4 Ways to License Your Information Marketing Products
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Licensing can be a great idea for many information marketers. And, it can make a lot of sense BOTH WAYS. Both as the licensee and the licensor. Below, I’ll be sharing with you primarily from the perspective of Licensor, where YOU are selling licenses to others.
In all of the examples below, I’ll assume a digital product that sells for $100.
1. Affiliate Programs
A standard affiliate program that every information marketer is familiar with is a form of licensing. You are essentially licensing the right to sell your products. For most people, it’s an OPEN license. That means that anyone can sell your products by just signing up and becoming an affiliate.
Affiliate program percentages vary, but the STANDARD commission rate is 50% on information products. This is fair. If you find someone who is well known in the field and pulls a lot of weight, you may want to give THEM a 60-40 split.
2. Resale License
A resale license is kinda like an “affiliate plus” concept. This is where someone can buy into a higher level of commission in exchange for some up front cash. If you’re offering 50% as an affiliate, then you may want to consider selling folks a resale iicense for our hypothetical $100 digital product for between $300 and $500.
This is a pretty standard rate. Charge people 3-5 times your retail sales price and let them gain an additional 20-25 percentage points each time they sell a copy as an affiliate. You get the immediate cash and then they get a bigger chunk every time they sell something. For a digital product, this makes a LOT of sense.
3. Standard LIcense
I refer to this second type of license as a STANDARD LICENSE. There is no “standard” way to refer to this license, it’s just my term for it.
In this case, you offer this license to people for 10-12 times the retail price. So, in this example, you would charge somewhere between $1000 and $1200. The person who buys the license then has the right to sell this product to their customers and keep ALL the money made from the sale.
The only proviso is that they may NOT alter the product in any way, AND, must sell it in it’s entirety. They can’t cut it up and sell it in pieces. They can’t pick and choose which PARTS to sell and all of YOUR bounceback offers will remain intact. This is a critical element of any licensing deal. Not keeping your bounceback offers intact will cost you a LOT of money on the back end.
4. Master License
A master license in the same as the standard license in every respect. With one very big exception: whomever buys this license can sell an UNLIMITED number of STANDARD licenses to others.
Similar to the STANDARD license, they cannot change or alter the product in any way. Again, the bounceback offers remain intact and people are driven to your sites for additional products and services.
Many info marketers will sell TONS of master licenses. Bad idea. Do that and you’ll reduce the value of the license by making them too common and available. It will also get your licensee’s annoyed because they’ll probably bump into a bunch of other people with the same license and feel they were ripped off.
I never sell more than 10 master licenses to any of my products. Follow my lead and you’ll have very few problems. Depending, of course, on the size of your niche.
SOME people will offer a variation on the master license that ALLOWS the buyer to make changes to the bounceback offers. Since this has MAJOR value to you, you’ll have to charge a significant premium over what the normal master license costs to remove your bouncebacks. How much? As a minimum, don’t sell a master license without your bounceback offers for less than 100 times retail, or in this case, $10,000.
But, on the flip side, when should you BUY or PURCHASE a license? When you find a GREAT product that you either don’t want to or is too costly for you to produce yourself.
I recently got a question from someone about licensing. She asked me whether or not to buy a license. The license was offered to her for $3,000. She told me the product was excellent. When she asked someone for a quote to create something similar, they came back with the number $7500. Clearly a good example of when it would make sense to BUY a license.
Licensing is something you should seriously consider doing. Either as the person selling the license, or the person buying the license. There are some products that you find that are so good that you shouldn’t attempt to create your OWN version when you can buy a license.