10 View Post

      We're living in the .99 economy. Look at the way people are slashing prices on books, movies, music, etc. A few years ago, most books were $20, now they're $9.99 on the Kindle or even $9.99 at Walmart. It's really not that different here. Hopefully people are making it up in volume and backend sales.

      That being said, I do think the WSO section caters to a very specific crowd. I take part in some other marketing circles and I see people selling $497 products that would be $9 WSOs here. They're catering to a very different market though. If you don't want to sell $5 WSOs you don't have to, there are crowds out there that will happily pay in the hundreds, if not thousands, for quality information.
      Great point about the $.99 economy observation. It is happening everywhere.

      Heck I can go to Taco Bell right now and buy enough food for lunch and dinner for $5!!!
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    • Profile picture of the author Aussie_Al
      Originally Posted by fitz10 View Post

      We're living in the .99 economy. Look at the way people are slashing prices on books, movies, music, etc. A few years ago, most books were $20, now they're $9.99 on the Kindle or even $9.99 at Walmart.

      .
      You got that right - I read some where today that Walmart is losing customers to 99 cent stores so they are building more "Walmart Expresses" to try and win back some of those lost customers
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    • Profile picture of the author warriorkay
      Originally Posted by fitz10 View Post

      We're living in the .99 economy. Look at the way people are slashing prices on books, movies, music, etc. A few years ago, most books were $20, now they're $9.99 on the Kindle or even $9.99 at Walmart. It's really not that different here. Hopefully people are making it up in volume and backend sales.

      That being said, I do think the WSO section caters to a very specific crowd. I take part in some other marketing circles and I see people selling $497 products that would be $9 WSOs here. They're catering to a very different market though. If you don't want to sell $5 WSOs you don't have to, there are crowds out there that will happily pay in the hundreds, if not thousands, for quality information.
      Very well said. You are right about the .99 economy and you
      are also right that there are MANY out there who will gladly pay
      much more. So, like Frank Kern advised in his State of The Internet
      address for this year, the question we should be asking is....

      WHAT CAN WE SELL, TO PEOPLE WITH MONEY, AT PREMIUM PRICING
      THAT WILL BE OF GREATER VALUE TO THEM, THAN THE MONEY THEY PAY??


      http://frankkern.com/state-of-the-internet-success/

      So, anyone who is REALLY serious about stopping the slavery
      of $5 products like Steven explained in his post above, should
      seriously start rethinking their strategies!

      Kingsley
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  • Profile picture of the author Maketso
    My thoughts are that we have not shot ourselves in the foot with the low price. I suspect that it may end up making us more money overall. How? I'm not tracking this, but it's reasonable to believe that more people may be game to give our product a try at the reduced price. It stands to reason that more people will buy at $7, $17, or $27 than at $47, $97, or $197. And, since we have a chance to showcase the quality of our stuff to more people...it also stands to reason that some of those people will buy our next thing. A sales maxim says something similar to "it's easier and less expensive to sell to existing customers than to find new customers and sell to.
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    • Profile picture of the author JMSD
      Originally Posted by Maketso View Post

      My thoughts are that we have not shot ourselves in the foot with the low price. I suspect that it may end up making us more money overall. How? I'm not tracking this, but it's reasonable to believe that more people may be game to give our product a try at the reduced price. It stands to reason that more people will buy at $7, $17, or $27 than at $47, $97, or $197. And, since we have a chance to showcase the quality of our stuff to more people...it also stands to reason that some of those people will buy our next thing. A sales maxim says something similar to "it's easier and less expensive to sell to existing customers than to find new customers and sell to.
      I happen to agree with the above sentiments so I won't labour the point by repeating them. However, I will give you an example from a consumer's perspective.

      I have bought several WSOs from total strangers (not names I recognise in the IM market) and the most expensive WSO from a known marketer (which disappointed, by the way) was $37. Those purchased at prices between $5 - £17 were hands down excellent value. I should know - I've spent tens of thousands of dollars on products priced between $97 and $997 from top marketers.

      Most of the WSOs were so good that I've indicated to the merchants that they may market to me at any time they come up with a new product (not necessarily a WSO).

      By providing a good quality product and overdelivering on a WSO, customer trust can be established quickly and repeat business (even for higher ticket items) guaranteed. On more than one occasion after buying great WSOs, I've gone on a hunt for the marketers' own sites to see what else they had to offer. In many cases, I've either bought another product from their sites or signed up to their continuity program. But for the low price/high value WSOs, they would not have been able to add me to their list of customer for their higher priced products.

      Apart from building loyalty and trust, where else would we, marketers, find a six-figure captive audience (increasing by the day) hungry for our products?

      Those who may agree with the notion that we are shooting ourselves in the foot could, perhaps, consider tailoring their WSOs in such a way that whilst they offer good value (after all, that's what consumers want and we should deliver every time), they don't also give away the store with the $5, $7 or $15 product.

      Instead, they (particularly for newcomer marketers) use their value WSOs for lead generation, finding eager affiliates and one or more influential JV partners who may help to take their business up to another level.

      And finally, let's not forget to treat our $5 or $7 purchasers with respect. They are BUYERS which, in my book, beats having thousands of freebie-seeking subscribers (acquired with great effort and money) who never buy a damned thing from us.


      James
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  • Profile picture of the author warriorkay
    .
    Indeed, we are REALLY shooting ourselves in the foot selling
    products for so low. I will talk more on this, but meanwhile,
    those who think they should lower their prices because
    of the economy, watch the below POWERFUL video by
    Frank Kern. It's his State of The Internet address this year:

    Frank Kern Presents The State Of The Internet Address | Frank Kern Internet Marketing

    In this video he clearly explains why it's super destructive
    slashing prices drastically just to keep up with the economy.
    He even calls it the kiss of death/circle of doom, and I
    agree with him.

    I remember how I started online some years ago, selling
    my first course for $97 and even made about $10,000+
    within hours and $30,000+ within days. And yes, it was
    just an ebook. And thankfully it was outside this forum. The
    truth is that those selling their awesome products for $5
    are unconsciously reducing the worth of other people's
    WSOs. Whether we want to accept it or not, it makes
    other people wonder why they should buy another product,
    even if it's better, for more than the $5 that they bought
    the last one, which was even by a "big name warrior" .

    Again, PLEASE I strongly advice everyone to watch that
    video by Frank Kern!


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  • Profile picture of the author Aussie_Al
    I always saw the WSOs as creators test driving their products before they took them to click bank (hence the low price)
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  • Profile picture of the author Alexa Smith
    Banned
    Originally Posted by Paul Barrs View Post

    Have we 'shot ourselves in the foot' by selling products at crazy prices?
    Yes, of course we have.

    We've trained the market only to buy "cheap stuff".

    We did it to ourselves.

    And everyone's the loser for it: "cheap stuff" is being sold all the time, and quality has declined.

    And the now-prevalent pricing dissuades some people from offering WSO's at all, because a top-quality product without income-claims in the sales-post is going to be relatively disadvantaged by the sales-location, and some people will sell such products elsewhere in preference.
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  • Profile picture of the author Mr Bill
    I don't personally think cheap prices are good bad or relevant. I look it differently. As long as I make enough money it doesn't really matter what I sell for. If I'm after "X" per day/week/month and I can do it by offering a product at a really cheap price everyone wins. I reach my cash target, the buyer gets great value and we're both happy.
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  • Profile picture of the author David Keith
    i also think there is a bigger picture here that is often missed.

    what is good for one individual is not necessarily good for the whole industry. selling a solid product for $5 to build a following is a solid business plan. offline merchants use loss leaders in marketing all the time and have for decades. they work.

    but when one offers a solid product for a low price, the competition almost has to follow suite. again you see that in very mature offline markets like cell phone plans and such. the competition is driving down the price.

    our usa housing market is another example. you have people who owe more than their house is worth, so for them, the best choice is to walk. but for the whole system that behavior creates a huge problem.

    what steven is talking about is creating a business plan that does not require you to perpetually create and sell $5 products. there is nothing wrong with that being part of your business plan. but if thats the primary way of you creating a profit, you are going to find it awful hard work.

    the WF has been thrown around as an example of a great business model. and it is, but lets not forget that most of the services of the WF are provided for free or at very low cost (war room). on an authority site with 5k+ visitors on all day everyday, most of the profits come from well under 3k or so of the exact same people launching wso and using the banner ads at the top.

    low cost products are not a big problem unless you choose to continually compete in ONLY that market.
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  • Profile picture of the author HeySal
    The closest I've ever come to the IM niche is my ebook on language/cognitive science. I price my products to be in the general lines of what you would pay if you went to a bookstore with a markup for the gas and time people would save going to buy a hard copy.

    I know people in IM will spend outrageous amounts for ebooks - and over all - if people are going to pay more for an ebook than they would for a book at a bookstore, people are going to charge that much for them. IM is about the only niche that you can get 200 bucks for a book outside of college textbooks - and when you consider that a LOT of what is in the WSO forum is warmed over to copied, what may seem like "underpricing" is actually a pretty accurate price for a lot of it. Not saying all of it - but be realistic about the originality of most of what is available there. Really. When you realize that much of the info in a lot of the products is available elsewhere for free, the cost of the book is just equaling time and effort to research and compile it all.

    If you have written a product that has the same value as a college textbook it may be worth the $200 bucks someone springs for it - but if all you have done is compile info that can be found with a little research, what is the justification for a whopper of a pricetag? Ego? Of course, if people are going to pay the whopping pricetag - by all means charge what you can get for it. If people aren't going to buy at a huge price, you have to drop the prices to make money from it. I've seen a lot of people that consider consumers cheap if they won't pay it, yet when it comes to content writing, many of the same people who scream if they are charged more than 5 bucks for an article seem to feel their products are worth a pretty penny - and some of them even use the cheaply priced outsourced material to build the product. Price as sells. Period.

    As far as my products - I'm not in IM niches and price my products just a bit over bookstore prices. When I sell PLR, I price so that anyone buying gets an awesome deal, yet in the overall run, I make a decent profit from the work I have done.

    It really doesn't matter what you THINK your product is worth - what matters is what the buying consumer thinks your product is worth.
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    • Profile picture of the author Ryan David
      Originally Posted by HeySal View Post

      I know people in IM will spend outrageous amounts for ebooks - and over all - if people are going to pay more for an ebook than they would for a book at a bookstore, people are going to charge that much for them. IM is about the only niche that you can get 200 bucks for a book outside of college textbooks - and when you consider that a LOT of what is in the WSO forum is warmed over to copied, what may seem like "underpricing" is actually a pretty accurate price for a lot of it. Not saying all of it - but be realistic about the originality of most of what is available there. Really. When you realize that much of the info in a lot of the products is available elsewhere for free, the cost of the book is just equaling time and effort to research and compile it all.
      Yeah, I agree. It's not just WSO products either. I get the feeling that most product creators think their stuff is so valuable that they pay no attention to structure, research, or the "big idea" of their product. Instead, it reads like a rambling account of their journey to IM success...with some tactics thrown in there.

      Realistically, the best books to learn about IM are actual books in the bookstores that teach about marketing. Learning how to market is how you make money onlne, not buy figuring out how to get free links from Squidoo and Hubpages.

      IMers try to set the price of their products based on potential value that the reader may gain from their products. For them, it's kinda like the ultimate rev-share deal. Price it based on potential revenue, but not be responsible if you don't hit that revenue number.
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  • Profile picture of the author absolutelee
    I think I'm going to probably disagree with everyone, here. This isn't something that needs to be figured out. Supply and demand will figure it out.
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  • Profile picture of the author Paul D Brady
    Yes, I think we have shot ourselves in the foot with such cheap products. I know people expect no claims for small priced articles but I think most people are generally much more satisfied with good quality products which cost more than cheap 'junk' which don't deliver.
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  • Profile picture of the author Charles Harper
    The market is what it is.

    But off the Warrior Forum, you sell at the Retail Value.

    On the Warrior Forum, you sell at wholesale and buy at wholesale to other marketers.

    CT
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  • Profile picture of the author jasonl70
    Cheap prices are often the refuge of poor marketers, and those afraid to just ask for more money.

    I fell into that last trap myslef with my first product. It was an OTO on the TY page of a squeeze page. I initially set the price at $17, and rationalized/justified my fear by convincing myself it would do better at that low price point (I even thought of going lower!). bit by bit, I raised it to $47 with no drop in conversion. I eventually brought it up to $67 if I remember correctly, and made a TON more money.
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  • Profile picture of the author Dennis Gaskill
    One of the leading causes of low prices, IMO, is inexperienced marketers selling beginner products to beginners. I'd bet money if you took the WSO forum away from all the MMO sellers, half of them couldn't earn enough money online in a month to take their family out for a steak dinner.

    Then when experienced marketers try to compete on price, the bottom falls out. Stop following, start leading. Some people have retail stores, and some people hold garage sales.

    The WSO forum has turned into a giant garage sale.

    The garage sale mentality is just one step away from the entitlement mentality. They live in the same neighborhood. If you want to set up shop in that neighborhood you are placing a ceiling on your income. You are creating a job for yourself, rather than a wealth creation vehicle.

    Do you really want to build your business around the garage sale mentality? That means more buyers with unrealistic expectations, which leads to more complaints, more support requests, more refunds, and most importantly, more time sucked out of your day babysitting people with little understanding of how cause and effect produces the circumstances of their life.

    Time is your most precious commodity, not money. You can't build wealth trading time for money because your time is limited. That means you have to minimize time-sucks to spend more time on sustainable income production. By sustainable I mean spending time on activities that keep producing results long after you stop pumping time into them.
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    • Profile picture of the author Steven Wagenheim
      Originally Posted by Dennis Gaskill View Post

      One of the leading causes of low prices, IMO, is inexperienced marketers selling beginner products to beginners. I'd bet money if you took the WSO forum away from all the MMO sellers, half of them couldn't earn enough money online in a month to take their family out for a steak dinner.

      Then when experienced marketers try to compete on price, the bottom falls out. Stop following, start leading. Some people have retail stores, and some people hold garage sales.

      The WSO forum has turned into a giant garage sale.

      The garage sale mentality is just one step away from the entitlement mentality. They live in the same neighborhood. If you want to set up shop in that neighborhood you are placing a ceiling on your income. You are creating a job for yourself, rather than a wealth creation vehicle.

      Do you really want to build your business around the garage sale mentality? That means more buyers with unrealistic expectations, which leads to more complaints, more support requests, more refunds, and most importantly, more time sucked out of your day babysitting people with little understanding of how cause and effect produces the circumstances of their life.

      Time is your most precious commodity, not money. You can't build wealth trading time for money because your time is limited. That means you have to minimize time-sucks to spend more time on sustainable income production. By sustainable I mean spending time on activities that keep producing results long after you stop pumping time into them.
      Dennis, everybody should take your response and plaster it on their
      forehead.

      I couldn't have said it better myself.
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      • Profile picture of the author Ram
        Our entry level product is $997 and it goes up from there. But we target customers with money and help them make more. For example, one of our target markets has always been offline professionals and businesses. We were doing offline before most people on the WF ever heard the term (since 2003.)

        The WSO forum seems to me to be basically price driven. I've bought quite a few things there - mostly PLR - and have been happy with it. But Lord, some of the questions, quibbles and complaints I see. The small-minded doubts, worries and hesitation over $5, $7 or $10 products is just amazing to me.

        And the demands! People want the sun and the moon, private consultation, do it for them, guarantees it's gonna make them rich by 4:30 tomorrow ... everything for a couple of bucks.

        If you want those buyers, feel free. Not for me. Never.
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  • Profile picture of the author Shannon Herod
    [QUOTE=Paul Barrs;4689282
    I mean, don't get me wrong, it looks like a great offer; great product, from a trustworthy source - of these things I have no doubt.

    But for 5-bucks! OMG!

    I totally understand and get the "build a list / add an up-sell" yada yada yada, I do it myself of course... but 5-bucks ?? This is a product that would have sold for $47-$67 easily 2 -3 years ago.

    What are we saying to these people? In the eyes of the consumer, does this devalue the overall product market? [/QUOTE]

    I have been saying that for 2 years now about the WSO forum.

    Shannon
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    • Profile picture of the author dtaylor
      Well....

      Good points made but here is my take:

      In the past I spent a LOT of money on courses from some of the biggest names. Some of them were pure crap for a lot of money. In fact, one ebook I bought as a WSO a couple of months ago was a lot better than many of those.

      Many of the BIG GURUS started turning out tons of high-priced garbage aimed at the newbie, get rich quick market. And some of it was rehashed garbage.

      The WSO marketplace is one I look at primarily as a source for specific techniques or tools. For this it is invaluable. For under $20 I can get expertise on a subject and not have to spend my time exploring every little aspect of it.

      I am not sure what high-priced training anyone would sell me anymore. Not that I know everything about the market but I simply cannot imagine spending hundreds of dollars on a course that starts with keyword research and moves on to buying a domain etc.

      When all of that was fairly new, 7 or 8 years ago, a product could walk you thru all of that and it was valuable....then. Times have changed. The IM world moves at an astoundingly rapid pace. Courses that were relevant a couple of years ago are out of date.

      I remember paying $275 dollars for a course from Jim Edwards on setting up mini-sites, complete with DVDs. I thought it was the biggest bargain ever. It made me money. Now that the knowledge is available with an internet search I am unwilling to pay for a soup-to-nuts solution and will only buy specific items.

      The WSO market is not perfect. There is a lot of junk and re-hashed garbage, even from some pretty well known names. But when I want to find out about a certain IM technique or market it is the first place I go. If I choose wrong I am only out a few bucks, not a couple of hundred.

      Spoken as a WSO junkie.

      Thanks for a great discussion. Also, thanks to Steve Wagenheim for all of the great products he has put out here as well as the knowledge freely given.

      DTaylor
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    • Profile picture of the author Colin Theriot
      What an awesome thread - so much to comment on - these are just my replies to what's going on on the first page:

      Originally Posted by Paul Barrs View Post

      Are we attracting the wrong type of customer doing this or are we just "filtering" the numbers?

      If nothing else, I wonder if we're making it harder for ourselves to make a living selling online?
      For the individual marketer, yes you will attract the wrong kind of customer. Overall in the marketplace, only the people who insist on playing that game are making it hard on themselves. It's not the only game you can play.

      Originally Posted by DianaHeuser View Post

      1) The freebie hunters always complained about the price
      Originally Posted by Robert Puddy View Post

      Always amazes me when people aim their products at people with no money to spend.
      These two statements are intimately tied together. Beginning or stupid marketers make the mistake of listening to the whiniest segment of their audience, which is also likely to be the least satisfied and most demanding. They want everything for nothing, and creating products to please those people is a formula for failure.

      Originally Posted by Ron Douglas View Post

      WSO sellers are absolutely shooting themselves in the foot and killing the marketplace at the same time.
      I agree with you that the individual doing this is harming their own potential. But they aren't killing the marketplace, IMHO. They are actually creating an opportunity for people who want to stand apart. When everyone's doing the same thing it creates a pattern. If you point that pattern out to people, it becomes boring and the thing that's different is the thing that stands out.

      Right now, it's easier than it's ever been to create a perception of pre-eminence in this market because all you have to do is charge more, and people presume you MUST be better than everyone else.

      Originally Posted by JohnMcCabe View Post

      If all you're selling is YAMPs (Yet Another MMO Product), then you are looking at selling for commodity prices.
      The key thing to note here is that whether it's a YAMP or not is entirely up to the way you position that info and yourself. As you pointed out, it's not the product or how much work you do that gives the product it's value - the value is created by telling the right story to the right customer at the right time.

      Originally Posted by Andy Fletcher View Post

      It's called a sales funnel and you should have one.
      Absolutely. The issue people have when they sell a $5 WSO now is that they CREATE a $97 Value product and give it away for $5 and use the WSO forum as their only channel. Instead, they should actually create the $97 product and give away a SLIVER of it for $5. In the former case, you attract people for whom $5 is a large sum. For the latter, you attract people who have $97 to spend in the first place.

      Originally Posted by Maketso View Post

      It stands to reason that more people will buy at $7, $17, or $27 than at $47, $97, or $197.
      The guy who will buy at $197 will certainly buy stuff that's cheaper as well. The guy who will buy something at $7 may not be able to afford anything more expensive. That's why you need to target the latter customer and anchor your value for THAT guy. $7 is the taste of what you have to offer, not the whole meal.

      Originally Posted by Alexa Smith View Post

      And everyone's the loser for it: "cheap stuff" is being sold all the time, and quality has declined.
      And that's how this has turned into a new opportunity. In the beginning, you could charge a lot for high quality because there was NO competition, right? How about now, where the competition is all low priced garbage? I tend to think that having a BAD alternative to your products is even better than having NO alternative. It's definitely a lot easier to sell. "You can't get this anywhere else because it doesn't exist" or "You can try buying this from someone else for less, but you will discover that those guys are out to screw you over."

      Originally Posted by Dennis Gaskill View Post

      The garage sale mentality is just one step away from the entitlement mentality.
      I agree with you about the mentality, but not the marketplace. The WF is more like a flea market or a bazaar. Yeah, there's lots of stalls with cheap wares. But there CAN also be stalls with rare, and expensive curios.

      Originally Posted by Dennis Gaskill View Post

      Time is your most precious commodity, not money. You can't build wealth trading time for money because your time is limited. That means you have to minimize time-sucks to spend more time on sustainable income production. By sustainable I mean spending time on activities that keep producing results long after you stop pumping time into them.
      This really hits home even for me - as much as I know about this stuff from working with clients, I definitely need to drink my own Kool-aid, so thanks for the reminder!
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      • Profile picture of the author Ryan David
        Most of the WSO's are glorified forum posts. It's not uncommon for someone to make a good post and someone chime in "Hey, That should be a WSO!". If that's the quality you can expect, then $5 is probably about the right price.

        And to be honest, I don't even know if most people that are selling WSO's are capable of producing a $97 product.

        Look outside the WSO forum. I bought SEO Elite in 2006 for $150. It now sells for $167. He's tested monthly payments for that product, so I would assume that he's able to make more by selling it as a one-time payment. That product has gone through several BIG updates for no charge.

        I consider SEO Elite to be an excellent product, has an excellent sales page, and has great bonuses.
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      • Profile picture of the author Colin Theriot
        Originally Posted by Black Hat Cat View Post

        If a product doesn't sell at $47, but makes regular sales at $37, it makes no sense to just drop the product and move on to something else that also might not sell at your preferred price, especially when we're talking about digital products.
        Dropping the product is not the only option if it won't sell at the price you want to make. Dropping the price should be the LAST option on the list, possible ONLY after you have tried the following, one at a time:

        1. Changing the story.
        2. Adding more perceived value.
        3. Adding more actual value.
        4. Trying a different market.

        Then MAYBE think about dropping the price, or making a new product more in line with what you learn from the above process. The thing no one addresses is what happens to public perception of your brand and your product when you publicly drop your price. What do you think that says about any claims you made about its value when you tried to sell it for more?

        Originally Posted by Paul Barrs View Post

        When a new consulting client comes to me and I ask about what's happening in his business, I don't want the life story of the product - I want to know the numbers. THEY ALONE determine whether or not the product is a potential winner.

        The numbers alone determine whether or not we should "let go" of a project and move on to the next.
        The numbers are a diagnostic symptom. Other businesses may be different, but when you sell info and other things with an ambiguous value, there is no concrete truth to the market. Price can be justified entirely by story, and bad numbers don't mean "will never work" - that's not to say sometimes you won't decide to jettison it anyways, but it's not JUST numbers.

        Originally Posted by sal64 View Post

        How can we justify selling a $47 ebook when similar info is available on Amazon for $5? The consumer is getting smarter.
        ...
        The old rule always applies: Your income will reflect the value you give.
        Similar info may be available elsewhere. So what? You can buy a poster of a painting you like, but that's certainly not the same as buying the original painting from the artist. Or even a limited print run of the painting signed and numbered by the artist (in case anyone wants to say 'oh a painting is unique!!!'). The reason you can justify selling a $47 ebook is because you CAN'T get THIS info FROM ME in THIS FORMAT anywhere else on earth for any other price. That NEEDS to be part of your story if you want to create any perception of value.

        As for the last bit about income reflecting value given - it's not the value you give, because value is relative. It's in the perception of value you can create in the buyer's mind. This is something you CAN control. Pricing is just one way you do it.

        Originally Posted by sal64 View Post

        On a final note, one big winner for me is by taking an ebook and converting it into a training program. This has enabled me to increase profits of a product by 400%.
        ...
        People want tour guides... not just tour maps. Given the option, they will pay for the guide, but wont pay much for a map because they can find them for free at a tourist kiosk.
        This is probably the most useful post in the thread - this is how you create value in a market place that low-price-focused competition can't compete with. The ONLY way you can survive in a race to the bottom is by cutting quality to match the return. You can't duplicate personal interaction and guidance with an outsourced two page report. They would go broke trying to undersell you, and with the low prices they charge, they can't afford to deliver the same value. You win.

        Originally Posted by ramone_johnny View Post

        At the moment, my thinking is it makes much more sense to push a product at $57 converting at 1%, then to push it at $97, converting at 0.25%.
        ...
        Then again, who knows, I could be wrong.
        You are. If it's converting 0.25% at $97, do every conversion boosting thing you can. If SOMEONE is buying at $97, MORE people will, too. You need to figure out why you're not successfully making the case to more people. You MIGHT get a better conversion with a lower price, but that's lazy marketing. You'll get maximum conversion if you lower it to free, but that's not good business. Also, if you have a product with a value that's so flexible that you can drop the price by half with no second thought, maybe the product wasn't really worth $97 to begin with.

