We’ve all seen them: People create some type of digital product and then let people sell it for 100% commission. Why in the world would they do this?
In most cases, marketers are simply trying to get a list of buyers and are willing to forfeit their commission on the first sale, knowing that they will more than make up for it on future sales. Two things come into play here:
- It is easier to get a sale from somebody who has already purchased something from you than it is to find a new first-time buyer.
- Each paying customer has a life time value. Good marketers know this value and are willing to give up a small bit of that value, if necessary, to capture the rest.
There is another marketer who has taken this to another level. No names, but the guy is one of the “good guys”, but as soon as people catch on to this tactic… Well, I don’t know what’s going to happen, but it sure does seem like this technique could certainly widen the gap between the “haves” and the “have nots”.
Let’s take a look at how it works by working our way backwards. What do I mean by that? The ultimate goal is to get people to use a great service that bills monthly (I’ve signed up for the service myself, it does exactly what it is supposed to do, and I’m confident that it will soon start making me money). So let’s get started:
- The ultimate goal is to get people to use a high value, honest, and high quality service. For each person signed up, Mr. Nice Marketer will get a monthly commission.
- To get people to use this service, Mr. Nice Marketer sells an ebook — a very nice ebook, by the way (I should know; I purchased a copy) — that “sells” people on the RESULTS that the service provides. In fact, it even shows ways to get more out of the service by using other tools. By the end of the book (which sells for about $20), people who are ready for such a service see the “genius” in it and sign up for it.
- Mr. Nice Marketer then creates a viral, rebrandable ebook and allows his affiliates to brand it with their affiliate link. The goal of the free rebrandable is to get people to purchase the $20 ebook.
In summary, here’s what would happen if I were to give away the ebook (I won’t; I’d rather just promote the monthly service on my own and capture THOSE commissions! But this is a great lesson):
- I grab Mr. Nice Marketer’s ebook, brand it with my affiliate link, and start giving it away.
- People click on the link and buy Mr. Nice Marketer’s $20 ebook. I get $20.
- People read Mr. Nice Marketer’s ebook, sign up for the service, and Mr. Nice Marketer gets about $30 a month for a long time from that person (the service is good and it can continue to make you money if you know what you are doing).
It’s a great system, created by a great guy — and it’s quite ingenious. I’m glad that I purchased the $20 ebook and got to see how the whole system works. I just might try it myself some day… 
But I’d rather do a bit more work and be the person giving away 100% commissions on a $20 ebook than “lose” those $30 a month commissions.
Please note that I’m not suggesting that you use this method to promote some membership site that’s a load of garbage; to be honest, this won’t work because people won’t stay subscribed to it and you’d be better off chasing those $20 commissions. You need a great, high quality continuity program to make this work. I also recommend that you find a service that is run by someone who isn’t going to “cut and run” any time soon. Find somebody who is in business for the long haul. But if you do your homework and choose the right offer, I think this system would work — and work quite nicely.
In conclusion, marketers have traditionally offered 100% commissions to affiliates on products in order to create a list of buyers. This has been going on for some time now; nothing new there. But I think that we’re seeing the start of a new trend where skilled Internet marketers are going to start offering 100% commissions on products so that they can capture recurring commissions on high quality monthly membership sites.
Which leads to the question: Do you want to be one of the marketers scrambling for those one-time $20 commissions — or do you want to be the one capturing the recurring commissions on membership sites and services that deliver on their promises and make money for those using it?