        Originally Posted by WSOHelp View Post

        Again with the low price = bad quality. This is just not true of low price. Lots of extremely high quality things are sold at low prices.
        Did you know that there have been psychological studies done that show people ACTUALLY, physically and chemically derive MORE enjoyment from things that they believe were more expensive? High prices not only increase the PERCEPTION of how good your product is, they actually INCREASE how much someone is capable of enjoying them. Prejudices affect perception and perception affects reality. Yeah, there CAN be good quality for a low price. But good quality for a high price is better.

        Originally Posted by WSOHelp View Post

        More supermen flying in to save us from ourselves. Newbs are not from another planet. They make decisions based on what they need.
        This shows you have nearly zero understanding of actual buyer psychology.

        Originally Posted by WSOHelp View Post

        Inexpensive does NOT mean "cheap and nasty and dirty". I see most magazines I buy in my offline hobby (hot rods) priced exactly in the range of most WSOs. Does that mean all the magazines are crap just because they are priced at $9.00? Of course not.
        When you're building the actual hot rod, does the amount of money spent on quality parts vs. cheap parts also not matter? Are the cars built out of shoddy Chinese mass produced garbage metal going to be as sought after, respected, cherished, etc.? I doubt it.

        Originally Posted by WSOHelp View Post

        The mistaken view that "inexpensive = bad quality" has no basis in fact generally and certainly is not proved in this arena. In fact the opposite is true. The cheaper these get the BETTER value they are (providing the quality is good and they do what they say).
        Inexpensive = perception of low quality before the purchase is even made. This prejudice has been PROVEN to have an effect on how the product is judged by the purchaser.

        Originally Posted by iSoftware View Post

        ...
        I didn't want to quote it all here, but great post!

        Originally Posted by WSOHelp View Post

        Walk into a book shop and look at the books on the shelf. Do some have low prices and other have high prices? Can you tell the quality of a book by it's price? Is a $10 book "worse quality" than a $20 book? What about the $100 books? Are they 5 times better than the $20 books?

        Think.
        Which books make more money for the publisher? The paperbacks, or the hardbound first editions that are more expensive? Even though they are EXACTLY the same content, why do you think the hardback comes out first in a more expensive format? Think.

        Originally Posted by BIG Mike View Post

        That said, there simply is no, "One Size Fits All", right or wrong model when it comes pricing. The same is true for the particular audience you're targeting, assuming you have a target in mind, much like Shay indicated hers was. What's left is nothing more than individual preference and access to certain markets.
        I agree with this. But not a lot of the rest, lol.

        Originally Posted by BIG Mike View Post

        MYTH #1 - Refund Rates Are Higher On Low-Ticket Items
        Yes, your business may be an exception, but I promise it's not common. Here's the thing - really pricy stuff attracts a quality customer. Meet their expectations, and they don't refund. The lower you set the price, the lower-the quality of customer and with that, perceptions and expectations can change.

        If you are deliberately aiming at the lowest-price shopper and you hit them with a medium-to-high priced product, they are UNCOMFORTABLE paying that price and have a high occurrence of Buyer's Remorse. If the price is high enough, or they can get a no-hassle refund, they WILL get their money back. If you price it LOW enough, they won't bother and say "meh, just $5..."

        But while you DO get to keep the money, and DON'T get a refund, that's still not a positive impression to leave your customer with.

        Originally Posted by BIG Mike View Post

        MYTH #2 - It's Harder To Earn Big Bucks Selling Low-Priced Products
        "Harder" is relative. You have to have specialized knowledge and capital to be able to scale large enough to be profitable on volume vs. charging a premium for quality. This is exactly why a mom-and-pop shop get squashed by Wal-Mart because they don't have the resources to profit on volume even if they knew how.

        In info marketing, it's the same. It's a LOT harder for any solo-entrepreneur to set themselves up for profiting by volume when you're starting out than to establish expertise and charge a lot for scarcer products/services. If you want to THEN take that capital and get some knowledge on how, you COULD invest on scaling it upward. But you can't say that the easiest thing for some beginner to try is to go straight for a volume business right out of the gate, could you?

        Originally Posted by BIG Mike View Post

        MYTH #3 - Low-Ticket Products Equal Higher Support Costs
        You said earlier that low price = higher volume, so by your own definition, this would lead to more support. More support means higher cost. And you said cost-per-incident is reduced gradually if support is well organized, but for the marketer trying to dive right into this "business model", he's quickly going to be overwhelmed with more support than he can handle, and the sharks will begin circling. It happens in a lot of WSO threads I've looked at, especially when people try and do SERVICE at a hugely discounted rate.

        You may be an outlier, but you have a well developed business with lots of things in place that have paid for you to solve these other problems. It doesn't mean they don't exist - it means you can mitigate them in a way that 99% of people won't be able to replicate. At least not until they reach stability.

        Originally Posted by BIG Mike View Post

        MYTH #4 - You're Selling Commodities
        I agree that this is a myth, though for a different reason than you. If you're talking information-selling or any other malleable-value product, it's only seen as a commodity by the market if the seller treats it that way. You create the perception - there's no hard supply/demand in IM because you can create demand out of nothing and if you position it right, you are the sole supplier of every product you produce.

        Originally Posted by BIG Mike View Post

        MYTH #5 - If You Don't Have An Upsell, You're Leave Money On The Table
        This is really just semantics. You are selling more stuff to the same customers, you're just changing the interval from "right after the sale" to "a while after the sale". If you're not doing SOMETHING to follow up the first low-price sale with something that will get you more cash from that prospect, you have to sell a ****LOAD of front-end loss-leaders to stay in business, right?

        Originally Posted by BIG Mike View Post

        I want to reiterate that there's no right or wrong model - mine is based on long-term sustainability and it's a good match for what we do. Others prefer focusing on the upper-end of the spectrum - and I'm sure it's a great fit for them.
        Big ups to you for qualifying this - you must admit, the business you have developed is a fairly unique one in this marketplace. I think a lot of your success comes from the fact that you have little conceptual competition. People buy your stuff because you are Big Mike.

        Originally Posted by BIG Mike View Post

        My point to this litany is to demonstrate that low-priced products can be just as, if not more profitable than high-priced ones and it is no more or less difficult to generate and sustain an income from them.
        It can be as profitable, sure. I still disagree that it's not a lot harder for most people to do what you've done, because it took a lot for you to get in the position where you can offer what you offer for the price you do.

        When you're looking at a street lined with lemonade stands, all selling at $0.50 a glass, your average WSO seller is saying "****, I want in on that!" And they open up their own $0.50 lemonade stand. What you are saying is that yeah, that can be profitable if you're set up to give them a sandwich too and can handle 1000 customers a day. I'm saying it's a lot easier to just open up a "Super Lemonade" stand and charge $1.00 a cup because you put a fancy straw in it.

        You can build your business out of the exact same materials and the exact same infrastructure, you will make a lot more and then down the road, they can decide if they want to morph into your kind of business.

        ----

        My pal Andy Fletcher pointed out a discrepancy in my last post where I told him you have the problem with people making $97-value products and slitting their own throat to sell it at $7...

        Then later I told Alexa that the droves of $5 garbage make it easy to stand out. So are the cheap products under-valued or are they garbage?

        To clarify: The fact is there are two groups here. The first that I was talking to Andy about are the consumers of WSOs who are the ones trying to learn and do and set out to sell their own WSOs. They do what they are told and provide massive value for little return. This is a sucky proposition.

        The kind I was talking to Alexa about are the ones who prey on the previous kind of seller. Either they come in from outside to sell them crap because hey, they're buying! Or... even worse... the first kind morphs into the second kind, because instead of selling their products for what they are worth, they just reduce quality on subsequent products in order to match with the return they can get at the price they think they MUST use...

        And let's not forget that regardless of what your product's value is BEFORE you put a pricetag on it, the second you stick a $5 sticker on it, it is IDENTICAL in value to every other $5 product in that market because they HAVEN'T bought it yet. Chances are, a crappier product from a crappier seller will have lots more aggressive sales tactics, and they make you look lame by comparison.

        It's true low price is not a measure of quality, but low price is an indicator of POSSIBLE quality that the prospect relies on before they even decide to buy.
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    • Profile picture of the author Azarna
      Sadly I think this is inevitable as the markets become more and more saturated.

      1 - more people getting involved, many just want to make SOME money, they undercut others as it seems the easiest sales tactic. As information products have no on-going production costs, so it is easy to do this, unlike with physical things. Then the next guy to come along undercuts this and so on.. the prices go down as the benchmark for normal is shifted.

      2 - There is a LOT of rubbish out there, let's face it. People with no writing skills, and no real knowledge of what they are writing about, pouring out junk. It doesn't sell (because it is poor quality), so they reduce the price, over and over. As before this means that in the eye of the consumer the price of normal is now lower.

      I still believe though that a REALLY good product WILL sell for a decent price. A simple step like providing a short sample of your writing, for example, so buyers can see that this really IS a good product. Having genuine testimonies, from recognised people (ie, with links to websites so buyers can see they exist etc), and being TOTALLY honest in the presentation of the product.

      Adobe still sell Photoshop for the same price, despite there being good free alternatives like The Gimp. Same with Microsoft Windows and Linux, or Office and OpenOffice. People WILL pay for quality etc. (I am not saying that Gimp, Linux or OpenOffice are not good quality, btw, they are all excellent products, but their existance does not invalidate sales for the 'expensive' alternatives, it may well have dented them, but people are clearly still buying from companies they trust to deliver quality, heh)

      The rubbish will get cheaper, but the quality stuff will float to the top - at least I hope so!
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  • Profile picture of the author sal64
    Paul,

    One trend I noticed was for products sold from stage.

    About 5 years ago, people would sell a biz-in-a-box for $3k+. Usually printed with a huge thud factor.

    But I notice that this has evolved to a point where the biz in a box has become the bonus and many have added a coaching aspect to their product... or coaching as the main product.

    No doubt coaching has a higher perceived value... as it should.

    So for many years we have gotten away with high pricing based on the following:

    1- using a drop sell on the sales copy
    2- overblown values attached to bonuses
    3- doubling the price to allow for affiliate cuts

    So let's get real for a moment...

    The market has changed dramatically.

    How can we justify selling a $47 ebook when similar info is available on Amazon for $5? The consumer is getting smarter.

    Most of the stuff we used to be able to get away with selling is now available for free online.

    John McAbe made the correct point about commodities, which is what most products are these days. The only point of differentiation being the authors angle.

    So in answer to your OP, not really. It's just the way the market has evolved.

    The key as I see it is to offer real value in your products and then set the price accordingly.

    If you offer coaching for $10 per hour then you are a fool. But $10 for a 10 page report is good money when you consider the ROI based on $ for info.

    Are we creating a market of cheapskates? No we are not. We are only catering to demand for customers who don't have the big bucks to spend. Sellers can choose to participate or not in this segment. Quite simple really.

    And let's not forget the general state of western economies. I hazard to guess that there are less people able to afford the higher priced products these days.

    The old rule always applies: Your income will reflect the value you give.
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    • Profile picture of the author Jarrett
      Banned
      Originally Posted by sal64 View Post


      How can we justify selling a $47 ebook when similar info is available on Amazon for $5? The consumer is getting smarter.

      Most of the stuff we used to be able to get away with selling is now available for free online.
      When I was 13 years old.. I started my first computer tech business..
      If people had any kind of computer problems.. they'd call me up..
      And I'd either ask them to pick me up (cuz I couldn't drive lol)

      Or would see if I could get my mummy to do it.


      After I finished the job.. I'd slap them with a bill.. and even back then.. my prices were DOUBLE what most grown ass adults would charge.

      How could I justify charging those absurd prices?

      I did a dang good job... that's how I could justify it.

      I had great service. I fixed alot of mistakes that other people couldn't, and I made it a fun experience.. and because of that, people gladly paid me my exorbant rates.


      RARELY would anyone EVER argue with me about my prices or say I was charging too much..

      If they did.. It was real simple..

      I'd say... "Look, here's this person's #. feel free to give him a call next time. He charges alot less than I do. you're right... and who knows.. you might be able to find someone who'se even cheaper.. but you know what they say.. You get what you pay for..

      If he makes the problem worse, can't fix it, or gives you a headache.. don't say I didn't tell you so "


      So to answer your question..

      How do we sell a $47 ebook and compete with a $5 ebook on amazon?

      WE DON'T!

      For the same exact reason that I didn't try to compete with guys that were charging $17/hour for computer work...


      You hit the nail on the head when you said your income will reflect the value you give.. BINGO.


      Don't compete with them. Give more value. Give a unique edge to your stuff. Have a fun contageous personallity that nobody can compete with.. and that people want to be around.. and then charge whatever the heck you want!


      Originally Posted by sal64 View Post

      Most of the stuff we used to be able to get away with selling is now available for free online.
      Everything that's been sold can be found for free, at a cheaper price, or can be done themselves...

      so what?

      The cure for cancer is probably lurking somewhere on the internet.. out in the open.. FOR FREE... but do you know where it is?

      How much time would it take for you to find it? How long would it take you to weed out the junk from the gems?

      Let's say the cure for cancer was eating carrots and having an alkaline diet.. which is info that could be found for free on the net..

      but if you were on your deathbed right now... and I told you that.. and helped save your life.. would you not gladly pay me $10,000 for that gem?


      So if you or anyone else is trying to 'sell an E-book' for $47 and finding it harder to do so.. that's your first problem.

      You're trying to sell an EBOOK!

      I don't sell e-books.

      I sell experiences. I sell results. I sell you the solution to something that you desperately have been searching for and that up until now no one has been able to give you..

      And thats why i can charge ya whatever I want
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      • Profile picture of the author sal64
        With respect, I don't sell ebooks.

        And I get your point. Yes, people will pay for asolution handed to them on a platter. This is the main reason why people pay for stuff that is available for free.

        Also known as the 7/11 rule of marketing.

        The WSO is a microcosm and reflection of the world at large. People are becoming more price driven. That's free market competition.

        You want the benefits, you suffer the pitfalls of a free market economy.

        Competition will always produce something cheaper than the person before.

        So I don't see it as making a rod for our backs. What's dear today will be cheap tomorrow. Hence my reference to what gurus sell from the stage.

        Everything evolves. And we must also evolve our products and value... or get left behind with the competition.

        On a final note, one big winner for me is by taking an ebook and converting it into a training program. This has enabled me to increase profits of a product by 400%.

        People want tour guides... not just tour maps. Given the option, they will pay for the guide, but wont pay much for a map because they can find them for free at a tourist kiosk.

        So be the guide, not the map producer.

        Best,

        Sal



        Originally Posted by Jarrett View Post

        When I was 13 years old.. I started my first computer tech business..
        If people had any kind of computer problems.. they'd call me up..
        And I'd either ask them to pick me up (cuz I couldn't drive lol)

        Or would see if I could get my mummy to do it.


        After I finished the job.. I'd slap them with a bill.. and even back then.. my prices were DOUBLE what most grown ass adults would charge.

        How could I justify charging those absurd prices?

        I did a dang good job... that's how I could justify it.

        I had great service. I fixed alot of mistakes that other people couldn't, and I made it a fun experience.. and because of that, people gladly paid me my exorbant rates.


        RARELY would anyone EVER argue with me about my prices or say I was charging too much..

        If they did.. It was real simple..

        I'd say... "Look, here's this person's #. feel free to give him a call next time. He charges alot less than I do. you're right... and who knows.. you might be able to find someone who'se even cheaper.. but you know what they say.. You get what you pay for..

        If he makes the problem worse, can't fix it, or gives you a headache.. don't say I didn't tell you so "


        So to answer your question..

        How do we sell a $47 ebook and compete with a $5 ebook on amazon?

        WE DON'T!

        For the same exact reason that I didn't try to compete with guys that were charging $17/hour for computer work...


        You hit the nail on the head when you said your income will reflect the value you give.. BINGO.


        Don't compete with them. Give more value. Give a unique edge to your stuff. Have a fun contageous personallity that nobody can compete with.. and that people want to be around.. and then charge whatever the heck you want!




        Everything that's been sold can be found for free, at a cheaper price, or can be done themselves...

        so what?

        The cure for cancer is probably lurking somewhere on the internet.. out in the open.. FOR FREE... but do you know where it is?

        How much time would it take for you to find it? How long would it take you to weed out the junk from the gems?

        Let's say the cure for cancer was eating carrots and having an alkaline diet.. which is info that could be found for free on the net..

        but if you were on your deathbed right now... and I told you that.. and helped save your life.. would you not gladly pay me $10,000 for that gem?


        So if you or anyone else is trying to 'sell an E-book' for $47 and finding it harder to do so.. that's your first problem.

        You're trying to sell an EBOOK!

        I don't sell e-books.

        I sell experiences. I sell results. I sell you the solution to something that you desperately have been searching for and that up until now no one has been able to give you..

        And thats why i can charge ya whatever I want
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    • Profile picture of the author Robert Puddy
      Originally Posted by sal64 View Post

      Are we creating a market of cheapskates? No we are not. We are only catering to demand for customers who don't have the big bucks to spend. Sellers can choose to participate or not in this segment. Quite simple really.

      And let's not forget the general state of western economies. I hazard to guess that there are less people able to afford the higher priced products these days.

      The old rule always applies: Your income will reflect the value you give.
      Hmmm...All i know is that at $7 a pop i would have to make 100 sales day at least. Or I can charge $100 a pop and only have to make 7 sales day

      And 7 sales a day is easy, and easily comes into the remit in the bolded part above. Im after those less people that can afford it. Their better customers, less pressure on the support side. Ask for fewer refunds and are generally easier to deal with

      So all in all you can have the 100 customers a day and i will take the 7 a day
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      • Profile picture of the author abhi1
        Originally Posted by Robert Puddy View Post

        Hmmm...All i know is that at $7 a pop i would have to make 100 sales day at least. Or I can charge $100 a pop and only have to make 7 sales day

        And 7 sales a day is easy, and easily comes into the remit in the bolded part above. Im after those less people that can afford it. Their better customers, less pressure on the support side. Ask for fewer refunds and are generally easier to deal with

        So all in all you can have the 100 customers a day and i will take the 7 a day
        I completely agree with you here but the issue that has come up is that
        there are less and less number of buyers who are ready to pay $100 for
        a product (and I'm talking about the WSO Marketplace here) and this is
        only because there are other similar WSOs selling for a 93% lesser price.

        Some sellers are only forced to price their products less just because there
        competitors are selling for such cheap prices...

        Is it not possible to put up a "price-check" moderation on the WSO
        marketplace to stop whats happening to the market?
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      • Profile picture of the author Paul Barrs
        Originally Posted by Robert Puddy View Post

        In here No... but they are out there

        And I originally took Pauls post to mean in general not just in the WSO forum. Even net wide people still grossly undervalue and under price. Using the logic that because they cant afford more then that must be the same for everyone.
        Robert you are correct here, although it was a WSO that prompted me to write it, but the point is valid across the board.

        However, the content of this thread is worth a round-table discussion all on its own!

        Originally Posted by RichardWing View Post

        Interesting thread Paul.

        I have enjoyed all of the contributions to this thread.

        Here are my thoughts.

        You are running a poll...

        The poll doesn't indicate if you want to know from a buyers point of view or you are seeking advice from other marketers on what they think would be a good price point for a wso backend offer.
        Richard, I did have in mind at the time from a buyers POV, but now looking over all comments I don't think it matters any more.. .the results stand on their own.

        As for you many other *very* well thought out replies - thank you. I'm still going through them.

        I'm definitely going to print this out and perhaps make comment on all of it for my MSU members - it's a topic that deserves serious thought for those of us who want to be in business for the long term...

        And I guess that was what's in the back of my mind at all times; and it's been said a few times earlier; Robert pointed it out well.

        It's pretty damned hard to make a solid living off dime-sale products! I know there are some out there who do it, but they are the few. Then the newbie comes into the market and wonders why he / she is struggling only making a few bucks profit of each sale....

        Ouch.

        It's like the business whose sales are dropping and thinks "if I cut my prices more people will buy"... No!! If you cut your prices you'll make less profit! This would only work if they "cut prices + reduced overheads + increased sales" - price cuts alone don't save a business, they're the death knell.

        Yet for so many of us, FEAR drives us to it.

        Originally Posted by E. Brian Rose View Post

        I wasn't always like that. "Special Offer" used to mean discount from the regular public price. Now, it means whip up a short report and get affiliates to mail for it.
        Ugh, makes me shiver!

        Another point worth discussion... many people wonder why their "product launches" fail - simple reason, their price point was too low and "major affiliates" don't want to bother with low commission sales.

        Yet another reason to put prices up.

        Originally Posted by Robert Puddy View Post

        Hmmm...All i know is that at $7 a pop i would have to make 100 sales day at least. Or I can charge $100 a pop and only have to make 7 sales day

        So all in all you can have the 100 customers a day and i will take the 7 a day
        Amen! I'm hearing the hallelujah chorus playing somewhere in the background!

        Paul
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        • Profile picture of the author sal64
          Originally Posted by E. Brian Rose View Post

          I wasn't always like that. "Special Offer" used to mean discount from the regular public price. Now, it means whip up a short report and get affiliates to mail for it.
          Agree, but it is now what it is. So you either choose to play the game or not.

          Originally Posted by Robert Puddy View Post

          Hmmm...All i know is that at $7 a pop i would have to make 100 sales day at least. Or I can charge $100 a pop and only have to make 7 sales day

          And 7 sales a day is easy, and easily comes into the remit in the bolded part above. Im after those less people that can afford it. Their better customers, less pressure on the support side. Ask for fewer refunds and are generally easier to deal with

          So all in all you can have the 100 customers a day and i will take the 7 a day
          Absolutely Robert. And you're not exactly Robinson Crusoe in your way of thinking. Everyone will find what works for them. That's the beauty of working in a free market regime.

          Originally Posted by PeterGarety View Post

          Hey Paul,

          This is old fashion thinking.

          The most important thing that I look at and how I see it is the lifetime value of a customer.

          You see, there is nothing wrong about $5 - $10 or even OTO for $17 (guy sold million books on Kindle for $0.99), as in reality YOU GET PAID for getting high quality prospect on your list.

          Think about how much efforts and money you would need in order to build the same level list outside of WSO marketplace? I think you would pay at least triple the efforts of one WSO development.


          P.S. It is absolutely wrong to think that people who purchase a product for $5, do not buy high-priced products. I have sold tons of high-priced stuff - even $997 or $1997, to the same WSO buyer list.
          Go away! There is no room for your logic on here.

          The greatest 5 words spoken on this thread thus far: the lifetime value of each customer.

          Originally Posted by Paul Barrs View Post

          Robert you are correct here, although it was a WSO that prompted me to write it, but the point is valid across the board.

          Paul
          well that's ambiguous to me, Paul. Your poll specifically relates to WSO upsells.
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          • Profile picture of the author Paul Barrs
            Originally Posted by WSOHelp View Post

            So your saying (despite everything that's been said above) that low price probably still equals low quality?

            Walk into a book shop and look at the books on the shelf. Do some have low prices and other have high prices? Can you tell the quality of a book by it's price? Is a $10 book "worse quality" than a $20 book? What about the $100 books? Are they 5 times better than the $20 books?

            Think.
            Bill, just as a side-note here, I often look through the bargain basement books at the local bookstore - but this is where books go that *are not* selling at their usual price -

            Taking this further... and not related to my OP; how many of the low ticket items that we sell *could* sell for more. I don't need an answer for this, it's just a random thought.

            Brings me back to warrior *special offer*... better than elsewhere.

            Originally Posted by Spartacus View Post

            By the way, I can look into a book to see what quality it is if I'm not sure, can't do that with a WSO.
            Indeed....

            Originally Posted by CMPimagegroup View Post

            I have to admit when I first saw a WSO, I think the price was like 17 bucks or something. My first thought was, what is this really, 17 dollars?
            Now this opens up yet another discussion - that of perception.

            Do we BELIEVE that the product offers good value for what it claims to do. Now most would say, sure $17 / $7 whatever - of course tut others will say, "you're' kidding right?"

            So putting aside all the "sales copy", it is the price determines the final perception.

            That said however, for people whoa re used to WSO offers, that alone creates it's own perception.

            Originally Posted by ShayRockhold View Post

            Okay, so.... I will chime in.

            I really think it comes down to what your business model is.

            My business model is offering Hotsheets - short reports that are low-priced but don't have any fluff and they are highly actionable. You can take one of my IM Hotsheets and use them to make money - a full-time, scalable business - for a very small investment.

            That doesn't mean I'm never going to offer a product that's higher priced. It also doesn't mean that offer garbage - my Hotsheets are a good quality and unique ideas/twists on ideas.

            It's also a business model that I use outside of the Internet marketing niche - low-priced Hotsheets that give good information and are basically "impulse buys."
            Shay. Great.

            And so doing this opens up the "sales funnel" so to speak. I too have been looking at doing this for some of my short reports.

            And that's the thing; some might have thought that my OP was actual "asking the question".. no, it was to open up discussion.

            I know that offering low ticket items to then lead towards a hopeful upsell is a great business model. I also know that 8 - 10 times I don't like dealing with "low-ticket" minded buyers on a long term basis - customer support can become a major issue and when this happens, the "lifetime value" of the customer a severely decreased.

            Food for thought.

            Next comment....

            Originally Posted by PeterGarety View Post

            Hey Paul,

            This is old fashion thinking.

            The most important thing that I look at and how I see it is the lifetime value of a customer.

            You see, there is nothing wrong about $5 - $10 or even OTO for $17 (guy sold million books on Kindle for $0.99), as in reality YOU GET PAID for getting high quality prospect on your list.
            Peter, yes. The question here is how to determine a "high quality prospect"?

            For me, someone who won't go above 10-bucks is NOT a high quality prospect. And I may need to sort through 50 + $10 players to find one $500+ "high quality prospect".

            In our businesses we each need to determine (as you said) the $value of the customer. *That* determines our business model, and *that* will determine our success or failure.

            This discussion will hopefully help many people start considering these facts, and therefore build better businesses.

            Originally Posted by sal64 View Post

            well that's ambiguous to me, Paul. Your poll specifically relates to WSO upsells.
            Sorry Sal - you know me. The conversation took so many turns that I lost track a moment!

            However, I see also many people building lists of nothing but $10 players and wondering why they're not seeing the success that they really want - I guess what I'm asking here is this...

            Is the / can the $10 player be a / build a stable sustainable business model alone?

            Obliviously he / she can. The dime-sale model has worked online for years, and for many more years offline. However, I think that many people are "shooting themselves in the foot" by building a business that does nothing more, as has been illustrated so well in this thread.

            Paul
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  • Profile picture of the author Mr Bill
    Shell doesn't seem to have a problem selling gasoline for small prices (relatively). Chocolate bar manufacturers don't have a problem selling their candy bars for less than a dollar (sometimes). They just sell enough to meet their targets. These are digital products we're talking about. What does it matter what you charge as long as you meet your own financial targets? If you offer a service - fair enough, you can't really discount your time too low but what's wrong with selling heaps of an inexpensive digital item?

    The WSO section is a special and isolated sector of the internet. The massive volume allows for lower prices. It matters nil that someone who can sell a good value WSO for enough to keep them happy in the WSO section may not be able to sell the items elsewhere. Think of an apple seller. Apples sell for less than a dollar each and they would have no chance selling their apples at the farm gate anywhere near as well as they could sell them if they took them to the right marketplace.

    Great value and lots of customers is all that's needed to meet your targets. The problem is very few are setting total sales income targets. If you are happy with $10,000 a month then sell your products for the cheapest prices that will get you to that target. Again, this will only work with digital products which are unique in this world because they cost nothing to produce and distribute (small fees aside).

    The only problem I see is that people want to get more for their product...just to get more for their product. Smacks of greed when they could easily just set the price lower, sell more items, meet your own financial needs and keep the client happy. I do not see a problem with inexpensive products that offer astonishing value. I don't even mind "rehashed" ideas if the new author explains it in a way I understand. I'm not concerned with who originally came up with an idea/system/method (as loing as you're not stealing it of course but if it's just a fresh explanation of say - the working of facebook - I don't need to source the information from the very first person who ever thought to put out a Facebook guide). If I'm seeing it for the first time - I'm grateful. How many teachers are there in schools teaching exactly the same thing?

    No, I think the problem is not price. It's that everyone just wants to make as much as possible without regard to financial goals so they only think about how much they can get instead of considering the overall financial goal.

    As soon as sellers start to think about how much they need to make instead of how much they are going to get per unit they will realise they might make less per unit but will make more at the end of the day/week/month they will not complain about the price and everyone wins.
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  • Profile picture of the author Focused Action
    Just think of what would happen to pricing if buyers of WSO's actually implemented what they read and were too busy building a business to come back and buy WSO's every day!
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  • Profile picture of the author Mr Bill
    True, word would spread and the marketplace would sky rocket in sales and popularity.
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  • Profile picture of the author salegurus
    Originally Posted by Paul Barrs View Post


    I mean, don't get me wrong, it looks like a great offer; great product, from a trustworthy source - of these things I have no doubt.

    But for 5-bucks! OMG!

    Your thoughts....

    Paul
    And even at $5 there are still free loaders asking for "review copies"
    That's what gets me... :confused:

    -Theo
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  • Hi Paul

    Pricing is an interesting conundrum for sure.

    From a product creators point of view:-

    Our view is that the WF is the place to test drive public acceptance for your product and in doing so allows for feedback, tweaks, possible JV partners and hopefully testimonials so that you can take the product out to a wider audience. It also allows you to see in one place what is selling and what isn't so that you can gauge what your next move might be.

    From an end users point of view:-

    It allows us to buy "more" stuff. To decide what works for us and what doesn't and also to effectively pick the brains of other credentialled Warriors by checking out the sales page, the product, the format, the methodologies and the mode of delivery. It also saves us alot of time as we get to see comments from other know Warriors on the products before we jump in.

    All in all it's a great place to be.

    Regards

    Bronwyn and Keith



    Originally Posted by Paul Barrs View Post

    Every now and then I stop by the WSO forum and take a look at what 'competitors' are offering. I saw one today that just made me sad -

    I mean, don't get me wrong, it looks like a great offer; great product, from a trustworthy source - of these things I have no doubt.

    But for 5-bucks! OMG!

    I totally understand and get the "build a list / add an up-sell" yada yada yada, I do it myself of course... but 5-bucks ?? This is a product that would have sold for $47-$67 easily 2 -3 years ago.

    What are we saying to these people? In the eyes of the consumer, does this devalue the overall product market?

    Are we attracting the wrong type of customer doing this or are we just "filtering" the numbers?

    If nothing else, I wonder if we're making it harder for ourselves to make a living selling online? What hope does this give to the newbie?

    Your thoughts....

    Paul

    PS. Mind you, as a consumer I'm not saying the prices should go up (we know that would never happen anyway), because I, like anyone, LOVE a bargain
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  • Profile picture of the author John Romaine
    I've been focusing my attention towards conversion rates lately and setting my pricing in alignment with best performance. I should point out that Im not actively involved in WSO's so I cant really comment on that.

    At the moment, my thinking is it makes much more sense to push a product at $57 converting at 1%, then to push it at $97, converting at 0.25%.

    As for pushing stuff at $5, one could only think its probably just recycled garbage.

    Then again, who knows, I could be wrong. I was once back in 1992.

    *shrug
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    • Profile picture of the author Mr Bill
      Originally Posted by ramone_johnny View Post

      As for pushing stuff at $5, one could only think its probably just recycled garbage.

      Then again, who knows, I could be wrong. I was once back in 1992.

      *shrug
      Might have to disagree with you on this point. Every day heaps of new and interesting things are created, conceived and offered. screenr is just one example of a cool thing I would not have found had someone not mentioned it in a cheap WSO. Cheap for me is less than twenty bucks. It will easily save a lot of time for anyone who wants to get a quick message across without difficult video editing.

      If on our travels we come across something really cool which we think would help others and we put together a report on how it can save you time, money, frustration or (gods forbid) make money, wouldn't that be worth paying something to find out about? Obviously you know a lot about the internet and marketing because you've been around so long but shouldn't it be ok if people can help other people out for a few bucks?

      I can think of lots of great tips that I'd have paid at least $5.00 for that would have saved me hours and days. I still can not find a good complete How To ebook, manual (whatever) showing me how to rebuild a quadrajet carb but as soon as someone does I'll be paying $20 for sure. I wasted weeks and months trying to put together all the information I needed and in the end I wasn't sure if I was doing it right.

      Price and quality are not always matched. Just because something is cheap does not mean it has no value. Not sure if you were being serious or joking but...

      Just saying...
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  • Profile picture of the author DonMarketer
    I read alot of the points made on this thread and they all have immense value in their own right as they come from people who know what they're talking about.

    Once thing I that has been overlooked is the cost of acquiring a customer now a days. It's rediculous expensive compared to few years ago when I started. In many cases, the $5 -$7 bucks are not really for the product, it's the price to get a new customer to the sales funnel.

    As we all know a buyers list is worth gold! Once on the sales funnel, experienced marketers will segment their list and separate the cheap skates from the value customers and here is where the real money is made.

    The shift that is happening at moment is more of a survial strategy - trying to adapt to the market. We can appeal to high end value buyers directly or we can do so using the funneling strategy.

    I'm sure some people will desagree but there are many others who will agree that things will never be the same as they were back in the days.
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    • Profile picture of the author Suellen Reitz
      Originally Posted by DonMarketer View Post

      I read alot of the points made on this thread and they all have immense value in their own right as they come from people who know what they're talking about.

      Once thing I that has been overlooked is the cost of acquiring a customer now a days. It's rediculous expensive compared to few years ago when I started. In many cases, the $5 -$7 bucks are not really for the product, it's the price to get a new customer to the sales funnel.

      As we all know a buyers list is worth gold! Once on the sales funnel, experienced marketers will segment their list and separate the cheap skates from the value customers and here is where the real money is made.

      The shift that is happening at moment is more of a survial strategy - trying to adapt to the market. We can appeal to high end value buyers directly or we can do so using the funneling strategy.

      I'm sure some people will desagree but there are many others who will agree that things will never be the same as they were back in the days.
      Good point Don,

      Except for the fact that those $5 to $7 products sold as WSOs to get customers on our list for future products at higher prices doesn't logically make sense. I mean... If people only buy the "cheap" products because of the economy through WSO's... will those same bargain hunters really pay for a more expensive product later? Or will they instead search for something similar as another WSO?

      One thing I believe we can attain from inexpensive (I prefer that to cheap) product sales as a WSO is if in fact the product is of quality... the buyers could easily be channeled into an affiliate position for future sales of the same product. At least I hope that happens!
      Suellen
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      • Profile picture of the author JohnMcCabe
        Originally Posted by Suellen Reitz View Post

        Good point Don,

        Except for the fact that those $5 to $7 products sold as WSOs to get customers on our list for future products at higher prices doesn't logically make sense. I mean... If people only buy the "cheap" products because of the economy through WSO's... will those same bargain hunters really pay for a more expensive product later? Or will they instead search for something similar as another WSO?

        One thing I believe we can attain from inexpensive (I prefer that to cheap) product sales as a WSO is if in fact the product is of quality... the buyers could easily be channeled into an affiliate position for future sales of the same product. At least I hope that happens!
        Suellen
        Suellen, there's really only one way to find out for sure, right?

        While I've yet to run a WSO, if it shakes out anything like the real world, some will buy the more expensive product later, some won't.

        And even if they buy that second product as a low-price WSO, if they buy it from you, they just doubled their lifetime customer value. How many Warriors end up saying "I buy anything he/she puts out because I know it's going to be good"?
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        • Profile picture of the author Suellen Reitz
          Originally Posted by JohnMcCabe View Post

          Suellen, there's really only one way to find out for sure, right?

          While I've yet to run a WSO, if it shakes out anything like the real world, some will buy the more expensive product later, some won't.

          And even if they buy that second product as a low-price WSO, if they buy it from you, they just doubled their lifetime customer value. How many Warriors end up saying "I buy anything he/she puts out because I know it's going to be good"?

          Good point John!
          I have seen that comment time and time again here on the forum. So it all goes back to value doesn't it! Not just the price... but the end product as well. Thanks for the reply.
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      • Profile picture of the author DonMarketer
        Originally Posted by Suellen Reitz View Post

        Good point Don,

        Except for the fact that those $5 to $7 products sold as WSOs to get customers on our list for future products at higher prices doesn't logically make sense. I mean... If people only buy the "cheap" products because of the economy through WSO's... will those same bargain hunters really pay for a more expensive product later? Or will they instead search for something similar as another WSO?

        One thing I believe we can attain from inexpensive (I prefer that to cheap) product sales as a WSO is if in fact the product is of quality... the buyers could easily be channeled into an affiliate position for future sales of the same product. At least I hope that happens!
        Suellen
        Suellen, thanks for sharing your opinion.

        Most of those $5 to $7 products tend to be followed up by an immediate upsell (OTO) which tends to be $17 (it varies) as we know OTO sells quite well here.

        Once the buyer is in our list we know a little bit more about him/her than we did before. We know that he/she has the ability and means to pay. I mean he/she either has a credit card or a paypal account.

        With this information I know that I don't just have a freebie seeker, I have a buyer. This customer is more valuable to me than the prospects in my list who arrived on my squeeze page and entered his/her name and email address in exchange for a free ebook/information and never bought anything from me!

        The next step is developing a relationship with that list through value and education... In the process I will definitely make some more product recommendations to help the customer learn more in order to grow his business to another level. The responsive ones will end up signing to my coaching programs or to referred coaching programs and so on. Not all customers will join but those who do will make the all process worth the while because it's all about the intrinsic value of a customer. What started with a simple $5 to $7 can lead to thousands in profit.

        We use the same strategy when we organize seminars. Most of the seminars that I and my tem organize are free. I know that most of the attendees will be freebie seekers but I also know that among them will be people who are seriously looking for value. This minority make it all worth the while. Why? Because they don't only buy products but they also end up subscribing to our coaching programs, paying us thousands in the process. All we have to do to have valuable customers, is repeating the process...

        What I'm trying to say is, it's all a matter of perspective. Not all of us have to do business the same way!
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        • Profile picture of the author Suellen Reitz
          Originally Posted by DonMarketer View Post

          Suellen, thanks for sharing your opinion.

          Most of those $5 to $7 products tend to be followed up by an immediate upsell (OTO) which tends to be $17 (it varies) as we know OTO sells quite well here.

          Once the buyer is in our list we know a little bit more about him/her than we did before. We know that he/she has the ability and means to pay. I mean he/she either has a credit card or a paypal account.

          With this information I know that I don't just have a freebie seeker, I have a buyer. This customer is more valuable to me than the prospects in my list who arrived on my squeeze page and entered his/her name and email address in exchange for a free ebook/information and never bought anything from me!

          The next step is developing a relationship with that list through value and education... In the process I will definitely make some more product recommendations to help the customer learn more in order to grow his business to another level. The responsive ones will end up signing to my coaching programs or to referred coaching programs and so on. Not all customers will join but those who do will make the all process worth the while because it's all about the intrinsic value of a customer. What started with a simple $5 to $7 can lead to thousands in profit.

          We use the same strategy when we organize seminars. Most of the seminars that I and my tem organize are free. I know that most of the attendees will be freebie seekers but I also know that among them will be people who are seriously looking for value. This minority make it all worth the while. Why? Because they don't only buy products but they also end up subscribing to our coaching programs, paying us thousands in the process. All we have to do to have valuable customers, is repeating the process...

          What I'm trying to say is, it's all a matter of perspective. Not all of us have to do business the same way!

          Thanks for the followup comment Don,
          I'm still fairly new to this game. I tend to think of others the same way I think. I know that is illogical... but I suppose it's human nature. Glad to get your perspective!
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          • Profile picture of the author DonMarketer
            Originally Posted by Suellen Reitz View Post

            Thanks for the followup comment Don,
            I'm still fairly new to this game. I tend to think of others the same way I think. I know that is illogical... but I suppose it's human nature. Glad to get your perspective!
            You're welcome Suellen.

            We're just exchanging points of view, and I find it healthy

            Have a lovely day.
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            • Profile picture of the author JohnMcCabe
              Quote:
              Originally Posted by BIG Mike
              MYTH #4 - You're Selling Commodities

              I agree that this is a myth, though for a different reason than you. If you're talking information-selling or any other malleable-value product, it's only seen as a commodity by the market if the seller treats it that way. You create the perception - there's no hard supply/demand in IM because you can create demand out of nothing and if you position it right, you are the sole supplier of every product you produce.
              Scan down the headlines. Read the monkey-see, monkey-do copy.

              Which $7 "Make $xx,xxx in y days with no work" product sticks out?

              Which "We do the work, you keep the profit" offer sticks out?

              Which blind copy come-on is the sole supplier?

              My point in bringing it up is that many sellers do treat their products like commodities. They don't know how to create demand or position their products, so they go for the low price and hope they get 'their share'...
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            • Profile picture of the author Ryan David
              When you're looking at a street lined with lemonade stands, all selling at $0.50 a glass, your average WSOseller is saying "****, I want in on that!" And they open up their own $0.50 lemonade stand. What you are saying is that yeah, that can be profitable if you're set up to give them a sandwich too and can handle 1000 customers a day. I'm saying it's a lot easier to just open up a "Super Lemonade" stand and charge $1.00 a cup because you put a fancy straw in it.
              There are some sellers that can stand above the rest. But it's a combination of lots of activity in the thread (sales), good seller reputation, and a quality product. Most people don't have any of that going on. But even with all that, there seems to definitely be a sweet spot for prices and I'm sure saavy WSO sellers realize this. What's the point of doubling the price and making 1/4 the sales?

              But your example about the lemonade stand is not a good one. Because I can guarantee you that if a bunch of lemonade stands lining a street, you'd be out of business fast priced at 2x the price of your competitors.

              In the town I lived in, Jewel was the only grocery store an their prices were high. Walmart moved in, stole tons of business, and Jewel was forced to lower the prices of their top 500 SKUs. Shopping at Jewel was more enjoyable, but the experience wasn't THAT much better. Shoppers aren't idiots..they'll pay for premium services, to a point.

              Life is much easier when you're not competing with Walmart. Or really competing with anyone.
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              • Profile picture of the author Colin Theriot
                Originally Posted by Ryan David View Post

                There are some sellers that can stand above the rest. But it's a combination of lots of activity in the thread (sales), good seller reputation, and a quality product.
                That's what you need to get attention in the flood of low priced products, I agree. Activity in the thread doesn't necessarily = sales, especially as more expensive buyers don't necessarily post a lot.

                Originally Posted by Ryan David View Post

                Most people don't have any of that going on. But even with all that, there seems to definitely be a sweet spot for prices and I'm sure saavy WSO sellers realize this. What's the point of doubling the price and making 1/4 the sales?
                To offer the reverse perspective, do you think cutting the price of a product in half will give you 4x the sales? There's only a "sweet spot" when you're playing a particular market a certain way.

                Originally Posted by Ryan David View Post

                But your example about the lemonade stand is not a good one. Because I can guarantee you that if a bunch of lemonade stands lining a street, you'd be out of business fast priced at 2x the price of your competitors.
                This is just wholly untrue. There is a percentage of the population who will BY DEFAULT buy the most expensive option available because they can afford to and feel they deserve the "best". You're presuming that people ONLY buy to get the best price, but that's never the case.

                Originally Posted by Ryan David View Post

                In the town I lived in, Jewel was the only grocery store an their prices were high. Walmart moved in, stole tons of business, and Jewel was forced to lower the prices of their top 500 SKUs. Shopping at Jewel was more enjoyable, but the experience wasn't THAT much better. Shoppers aren't idiots..they'll pay for premium services, to a point.
                Compare Wal-Mart's grocery prices with that of Whole Foods. Or Trader Joe's. All 3 groceries in my area are equally packed, and the food at whole foods is a lot more expensive. Or consider restaurants - are the only viable restaurants the ones with cheaper food? In the case of the Jewel vs. Wal-Mart scenario, the experience of being in Jewel wasn't different ENOUGH. Here we have Kroger and Publix and Wal-Mart and Target - all pretty much the same, sterile, big-box supermarket experience. Trader Joe's and Whole Foods are drastically different - in color, in layout, in selection, in attitude, etc. etc. There are people who PREFER to shop there and WILLINGLY pay more BECAUSE they think it's BETTER. I'm sure there are people shopping at either place that think the people who shop at the other place are idiots. But consider HOW MUCH OTHER STUFF Wal-Mart has to ALSO sell to make their low price model viable.

                Originally Posted by Ryan David View Post

                Life is much easier when you're not competing with Walmart. Or really competing with anyone.
                Exactly - which is why you can stop "competing" with the $5 Frenzy and set yourself apart, justify your value, and make it so you're not competing with anyone. A Rolls Royce and a Honda are both cars, but they don't compete with each other at all. For people who can afford to buy a Rolls Royce, there IS no competition. They want it because it's a Rolls Royce, not because it's a car.
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                • Profile picture of the author Colin Theriot
                  Originally Posted by BIG Mike View Post

                  You don't have to agree with it - we're just here discussing our differing opinions
                  Of course. I didn't think we were trying to convince each other of anything.

                  Originally Posted by BIG Mike View Post

                  I was actually going to respond to your comments in more detail, but then as I finished reading them, I realized your responses to mine were all theory based, with "IF" and "MAYBE", which I can't respond to. I'm responding from a fact-based opinion, rather than a theoretical one.
                  What makes you think my comments are based on theory? I probably work with more different business types and pricing tiers than a the majority of people here. I still don't presume to know it all, but I do know how to make a lot of money for people who go for premium positioning. As well as you know your angle on the IM market, I know mine.

                  Originally Posted by BIG Mike View Post

                  I don't think it's too difficult for people to build up this type of model - I've taught a number of people over the years how to do it and they've done it sucessfully. Incidentally, that was after failing again and again chasing the high-priced models.
                  Of course you don't think it's too difficult, you've done it. I can say the same as far as seeing people coached on the business models taught by the kinds of folks I work for after having failed in the low-priced models. Different strokes for different folks - I still think this way is "easier" because as you've pointed out, to win the low price game, you need lots of stuff in place to support it and make it all fit together. To win at the high-priced game, you can use the exact same stuff as the low-end weekend warrior selling PLR-filled, re-hashed crap in PDF format for $5. That's what I mean when I say "easier".

                  Originally Posted by BIG Mike View Post

                  I will say that there are millions of businesses around the world doing what I do - my model, as it were, is a fairly basic business 101 type model.
                  I think you minimize how much your persona has to do with how you sell. You definitely are part-way into the "high end expert" kind of selling I'm talking about as far as that is concerned. You are a known figure, and people respect you, and when you offer a $5 product it is SEEN as a discounted item vs. "This is worth $5." Most people don't have that when they start their day.

                  Originally Posted by BIG Mike View Post

                  I liked your anaolgy about the lemonade stands, and you know what the first thing I thought of?

                  In every town or city I've been in (in the USA), what do you find? if there's a gas station on one corner, chances are there a different one on each of the other three corners. Same with fast food - if you see a McDonalds, chances are a Burger King, Wendy's or others are also nearby.

                  What do they know about lemonade stands that we don't?
                  I bet in the same town is a fancier, one of a kind restaurant with a history and a story, and the owners (hopefully) are probably making a heck of a lot more than the guy who runs a chain franchise location.

                  Originally Posted by BIG Mike View Post

                  I know that a lot of my customers are also customers of many other Internet Marketers - like John Reese, Mike Filsaime, Dan Kennedy, etc. When those same customers buy something from me at a low price, how do they make the shift to becoming a "Low Quality" customer?
                  Do you think the majority of the people who buy your low-priced products are also customers of the $2K product clique? Yeah, high-quality customers sometimes buy low-priced stuff. But low-quality customers only ever buy low-priced stuff. No one is talking about transforming one to the other.

                  If you market yourself as "low price" it's UNDENIABLE that you will attract a lower quality customer. I hate to judge people, but the quality of people that shop at my local Wal-Mart makes me not want to shop there, regardless of the low prices. Same goes for flea markets and garage sales, malls in the city, etc.

                  If you market to pricepoint, you attract people for whom pricepoint is the most important factor. They have no loyalty to you, or your info, nor do they REALLY give a crap about quality, regardless of their protestations otherwise. If you want a funnel full of those guys, you can have them. I'm not even saying they aren't profitable.

                  But you have to send a lot of emails and promote a lot of < $20 stuff to them to make as much as guys that do one or two launches a year of a > $1K product.

                  And as we said, there are High-quality customers capable of buying high-priced stuff that do go for a bargain now and again. THOSE guys you actually WANT because you can ladder them up once they know you and trust you better. But to get those guys vs. the price-shoppers, you have to be positioned well. You have to display that this here low-price thing is a DISCOUNT from what it's worth, NOT the only price that will ever be applied to my stuff.

                  Most of your arguments for the validity of the low-price model work because you are Big Mike, and you have that positioning whether you give it any thought or not. It's there, and it's at work when you sell things.

                  Originally Posted by BIG Mike View Post

                  What does GM know about economy price points that we don't know?
                  Rolls Royce or Bugatti or Ferrari don't bother having low price models at all. 100% of their income comes from high-end luxury product sales. GM is focused on economy cars because that's what they grew out of - they pushed Cadillac into the luxury space because Toyota and Honda et al did well with Lexus and Acura. Why? Because some people will just buy the more expensive thing because it exists, and they can tack 20% more business on just for having it. McDonalds' has Chipotle - not a high quality restaurant, but it's pricier than McDonalds, and clearly tries to be fancier in perception and look and feel. Same thing - GM's not an example of a high priced brand seeing the value of the low end, it's an example of the opposite. A low-price brand seeing the value in having more expensive, more exclusive products.

                  Originally Posted by BIG Mike View Post

                  The model I prefer to use has worked sucessfully both on and offline, so it's efficacy is really a moot point, at least to me.
                  Me too. What I know is the premium pricing model can work with a much smaller business with a lot less overhead, and a much smaller pool of customers.

                  Originally Posted by BIG Mike View Post

                  The higher-priced models we're discussing also work well, but I'm surprised that there's so much adamant resistance to accepting that the low-price model works too.

                  Strikes me as kind of like wearing blinders...not a good thing for any business to do.
                  Yes, you're right, I'm totally wearing blinders and have totally resisted everything you've said. :rolleyes: I believe everything you said, and I think you represent the right way to do "low price" and make it up in volume.

                  But I think the way you are doing it is an exception, not the actual likely outcome if everyone reading this continues to go for the lowest pricing on their products.

                  Maybe you should make a $5 report that tells everyone how to do it?
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                  • Profile picture of the author BIG Mike
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                    • Profile picture of the author Colin Theriot
                      Originally Posted by sal64 View Post

                      1- Is it reasonable to assume that the WSO marketplace consists mainly of customers who are seeking info at a low cost, as well as those who don't have big $$ to spend? Therefore, there is a low probability that you'll ever sell them high priced products?
                      Mainly, but not exclusively. The probability of catching the higher quality customers is a matter of getting attention and justifying the higher price. I know a guy who sold a $5K WSO and sold 8 copies. Terrible conversion rate. No affiliates, no list. Still, the guy was pretty happy with the return. AFAIK, most "successful" WSOs don't net $40K.

                      The assumption you cite is the one that I feel is the mistake that makes most people approach it that way, which is how they're shooting themselves in the foot. Most of the people reading this thread - certainly most of the people posting in it - probably would be totally willing to pay $50, $100, $200 for something truly valuable. The most I've ever spent personally is $800 on an info product. And here I am at the WF.

                      I do still buy the occasional WSO though. Not the "MAKE $$$$$$ IN YOUR PANTIES WHILE YOU PLAY PS3 DRFUNK!!!!" ones. But I do still buy the ones that prove their value. I can recall recently buying a $97 one. We are in here, right now. So of course, we could be over there, in the WSO forum.

                      Originally Posted by sal64 View Post

                      2- Are high priced products more difficult to emulate and therefore there will be less competition? Or is the success of these products contingent on positioning in the market?
                      Yes to both. The positioning can justify the higher price. Both high price and justified value are hard to fake or smuggle using the "blind copy" and "super-low-price for a MILLION things" kinds of marketer.

                      Originally Posted by BIG Mike View Post

                      All I can say is WOW :rolleyes:
                      Why wow?

                      Here's what I mean, and maybe you disagree. People that shop at my local Wal-Mart are the kind that open products in the store and eat part of them and put them back on the shelf. Or take cold goods out of the cooler and leave them in electronics. Or beat and yell at their kids in public. Or leave dirty diapers in the shopping carts. Or wipe boogers on clothes on the racks. Etc. etc. I've personally witnessed all of this first hand in various Super Wal-Mart stores in several states. I don't see that in stores that are "fancier" and sell more expensive stuff.

                      There is such a thing as a "low-quality customer" and it's perfectly reasonable to choose not to serve them. No shirt, no shoes, no service. You ever see a sign like that in a restaurant? That means at some point, someone actually thought it was OK to go into a restaurant topless and barefoot and saw nothing wrong with that. And I can guarantee that when asked to leave, they didn't say "Oh, terribly sorry sir! Understood!" They probably raised a ruckus over it. But you know, your mileage may vary.

                      But I know you DID acknowledge having "problem" customers - I posit that a LOT of those problem customers have an attitude of unreasonable expectation and undue entitlement. That tends to go hand in hand with shopping for low price as your primary decision factor. Simply having higher prices WILL keep a lot of those sorts of issues from ever happening. Insensitive? Maybe. Rude? Probably. Honest? Yes.

                      You at least have to admit that there's a HUGE degree of difference between a customer who can afford a $2K product buying a $20 product because it's a good deal... and the guy for whom $20 means a bill won't get paid, or he won't get a pizza and a beer that night. They have wholly different perspectives and expectations, and the former is going to be a LOT more likely to be REASONABLE, because the second guy is buying irrationally in the first place.

                      Anyways, hope that clarifies what I meant.
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                      • Profile picture of the author Michael Oksa
                        Originally Posted by Colin Theriot View Post

                        Here's what I mean, and maybe you disagree. People that shop at my local Wal-Mart are the kind that open products in the store and eat part of them and put them back on the shelf. Or take cold goods out of the cooler and leave them in electronics. Or beat and yell at their kids in public. Or leave dirty diapers in the shopping carts. Or wipe boogers on clothes on the racks. Etc. etc. I've personally witnessed all of this first hand in various Super Wal-Mart stores in several states. I don't see that in stores that are "fancier" and sell more expensive stuff.
                        With all of your multi-state knowledge of the Wonderful World of Wal-Mart, it makes me wonder what all of the other customers are thinking of you.

                        ~M~
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                        • Profile picture of the author Colin Theriot
                          Originally Posted by Michael Oksa View Post

                          With all of your multi-state knowledge of the Wonderful World of Wal-Mart, it makes me wonder what all of the other customers are thinking of you.

                          ~M~
                          Not me. I really don't care. They probably don't like me. At least that's what I inferred from the look a lady gave me when I yelled at her kid for taking a piss inside a circular clothes rack in the women's wear department. Seriously, do you guys live somewhere with super classy Wal-Marts I don't know about?


                          Originally Posted by Dennis Gaskill View Post

                          I'm not seeing a lot of difference in the distinction you made ... there are treasures to be found at garage sales as well. With both you have to sift through "another man's trash" to find your treasure.
                          Right, but the expectation at a garage sale is that if you find a treasure, it will be a steal because the owner thinks it's trash. At most flea markets I've been to, there are stalls where people are selling premium merchandise at retail or boutique prices. Like swords, or stereo equipment, to give an example. The point I was making is that if you look at the WSO forum as a garage sale, you get people thinking you CAN'T sell more expensive stuff there because NO ONE buys it. That's just not true. The market is a lot more diverse than people gives it credit for, but hardly anyone wants to swim in the deep end of the pool. And for the people who DO swim there and do well, they aren't inclined to let the "I can only sell $5 WSOs!!!" guys know otherwise.
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                          • Profile picture of the author Robert_Rand
                            Mike you make some great points. Kudos for sharing so many specifics from your business. I can see how a lower front end price (or even free) works better for lots of markets.

                            I will share that for me, higher front end pricing has worked better most of the time. In one of my businesses, initially I went in at $9.95 because I have a back end and figured it only made sense to build a bigger buyers list.

                            But after a lot of testing, including different price points, $47 ended up being the most profitable - even with the back end.

                            For this product, the difference in conversion b/w 47 and 9.95 was actually not even that big. (and the refund rate stayed the same)

                            It's also important to take into consideration how you're getting traffic. You mention the value of not having an upsell - but when you're paying for traffic that can be the difference b/w a profitable business and no business. It's tough to invest and scale based on what results you might get...

                            Personally, I've never heard of anyone making less money by adding in a valuable and relevant upsell offer. Of course, if you're generating free traffic and have lots of other products, then that's a totally different story.

                            Again, it all comes down to testing and understanding the specifics of your business and your market.

                            Some great points in this thread on both sides...
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                          • Profile picture of the author Dennis Gaskill
                            Originally Posted by Colin Theriot View Post

                            The point I was making is that if you look at the WSO forum as a garage sale, you get people thinking you CAN'T sell more expensive stuff there because NO ONE buys it.
                            I think it's fairly obvious there are exceptions, but if you want to draw that distinction that's cool. You're probably giving my influence over people's thinking far too much weight though.
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                            • Profile picture of the author Colin Theriot
                              Originally Posted by Rich Jackson View Post

                              put it into context of the WSO section...if i have a $47 dollar product and i throw it on the WSO thread at $5 bucks do you think I'm going to make a ton of sells..heck yeah..
                              You will sell a lot of copies to people who will see that amount of content and value it at $5. They will not ever see $47 as a fair price for that product if you slash it so deeply.

                              Here's the deal - I shared this in a paid mastermind earlier, but I'll share it here for free, too. We all know when you want to sell something to people, it's easier when they KNOW, LIKE, and TRUST you, right?

                              Well what is KEY is in: WHERE they know you from, WHAT they like about you, and WHY they think they can trust you.

                              When you focus on the low-end entry point in your market as the main segment, or even just the widest part of your funnel, here's what happens.

                              1. The first encounter the customer ever has with you is anchored at the LOWEST price point and now you have to fight your way upward with them a step at a time. They KNOW you are the "low-price, big-value" guy. Trying to sell them the same quantity for more later on actually violates what they thought they "knew" about you. They feel like they were WRONG about you, and you see people say this verbatim sometimes in unreasonable WSO complaints in the forum.

                              2. If you give them huge amounts of valuable stuff for free or for absurdly cheap, they WILL like you. But they will like you because you give away the farm. Any attempt by you to re-connect value and price to match will be met with scorn. Because you will be violating the reason they learned to like you. "You've changed! You've sold out!"

                              3. The reason they come to trust you is because you eliminate ALL risk and give away EVERYTHING for NOTHING. You are 100% safe because you hide nothing, you preserve nothing. When you suddenly have SECRET information that you want to SELL them... "Wait, what? Now you keep SECRETS from ME?! I thought you were different. But you are just out to make a buck off me like everyone else!"

                              Now consider a twist - consider instead investing yourself in getting people to KNOW, LIKE, and TRUST you in a completely different way.

                              Imagine

                              1. They come to know you because your name is attached to straightforward, valuable products, services, and information and you charge what they are WORTH (with a *SPECIAL* offer now and again)... And note: "special" as in infrequently, not as in "so low it touches the floor")... Regardless of if it's a best seller, it DOES get attention because it's different. YOU are different.

                              2. They like you because you participate in the other parts of the forum and in chat rooms or wherever your prospects hang out. "A guy this awesome and he makes the time to hang out here? That's pretty cool." Even though you are busy and advanced beyond where they are, you hang out and share small glimpses with them.

                              3. They come to trust you because when you DO ask them to invest a FAIR amount of money into their time with you, or for your information or whatever, that ACTUAL RISK pays off. They take a gamble and they WIN. "I almost didn't buy this, but BOY am I glad I bit the bullet/trusted my gut and did it!" You make them take a calculated risk and you make it a rewarding experience.

                              Now consider this different context when you approach them again to sell them something pretty expensive. Does it violate the way they know you? No, they know you sell expensive stuff. Does it violate the way they like you? No, they like you because you treat them like an equal and deliver awesome value in relation to the time and effort you put into the niche. Selling them your stuff is seen as allowing them deeper in, not selling them upward. Does it violate the way that they've come to trust you? No. In fact enticing the risky nature in things becomes like a gambler's rush for them. Every time you ask them to step out of their comfort zone, you make them happy they did.

                              Both sellers are known, liked, and trusted by their audience. Both can sell products to those audiences. But whose audience you think is worth more? Which seller is perceived as "better" to people who are in both audiences, or even outsiders who are in neither?

                              This is about POSITIONING yourself. Claiming a high price justifies your ability to claim a high price.

                              Originally Posted by Rich Jackson View Post

                              {aside} I do not want to abrogate the idea of selling high ticket items..I do it everyday..but I am not against the low tic model either..im also involved in that model as well.

                              Offline...i price all of my SEO clients high as i possibly can, I do it by making really bold claims..that i always back up..anyway back to the topic.
                              Why would you treat your offline and online clients differently in this context? Why does one of them get a high price and one a low price?

                              Originally Posted by Rich Jackson View Post

                              I honestly would go for the most people...because even though tom, dick and harry can give you $10,000 they only make up maybe 3% (just a guess) of the actual voting population.
                              80% of your results come from 20% of the work. If you're raising funds, you focus on the richest, most likely 20% that can pay out. You give them lots of attention and promises. Once you have that money, THEN you use it to reach the voters. Without the money, there are no votes. But even when you're talking about votes, they don't want the MOST. Popular vote isn't what wins. You want the electoral college votes. That's a smaller number of more "expensive" votes.

                              But we aren't talking elections here. My point is, my experience tells me it's better to focus on the higher-spending clients from the beginning, because you will make more money and work less and have less overhead. If you want to grow beyond where that gets you, you can. But most guys I know at that level don't.

                              Originally Posted by Rich Jackson View Post

                              Dude, are you serious... I personally know a guy in which the majority of his product are low ticket (non wso) products. most of his products are between $17-$27 and he makes hundreds of thousands each month...due to high conversion rates, awesome sells funnels, and affiliates.

                              Also if i'm correct there's a warrior named jason fladlien (i hope im spelling it right) whose business is set upon the same model...

                              I really hope you were joking with that statement...
                              I said "most" and you named two guys. We don't disagree - some get it, most don't. I don't see how you can disagree that most WSO sellers have no idea what they are doing. There are drastically more failed WSOs than successful ones. Not even the guys who are GOOD at it get a hit every time.

                              Also, yeah, I know Fladlien. He's a buddy. We met last year and spoke at the same events a couple of times this summer. Right now he an Wil Mattos do lots of sales webinars for lots of software products. As far as I know, the info product things aren't his focus right now, but as you say, he's a great example of how to do it right. Do you think his products are popular because they are cheap, or because he is famous, funny, rich Jason Fladlien?

                              Originally Posted by Rich Jackson View Post

                              yes it is..actually its a combination of us (the marketers) driving the price down..as well as the consumers preference.

                              and of course you have those poor marketers and sad business men and women is the WSO section who have no choice..or better yet no know how, other than to compete on price. so yes, they do kind of screw the pooch for us all.
                              It's more of the latter kind causing the environment we have now, than anything "we" did or the customers did. Largely, the customers do what they are told to do. Not enough smart marketers are bothering to talk to them right now.

                              Originally Posted by Rich Jackson View Post

                              I know this as I would assume anybody above the level of "newbie" does..but that doesn't execrate the fact that it works.

                              they are reeling you in with free/cheap content, and marketing higher priced content on the back end..

                              sounds familiar right....
                              You misunderstand. You only *think* what you are getting is "content". It's designed to feel like content. It is not actually "content" - not like what you would find in the course itself. It's sales material. I promise.

                              This actually works very poorly if you give away too much value as part of this process. The wrong kind or amount of goodies in the grab bag will make them pre-satisfied, or pre-occupied, so that when you try to go for the sale, they're already happy or already busy. You must carefully provide information that creates in their mind a problem - a specifically defined, very specific problem.

                              Once they are aware of it, they believe in it. It stays in their mind while they subconsciously go on alert to keep an eye out for solutions. Then when you make your offer, it "fits" the problem in their mind like a key in a lock. "Wow! This is just what I needed!" The fact is, they only *needed* it to solve a problem I taught them to have.

                              To look at what they are doing and think "If I give away free content, I will make a lot of sales!" is to drastically underestimate and oversimplify what they are actually doing. If they hire me, that is.

                              Originally Posted by Rich Jackson View Post

                              In my original post i touched on this by saying it is the marketers responsibility to weed the "im never going to buy anything higher than $5 dollar" guys out.
                              Or you can keep them off your list altogether by never selling anything for less than $10. Let the people who will never sell anything that costs more than $5 have them and fight over them. I want the people who would LOVE to spend $100 if only someone would show them something that was WORTH it. (Hint: this is easy, just put a $100 price tag on it instead of a $5 one and you are halfway there already.)

                              Originally Posted by Rich Jackson View Post

                              It also depends on the quality of service..because I know and im guessing you know as well..there is no margin for error at high price points. if you under perform those customers will ask for a refund quicker than you can say your name..
                              You must deliver what you promise. The expensive products that have high refund rates fail to do this, but the mistake is not in what they delivered. It's in what they promised in the sales material. The fact is, you can oversell anything. I've never had to make an outrageous claim in any of the $2K + products I've promoted because they had real, demonstrable results. We made reasonable claims and set reasonable expectations that justified the price we were charging.

                              Note: When you OVERSELL an expensive product, you can accidentally get... SURPRISE! Low-quality buyers - who will do stupid **** like max out multiple credit cards or mortgage the house to buy your thing because you claim "any old moron can turn the $2K investment into $250K in 30 days or less!" But if you set reasonable expectations, only the people SMART enough and SKILLED enough to extract value from it will bother buying. And you get really, really low refund rates (and really, REALLY loyal customers.

                              And also, when you say there's no room for error - the fact is there is a HUGE margin for error, but it's easily covered. Because the SMART marketer who has sold a FEW copies of a VERY EXPENSIVE course can actually manage direct interaction with that audience. Sometimes even on a one-on-one basis. The best received products I've helped launch have all had an interactive component where the seller delivered more of their valuable time, to a smaller audience, with a bigger personal touch. Even if you HAVE a problem with the product, you are getting so much attention and response that it's quickly fixed and no refund is needed.

                              Originally Posted by Rich Jackson View Post

                              I will say they are a more responsible breed.. and i do personally prefer to have customer that entered through a higher price point..

                              But as i keep saying that doesn't mean all is lost with the WSO section..my funnels are doing a pretty good job converting those people into long term customers..
                              I never said all was lost. I'm saying the people who WILL buy at a higher price point are IN THERE NOW. I know because I'm one and I'm in here. Most people in here also would. No one is serving that market because everyone is deluded into thinking the WSO forum ONLY wants cheap products and that you aren't "successful" if you don't sell a whole hassle's worth of cheap products to ungrateful idiots.

                              But it's arguably the low-price addicted affiliates who are even dumber.

                              THEM: "I don't sell stuff over $20 because my list won't buy it."

                              ME: "How do you know?"

                              THEM: "Well I never offer them anything over $20, so they aren't used to it."

                              ... Explain to me how THAT makes any sense? And yet I've heard it more than once from people who should know better.

                              Originally Posted by Dennis Gaskill View Post

                              I think it's obvious there are exceptions, but if you want to draw that distinction that's cool. You're probably giving my influence over people's thinking far too much weight though.
                              I don't know - seemed like a lot of people in this thread picked up on that analogy specifically, or hadn't you noticed? Don't sell yourself short, Dennis. People value what you say for sure. In fact, you should raise your prices.
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                              • Profile picture of the author blackhawkup
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                                Originally Posted by Colin Theriot View Post

                                You will sell a lot of copies to people who will see that amount of content and value it at $5. They will not ever see $47 as a fair price for that product if you slash it so deeply.
                                Excellent, rebuttal,


                                Again, for the most part yes, I do agree with you. And I understand your point of view..

                                Like I said I myself primarily promote high ticket products...But my argument is that the WSO section is not dead. And that it's not a bad idea to do low cost WSO's as well.

                                The reason I stand firm on that is because personally I find it fairly easy to convert those guys into high tick buyers.. But then again i have a pretty refined system backed by refined projects & processes.

                                The only thing I will comment on is the "Free Content" comment only because it seems as if i dont know whats "Really" going on..

                                But I do,

                                It's a little thing called pre framing plus the use of a bunch of pacing techniques, tied into a story, a hook,plot devices, emotions...yada,yada,yada...

                                Stuff I would never waste my energy doing when selling a WSO, LOL....

                                Anyway,

                                Oh yeah..about jason fladlien...I dont know him, nor am I in anyway connected to his business...I just read a few things about him... I'm sure he sells high ticket products though.

                                Ok, I'm going to sleep..haha
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                              • Profile picture of the author sal64
                                Colin, this explains the whole train your buyers theory concisely.

                                Thanks.

                                Originally Posted by Colin Theriot View Post


                                When you focus on the low-end entry point in your market as the main segment, or even just the widest part of your funnel, here's what happens.

                                1. The first encounter the customer ever has with you is anchored at the LOWEST price point and now you have to fight your way upward with them a step at a time. They KNOW you are the "low-price, big-value" guy. Trying to sell them the same quantity for more later on actually violates what they thought they "knew" about you. They feel like they were WRONG about you, and you see people say this verbatim sometimes in unreasonable WSO complaints in the forum.

                                In this case, they perceive you as using a low price product to get their attention, only so you can screw them with a higher priced product, right?

                                2. If you give them huge amounts of valuable stuff for free or for absurdly cheap, they WILL like you. But they will like you because you give away the farm. Any attempt by you to re-connect value and price to match will be met with scorn. Because you will be violating the reason they learned to like you. "You've changed! You've sold out!"

                                3. The reason they come to trust you is because you eliminate ALL risk and give away EVERYTHING for NOTHING. You are 100% safe because you hide nothing, you preserve nothing. When you suddenly have SECRET information that you want to SELL them... "Wait, what? Now you keep SECRETS from ME?! I thought you were different. But you are just out to make a buck off me like everyone else!"

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                      • Profile picture of the author BIG Mike
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                        • Profile picture of the author Colin Theriot
                          Originally Posted by BIG Mike View Post

                          Most of those low-quality customers I have, as you call them, are just regular people - polite, patient, friendly and a easy to work with.
                          You sell software. The people who buy software are capable of extracting an ROI - they probably even WANT to. The majority of buyers active right now in the WSO forum are not. They are there for ENTERTAINMENT. Which is fine, I like to read video game magazines even though I don't own any modern consoles or a computer that can run them. I'm fine with that.

                          The thing is, for the people who are in the IM market for the entertainment value will HARDLY EVER buy anything above $20 because that's the ceiling for entertainment expenditure. If you can't get ROI out of anything, spending more than that is pretty dumb. So kudos to them.

                          The problem I'm trying to address is for the person in IM that is stepping out to make their own products - making a super valuable product and slitting your own throat to go with a low price is a LOSING proposition.

                          Because the majority of the people here WILL NOT see the value and think of the price as a deal. They are not in it for the ROI, they are in it for the entertainment. And if you position it like all the other low-price sellers, you're pitching it as that, too. Entertainment as a commodity.

                          And that's not where the opportunity is, and it's not a great way to start a business UNLESS you are SPECIFICALLY trying to be in the infotainment business, then you'll do well.

                          Originally Posted by BIG Mike View Post

                          Yes, I do have my fair share of problem customers...some like < .25 percent maybe? You can't tell me that those selling a high-ticket item don't also have a similar rate or higher number of problem customers, because I've been there and know it's true.
                          You certainly get a lot less people buying those expensive products who are A. only in it for the entertainment and B. Serial refunders who want the "buzz" but don't want to go broke paying the dealer for their fix. Yeah, you get problem customers everywhere. That's not really what I mean by "low quality" in this case.

                          Originally Posted by BIG Mike View Post

                          I don't dwell on those folks, because it's a normal part of any business model. It doesn't matter if you're Wal-Mart or an upscale shop on Rodeo drive. I've seen firsthand those high-quality customers, as you call them, behave just as badly, if not worse than any problem customer I've ever had.
                          If you have a smaller, higher end business, it's a lot easier to deal with the problem customers. If you have a high volume business, their numbers can make it so the majority of your time (or the time of someone you pay) is spent trying to satisfy people who refuse to be satisfied.

                          Originally Posted by BIG Mike View Post

                          I say wow Colin, because in all of your comments you're trying very hard to defend the high-priced model (which doesn't need any defending) by pretty much crapping all over anyone who dares to look for a deal at a low price or consider venturing into a low-priced model.
                          Several times I've said the low price model can work. It works for you, it works for others. But you need infrastructure and a knowledge of business and scaling that most beginners don't have. I suggested that if you WANT to go low-price, at least go high-price first so you can anchor yourself as a premium provider. I've never crapped on it, I've said that in this marketplace, if you join the race to the bottom, you're shooting yourself in the foot.

                          Originally Posted by BIG Mike View Post

                          The Walton family knows this and that's good enough for me

                          P.S. - I will gladly re-think my entire side of this discussion the moment you show me any Internet Marketer pursuing high-valuation customers who makes the Forbes 500 list and any 2 who replicated his or her success
                          Look, this is silly. Show me someone playing the super-low price WSO game who is on the Forbes 500 list. Selling $5 ebooks does not make you Wal-Mart. Thinking you can BE Wal-Mart just because you sell for low prices is just not smart. Wal-Mart can sell low and succeed because they are HUGE. HUGE volume. If you are small and just starting out, you don't have volume, and in the WSO forum you're competing with everyone else fighting for that entertainment dollar.

                          Yes, some people CAN make money going for the low-price, high-volume model. But it takes a LOT of work to get there, and it takes a lot of knowledge to even know how to set it up right. If I want to buy that knowledge from YOU, you charge $10K. Why? Because you know what it's worth. You won't be making a $7 ebook course on that any time soon, will you? Of course not.

                          For the vast majority of sellers here TRYING to succeed, it is a faster, slicker path to simply target a higher-quality, bigger-spending audience. You DON'T need anything in place to scale or handle volume. If you're a solo product creator, you use the EXACT same tools and processes to create a $50 or $100 product as you do to create a $5 product.

                          But look, at the end of the day, I really don't care all that much. Please, dear readers - by all means, work very hard on your products, then go to the WSO forum and bend over for the low-price info-addicts. You are welcome to them. You could be the next Wal-Mart! Just think, you know what will sell even better than $5 ebooks??? $3 ebooks!!!! You'll be rich in no time.
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                          • Profile picture of the author BIG Mike
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                            • Profile picture of the author Colin Theriot
                              Originally Posted by BIG Mike View Post

                              Obviously you don't want to discuss this, you prefer to insult pretty much everyone who's ever run a WSO or disagreed with you.
                              Clearly I don't want to discuss it, which is why I've written about half the words in this entire thread, lol. Look, if you sell WSOs and feel like I've been insulting you, hopefully all that Wal-Mart level profit you're allegedly making can console you while you laugh all the way to the bank.

                              Originally Posted by BIG Mike View Post

                              Well, I've got news for you...a lot of those members who are bending over running WSO's have gone on to build very successful businesses for themselves based on that experience - and I'm willing to bet they did it without your help.
                              Define "a lot". Because I am fairly certain the majority of WSOs are a failure and the majority of people selling them are not getting anything like a sustainable business or a reliable income out of it. THAT is who I'm talking to. If you sell low priced stuff and make a ton of money off it, great. Ignore me. Laugh at what I say, I don't care.

                              But for everyone else (like the guy who started this post) who thinks "Damn, this is not working and I need to do something better..." I've offered a lot of insight as to WHY it is the way it is, HOW it works right now, and lots of suggestions on how to OVERCOME the issues with that marketplace and hopefully get MORE people making MORE money.

                              If that hurts some WSO sellers widdle feelings well BOO HOO. I'm not typing all this to hear myself type, you know?

                              Originally Posted by BIG Mike View Post

                              Somehow I suspect that's a good thing

                              I'm outa here...
                              Bon soir, mon ami! You're right - I usually don't work with WSO sellers because at $5 for an ebook they would have to sell upwards of 2000 copies to afford to hire me to write their copy.
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                            • Profile picture of the author Ryan David
                              Originally Posted by Colin Theriot View Post

                              So, you focus on lowest price for food, so I CAN make the assumption that if price is your PRIMARY determiner of purchase, that you will be very hard to move up the ladder for higher priced products.
                              No, it depends on the product. I pay higher prices for things that I perceive to have more value. And I don't think that things are perceived to have more value because someone tells me they do.

                              Originally Posted by Colin Theriot View Post

                              In the context of the IM marketplace, I don't know if it's "better" but it's certainly easier to do while you are a small size or even a solo operator. In my own experience (and that of many clients I work with), it's also a faster way to getting big enough profits so that you can invest some capital into the infrastructure and resources it takes to profit on volume.
                              I disagree. Because I choose to operate one of my websites different than some of the other "higher end" outfits. I sell a basic product, but I realize that it's a product that has a certain viral effect. So my goal is to sell MORE at a fair price (good for customer, good for me). The thought is that the more I sell, the more referrals I'll get. I can handle the volume.

                              Some competitors prefer to deal with smaller customers for more custom projects. They are dealing with people that value a higher-end product, but they are exposing their product to less people. Their growth is also limited because they are personally involved in the customization of all the custom work.

                              Originally Posted by Colin Theriot View Post

                              And here, my assumption is proven correct. I don't care if you live in an affluent neighborhood or whatever. I care that you will see VALUE in what I offer BEYOND how low the price is. You are not that kind of customer, so if I sell info products, I'd rather go after someone who does, rather than go after you.

                              Yes. A customer who gives me $2K is a better customer than someone who gives me $5. Given a choice between the two, I will choose the first one every time.
                              You'd be wrong, because I spend money where I see value. I was a 2-year member of stompernet at $797/month because I bought their original $50-$100 Stomping the Search Engines CDs. You used to be a stompernet employee right? I've never bought a Reese, Filsaime, or Kern product in my life.

                              I don't blame people for wanting the higher-end customers, but it's not like it comes with no extra strings attached. And it depends on the type of business.
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                              • Profile picture of the author Andy Fletcher
                                You'd be wrong, because I spend money where I see value. I was a 2-year member of stompernet at $797/month because I bought their original $50-$100 Stomping the Search Engines CDs. You used to be a stompernet employee right? I've never bought a Reese, Filsaime, or Kern product in my life.
                                This was made extra amusing to me because I happen to know who wrote the copy for Stomper net
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                              • Profile picture of the author Colin Theriot
                                Originally Posted by Ryan David View Post

                                No, it depends on the product. I pay higher prices for things that I perceive to have more value. And I don't think that things are perceived to have more value because someone tells me they do.
                                Well you're agreeing with me then, aren't you? If you don't see increased value in the things I tell you to, then you're not my best customer.

                                Originally Posted by Ryan David View Post

                                I disagree. Because I choose to operate one of my websites different than some of the other "higher end" outfits. I sell a basic product, but I realize that it's a product that has a certain viral effect. So my goal is to sell MORE at a fair price (good for customer, good for me). The thought is that the more I sell, the more referrals I'll get. I can handle the volume.
                                How can you disagree with my general statement with yourself as the example when you OPEN your point explaining how you do things in a different way than most people? I'm talking about the way it will work for most people. If you're doing it in a unique and different way, then you're talking about something else, and not disproving what I said.

                                But that's cool - you have looked at what the landscape was like and offered something different that makes you stand out. That's all I'm advising people to do. In an ocean of $5 crap, be the $50 awesomeness and you will get the same effect.

                                Originally Posted by Ryan David View Post

                                Some competitors prefer to deal with smaller customers for more custom projects. They are dealing with people that value a higher-end product, but they are exposing their product to less people. Their growth is also limited because they are personally involved in the customization of all the custom work.
                                I agree with that, but if we're talking about selling info-products, your growth is limited by targeting only low-price customers, too. Selling a higher-priced, more valuable product is what opens you up for growth DOWNWARD into the lower priced markets instead of starting at the bottom.

                                Originally Posted by Ryan David View Post

                                You'd be wrong, because I spend money where I see value. I was a 2-year member of stompernet at $797/month because I bought their original $50-$100 Stomping the Search Engines CDs. You used to be a stompernet employee right? I've never bought a Reese, Filsaime, or Kern product in my life.
                                I wrote the copy for StomperNet and the Stomping the Search Engines offers. If we'd given you a free ebook or a $5 SEO course, I find it highly unlikely we could have ramped you up to the $800 a month membership. Maybe you SPECIFICALLY, but the vast majority of people who bought a $5 thing would not convert upwards to that flagship premium membership. Which is my entire freaking point.

                                Originally Posted by Ryan David View Post

                                I don't blame people for wanting the higher-end customers, but it's not like it comes with no extra strings attached. And it depends on the type of business.
                                There are pros and cons of both types of models, and I think we've illustrated a lot of them in this thread. For anyone here that is selling a low priced WSO, do yourself a favor. Raise the price by say, 15%. See what happens. Next one you want to sell, charge double what you were going to charge. See what happens. If you don't make more money, you can drop the price right back, right? I'm not saying to do anything different except charge what your stuff is WORTH.
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                                • Originally Posted by Colin Theriot View Post

                                  For anyone here that is selling a low priced WSO, do yourself a favor. Raise the price by say, 15%. See what happens. Next one you want to sell, charge double what you were going to charge.
                                  Moreover, not only increase prices by a 15% on your front-end product, but more importantly instead of churning out entry products at low-end prices (WSOs) one after another, develop a deeper sales funnel so that $7 customer eventually (potentially) becomes a $97 customer, and then a $497 customer.

                                  Strictly speaking, entry products are not bad as long as there are a few beefy offers (either own products or affiliate offers) awaiting in the background, which is where the REAL money is to be made.
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                                  • Profile picture of the author blackhawkup
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                                    exactly...thats all i have been trying to get across...it's a sustainable business model when you do it like this...

                                    Wow, we have so many brilliant people here in this forum, and this thread is proving it...

                                    we should all join together and take over the world!


                                    Originally Posted by Anonymous Affiliate View Post

                                    Moreover, not only increase prices by a 15% on your front-end product, but more importantly instead of continue creating entry products at low-end prices (WSOs) one after another, develop a deeper sales funnel so that $7 customer eventually (potentially) becomes a $97 customer, and then a $497 customer.

                                    By definition, entry products are not bad as long as there are a few beefy offers (either own products or affiliate offers) awaiting in the background, which is where the REAL money is to be made.
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                                  • Profile picture of the author Colin Theriot
                                    Originally Posted by Anonymous Affiliate View Post

                                    Moreover, not only increase prices by a 15% on your front-end product, but more importantly instead of continue creating entry products at low-end prices (WSOs) one after another, develop a deeper sales funnel so that $7 customer eventually (potentially) becomes a $97 customer, and then a $497 customer.

                                    By definition, entry products are not bad as long as there are a few beefy offers (either own products or affiliate offers) awaiting in the background, which is where the REAL money is to be made.
                                    Yes, and my advice is don't START with the $7 product. Make the $97 product first. You have to sell 13x less of them to make the same amount of cash as the $7 product. Will you sell as many copies? No. Will you make as much money - probably. Will it do HUGE things for your recognition and branding and quality of customer you can attract? Hells to the yes.

                                    Then, later, if you still want to, you can create a little slice of something that can sell for $7, and you have the halo effect of being a higher-value product creator that makes that $7 product seem AMAZING instead of just some other $7 crap like everything else.

                                    Then, when you try to sell them the $97 thing, the people who bought the $7 thing and love it can say "wow, I bet this $97 thing must be great!" If you create and sell the $7 thing first, THEN try and upsell to $97 without that pre-existing context, they think "you're one of those MEAN OLD MARKETERS only out to make a buck and dammit I'll go find some other $7 thing to buy instead!!!"
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                                    • Profile picture of the author blackhawkup
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                                      Now.. I can dig this..

                                      I knew ol' colin had a heart.. haha

                                      Originally Posted by Colin Theriot View Post

                                      Yes, and my advice is don't START with the $7 product. Make the $97 product first. You have to sell 13x less of them to make the same amount of cash as the $7 product. Will you sell as many copies? No. Will you make as much money - probably. Will it do HUGE things for your recognition and branding and quality of customer you can attract? Hells to the yes.

                                      Then, later, if you still want to, you can create a little slice of something that can sell for $7, and you have the halo effect of being a higher-value product creator that makes that $7 product seem AMAZING instead of just some other $7 crap like everything else.

                                      Then, when you try to sell them the $97 thing, the people who bought the $7 thing and love it can say "wow, I bet this $97 thing must be great!" If you create and sell the $7 thing first, THEN try and upsell to $97 without that pre-existing context, they think "you're one of those MEAN OLD MARKETERS only out to make a buck and dammit I'll go find some other $7 thing to buy instead!!!"
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                                • Profile picture of the author blackhawkup
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                                  I was done with this but you guys wont quit haha

                                  I totally agree that price bumping does not effect conversions..

                                  I'm originally from cleveland, ohio last year i moved to texas to be closer to my business partners..

                                  We run a SEO company for local clients...

                                  When it came time for us to test price points here's what we did (very simple).

                                  we charged extremely low prices and extremely high prices to similar companies located in the a close vicinity..

                                  and what we found is we converted almost the same amount of people with the high cost..as we did with the low cost.

                                  So we started charging people outrageous prices..ofcourse we get results so we can justify it.

                                  BUT..we didnt scrap the low cost model altogether...

                                  here's why..

                                  We tried to get 100 local clients to agree to a $4,000 per month SEO "gig"

                                  do to our proof, USP etc,etc..the majority said yes..

                                  but to all people who said NO, we countered with a much lower price point and guess what.. we landed them.

                                  would you say im shooting myself in the foot??

                                  yes i have clients paying $4,000 and above for SEO services..but for those who dont agree to that price due to the fact that they are a newer company and might not have the funds or for whatever we reason we drop the prices and land them as a client.

                                  Our guys get results so in turn we bring more business to them, they make more money...we pitch higher priced plans...

                                  eventually they turn in those high ticket customers..

                                  And those who dont, we discontinue doing business with them because you don't want to keep loss leaders around for to long.. thats bad business.

                                  i dont disagree with your thoughts on selling high ticket items..like i said i do it as well. as an affiliate.

                                  But i do disagree with the fact that you totally discredit low ticket products altogether.

                                  again, im not saying that the point you're making is wrong...but theres more than one way to skin a cat!

                                  Originally Posted by Colin Theriot View Post

                                  Well you're agreeing with me then, aren't you? If you don't see increased value in the things I tell you to, then you're not my best customer.
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                                  • Profile picture of the author Colin Theriot
                                    Originally Posted by Rich Jackson View Post

                                    would you say im shooting myself in the foot??

                                    yes i have clients paying $4,000 and above for SEO services..but for those who dont agree to that price due to the fact that they are a newer company and might not have the funds or for whatever we reason we drop the prices and land them as a client.
                                    Yes, you are absolutely shooting yourself in the foot when you slash your price when a business owner says they can't afford you. Especially if you don't rein in the service offering to match the price slash.

                                    Business owners want to keep costs down and they put you in a position where THEY feel like they are the prize, and you have to WIN them. When you dance for them, they know now that you will dance. Do you think they are more or less likely to haggle with you on the price of any future sale you try to make?

                                    And the fact is, you're eating up your resources serving a client who ALREADY doesn't see the value in what you do... and since you slashed your price for them they will NEVER see a value/price match. Because they think "if he can do the service for X and was going to charge me Y, it must really only be worth X" regardless of the result.

                                    What you should do instead is do a dossier on your competitors. When they say "no" to your price say, "Look, I sold you on the idea that you NEED this service, right? You know it will benefit you. If you're not going to get it from US, here's the other providers in the area. Now, you COULD get this for cheaper from them, but here is what they are going to LEAVE OUT in order to save you that money. Here's why I think that's a mistake. But if price is the thing that matters most to you right now, yeah, these guys can save you some money on the front end. If results are more important, then take some time to think about it. We'll follow up. Thanks for your time."

                                    Then get a referral agreement worked up with that competitor so you get paid if they go with them. Let your competition get all busy with the companies that don't see value in what you're doing and want to talk down the price. It frees you up to go after all the businesses who can and will.

                                    But I don't advise ever letting someone beat you up on price, and if you need the business, put some REALLY big hooks in the agreement like automatically rising back to full price when result quotas are met, or an "if I do this, you also agree to get this service from us down the road" thing. Never just offer the exact same thing for less money.

                                    IMHO.

                                    Originally Posted by Rich Jackson View Post

                                    i dont disagree with your thoughts on selling high ticket items..like i said i do it as well. as an affiliate.

                                    But i do disagree with the fact that you totally discredit low ticket products altogether.
                                    I never ever ever totally discredited selling low priced stuff. I said in the WSO market, if you sell IM stuff in here, if you join everyone in the race to the bottom, you are shooting yourself in the foot. Period. If you have the structure and know-how to make selling-in-volume pay, then by all means, do it. If you DON'T, you CANNOT profit in volume. Not here. Not if you're just starting out, for sure.
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                                    • Profile picture of the author Rus Sells
                                      Lets not forget the referrals these owners give you will expect the same price slashing you gave your client.

                                      Colin, you look young but I can tell you have some real world business experience.

                                      Originally Posted by Colin Theriot View Post

                                      Yes, you are absolutely shooting yourself in the foot when you slash your price when a business owner says they can't afford you. Especially if you don't rein in the service offering to match the price slash.

                                      Business owners want to keep costs down and they put you in a position where THEY feel like they are the prize, and you have to WIN them. When you dance for them, they know now that you will dance. Do you think they are more or less likely to haggle with you on the price of any future sale you try to make?

                                      And the fact is, you're eating up your resources serving a client who ALREADY doesn't see the value in what you do... and since you slashed your price for them they will NEVER see a value/price match. Because they think "if he can do the service for X and was going to charge me Y, it must really only be worth X" regardless of the result.

                                      What you should do instead is do a dossier on your competitors. When they say "no" to your price say, "Look, I sold you on the idea that you NEED this service, right? You know it will benefit you. If you're not going to get it from US, here's the other providers in the area. Now, you COULD get this for cheaper from them, but here is what they are going to LEAVE OUT in order to save you that money. Here's why I think that's a mistake. But if price is the thing that matters most to you right now, yeah, these guys can save you some money on the front end. If results are more important, then take some time to think about it. We'll follow up. Thanks for your time."

                                      Then get a referral agreement worked up with that competitor so you get paid if they go with them. Let your competition get all busy with the companies that don't see value in what you're doing and want to talk down the price. It frees you up to go after all the businesses who can and will.

                                      But I don't advise ever letting someone beat you up on price, and if you need the business, put some REALLY big hooks in the agreement like automatically rising back to full price when result quotas are met, or an "if I do this, you also agree to get this service from us down the road" thing. Never just offer the exact same thing for less money.

                                      IMHO.



                                      I never ever ever totally discredited selling low priced stuff. I said in the WSO market, if you sell IM stuff in here, if you join everyone in the race to the bottom, you are shooting yourself in the foot. Period. If you have the structure and know-how to make selling-in-volume pay, then by all means, do it. If you DON'T, you CANNOT profit in volume. Not here. Not if you're just starting out, for sure.
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                                    • Profile picture of the author Dennis Gaskill
                                      Originally Posted by Colin Theriot View Post

                                      Yes, you are absolutely shooting yourself in the foot when you slash your price when a business owner says they can't afford you. Especially if you don't rein in the service offering to match the price slash.

                                      Business owners want to keep costs down and they put you in a position where THEY feel like they are the prize, and you have to WIN them. When you dance for them, they know now that you will dance. Do you think they are more or less likely to haggle with you on the price of any future sale you try to make?

                                      And the fact is, you're eating up your resources serving a client who ALREADY doesn't see the value in what you do... and since you slashed your price for them they will NEVER see a value/price match. Because they think "if he can do the service for X and was going to charge me Y, it must really only be worth X" regardless of the result.

                                      What you should do instead is do a dossier on your competitors. When they say "no" to your price say, "Look, I sold you on the idea that you NEED this service, right? You know it will benefit you. If you're not going to get it from US, here's the other providers in the area. Now, you COULD get this for cheaper from them, but here is what they are going to LEAVE OUT in order to save you that money. Here's why I think that's a mistake. But if price is the thing that matters most to you right now, yeah, these guys can save you some money on the front end. If results are more important, then take some time to think about it. We'll follow up. Thanks for your time."

                                      Then get a referral agreement worked up with that competitor so you get paid if they go with them. Let your competition get all busy with the companies that don't see value in what you're doing and want to talk down the price. It frees you up to go after all the businesses who can and will.

                                      But I don't advise ever letting someone beat you up on price, and if you need the business, put some REALLY big hooks in the agreement like automatically rising back to full price when result quotas are met, or an "if I do this, you also agree to get this service from us down the road" thing. Never just offer the exact same thing for less money.
                                      That was sound analysis and good advice. I agree with everything except this wording: "Look, I sold you on the idea that you NEED this service, right?"

                                      It may seem a small thing, but no one likes to be "sold." When you ask a question like that you're giving them to chance to say (if only to themselves), "No, I'm not sold. I'm getting along fine without it."

                                      Offering such an easy out is often not a good thing. It would be better to say, "I know you understand that this service will increase your profits..." and then go on with the rest of what you said. That keeps the focus on the strongest benefit, rather than on being sold.
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                                      • Profile picture of the author Colin Theriot
                                        Originally Posted by Dennis Gaskill View Post

                                        That was sound analysis and good advice. I agree with everything except this wording: "Look, I sold you on the idea that you NEED this service, right?"

                                        It may seem a small thing, but no one likes to be "sold." When you ask a question like that you're giving them to chance to say (if only to themselves), "No, I'm not sold. I'm getting along fine without it."

                                        Offering such an easy out is often not a good thing. It would be better to say, "I know you understand that this service will increase your profits..." and then go on with the rest of what you said. That keeps the focus on the strongest benefit, rather than on being sold.
                                        I agree with that. Speaking off the cuff, I got into "talking to marketers" mode I guess. I would say something like "You get that you need this service and you need it sooner rather than later." But that's just nitpicking, the main point of what you're saying is sound. If I'd edited this as copy, I would have hopefully caught and fixed it.
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                                        • Profile picture of the author Dennis Gaskill
                                          Originally Posted by Colin Theriot View Post

                                          If I'd edited this as copy, I would have hopefully caught and fixed it.
                                          I'm sure you would have. You know what you're doing. Writing in stream of consciousness mode as we tend to here often allows a few little things to escape our attention. I posted that more for the benefit of others than I did in thinking I was telling you something you didn't know.
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                                          • Profile picture of the author Ryan David
                                            I wrote the copy for StomperNet and the Stomping the Search Engines offers. If we'd given you a free ebook or a $5 SEO course, I find it highly unlikely we could have ramped you up to the $800 a month membership. Maybe you SPECIFICALLY, but the vast majority of people who bought a $5 thing would not convert upwards to that flagship premium membership. Which is my entire freaking point.
                                            You wrote the copy for the original offering in Oct 2006? And when I'm talking Stomping the Search Engines, I'm talking about the original CD version...not the one released in 2008-ish.

                                            I'm asking because I've heard multiple people credited with the original Stompernet launch. I thought I heard Andy Jenkins say he wrote the sales letter, then I heard Frank Kern wrote it, and now you say you wrote it.

                                            Here's the thing with these info-products, people buying something more expensive doesn't tell you that much about the people's ability to continue to spend money. I'd guess most of the people haven't made a dime online, which means it's only a matter of time before their CC's are maxed.
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                                            • Profile picture of the author Colin Theriot
                                              Originally Posted by Ryan David View Post

                                              You wrote the copy for the original offering in Oct 2006? And when I'm talking Stomping the Search Engines, I'm talking about the original CD version...not the one released in 2008-ish.
                                              Ah, I worked there from early 07 to late 09. While I was there I was their sole staff marketing copywriter. That's after the initial launch, but from the second re-open forward (March 07 I think?), I was there until I left.

                                              When you said you bought the one and were upsold the other, I thought you meant the 08 releases, as that would have been me. Honest mistake. Not trying to claim credit for something I didn't do.

                                              Originally Posted by Ryan David View Post

                                              I'm asking because I've heard multiple people credited with the original Stompernet launch. I thought I heard Andy Jenkins say he wrote the sales letter, then I heard Frank Kern wrote it, and now you say you wrote it.
                                              As for copy on the original launch, it was (afaik) a collaboration between the two for the first letter. I believe Andy wrote a draft, Kern did a rewrite, and then Andy did another rewrite. I helped make the HTML for the page though even though I wasn't an employee there yet at the time.

                                              At that time, "StomperNet" was 2 guys and a box of DVDs and a forum. By the time I started working there, it was the beginning of the full blown Faculty and Live Event and Content Vault extravaganza.

                                              Originally Posted by Ryan David View Post

                                              Here's the thing with these info-products, people buying something more expensive doesn't tell you that much about the people's ability to continue to spend money.
                                              This is true, and is sometimes problematic. Overall though, other than StompeNet proper and Kajabi, almost all the other launches I've done weren't continuity programs. Some had installment payments, but most of the sales were usually for the full price as far as I remember.

                                              But to be fair, someone spending $7 has just as little guarantee that they have any further money to spend, so I'm not exactly sure of your point, other than it is a possible occurrence.

                                              Sure, some people may have bought something they shouldn't have. But it's the exception and not the rule, and certainly shouldn't be used as an excuse for not trying to sell more expensive products. You'll get that behavior at any price point.

                                              But if it turns out they CAN'T afford the more expensive thing, THEN you can sell them the cheaper things. If you sell them the cheaper thing first, THEN want to sell them a more expensive thing, what are they supposed to do with the cheaper thing they bought?

                                              The real thing that SO many marketers miss out on is that when you sell something like info and the value is built around the expertise of a person or organization, you DO NOT want it to be risk FREE. You don't want it to be 100% safe.

                                              You want it to have a little bite, a little risk, be a little bit outside of their comfort zone. Because when they make the leap, and you OVER deliver, you have created an ADDICT for your stuff. You make them feel good in response to challenging them. You had them take a gamble and they WON. That's rare in real life. Heck, it's rare in business, too. But if you can give that to people, they will WANT to buy nearly anything you have to sell them.

                                              When you sell super low-price stuff, there's not that spark. Without the spark there's no addiction. Without the addiction there's little loyalty.

                                              And again, all it takes to get all that psychological and positional benefit in your market is to charge a little more instead of trying to be as cheap as the cheapest.

                                              Originally Posted by Ryan David View Post

                                              I'd guess most of the people haven't made a dime online, which means it's only a matter of time before their CC's are maxed.
                                              It's not a very accurate guess.

                                              You're right that a lot of them haven't made a dime online. BUT...

                                              Turns out that's not the only way possible to have a lot of money, you know? The majority of the people in that end of the market, IME, were people who either had had very high paying jobs and wanted to invest into an asset, or people who had had offline businesses and wanted to expand online, or wanted to create something new online to get away from the meat-space.

                                              We had very high retention rates on the membership, and while it's true the biggest reason people dropped out was that they could no longer afford it, they were also the same people who weren't taking action on anything that was being offered in the 4 to 7 months or whatever they had maintained a subscription.

                                              Even for the products that weren't subscription based, you'd see a lot of the same customers buying up each thing because they could afford it, and they found value from it. And they would come to every live event (multiple times a year) and they were perfectly happy and able to do so.

                                              I don't know you super well, Rich. I don't want it to seem like I'm "arguing" with you because we're just chatting here. But the idea that you think most customers who can spend $5 are all potentially awesome lifetime customers and the people with $2000 to spend are probably mostly broke and unsuccessful is something I find interesting. Is that really the way you divide it in your head?

                                              It seems backwards to me. I don't want to get $5 out of you and hope you have $100 later. I'd rather get the $100 now if I can. Or at the very least, I don't want to take your $5 unless I KNOW you actually HAVE and WILL SPEND $100 later. And I can know that because of what lists you are on, and based on how you respond to what I sell you.

                                              It seems like a sort of limiting belief. Do with that what you will, but I intend it in the most positive way possible. There really are a LOT of players with money in the market, and a LOT of them do actually hang out in places like this. And no, they aren't broke.

                                              EDIT TO ADD: I haven't worked at Stomper since August 09 - My understanding is that it is quite a bit different now than when I worked there. When I talk about my time there, that's the only time frame I'm speaking about. Since I left, I've also worked on launches for several of the guys who used to be Faculty while I was there, and that can add to the confusion, too. I don't work there now, and can't speak to how it is now. By this time, no one I worked with then is still there.
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                                    • Profile picture of the author Ryan David
                                      Originally Posted by Colin Theriot View Post

                                      I never ever ever totally discredited selling low priced stuff. I said in the WSO market, if you sell IM stuff in here, if you join everyone in the race to the bottom, you are shooting yourself in the foot. Period. If you have the structure and know-how to make selling-in-volume pay, then by all means, do it. If you DON'T, you CANNOT profit in volume. Not here. Not if you're just starting out, for sure.
                                      You quoted me, but I actually didn't say that I think the conversation has gone in a few directions. My point towards the beginning was that most of the WSO's aren't worth much. Like I said before, they are glorified forum posts. I don't even think many of them are worth $5. Raising the price and putting a bow on it isn't going to change that. But if you're just hoping to hit it big selling $5 WSO's all day long, not sure why you'd waste your time. I've only bought a few, and couldn't even tell you the name of the people that I bought them from.

                                      But in the WSO forum, good luck. People in this thread that talk about being at higher price points have sold there for $30 or $40, and from the post count, don't look like they generated much attention. It's just a tough place to sell.

                                      But personally, I've never really been a big fan of setting arbitrary prices and calling that "my value" or whatever. I set the price low at first, monitor demand, and then make adjustments from there. If I have a capacity of 100 units per day, then I'll set the price low at first. When 100 units is hit, I'll raise the price.
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                                      • Profile picture of the author Ryan David
                                        At that time, "StomperNet" was 2 guys and a box of DVDs and a forum. By the time I started working there, it was the beginning of the full blown Faculty and Live Event and Content Vault extravaganza.
                                        This doesn't have to do with the topic, but Stompernet was much better prior to turning into what it became. Andy/Brad/Thies/Rohde...and Edmunds was a nice addition as well. But I think it started to nosedive when they got a little more protective of their content. Monitoring ebay, no more downloadable videos (later changed), no recording of calls, and limited recording at Live events.

                                        Just my 2cents. The economy didn't help, but things changed. It didn't really even appear that Fallon was involved at all besides live events.
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                                        • Profile picture of the author Colin Theriot
                                          Originally Posted by Ryan David View Post

                                          You quoted me, but I actually didn't say that
                                          Yeah, my bad. I was quoting Rich, so I just fixed it.

                                          Originally Posted by Ryan David View Post

                                          I think the conversation has gone in a few directions. My point towards the beginning was that most of the WSO's aren't worth much. Like I said before, they are glorified forum posts. I don't even think many of them are worth $5. Raising the price and putting a bow on it isn't going to change that.
                                          Agree - but I think when you see that, it's people trying to match the quality of the product to the price they believe they MUST charge or else not sell any copies. My point is that this is not true. You can and should try selling high-quality, higher-ticket items into the WSO forum.

                                          You can't raise the price on a turd (well you CAN, but that's a different conversation). But you shouldn't gut the price of a valuable product to sell it at those low prices. And you shouldn't focus on creating products that match their value to that price point because like you said, they are crappy.

                                          Make a better product, charge more for it. People will see you as a better seller/advisor, and they will value ALL your stuff more, even the cheaper stuff you may decide to sell.

                                          Originally Posted by Ryan David View Post

                                          But if you're just hoping to hit it big selling $5 WSO's all day long, not sure why you'd waste your time. I've only bought a few, and couldn't even tell you the name of the people that I bought them from.
                                          EXACTLY.

                                          Originally Posted by Ryan David View Post

                                          But in the WSO forum, good luck. People in this thread that talk about being at higher price points have sold there for $30 or $40, and from the post count, don't look like they generated much attention. It's just a tough place to sell.
                                          They can't see the price from the thread title, and just because they buy doesn't mean they'll post. So low views doesn't mean the price was too high, and low posts doesn't mean it didn't sell.

                                          Originally Posted by Ryan David View Post

                                          But personally, I've never really been a big fan of setting arbitrary prices and calling that "my value" or whatever. I set the price low at first, monitor demand, and then make adjustments from there. If I have a capacity of 100 units per day, then I'll set the price low at first. When 100 units is hit, I'll raise the price.
                                          Being able to put a value on things is a key skill for a marketer, and being able to justify the price you aim to charge is the purpose of sales copy (IMHO). The way you're doing it is not the way I would do it, but if you are selling into the same market, you SHOULD try selling your subsequent product STARTING at your 100 unit price for the previous product.

                                          Originally Posted by Ryan David View Post

                                          This doesn't have to do with the topic, but Stompernet was much better prior to turning into what it became.
                                          I agree, and that's part of the reason I chose to leave.

                                          Originally Posted by Ryan David View Post

                                          Andy/Brad/Thies/Rohde...and Edmunds was a nice addition as well.
                                          That's the era when I was there. Since leaving I've written for all of Andy's launches and I worked with Thies and Rohde on their Link Liberation thing last year. I just did a webinar for them for SEO Braintrust on copywriting. I've also been in touch with a few other of the old faculty as well, but not done work for them due to scheduling or whatever.

                                          I haven't been in touch with either Edmunds or Brad since leaving.

                                          Originally Posted by Ryan David View Post

                                          But I think it started to nosedive when they got a little more protective of their content. Monitoring ebay, no more downloadable videos (later changed), no recording of calls, and limited recording at Live events.
                                          It's because we had some "disgruntled" customers who were basically manufacturing and or pirating our material. Even at the high end, you have bad "low-quality" customers. I agree, the measures they took punished good customers in an attempt to thwart the bad, but I was just a copywriter.

                                          Originally Posted by Ryan David View Post

                                          Just my 2cents. The economy didn't help, but things changed. It didn't really even appear that Fallon was involved at all besides live events.
                                          I agree with this, too.
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                                          • Profile picture of the author Ryan David
                                            Originally Posted by Colin Theriot View Post

                                            They can't see the price from the thread title, and just because they buy doesn't mean they'll post. So low views doesn't mean the price was too high, and low posts doesn't mean it didn't sell.
                                            Sure, it doesn't mean that it didn't sell. But a blog with a lot of readers will naturally have a lot of comments. Or at least, SOME comments.

                                            Originally Posted by Colin Theriot View Post

                                            That's the era when I was there. Since leaving I've written for all of Andy's launches and I worked with Thies and Rohde on their Link Liberation thing last year. I just did a webinar for them for SEO Braintrust on copywriting. I've also been in touch with a few other of the old faculty as well, but not done work for them due to scheduling or whatever.
                                            Leslie Rohde blew my mind the first time I heard him talk at STompernet 1. It took me awhile to appreciate Dan Thies, but he's a gem.


                                            Originally Posted by Colin Theriot View Post

                                            It's because we had some "disgruntled" customers who were basically manufacturing and or pirating our material. Even at the high end, you have bad "low-quality" customers. I agree, the measures they took punished good customers in an attempt to thwart the bad, but I was just a copywriter.
                                            Yeah, that especially sucked because it happened all at once. Andy seemed like an ok dude, but he would say things like "We surveyed the members and this is what they wanted". Really? I never got a survey. I think his definition of a survey was saying something at a conference and then hearing applause.

                                            I figured the reasons were due to piracy, but they gave some lame excuses. Like when they stopped taping the conferences, they said that it's so people could get no-hold-bars info! And they went from being able to submit questions for a call to "Office Hours" so they stopped taping those. I guess it's good in some ways, but I hated having to sit on these calls and listen to people think aloud while talking to Thies or whoever. And then after that, they rephrase the question 5 other ways. And they'd close by asking a hypothetical question that they're clearly not ready for. The guy that had zero websites would be asking about building 100 pagerank pumper sites for their money site. /rant
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                              • Profile picture of the author ShayB
                                IMHO, choosing a business model is like choosing a niche.

                                You choose what works for you and what makes you money.

                                High-priced products? Low priced products? It's not that one is "good" and one is "bad" - they are both valid business models.

                                If the only money I made was from running WSOs, maybe I'd try a different strategy. I don't know. I don't just make money from WSOs. I have my sites, lists and my offline biz.

                                I have to say, though, that this whole attitude of viewing "$5 customers" as the dregs of society bothers me. A lot.

                                I chat with the people on my list a good deal. (Not all of them, but it's a high ratio.) Most of them are looking for a sustainable business model. They want solutions - not the push-a-button-and-make-a-bazillion-dollars-sitting-in-your-underwear-eating-Captain-Crunch type of BSOs, but real business solutions.

                                But they simply don't have $100 to invest right now.

                                So, when I show them a way to make money and it's under $10 for the WSO, PLUS they don't need to buy anything else in order to put the WSO into practice, they appreciate that.

                                Once they start making money, most are happy to invest more.

                                I don't have customer service headaches because I cater to the under $10 price point. I have to say that the customer service issues are quite minimal. Most of them are questions about information clarification - and I use those questions to help improve my products, so it's not a bad thing at all.

                                You will have different price points and different markets for anything.

                                For example, I love chocolate. Most of the time I'll settle for a Snickers bar or something else similar. Every so often I will splurge and spend 10 times the price for a Godiva chocolate bar.

                                Maybe it's not the same type of thing for an Internet marketing product, but in the above example, I'm the same person buying at two different price points. Buying at one price point or another doesn't make me good or bad - I simply buy what suits my needs at the time.

                                If I have a business model that fits my business philosophy - providing products at an affordable price point - and I'm making good money doing it and it's not stressing me out... then I'm not changing it.

                                I don't see the purpose of this thread being that one side needs to convince the other one to change their business model. I truly don't.

                                I see it as being able to present both sides of the argument/debate and let people choose which business model they prefer. (Or see that there is more than one way to skin a cat, so to speak.)
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                          • Profile picture of the author JohnMcCabe
                            Random thoughts...

                            Ryan, at 3.3%, Whole Foods' margins are about three times the national average for supermarket/grocery stores. WalMart has to sell at least three times as much as Whole Foods to generate the same dollars. Of course, they do many times that, so there is profit in volume.

                            And even WalMart recognizes the need to start moving up, or at least catering to, a more affluent crowd. Look at their growing line of organic offerings and there 'Steakhouse' line of meats...

                            Naples, FL is just down the road. Naples has one of the largest wealth per capita numbers in the USA. It's a hoot to stop by the local Walmart and see the rusted out Chevys and Toyotas parked next to the Benz, Audi, BMW, Rolls, Jags, etc.

                            Stopped at the DQ the other day, parked my Buick between a $100,000+ Porsche convertible and a sub-$1,000, rusted out Olds (not sure how old it was, but it could have been your father's Oldsmobile ).

                            Colin, you wrote:

                            Look, this is silly. Show me someone playing the super-low price WSO game who is on the Forbes 500 list. Selling $5 ebooks does not make you Wal-Mart. Thinking you can BE Wal-Mart just because you sell for low prices is just not smart. Wal-Mart can sell low and succeed because they are HUGE. HUGE volume.
                            What a lot of people miss is that Walmart is selling the same products as more expensive stores, at least their bread and butter lines. It's not about just low prices. It's about getting the same product for less.

                            Kmart has low prices, and they're one step away from taking the big swirly...
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                  • Profile picture of the author Ryan David
                    Originally Posted by Colin Theriot View Post

                    If you market yourself as "low price" it's UNDENIABLE that you will attract a lower quality customer. I hate to judge people, but the quality of people that shop at my local Wal-Mart makes me not want to shop there, regardless of the low prices. Same goes for flea markets and garage sales, malls in the city, etc.

                    -Walmart might have a "lower quality" customer, but they also have a pharmacy inside. Does Whole Foods?

                    -McDonald's might serve overweight people greasy food, but they also have a playland so Soccer Moms can sip on their McCafe's.

                    You might view Whole Foods as the Holy Grail because of it's more desirable customer base, but what you're missing is, that there are a lot more people shopping at McDonald's, Walmart, and Walgreens.

                    And those companies all make more profit than Whole Foods. Not just more money, but better margins.

                    Target



                    Walmart



                    Walgreens



                    Whole Foods



                    So it's not just about picking some arbitrary price point because you assume that you can make more money there. It's about finding the segment of the market that presents the greatest opportunity for you (low priced or high priced).
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                    • Profile picture of the author Colin Theriot
                      Originally Posted by Ryan David View Post

                      -Walmart might have a "lower quality" customer, but they also have a pharmacy inside. Does Whole Foods?
                      What's your point? Wal-Mart has lots of other stuff for sale inside it than any other grocery store. I don't get how that maps to the IM market and the seller trying to compete by lowering prices. Should they also include some other sort of side business then?

                      Originally Posted by Ryan David View Post

                      -McDonald's might serve overweight people greasy food, but they also have a playland so Soccer Moms can sip on their McCafe's.
                      Still not getting the relevance... But it's early for me.

                      Originally Posted by Ryan David View Post

                      You might view Whole Foods as the Holy Grail because of it's more desirable customer base, but what you're missing is, that there are a lot more people shopping at McDonald's, Walmart, and Walgreens.
                      It's not that, it's that Whole Foods did not go into the grocery market and try to compete with everyone else in price. They didn't care at all that their stuff is more expensive. They created a different experience and for their customers, that experience justifies the price.

                      This is WAY easier for them as a grocery chain than to try going into a new town and trying to pull customers away from Wal-Mart by competing on price. They can't do it, because Wal-Mart's prices are low BECAUSE of the volume they move on everything else they sell.

                      So if you want to compete, you don't play that game, you play a different one. Wal-Mart CANNOT WIN the "classy" competition. Hopefully I explained that better.

                      Originally Posted by Ryan David View Post

                      And those companies all make more profit than Whole Foods. Not just more money, but better margins.
                      First of all, to make it fair, let's talk just the grocery biz. Which is only a SLIVER of Wal-Mart and Target's businesses, and is even less of Walgreens'. It's Whole Foods' ONLY business, and overall, they seem to be doing pretty well considering how much other stuff those other places sell. Of course they sell less, but they're also smaller, and much liked by their customers. They have PASSIONATE customers. I don't know anyone that's really passionate about Walgreens or Wal-Mart. Maybe Target, but not because of their groceries.

                      Originally Posted by Ryan David View Post

                      So it's not just about picking some arbitrary price point because you assume that you can make more money there. It's about finding the segment of the market that presents the greatest opportunity for you (low priced or high priced).
                      So all the people who go into the WSO forum who decide to go low-price because everyone else is doing it or because they think it's the "right way"... those people aren't arbitrarily picking a price point because they assume they can make money there?

                      How is my saying "charge more, go after people looking to spend more money" NOT finding the segment of the market that presents the greatest opportunity? The low-price market in the WSO forum is OVER served. People are DROWNING in $5 mini-micro-products. For people who want MORE and would love to PAY more, no one is giving it to them.

                      So you tell me, where is the opportunity there? Fighting with every other low-price vendor in that frenzy, or aiming higher for a better class of customer?
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                      • Profile picture of the author Martin Luxton
                        I think this discussion could be more productive if we talked about 'development aware' customers vs. 'consumer mindset' customers.

                        Surely, what we are all ideally looking for are long-term customers who are interested in

                        1. Developing themselves.

                        2. Developing a sustainable business.

                        These people are investing in themselves and their business. At the moment, they might only be able to afford a $7 product, but a year down the line they could have the wherewithal to spend hundreds or thousands of dollars a month.

                        The problem the $7 "development aware" customers have in the WSO Forum is finding products that cater to their needs. Developing yourself and setting up sustainable business systems are not very sexy subjects and lack the sizzle to sell big but they are the most valuable kind of product for budding entrepreneurs.

                        In a sense, whatever the price point, what we want to avoid is customers who fall for the enticing "Make $10,000 Overnight Without Any Work!!!"


                        Martin
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                      • Profile picture of the author Ryan David
                        Originally Posted by Colin Theriot View Post

                        What's your point? Wal-Mart has lots of other stuff for sale inside it than any other grocery store. I don't get how that maps to the IM market and the seller trying to compete by lowering prices. Should they also include some other sort of side business then?
                        Ok, I'll give you another example.

                        Starbucks has Profit Margins of 10.47%. Dunkin' Donuts has profit margins of 13.87%

                        Dunkin' Donuts sells cheaper products, but hits the sweet spot of volume/margins.

                        If you're arguing that you need to find your niche and separate yourself from the competition in a unique way, I'll agree with you.

                        If you're arguing that catering to the "higher quality" customer is somehow a better business model, I'd disagree. Because you can't make assumptions on a person based on the amount of money they'll spend on some product. I live in an upscale town and I shop at Walmart cause the prices are lower, despite there being a Trader Joe's and Whole Foods right down the street.

                        I don't pay high prices to the gurus to pay for their pretty DVDs. But I bet there are a lot of suckers who have $20K in credit card debt that do. Is the guy that paid $2K for some product REALLY a better customer?


                        Originally Posted by Colin Theriot View Post

                        So you tell me, where is the opportunity there? Fighting with every other low-price vendor in that frenzy, or aiming higher for a better class of customer?
                        WSO is a flea market. If gurus had no other channels to sell their product, they wouldn't be charging $2K for them in the WSO forum. But, they do have other channels. Which is kinda the key.
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                        • Profile picture of the author Colin Theriot
                          Originally Posted by Ryan David View Post

                          If you're arguing that you need to find your niche and separate yourself from the competition in a unique way, I'll agree with you.
                          So looking at the WSO forum that's flooded with low-priced, PERCEIVED low-value products, what would be a very simple way to stand out?

                          Originally Posted by Ryan David View Post

                          If you're arguing that catering to the "higher quality" customer is somehow a better business model, I'd disagree.
                          In the context of the IM marketplace, I don't know if it's "better" but it's certainly easier to do while you are a small size or even a solo operator. In my own experience (and that of many clients I work with), it's also a faster way to getting big enough profits so that you can invest some capital into the infrastructure and resources it takes to profit on volume.

                          Originally Posted by Ryan David View Post

                          Because you can't make assumptions on a person based on the amount of money they'll spend on some product. I live in an upscale town and I shop at Walmart cause the prices are lower, despite there being a Trader Joe's and Whole Foods right down the street.
                          So, you focus on lowest price for food, so I CAN make the assumption that if price is your PRIMARY determiner of purchase, that you will be very hard to move up the ladder for higher priced products.

                          Originally Posted by Ryan David View Post

                          I don't pay high prices to the gurus to pay for their pretty DVDs.
                          And here, my assumption is proven correct. I don't care if you live in an affluent neighborhood or whatever. I care that you will see VALUE in what I offer BEYOND how low the price is. You are not that kind of customer, so if I sell info products, I'd rather go after someone who does, rather than go after you.

                          Originally Posted by Ryan David View Post

                          But I bet there are a lot of suckers who have $20K in credit card debt that do. Is the guy that paid $2K for some product REALLY a better customer?
                          Yes. A customer who gives me $2K is a better customer than someone who gives me $5. Given a choice between the two, I will choose the first one every time.

                          Originally Posted by Ryan David View Post

                          WSO is a flea market. If gurus had no other channels to sell their product, they wouldn't be charging $2K for them in the WSO forum. But, they do have other channels. Which is kinda the key.
                          I personally know people who have successfully sold $5K WSOs and even a $20K WSO. You DON'T NEED OTHER CHANNELS which is my whole point. The higher-spending buyers are RIGHT HERE, RIGHT NOW. They don't ONLY buy $5 ****. Yes, sometimes they do. But if you ONLY sell $5 ****, you will get MAYBE them, and PROBABLY a lot more people who ONLY buy $5 ****.

                          But if you sell $50 ****, you will get the people who buy $50 **** (who also sometimes buy $5 ****). But you will get ZERO of the people who only ever buy $5 ****. If all you EVER want to sell is $5 ****, no big. But if you are following the typical "build a list and ladder people up on spending more" model, aim higher with your entry-level products. If you still want to sell $5 ****, sell it to your buyer's list of $20-$50 + buyers, not as an entry-point, at least not in the context of the WSO forum.

                          Or you know, don't. If what I'm saying doesn't make sense to you, and you want to carry on wanting to be a volume seller, please do. If anyone reading wants to build a stronger, higher value personal brand... if you wish you could be selling $250 products instead of only $5 ones, re-read the stuff I said in earlier posts.
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            • Profile picture of the author mrdomains
              If one decides to lower the price of a product there must be a reasoning behind it. A strategy. A plan.

              Is there?

              Analyzing the why is very important. Because it might show that the pricepoint is not the issue.

              Why lower the price of a product?

              To sell more units? Increasing volume by selling units at a lower price does not always mean more profit.

              Ah.. but every buyer goes on the list.. there is value in that right? Not necessarily. The quality of the list is undermined with buyers whose main motivation is price.

              And yet, a low price is not the problem. Any price is ok, 47,17, 11, 5 or even a single buck as long as the product quality (novelty, content, mass) matches the price.

              Lowering the price of a product does more harm than good in most cases. There is a real danger of being perceived as desperate which is not a good thing when you are trying to sell something.

              Anyway, selling these days is a lot about applying a escalating process. If your product is the first step, then a low price for a small product is fine. Some (may I say many?) marketers fail the escalation process and overdeliver too early which is the same as shooting themselves in the foot. Instead of gaining gratitude and rep, it dilutes credibility as fulfilling the next steps becomes more and more difficult.
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  • Profile picture of the author seankaye
    Wow, good thread... WSO's have been bothering me for a few months, in a blog post I referred to them as "junk food" - low price and bad for you.

    First of all, DTaylor raised "the gurus" and their products and how crap they were. Nonsense. Compare something like Video Boss to ANYTHING you get as a WSO and the two aren't comparable? Why? Because Andy Jenkins has an Emmy, has worked on film and TV, is a film investor and is a damn good marketer. Period. It costs $2000 because that's what he values his product at. You will not find better value as a WSO, you'll find rubbish.

    Same with other products in that high-end space, Brendon Burchard gives away his whole book offer sheets - people spend THOUSANDS of dollars to get agents to put together those things before sending manuscripts out to publishers, so Experts Academy gives you more value in that one item. Not to mention all the other stuff you get. Do you really think some guy telling you the steps to publish an ebook on Amazon is comparable quality? Please.

    Moving away from the gurus...

    The WSO's have taken off for a couple reasons. Clickbank has made it MUCH harder to publish an IM product AND lowered their entry point to $47. On top of that, their ridiculous refund policy virtually ensures that your IM product will see 50% refunds.

    WarriorPlus has created a very efficient affiliate market for WSO's. Plus the lower prices mean people are less likely to refund.

    The problem with WSO's is quality - frankly, 90% of them suck. Big time. The information they are promoting is BAD and not good for newbs to learn. Often times the people writing them are newbs. I remember one a few months ago from this one person telling people how to create WSOs and he used his earnings as example of why its so great. When you ran the math (including affiliates, etc) he was earning the equivalent of a minimum wage job. He'd been in Internet Marketing for a whole THREE MONTHS.

    The other thing that's happening is a new cartel of WSO "pushers" have formed. They're acquiring big lists and are mailing EVERY DAY with another offer. Usually, you can tell they've been coordinated and this is driving up sales on bad products. These products are then becoming "WSO of the Day" further stimulating the feeding frenzy.

    I counted at least three "WSO of the Day" offers in the last two weeks which were TERRIBLE! REALLY BAD! One sold over 3500 copies at like $9. Unbelievable.

    These cartels that are forming are no better than the little cliques that used to rule Clickbank. They prey on the weak and the newbs.

    There's one "Warrior" who like clockwork releases a new WSO every two weeks. I'm starting to think they are re-written PLR eBooks.

    My feeling is, none of these people have EVER done anything outside of the WSO/IM niche. All of their SEO tactics, Facebook strategies, YouTube hacks, none of it has been tested in a really competitive niche I bet. The WSOs I've seen on Niche Research clearly shows that they don't know what they're doing, so they certainly won't be finding any pearls through anything other than luck.

    Its a race to the bottom where everyone loses.
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    • Profile picture of the author Mr Bill
      Originally Posted by seankaye View Post

      Wow, good thread... WSO's have been bothering me for a few months, in a blog post I referred to them as "junk food" - low price and bad for you...
      Again with the low price = bad quality. This is just not true of low price. Lots of extremely high quality things are sold at low prices.

      Originally Posted by seankaye View Post

      ...The problem with WSO's is quality - frankly, 90% of them suck. Big time.
      90%! Wow that's a lot! Did you buy them all and these are your averages? Or are you just guessing? If you did you must have bought all the really bad ones and I would ask for my money back. I'm guessing you left negative feedback so the rest of us can know which of them are so bad as to earn your scorn.

      Going on my experience (I have bought dozens) I would say that maybe 10% are a "bit" thin and 100% taught me something useful enough to make them worth while. Never found one so bad as to ask for a refund. I'm sure there's a few but the negative reviews should point those out fairly quickly so thanks for doing that. I'm sure it will help us isolate the bad ones from the good ones.


      Originally Posted by seankaye View Post

      The information they are promoting is BAD and not good for newbs to learn.
      Says...?

      Originally Posted by seankaye View Post

      ... Often times the people writing them are newbs.
      ...and these people are new to the planet? Or new to IM? Or new to WF? "New" meaning they are completely worthless authors who could not possibly have anything of value to add? Please.

      Originally Posted by seankaye View Post

      ...I remember one a few months ago from this one person telling people how to create WSOs and he used his earnings as example of why its so great. When you ran the math (including affiliates, etc) he was earning the equivalent of a minimum wage job. He'd been in Internet Marketing for a whole THREE MONTHS....
      Wait, within 3 months a new member is making a wage out of IM and this is a bad thing?! I see this is a fantastic and glowing testamony to exactly why this place is so freaking great. Where else can someone change their lives totally in 3 months to the point where they made themselves a job? Not only that but they have taken the time to stop and show others how they did it. Congratulations to that person for showing many exactly how possible it is! Well done I say!

      Originally Posted by seankaye View Post

      ...I counted at least three "WSO of the Day" offers in the last two weeks which were TERRIBLE! REALLY BAD! One sold over 3500 copies at like $9. Unbelievable....
      You "counted" or you bought and can speak on their quality? If you bought them and they were so bad I hope you left a negative comment so that others don't follow. You did buy them - right?

      And since when is 3,500 copies at $9 a business failure? I wonder why they sold 3,500? That sounds like a resounding vote of confidence unless you are saying that 3,500 of us are dumber than spuds. Is that what you're saying? 3,500 were stupid and ignorant people not capable of making a value judgement?

      Originally Posted by seankaye View Post

      ... They prey on the weak and the newbs....
      More supermen flying in to save us from ourselves. Newbs are not from another planet. They make decisions based on what they need. If they buy an irrelevant WSO I'm sure they learned something and if it was so bad they should ask for a refund. I see no one who needs "protecting" here. We are all grown adults for the most part. We are all capable of making our own decisions on what's good for us and what isn't and no one is being "preyed on" here.

      Originally Posted by seankaye View Post

      ...There's one "Warrior" who like clockwork releases a new WSO every two weeks. I'm starting to think they are re-written PLR eBooks...
      Good luck to them! The more the merrier. Since when was it possible to have too much information available? 100% of educational institutions encourage gathering information as a way to become more educated. If they have something valuable to add let them release one every day. Frequency is not an indicator or quality.

      You're "starting to think" they are re-written PLR eBooks? You mean you didn't buy them? How do you know? Do you know? If they are I'm sure the mods would like to know - better show them your evidence.

      Originally Posted by seankaye View Post

      ...My feeling is, none of these people have EVER done anything outside of the WSO/IM niche. All of their SEO tactics, Facebook strategies, YouTube hacks, none of it has been tested in a really competitive niche I bet.
      "None of...?" "All of...?" "...EVER?" "...None of it...? Wow you must have done a LOT of testing. Or is this just speculation or guessing? Because such sweeping and damned generalisations really don't mean anything unless you can back it up with examples or experience and personal testing.

      Originally Posted by seankaye View Post

      ...The WSOs I've seen on Niche Research clearly shows that they don't know what they're doing, so they certainly won't be finding any pearls through anything other than luck.
      Ok, now these you can comment on because you bought them (I presume) and I hope you left a clear feedback on the thread warning the newbies (that you want to protect) - right?

      Originally Posted by seankaye View Post

      ...Its a race to the bottom where everyone loses.
      No, it's not. For the most part I have bought nothing but great quality tips, full blown courses, extremely interesting and thorough video walk throws (that have saved me hours of frustration and revealed great shortcuts) and really good advice on how to save time and money and in many cases make money from ideas I would never have thought of myself. I thank WF for WSOs and hope they get cheaper and I hope the vendors sell more and help more people.

      I think a lot of people are talking from rumour and innuendo-based hysteria which is clearly rarely based on personal experience and with a WSO love/hate/jealousy thing going on (that is so conflicted) it's hard to determine what the motives are. Mine are clear and obvious. I love 'em. Can't get enough. I have learned so much I can barely contain my amazement.

      If you bought a WSO that was such bad value for the (measly) price that you were truly disgusted and you know for sure will not work then you can ask for a refund and leave an appropriate warning or else you yourself are perpetuating the very thing you seem to despise.

      I am stunned at how many people use damaging generalisations plucked out of thin air not based on any facts or personal experience and that people would deny another person success just because they were new to something. There's a name for that.

      Inexpensive does NOT mean "cheap and nasty and dirty". I see most magazines I buy in my offline hobby (hot rods) priced exactly in the range of most WSOs. Does that mean all the magazines are crap just because they are priced at $9.00? Of course not.

      The mistaken view that "inexpensive = bad quality" has no basis in fact generally and certainly is not proved in this arena. In fact the opposite is true. The cheaper these get the BETTER value they are (providing the quality is good and they do what they say). I don't mind buying an idea or a theory if I know that's what I'm buying but if I'm buying a walk through and it's not a walk through or I buy a blueprint for a specific method and it's not a blueprint on a certain method or I buy a pack of graphics and I get an empty zip file...then sure I'll complain. I'll ask for a refund and I'll leave a comment warning others. But that's never happened to me.

      Apart from that, I'm happy if things get cheaper (like every human on the planet) because then more people will buy them and it will be easier for me to meet my income target. I wonder why people are complaining about when there is no scientific evidence to point to such claims of poor quality. None. And even if there were, refund and negative feedback to warn others creates a system of market driven balances.

      If you have a system that is so good that is virtually guarantees income then you can easily charge accordingly and the market will pay (for obvious reasons) anything else is just a "hand", a brochure, the low-down, the skinny but most are good solid information that creates income for the seller and great value for the buyer and I just have not seen any evidence of anything else.

      I'm sorry to upset those who clearly really want WSOs to be bad quality - it just ain't true and I have seen no evidence supporting that view presented here.
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      • Profile picture of the author JohnMcCabe
        Originally Posted by ramone_johnny View Post

        I've been focusing my attention towards conversion rates lately and setting my pricing in alignment with best performance. I should point out that Im not actively involved in WSO's so I cant really comment on that.

        At the moment, my thinking is it makes much more sense to push a product at $57 converting at 1%, then to push it at $97, converting at 0.25%.

        As for pushing stuff at $5, one could only think its probably just recycled garbage.

        Then again, who knows, I could be wrong. I was once back in 1992.

        *shrug
        Johnny, you've probably thought of this, but I'll mention it for the benefit of others.

        Many products actually have three price points. There's the highest price at which you can sell the product, the price that converts the best, and an optimum price which yields the most profit. That price is often somewhere between the first two.

        And that's the one I want to find...
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    • Profile picture of the author dtaylor
      Originally Posted by seankaye View Post

      First of all, DTaylor raised "the gurus" and their products and how crap they were. Nonsense. Compare something like Video Boss to ANYTHING you get as a WSO and the two aren't comparable? Why? Because Andy Jenkins has an Emmy, has worked on film and TV, is a film investor and is a damn good marketer. Period. It costs $2000 because that's what he values his product at. You will not find better value as a WSO, you'll find rubbish.

      Same with other products in that high-end space, Brendon Burchard gives away his whole book offer sheets - people spend THOUSANDS of dollars to get agents to put together those things before sending manuscripts out to publishers, so Experts Academy gives you more value in that one item. Not to mention all the other stuff you get. Do you really think some guy telling you the steps to publish an ebook on Amazon is comparable quality? Please.

      Moving away from the gurus...
      I don't think I said ALL gurus put out garbage. I mentioned courses I purchased that helped me a lot. It is just much harder to shell out hundreds of dollars on a course from a guru if you have been less than happy with a couple of products in a row.

      You made a good point about those that churn out a new WSO each week or so. I have purchased WSOs from some of them and, for the most part, have been disappointed. Still, not as disappointed as if I had paid $67 or $200, let alone $2,000.

      Face it, looking at WSOs is not the same as attending a Perry Marshall event. Picking up a pair of jeans at WalMart is not the same as picking out a suit at Saks. If you create $2,000 products and can sell them, great. I may even purchase one if it fits my needs. But, I still wear jeans.


      DTaylor
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      • Profile picture of the author Spartacus
        I don't get some of the low prices either, I wouldn't be surprised if someone that wants to offer a similair products thinks by himself, forget it...I can't do this, I can't offer my product this cheap.

        Plus some of the extremely low prices make me think that the product isn't worth it.
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        • Profile picture of the author Mr Bill
          Originally Posted by Spartacus View Post

          I don't get some of the low prices either, I wouldn't be surprised if someone that wants to offer a similair products thinks by himself, forget it...I can't do this, I can't offer my product this cheap.
          Then they would miss out on a making lost of good-for-spending money.

          Originally Posted by Spartacus View Post

          Plus some of the extremely low prices make me think that the product isn't worth it.
          So your saying (despite everything that's been said above) that low price probably still equals low quality?

          Walk into a book shop and look at the books on the shelf. Do some have low prices and other have high prices? Can you tell the quality of a book by it's price? Is a $10 book "worse quality" than a $20 book? What about the $100 books? Are they 5 times better than the $20 books?

          Think.
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          • Profile picture of the author Spartacus
            My answer was a reply to the OP.

            And about your example with the book, when something is offered extremely cheap there is a bigger chance of it being of worse quality than good quality (in the real world). At least in my experience. By the way, I can look into a book to see what quality it is if I'm not sure, can't do that with a WSO.


            Originally Posted by WSOHelp View Post

            Then they would miss out on a making lost of good-for-spending money.



            So your saying (despite everything that's been said above) that low price probably still equals low quality?

            Walk into a book shop and look at the books on the shelf. Do some have low prices and other have high prices? Can you tell the quality of a book by it's price? Is a $10 book "worse quality" than a $20 book? What about the $100 books? Are they 5 times better than the $20 books?

            Think.
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            • Profile picture of the author Mr Bill
              Originally Posted by Spartacus View Post

              My answer was a reply to the OP.

              And about your example with the book, when something is offered extremely cheap there is a bigger chance of it being of worse quality than good quality (in the real world). At least in my experience. By the way, I can look into a book to see what quality it is if I'm not sure, can't do that with a WSO.

              Also, don't tell me to think.
              I agree that you can not look into a cheap info product. Then again you can't return a book just because you didn't like it. And of course your right. I shouldn't have to ask you to think.
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  • Profile picture of the author Paleochora
    One or two observations to take on board.

    Firstly, many WSOs are run on a dimesale basis these days so, the $5/$9 price tag you often see when they first hit page 1 may evolve into a $27/$37 tag over a number of sales and a couple of bumps.

    Secondly, I think that many $5 WSOs would possibly have been 'free WSOs' back before WarriorPlus introduced the affiliate system. Also there have been many threads warning people off running free WSOs so that they filter out or do not end up with just freebie hunters or broke people on their lists who will never make any future purchases. I don't see many free WSOs just in the last 6 months or so.

    Thirdly, I am guessing, but I would imagine that the sales of higher ticket products have declined somewhat in the last year or two because people simply do not feel confident to invest in products as freely as they did - maybe they are nervous about spending on anything, not just info products or maybe they may have been ripped off in the past.
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  • Profile picture of the author iSoftware
    If it were $5 continuity that'd be something (login frequency marketing, ftw!)

    lol

    Actually, this is one of the best discussions that have popped in the last 6 months. If anyone isn't familiar, I'd google Terry Dean, Perry Marshall and Dr. Glenn Livingston (main guy....) discussion on "hyper-responsive" marketing).

    Here are also a few 'aha's that changed my thinking about pricing and consumer psychology -

    - According to the latest UN & Merrill Lynch World Wealth report, approx. 1-5% of the population now control about 99-98% of the world's wealth!

    - Using Perry Marshall's list segmentation best practices, coupled with information about "who really has the money to spend" , 1-5% of your list is responsible for approx. 90% of your PROFITS.....


    How does this affect all of us?

    Fact is, a good portion of the profits out there are with VALUE vs. PRICE shoppers - when you slap on those cheapo price, they immediately say "him, there's a relationship between price and value, let me go with the more expensive product because it's better...money isn't an option anyway!!"


    In a recent mastermind, I spoke with a guy who relates the story of someone who sold 8 WSOs' at $4000 a pop!

    A good buddy of mine ran a $500 WSO last month (it was a 'dime sale' that went up to $750) - with an astounding $88 EPC!


    Given that only a few people are going to represent high customer lifetime value on your list, I'm really starting to get that it makes much more sense to put a value shopper on your list vs a cheapo priced-based shopper - to begin with - then segment your list based on the value-based products they are willing to invest in.

    On a recent review of an account, I saw a mailing where I got more clicks out a sub-segment of exactly 68 people than a friend who had about 1000 people on a list.


    Frank Kern really hits home when he talks about one of his "unknown" secrets which is the freebie you offer people (or in this case the first front end offer) will determine the lifetime value of that customer.

    Like Robert says, if that front in offer gives a wrong first impression, you're screwed.

    It's like taking me out for dinner and paying $100 bucks for an appetizer - then expecting me to pay the rest of the bill - lol okay bad anology

    It's like a girl giving a little loving on the first date then on the second date the guy's like "wanna go back to my place" and you slap him in the face and are like
    "you *******, I'm NOT that kind of girl!!!"

    In other words, pricing gives an impression and belief about quality from the first moment.

    What kind of impression are sellers giving the market as a whole?


    Also I think some people just don't have the self-belief that they can sell 'so called' high priced products, or that they are "worth it".....

    They'll give all the excuses that sound rational to them but it's about belief...


    Like I said if it's a low end price for continuity it's different (cause we are talking mega long term visitor value over the long run if you deliver) - but one off sales are another thing....
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  • Profile picture of the author RichardWing
    Interesting thread Paul.

    I have enjoyed all of the contributions to this thread.

    Here are my thoughts.

    You are running a poll...

    The poll doesn't indicate if you want to know from a buyers point of view or you are seeking advice from other marketers on what they think would be a good price point for a wso backend offer.

    You asked...

    "What do you consider is a reasonable price for a WSO up-sell?" and you list some example prices.

    From a buyers point of view I feel that most people don't buy just any ole' backend offer just because of the price. I know I don't. Do you?

    If the product being offered will benefit them in such a way that they can see they will get a return from the knowledge or use of it then the price is of no consequence.

    It's when the seller hasn't done his/her job convincing the buyer they must have their product that price will be a factor. Because the potential buyer will try to justify the price in order to make his/her decision because they were not convinced it was worth more than the price being asked for.

    If the seller has done their job then it won't matter what the price is, the buyer will find a way to come up with the money to get the product even if it means saving up for the product.

    Asking a buyer what a good price for a wso backend without knowing what the product is leaving out some important information.

    Is it a running car that you are offering as your wso backend?

    Is it a iPad?

    If it were either of them I would definitely consider your highest price of $197 a very reasonable price to ask and please add me to the $197 vote since I didn't participate in the poll yet.


    From a sellers point of view I would also need to know a little bit more information...

    How long did it take you to create your backend product?

    What is your time worth?

    Did you outsource any of it and if so what was your investment?

    Are there competing products to your backend offer?

    What is the affiliate commissions you will give to affiliates?

    What % of your own direct sales do you expect verses affiliate driven sales?

    What is a reasonable expectation to get back your investment for creating the product after paying affiliate commissions? i.e rate of return

    I feel when pricing something all these things should be considered.

    How can one pick a reasonable price without knowing the answers to some or all of the above questions?

    With this said no matter which point of view...

    The price that wins the poll won't matter if the salesletter doesn't do its job of convincing buyers of why they need the product.

    It could be $5 or $27 and if the potential buyers aren't convinced they can benefit from it then the lowest price won't matter a bit.

    If the salesletter is performing its job then wouldn't the $197 be reasonable just the same?



    In regards to the question of devaluing a market.

    Value and devalue are subjective things.

    It depends which side you are on.

    Seller or Buyer. Both sides want to get the best deal they can.

    Is it wrong if a seller feels that he can get an honest return for his time and effort in creating his product and at the same time give the customer the value he or she is seeking even if its lower than what a competitor is offering for a similar product?

    When this seller is setting his price is he/she thinking of himself and his clients or are they thinking how badly they can screw the industry?

    I always subscribed that you should pick a price that will cover your costs, provide you an income and will be in line with what the market will bare. I never heard that I have to worry about what my competitors are doing.

    If one is over delivering, their clients are happy, and they are making a living how can they be devaluing their product?

    What is the standard suggested formula that one should follow so that others can know for certain that a product is devalued?

    development cost / 1000 potential products sold x 200% markup = product price

    I would be interested in others opinions on a formula.

    Richard Wing
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  • Profile picture of the author David Keith
    pricing pressure is not something that just the IM industry is fighting. its happening in many industries and for many different reasons.

    look at microsoft office. google docs (free) almost single handedly forced microsoft to put out office 2010 (trial version) with a somewhat limited functionality that actually works pretty well. google docs basically forced microsoft to offer a free version of one of their major profit streams.

    microsoft office still has features others dont have, but a large percentage of people just dont value those extra features enough to pay the $150 ish price tag.

    this whole idea that we did this to ourselves is not very accurate. competition and availability of information is what did this.

    back when i started in 1996 or so, there was virtually no one who knew a damn thing about IM. not even those doing IM. the late corey rudl was a pioneer in this market. he had a course that was like $197 i think at the time. but most then knew that he had information that few others had figured out.

    now fast forward 15 years, and there is very little knowledge between my ears that can't be found for free in the WF. it will be unorganized, but the info is almost all there.

    the biggest thing most IM products do now is provide some level of organization to the information and guide you in which of the information is valuable and what to avoid.

    that is not worth nearly as much as having information no one else has...which was the case some 15 years ago.

    just like microsoft, a few years ago if you wanted to create a word document, you bought their product. there were few realistic alternatives. but today, i am pretty sure most individuals could easily go without every purchasing a full word 2010 license. they lost tens of millions on this deal simply because they are no longer the only game in town when it comes to word.

    thats the IM reality.
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  • Profile picture of the author CMPimagegroup
    Originally Posted by Paul Barrs View Post

    Every now and then I stop by the WSO forum and take a look at what 'competitors' are offering. I saw one today that just made me sad -

    I mean, don't get me wrong, it looks like a great offer; great product, from a trustworthy source - of these things I have no doubt.

    But for 5-bucks! OMG!

    I totally understand and get the "build a list / add an up-sell" yada yada yada, I do it myself of course... but 5-bucks ?? This is a product that would have sold for $47-$67 easily 2 -3 years ago.

    What are we saying to these people? In the eyes of the consumer, does this devalue the overall product market?

    Are we attracting the wrong type of customer doing this or are we just "filtering" the numbers?

    If nothing else, I wonder if we're making it harder for ourselves to make a living selling online? What hope does this give to the newbie?

    Your thoughts....

    Paul

    PS. Mind you, as a consumer I'm not saying the prices should go up (we know that would never happen anyway), because I, like anyone, LOVE a bargain
    I am kinda new to IM, I spent a few hundred bucks on tanning, with a few different gurus be for I found the WF.

    I have to admit when I first saw a WSO, I think the price was like 17 bucks or something. My first thought was, what is this really, 17 dollars?

    But the more I came on the form I could tell that there were people on WF that know what they were doing and would sell info that would cost hundreds of dollars in the "real world".

    As some one new I have bought quite a few WSO in the past 60 days, some for like 27, some 17, some 5, some 9, 10, 12 bucks, and two for $99. One of them was vary good, and the other wasn't worth 99 cents.

    I have to say that I don't use all of the WSOz I buy, but, I learn things in some WOSz that were not in others. To me it is the way it is marketed and what the goal of the seller is. I noticed that the real cheep ones would be a well put together pdf most of the time, or they were just trying to get my email and turn me in to a professional, WSO buyer.

    Most WSO's are use as impulse buys by most markets, but the two that I paid 100 bucks for were marketed as investment with a RIO that would far exceed the C-note if paid for them. Also I didn't just read the WSO, I had to go to there web site and ponder, look at what they had to offer ask questions and then bought the it.

    The "cheep" WSO's to me there a 50/50 chance that you will be getting crap, or cream, but it's only 9 bucks or so. I will take a chance on a 5-9 doller WSO, however and 30 daller WSO not so much. Also if the 5 dollar WOS is half as good as the add copy says it is, and it helps me in my business why do I need to get my money back. I have only gotten a refund on 1 WSO because it was some software that didn't work for me.

    I if you know how and offer value, I don't think it matters what price you put on your WSO and here is why.

    I am a photographer, started shooting team photos in 2004, I sold them for like $15 a package, I now sell 60 to 100 dollar packages. Well why can I sell packages now for 5 times what I used to, because I know what I am doing now, then I was just getting started and wanted to just get sales. Now I want to create the best possible photo you will get of your child in a given year and build a client list that will pay for them.

    I have a cool name for the product called "The Ultimate Team Montage", the quality of the product is superior to my competition, I give better service and proof all photos before the parents buy prints, and I don't require them to buy a high dollar package they have choices. Now I get people some times that say your prices are to high, but they told me that when my prices were 30 bucks as well.

    I think there are 2 sides to this coin, offering WSOz for 5 or 10 bucks could be looked at as a sale approach for impulse buyers, but that is where competition comes in, if you offer coaching or something like that. The value of your WSO goes way up when put it up against a pdf or a few videos.

    So what do you battle tested Warriors thing of my take on this subject.

    Mr. C.
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    • Profile picture of the author Cool Hand Luke
      Originally Posted by CMPimagegroup View Post

      I will take a chance on a 5-9 doller WSO, however and 30 daller WSO not so much. Also if the 5 dollar WOS...
      Wow. How did you manage to unintentionally spell "dollar" 3 different ways in the span of 15 words? That's impressive.
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      • Profile picture of the author sal64
        I think it's called split-testing

        Originally Posted by Cool Hand Luke View Post

        Wow. How did you manage to unintentionally spell "dollar" 3 different ways in the span of 15 words? That's impressive.
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        • Profile picture of the author ExRat
          Hi sal64,

          Originally Posted by Cool Hand Luke
          Wow. How did you manage to unintentionally spell "dollar" 3 different ways in the span of 15 words? That's impressive.
          Originally Posted by sal64 View Post

          I think it's called split-testing
          Multivariate testing.

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  • Profile picture of the author thekaver
    its hard to vote and put a figure on the correct price of an upsell, as it depends on what the upsell is!

    for example a 1 page report is worth alot less than a 100 page report with bonus'
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    • Profile picture of the author ShayB
      Okay, so.... I will chime in.

      I actually have read through all two pages of the thread. Lots of good points made on both sides by a lot of people.

      I really think it comes down to what your business model is.

      My business model is offering Hotsheets - short reports that are low-priced but don't have any fluff and they are highly actionable. You can take one of my IM Hotsheets and use them to make money - a full-time, scalable business - for a very small investment.

      I have said it before and I'm sure I will be saying it again: I price my Hotsheets so that a single mom doesn't have to choose between buying one of my products and paying for groceries or diapers.

      That doesn't mean I'm never going to offer a product that's higher priced. It also doesn't mean that offer garbage - my Hotsheets are a good quality and unique ideas/twists on ideas.

      It's also a business model that I use outside of the Internet marketing niche - low-priced Hotsheets that give good information and are basically "impulse buys."

      I make up the difference in volume. Always.

      I also don't send a whole bunch of offers to my lists, either. I let them know when I have a new Hotsheet coming out, and every so often I will let them know about a special offer and send an affiliate link. (When I say "every so often" - that translates to about once every two months.)

      I also don't offer every Hotsheet as a WSO. I have some that are only available through my list and/or my website. IMHO, a WSO is just that - a product offered at a special rate to Warriors. A "Special Offer." Running WSO after WSO after WSO isn't a business, IMHO. I run WSO's to help introduce new people to my products, but most of my income comes from my lists.

      Again, this is my business model. You don't have to do the same thing I do. You don't have to think I'm doing it the right way.

      All I know is that I am finding this to be a very profitable business model - and if it ain't broke I ain't fixing it.

      JMHO and YMMV
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    • Profile picture of the author RichardWing
      Originally Posted by thekaver View Post

      its hard to vote and put a figure on the correct price of an upsell, as it depends on what the upsell is!

      for example a 1 page report is worth alot less than a 100 page report with bonus'
      I agree with you that it depends but I disagree that a 100 page report with bonuses is automatically worth more than a 1 page report.

      What if the 1 page report told you actual locations of buried treasure around the world (treasure map) and the 100 page report taught you how to find a job?

      I would venture to say the 1 page report is worth way more.

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      • Profile picture of the author James Sides
        Originally Posted by RichardWing View Post

        I agree with you that it depends but I disagree that a 100 page report with bonuses is automatically worth more than a 1 page report.

        What if the 1 page report told you actual locations of buried treasure around the world (treasure map) and the 100 page report taught you how to find a job?

        I would venture to say the 1 page report is worth way more.

        Richard Wing
        623-505-6302
        skype - richardwing
        Thank you for pointing out to the world that it isn't quantity but quality that matters! I see 100 page ebooks all the time that aren't worth the virtual paper they are printed on (i.e free).

        However, not long ago I received a template for creating high quality info products from Brendon Bruchard as part of a $2,000 training. I'll tell you right now that template is worth more than any WSO I've ever bought. It was two pages in length and it wasn't even a PDF. It was a word doc.

        I dunno about others but my most valuable asset is time so if you are going to fill your product with fluff to make it look bigger that's not impressing me... In fact I'd say its about like a guy that stuffs a sock in his pants to..well you know.

        When it comes time to do the deed some gal is gonna be awful disappointed and the same is true with long ebooks that never get to the point. Give me the five page actionable stuff any day over the 100 page story book.

        Just my two cents!

        James
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  • Profile picture of the author MatthewNeer
    I agree with you.

    Sometimes people sell stuff WAY to low. Sometimes so low that its almost an insult to the market. But at the same time, this is how newbies get their start to selling stuff online. It makes it easy for them to make sales because it takes less traffic to pop the sale, typically...

    Then again, this is the place for the deal. Thats what a WSO is, after all.

    Plus the cream always rises to the top, meaning the best products will always retain the a premium price and deliver the best stuff.

    YEEHAW!
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  • Profile picture of the author Suellen Reitz
    Very interesting thread. I love a great bargain...and you can certainly find bargains every day of the week in this forum. That said, I'm told many sell their product cheap as a WSO to set up conversion statistics later on click bank. I wonder how that can really be a true sampling of sales, considering the drastic price difference as a WSO and full price version on clickbank? And yet... new marketers almost have to sell lower than established gurus...simply because they have not yet proven their worth.

    Ive also noticed that even on the WSO forum, newer members seem to have much less response in their comments and views. So am I right? Do new members really have to earn their spots to sell even at low prices?
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  • Profile picture of the author PeterGarety
    Hey Paul,

    This is old fashion thinking.

    The most important thing that I look at and how I see it is the lifetime value of a customer.

    You see, there is nothing wrong about $5 - $10 or even OTO for $17 (guy sold million books on Kindle for $0.99), as in reality YOU GET PAID for getting high quality prospect on your list.

    Think about how much efforts and money you would need in order to build the same level list outside of WSO marketplace? I think you would pay at least triple the efforts of one WSO development.

    So, the question to anybody is this - what is lifetime value of one customer for you?

    Thanks
    P.G.

    P.S. It is absolutely wrong to think that people who purchase a product for $5, do not buy high-priced products. I have sold tons of high-priced stuff - even $997 or $1997, to the same WSO buyer list.
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  • Profile picture of the author Geeked Labs
    I usually just ignore the WSO section. I find it's mostly low priced junk put together in 30 minutes by some IM newbie who is 2 weeks away from eviction.

    The only reason I ever go on there is to look for "soon" to be released scripts/software that seems like it will be seriously supported.
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  • Profile picture of the author sal64
    I agree that the $10 client is not sustainable per se.

    On the other hand, how do we determine if that's all a customer has to play with, and surely, it's a better way to at least get a pre-qualified customer on your list as opposed to a freegan?

    There is nothing wrong with a self-liquidating front end offer IMO.

    The key is what you do after that initial sale.

    If you don't have a back end funnel in place to sell them into higher and higher priced products, of course it's not sustainable.

    BUT once on your list and showing a willingness to pay you, you can hit them with a high ticket product. Not everyone will take it... for the rest, you create down sells for them and let them determine which price level suits them, if any.

    If you just pump that list with more $10 products, then you're setting yourself up for failure in the long term.

    So in answer to your title, no -but as long as you have the funnel in place.
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    • Profile picture of the author Paul Barrs
      Originally Posted by sal64 View Post

      I agree that the $10 client is not sustainable per se.

      On the other hand, how do we determine if that's all a customer has to play with, and surely, it's a better way to at least get a pre-qualified customer on your list as opposed to a freegan?

      There is nothing wrong with a self-liquidating front end offer IMO.

      The key is what you do after that initial sale.
      Let me guess, a "freegan" is a different breed of Bogan right?

      You've summed up my thoughts on this whole topic; it's a branch out on my current business model that I've been considering.

      "Self-liquidating"... yes, and there's a key there - it must pay for itself! No subsidies allowed - that's what Governments do, not smart business people. I get real curious sometimes when I see just how much people 'spend' on advertising in the hope of making more sales.

      Truth is, if your $7 product can't make back the $40 post fee and the additional WSO pro fees (if you use it), then you need either (1) better sales copy or (2) better product.

      Of course, you could always do what Robert suggested way back on the first page - ditch it, and move on.

      That's smart.
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      • Profile picture of the author sal64
        Nah, freegans are feebie seekers who never buy.

        Of course it has to pay for the $40.

        That's how I set my targets. Frankly I am not into WSO's for the cash.. just the leads.

        I tally up the leads and then work out my cost per lead.

        It is simply smart business IMO.

        Not that everyone agrees.

        Originally Posted by Paul Barrs View Post

        Let me guess, a "freegan" is a different breed of Bogan right?

        You've summed up my thoughts on this whole topic; it's a branch out on my current business model that I've been considering.

        "Self-liquidating"... yes, and there's a key there - it must pay for itself! No subsidies allowed - that's what Governments do, not smart business people. I get real curious sometimes when I see just how much people 'spend' on advertising in the hope of making more sales.

        Truth is, if your $7 product can't make back the $40 post fee and the additional WSO pro fees (if you use it), then you need either (1) better sales copy or (2) better product.

        Of course, you could always do what Robert suggested way back on the first page - ditch it, and move on.

        That's smart.
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  • Profile picture of the author jacksonlin
    I think it really depends on the market that you're in. In the IM Market there are crazy price ranges.
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  • Profile picture of the author Chris Munch
    Just seems like the natural market effects of competition to me.

    Competition and saturation of a product drives prices down to their natural place. It's healthy for customers, and only the businesses that can provide the product within that range survive, or the ones that create USPs for a higher price can stay in business.

    It's a bit like how an entry level laptop can now cost $300, when a few years ago they were costing over $1000. There's still room for companies to sell laptops at high prices if they can create strong USPs, but market forces have forced prices down as a whole.

    The IM infoproduct succumbs to those forces just like any other market.
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  • Profile picture of the author dagaul101
    It's a thin line as a seller do they keep the prices up and sell few or sell the most they can at an affordable price, most especially those without a following chose the latter
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  • Profile picture of the author Rus Sells
    To quote a skype conversation I just had with some one about a product of mine which sells for $47 front end and $(secret) on the back end.


    Me: Hey "name" you want to promote to your list? File transfers of the product ensue. Link to product page.

    Friend: Gotta go through it first but yeah if it looks good....

    Small chit chat....while friend looks at landing page.

    Friend: Is it converting well?
    Me: Yeah decent enough considering I wrote the copy....
    Friend: OH your balsy at $47!
    Me: lol
    Friend: Gosh man why $47
    Me: Yeah and every one who's bought so far says its worth more.
    Friend: Yeah, your just missing out on a ****load of sales.
    Me: Well honestly that's just a matter of perspective, more sales = more support = more time = less net profit. (not sure he he understand the difference between gross and net profit)
    Friend: True
    Me: Also the lower the product cost the higher the refund rates on avg. People who spend more aren't looking for just, "information" they are looking for something more serious and are usually more serious about their business as well. hence, less likely to request a refund "IF" the product delivers value.
    Friend: silence.

    So really we just attract the kind of buyer we want by the quality, pricing, and support we offer.

    We as merchants do set the standard in "MOST" cases.

    See, I perceive that my friend won't be able to promote my product because all the buyers on his list are $5 dollar make ya holla buyers. oh well!
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    • Profile picture of the author Suellen Reitz
      Originally Posted by Rus Sells View Post

      To quote a skype conversation I just had with some one about a product of mine which sells for $47 front end and $(secret) on the back end.


      Me: Hey "name" you want to promote to your list? File transfers of the product ensue. Link to product page.

      Friend: Gotta go through it first but yeah if it looks good....

      Small chit chat....while friend looks at landing page.

      Friend: Is it converting well?
      Me: Yeah decent enough considering I wrote the copy....
      Friend: OH your balsy at $47!
      Me: lol
      Friend: Gosh man why $47
      Me: Yeah and every one who's bought so far says its worth more.
      Friend: Yeah, your just missing out on a ****load of sales.
      Me: Well honestly that's just a matter of perspective, more sales = more support = more time = less net profit. (not sure he he understand the difference between gross and net profit)
      Friend: True
      Me: Also the lower the product cost the higher the refund rates on avg. People who spend more aren't looking for just, "information" they are looking for something more serious and are usually more serious about their business as well. hence, less likely to request a refund "IF" the product delivers value.
      Friend: silence.

      So really we just attract the kind of buyer we want by the quality, pricing, and support we offer.

      We as merchants do set the standard in "MOST" cases.

      See, I perceive that my friend won't be able to promote my product because all the buyers on his list are $5 dollar make ya holla buyers. oh well!

      So the big question is... do you have friends that don't have that $5 mentality list? I love the great feedback this thread has gotten. It should be a sticky!
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    • Profile picture of the author Lisa Gergets
      Originally Posted by Rus Sells View Post


      So really we just attract the kind of buyer we want by the quality, pricing, and support we offer.
      This is quite possibly the most important sentence in this entire thread.
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  • Profile picture of the author sal64
    On this topic...

    I might be missing something, but as John states - surely it shakes out like the real world.

    I think it's a bit rich to claim that all buyers of a $5 product won't buy higher priced products.

    I sell my wso for $27. There is a take up on my oto for another $27, then 10% will order my custom service at $197.

    So are people speculating on what they think will happen, or are they commenting on actual experience with the process?

    How do we differentiate these buyers from the ones that take up a $1 trial?

    Isn't the whole idea that we try and qualify people by extracting their credit card details?

    Don made the call about cost of acquisition, and I agree.

    Now let me make this clear...

    The key as I see it is that if you offer a $7 product, then only value in that product which is congruent with the price. Quite simple really.

    And what is wrong with selling a product which might otherwise be given away for free for $7... and building your list with qualified customers who have shown a willingness to spend?

    If you are stupid enough to offer a mega product for $7 then of course your customers will be trained the wrong way.

    Useful but incomplete, people. Useful but incomplete.
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  • Profile picture of the author Rus Sells
    I should ad that my "friend" perceives that he cant' promote a higher priced product because all his buyers are buying at lower pricing. Whether they buy or not he's already judged for himself.
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  • Profile picture of the author Mieko
    Do you really want to build your business around the garage sale mentality? That means more buyers with unrealistic expectations, which leads to more complaints, more support requests, more refunds, and most importantly, more time sucked out of your day babysitting people with little understanding of how cause and effect produces the circumstances of their life.
    Very, very well said sir.
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    • Profile picture of the author Paul Barrs
      Originally Posted by Rus Sells View Post

      Small chit chat....while friend looks at landing page.

      Friend: Is it converting well?
      Me: Yeah decent enough considering I wrote the copy....
      Friend: OH your balsy at $47!
      Me: lol
      Friend: Gosh man why $47
      Me: Yeah and every one who's bought so far says its worth more.
      Friend: Yeah, your just missing out on a ****load of sales.
      Me: Well honestly that's just a matter of perspective, more sales = more support = more time = less net profit. (not sure he he understand the difference between gross and net profit)
      Friend: True
      Me: Also the lower the product cost the higher the refund rates on avg. People who spend more aren't looking for just, "information" they are looking for something more serious and are usually more serious about their business as well. hence, less likely to request a refund "IF" the product delivers value.
      Friend: silence.
      Russ, OMG! ::

      Originally Posted by sal64 View Post

      If you are stupid enough to offer a mega product for $7 then of course your customers will be trained the wrong way.
      Sal, just had to pull this quote out - perfect!
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      • Profile picture of the author sal64
        Originally Posted by Paul Barrs View Post

        Russ, OMG! ::



        Sal, just had to pull this quote out - perfect!
        Just came up with a new brand...

        Steel cap boots marketing. Shoot yourself in the foot and laugh all the way to the bank.
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  • Profile picture of the author Nightengale
    Wow! This is a huge hot button issue for me.

    Have we shot ourselves in the foot with ridiculously low prices?

    YES!

    The extremely low prices here and the mentality that goes with it is exactly why I don't post WSOs or pursue Warriors as customers in any way. I have info (with experience to back it up) that a lot of Warriors are interested in. But it's not worth the time or headache to give it to Warriors. I may yet post another WSO some time in the future, but as an exception. And not any time soon.

    The extremely low prices here actually turn me off most of the time. Like most people, I demand a good value for what I buy and I like a bargain. Maybe I'm in the minority here, but I'm NOT primarily a bargain basement shopper. There's a difference between wholesale prices and bargain basement prices. The latter just make me more skeptical.

    In fact, I deliberately sought and happily paid a premium price ($1500) for an IM course back in 2008. I loved it and was very happy with my purchase. Why?

    1. The info was a comprehensive, complete system, not the bits and pieces that make up the $5 and $37 e-books.

    2. The info was by a REAL businesswoman with REAL results and aimed at REAL business owners, not IM wannabes who just want to "work from home in their pajamas." No sleaze or snakeoil. Real info for real business owners.

    The $.99 economy IS a huge issue for many people and Dan Kennedy's newest book No B.S. Price Strategy addresses this very issue.

    Originally Posted by JohnMcCabe View Post

    Depends on what you are selling, a commodity or something more unique.

    If all you're selling is yet Another MMO product, then you are looking at selling for commodity prices.
    This is HUGE -- and SO true!

    But first there are two other things you need to seriously consider:

    1) Your WHO -- who's your target market? This has a tremendous impact on whether you'll eat peanuts or steak. (Hint: pick people who WANT what you have and are willing to pay for it.)

    2) Your positioning in your market. Positioning is critical and entire books have been written about it.

    One you've determined these things, the next biggest step is to GET OUT OF THE COMMODITY BUSINESS! Your challenge is to stop being perceived as a commodity and be pursued by premium price buyers.

    There are lots of ways to do this. Check out Dan Kennedy's price book for details. It's full of great info.

    Michelle
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  • Profile picture of the author Sabiha
    Paul Barrs you have started a very valid discussion. Because this is something we will have to do collectively as sellers to not devalue a product by decreasing the price too much.

    However like someone has pointed out earlier that this 'WSO' is a special offers thread. People come here to pick bargains...

    My opinion is that we should not sell at WSO if we want to sell at a high price except only if we want to test the response or want to collect testimonials before our big launch then our WSO offer should be a very limited time offer and it should actually close before we introduce it to the general public.

    Ofcourse when we sell it at a higher price to the public then it should have more bells and whistles or bonuses compared to the WSO. So that both customers, the WSO buyer and the regular buyer appreciate the value of their purchase and not feel cheated.

    We certainly send a wrong message when we sell a product at a very slashed price at a WSO and then try to charge much much more later for the same exact offering.
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  • Profile picture of the author BIG Mike
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    • Profile picture of the author sal64
      Wow, thanks for the share Mike.

      Truly magnanimous of you to do so. No wonder you enjoy the success that you do.

      Quick question... do you believe that the consumer is more savvy these days, making it harder to over inflate prices?

      Sal

      Originally Posted by BIG Mike View Post

      I was really hoping you would



      I'm beginning to think (not because of you Shay), that the phrase "Business Model" is grossly mis-used in IM.



      That's pure gold and an excellent real life example of a "Business Model"



      My favorite phrase



      I wouldn't either

      Since we seemed to have moved beyond WSO pricing in this thread and more into the real world, I'm going to chime back in here myself on a few key points about pricing models that seemed to be misunderstood, or spun to imply a certain wrongness with them.

      Firstly, it bothers me a lot to see the thread going in the direction of, "If you're not setting a high price point, you're doing everything wrong..." type of comments.

      You can't have a balanced discussion by only talking about the pros of the argument for and the cons of the argument against something. This is even more true than when we're tossing theoretical numbers around rather than empirical data.

      When we're specifically talking about WSO's and that particular marketplace, I tend to agree with a lot of what's been discussed in this thread. Probably for different reasons, but I do see many excellent points being made.

      That said, there simply is no, "One Size Fits All", right or wrong model when it comes pricing. The same is true for the particular audience you're targeting, assuming you have a target in mind, much like Shay indicated hers was. What's left is nothing more than individual preference and access to certain markets.

      Professionally, I've been on both sides of the argument - I've sold multi-million dollar projects and low-cost products and services. There are clearly benefits to both as well as disadvantages, but they both do work equally well.

      However, when I start seeing comments about being "Afraid" of selling at a higher price, that folks are wasting their time selling "Commodities", hear how much "Harder" it is to make big bucks on low-priced products, "Refund Rates are Higher" and there's "Much More Support", it's time to put on my Myth Busters hat and get to work.

      At present, my core online business produces and sells low-cost scripts and software. In addition, I've got a number of other, smaller revenue streams that round out my overall income. The pie chart below is about a year old, but is still relatively accurate.


      The important slice of that pie for this discussion is product development, which accounts for 46% of my gross revenue. Over the past 3 years and some 100K plus sales transactions, the average sale was a measly $15.77!

      I should point out that we rarely do OTO's or upsells

      At the present time, all of my online products are priced between $4.95 and $29.95, with the exception of one $67 product. Prior to 2008, my products were typically priced between $77 and $147 (I'll explain at the end why the dramatic change in pricing took place).

      MYTH #1 - Refund Rates Are Higher On Low-Ticket Items

      Before we implemented our No-Refund policy as well as before reducing prices significantly, our refund rate was less 1% and of those, fully 50% were not requested by the customer, but offered by us due to problems we could not resolve.

      Since we're tossing out numbers, let's assume for a moment that our refund rate is exactly 1% on a $400 product. If we are doing 1000 transactions a year, then we'd have 10 refunds ($4,000).

      Using my own numbers on low-priced products, assume a refund rate of 1% on a $15.77 product. Since we do roughly 33,000 transactions a year from that one site, we'd have 333 refunds ($5,251).

      The Refund "Rate" is NOT higher - the volume is. However, on the $400 product the gross is left at $396,000, while from my own numbers, the gross is left at $515,159.

      MYTH #2 - It's Harder To Earn Big Bucks Selling Low-Priced Products

      My numbers in Myth #1 clearly prove this out, but I know that a lot of marketers promote the idea that it's easier to sell 100 - $500 products than it is to sell thousands of low-priced ones, but that is simply not true.

      I would agree with that concept if we were all door-to-door salesman, but we're not. This is the Internet - with a properly automated system, it's mostly hands off...I fail to see where the "Hard Work" comes into play (with the exception of physical products/services).

      Price point is a key factor in Market Reach - assuming a good quality product, the lower the price, the greater the reach. With digital products we have very little overhead and zero production costs, which means ROI can generally be achieved much faster.

      The next chart was made as part of a project I did last year for my doctoral studies. I think its demonstration of Market Reach is fairly self-appearant (NOTE: I modified this to remove superfluous information unrelated to the topic).


      The reason understanding Market Reach is so important is for Revenue Management purposes.

      Obviously, anyone selling a product would like to do so to those customers having a high valuation. However, if they cannot access high dollar customers in a reasonable time frame (say, during a product launch), they risk losing revenue on products that could have been sold to low valuation customers.

      The problem with the pricing dynamics talked about in this thread is that it locks sellers out of a stochastic model, which is what airlines, car rentals and similar companies use, i.e.; right price, right time, right customer.

      You can't sell a $1,000 item during your product launch this week and next week offer the same product for $99 as a WSO.

      MYTH #3 - Low-Ticket Products Equal Higher Support Costs

      Again, the answer is...wrong!

      Support Costs are always proportional to sales volume, product type and product quality. The cost per incident is reduced gradually in higher volume sales, especially if support is well organized.

      We have two full-time support techs on staff - support tickets represent between 2% and 5% of all daily transactions (the 5% peak is normally during specials).

      MYTH #4 - You're Selling Commodities

      @Michelle - I loved your post except for that one comment...I respect the spirit in which you intended it, but it's a myth in my opinion.

      One of the benefits of selling a low-riced items is Cash Flow. In Myth #3 I mentioned a stochastic model, which is basically where you take a product (where demand is tapering off) that retails for $19.95 and put it on sale for $7.77 - you just injected another $3K to $5K in capital from a moderately sized list (10K subscribers).

      I happily sell those "Commodities" - I can count on doing 50 to 100 plus transactions every single day.

      MYTH #5 - If You Don't Have An Upsell, You're Leave Money On The Table

      I know from experience that this is not true, at least in long-term profitability models. When you factor Lifetime Customer Value into that model, you're deferring the revenue generated from short-term model upsells to a future date.

      In other words, you're still earning the revenue, just differently and not today. Incidentally, I've tracked significantly increased conversion rates (>50%) in this model.

      At a $7 entry point, assuming a long-term model, each customer can represent $2K or more in future revenue.

      Why I Use This Model

      The first product I made and sold online 10 years ago was a utility program priced at $4.95 (I priced it based on my offline experience). Over the next six months I sold some 22K copies of it (you can do the math)

      As I got involved in IM, I began to follow the chant of "Raise Your Prices". I priced my products between $77 and $147 and did OK. I knew I could sell a lot more at lower prices but was determined to stick it out to really evaluate the methods I was using.

      In 2008, as the economy began tanking, so did sales. Our market reach was diminishing rapidly and decided to return to my original, low-priced model, which is more in line with mainstream software products.

      Business exploded. There's no better way to say it - since then we've been earning 7 or 8 times the revenue based on volume sales. Here's the ironic thing - we're actually doing a hell of a lot less work!

      Our list has quintupled in size as well and it's a solid buyer's list. With the high conversion rates, the larger list our profitability on those low-priced products everyone seems to turn their nose up at is enormous.

      I want to reiterate that there's no right or wrong model - mine is based on long-term sustainability and it's a good match for what we do. Others prefer focusing on the upper-end of the spectrum - and I'm sure it's a great fit for them.

      My point to this litany is to demonstrate that low-priced products can be just as, if not more profitable than high-priced ones and it is no more or less difficult to generate and sustain an income from them.

      Both models, in the right hands, work exceptionally well...and there's absolutely no reason why you cannot do one or the other or both

      Just don't make the mistake of deciding one over the other based on myths - then you're really shooting yourself in the foot!
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      • Profile picture of the author Ryan David
        Thanks for that post Big Mike.

        I was really surprised that people think that Refund Rates and Support Costs would be higher. Personally, as a consumer, I rarely contact support for small purchases.
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        • Profile picture of the author Richard Van
          Originally Posted by warriorkay View Post


          How many WSOs does Allen Says bring out and sells for $5?!

          Of course none. He spent his entire time for MANY YEARS
          building just one AUTHORITY site.
          Allen Says Private Posts is worth it's weight in gold in my opinion but went for just $10.

          The report is actually worth thousands. I'm only asking $10 for it. To a limited number of people - Allen Says
          I'm also pretty certain, Allen hasn't dedicated his entire career to just this forum and has a number of fingers in a number of other pies.

          I could be wrong though and will happily stand corrected.
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    • Profile picture of the author Nightengale
      Originally Posted by BIG Mike View Post

      MYTH #4 - You're Selling Commodities

      @Michelle - I loved your post except for that one comment...I respect the spirit in which you intended it, but it's a myth in my opinion.

      One of the benefits of selling a low-riced items is Cash Flow. In Myth #3 I mentioned a stochastic model, which is basically where you take a product (where demand is tapering off) that retails for $19.95 and put it on sale for $7.77 - you just injected another $3K to $5K in capital from a moderately sized list (10K subscribers).

      I happily sell those "Commodities" - I can count on doing 50 to 100 plus transactions every single day.
      Thanks for such a thoughtful post Mike. I agree with all of your points.

      Remember the definition of a commodity: a product (or service) that's perceived by the customer as no different from any other product (in its category) and therefore, price becomes the driving factor. It becomes a race to the bottom, with no money left for marketing, service or investing in any type of R&D.

      Just to clarify, I wasn't saying that just because you're selling a low-priced product, you're in the commodity business and or leaving a lot of money on the table. And selling a low-priced product certainly isn't a bad thing just because it's low-priced. Selling at low prices and making it up in volume is a valid business model. (You can't argue with the success of Walmart.)

      I'm a economics/marketing major and I LOVED my maco- and micro-economics classes. I know that any time you lower the price, you effectively increase your market and demand (which is way cool).

      Shay makes money selling low-priced products to moms (who don't have a lot of money). That's more a great example of excellent target marketing (which dictates the price levels) though.

      I hope I'm saying it in a way that makes sense. In no way did I mean that selling low-priced items or services is a bad thing (or you should do everything you can to increase your prices or always sell at a premium price). My comments were aimed at those who are selling their products and services at bargain-basement prices because they feel pressured by the competition and their prices. So they keep lowering their prices (without changing anything else, like their marketing strategy or overall business strategy) and end up going under.

      Even if you DO sell a commodity product, there a lot of ways to maintain your prices or even raise them, if it's warranted. (Adding service is a great way to maintain your prices even if your competitors are lowering theirs.)

      I agree with all of your points. In the end, every person's situation is different. Your prices will be dictated by your business model, your target market, your costs, your goals, etc. None of it is bad if you've got a successful, sustainable business.

      Michelle
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  • Profile picture of the author Alex.R
    I liken this to the Stockmarket and the heard mentality when everyone starts to chase the trend, wether it be an uptrend or a downtrend. When it gets over bought or oversold that is the time when the big guys do a contra move against the trend.
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  • Profile picture of the author Tony Shepherd
    Is it only me who thinks the WSO marketplace is a really exciting and vibrant arena?

    I buy a lot of WSO's and while yes there is an amount of crap in there, there are also some absolute gems coming from new marketers who are creating and using REAL systems to make a REAL online income.

    I'll take that over the last few years of hyped up Clickbank crap anytime.

    As for selling products too low...

    C'mon guys, take some responsibility. If you put your latest invention in a 'Everything costs £1' shop how much do you think you're gonna get for it?

    Put the same gizmo in a high end science gadget store and you'll make 10 times as much.

    It's all about positioning.

    The WSO forum is what it is, and should be used as such for tracking, testing, lead gathering and making a few quid if you're skint.

    For more serious business, nothing has changed.

    Cheers,

    Tony
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  • Profile picture of the author sal64
    Hi Colin,

    Mate, there is just way too much to multi-quote and comment on, but a massive thank you for all the effort you have put in on this thread.

    Very well articulated answers and extremely helpful to anyone finding themselves torn between both strategies.

    You have certainly given this old fool some ideas to contemplate. Ironically I am about to jump on a copy webinar which is all about stories and how to use them to increase the customer experience so you can charge higher prices.

    Once again, many thanks and keep going by all means.

    Sal
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  • Profile picture of the author sal64
    Ok, so I jave 2 questions for the panel...

    1- Is it reasonable to assume that the WSO marketplace consists mainly of customers who are seeking info at a low cost, as well as those who don't have big $$ to spend? Therefore, there is a low probability that you'll ever sell them high priced products?

    And secondly...

    2- Are high priced products more difficult to emulate and therefore there will be less competition? Or is the success of these products contingent on positioning in the market?
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