The 10-1 Rule of Information Marketing – Arriving at a Price For Your Product

What’s the 10 to 1 rule of information marketing? Simply put, it means the price at which you’re selling your information product (assuming it’s a physical product vs. digital delivery) must be priced a minimum of ten times your production cost for that product to be a viable product long term.

The 10:1 rule is one of the major reasons why information marketing is such a popular business model. Info marketers routinely get a ten to twelve times markup or more (in many cases, much much more) over their cost to produce the product. The attractive markup is why new information marketers come into the market every day.

No more busting your butt for a measly 10%, 15% or 20% margin over costs. The 1000% markup allows you to recoup development costs quickly, pay affiliate partners a meaningful percentage, and build a business of real value.

So, what’s it all mean in real numbers? If it costs you $10 to produce your product then you should be selling it at around $100 or more. If you follow the pricing rule of “7″ then it might be a $97 retail product.

Some of you may be wondering “what is the pricing rule of “7″? Well, research indicates that people, for whatever reason, tend to be more response to prices that end with the digit 7, so 37, 47, 97, 127, etc. So, if your product costs $30 to produce then it needs to be a $297 or higher product. If it’s $100 to produce then that’s at least a $997 product. And so on and so forth…

But let’s look at it from another standpoint. What if you’re producing an info product that costs you $30, but the market you’re selling into won’t spend more than $97 on that type of information product. What should you do?

If $97 seems to be the “number” in your market then you need to figure out what you can package for them that costs you no more than around $10. You may have to eliminate some of the content you were wanting to include in your product to bring your numbers in line.

Maybe the additional material can be bonus downloadable information or be saved for a separate product. You decide what will work best for you. But the bottom line is you need to bring your production costs as close in line to the 10:1 rule as you can.

Now, if the product is simply a lead generation product for other higher ticket items that you sell then you can throw the 10:1 rule out altogether. Many marketers are even okay with losing money on that initial sale because they know their back end conversion numbers so well they know they don’t have to make any money on that initial sale.

But if the product you’re selling is one you want to be a highly profitable cash producer for you then make sure you follow the 10:1 rule.

An Introduction To The Information Marketing Business

What is Information Marketing?

Information Marketing is the creation, promotion and the selling of information based products that is created once and sold many times.

Information Marketing is about identifying a responsive and hungry market or group of people who have high interest in a particular subject or topic with a strong demand for information; packaging an information product in a suitable format–with the purpose of educating these set of people–and devising ways and methods to sell and deliver the products.

Why Start an Information Marketing Business?

What’s in it for you if you start an information marketing business? And why should you choose this business over many other business models? There are astounding answers to these questions.

• The profit far exceeds work
In the Information Marketing business world, you do the work once and get paid many times because the marketing system that is set-up generates money for you on auto-pilot.

• Easy to learn and operate
Information Marketers do not need to have talent, expertise or any remarkable gift to begin (But having these skills makes work easier for you as it shorten the time needed to learn them). You also determine the amount of time you spend running the business.

• Establish your credibility faster
Your subscribers will always buy more from you if you provide them with quality products. They will be interested in buying other products from you (after buying the first time) once you establish your credibility–by providing quality products–on the topic you have chosen.

Benefits of Information Marketing

The benefits of running an information marketing business are numerous. If you are about giving up on the idea that this is not for you, consider the benefits inherent in this business such as:

• Flexibility
Everything that is needed to start an information marketing business can be learned in few months–or weeks if the resources are available–and you can begin to make money after six months.

• Low start-up cost
The cost of start-up is relatively low. You don’t have to be a millionaire before you can start an information marketing business neither do you have to be a petroleum tycoon. Since the inventory cost very little or cost next to nothing, you make more money selling more of your information products.

• Profit Potential is Huge
You can make hundreds of dollars doing this business alone. An example is the Information Marketing Organisation with a large database of credible info-marketers. The general rule of thumb is the more money you invest in the business, the more you make from it.

• You can work from Home
One of the interesting thing about this business is that it can be operated from you home as long as there is computer and internet connection. The freedom this brings gives you more time to spend with your family and loved ones.

What is Needed For Running an Information Marketing Business?

To run an Info-Marketing business, you must have in place necessary skills–or learn them–to operate it successfully. There are many skills you can learn when starting-out. I have outline some of the things you will need to start.

• Idea or expert knowledge
If you are knowledgeable or have expert skills in a particular topic or subject, chances are that other people are interested in that topic too. This opens an avenue for you to easily make money with your topic of interest. But if you do not have any experience or knowledge, don’t panic! What you need to do is identify the problems people are having. Make research on how to solve the problem and package the solution in suitable format and offer it to them.

• Video/audio program and/or Word processor
You need a word processor program like Microsoft Word (preferable) or notepad to type up your documents. You will also need a software to record your audio files or videos if you choose to offer video and audio equivalent of your products.

• Portable documents format converter
The best–and most popular–format for eBooks now is the portable documents format. It is the most widely used format for eBooks on internet. Many information marketers have used it successfully. You should follow suit. There are paid and free versions available on the internet. You can choose between the free or paid options depending on your budget.

• Ftp program
You need to make use of ftp program to upload your files and documents to the internet. You can download free ftp programs on the net. Try searching through Google and choose the one that you like. But if you want the paid one, you can get it from the internet too.

• Download page
This is where people will download your products after they have paid for it. It can be on a website you have created or a third-party website that offers you bandwidth and space to upload your files to.

How to Profit from Information Marketing

There are so many ways to make money from information marketing especially now that readers are reading increasingly more content on the internet and turning to cyberspace whenever they need information on anything at all.

That is why information marketing offers such an interesting business opportunity for writers an non-writers alike.

You can make a lot of money as an Information Marketer if you are very creative.

• Videos
You can offer videos to those who don’t have the time to read or who hate to read. Offering your information in this form can attract potential customers who prefer information in the form of videos.

• eBooks and report
You can profit online selling information in the form of eBooks and reports. If you can’t write, you have the choice of hiring a freelance writer to write it for you–with your guidelines–or buy private label right products and re-write them.

• Membership sites
You can set up a membership site that offers monthly fresh content to subscribers and charge them monthly recurring fees or a one-time fee (the latter being more expensive than the former).

• Downloadable audio and mp3
You can also offer your information products in downloadable audio or mp3 format for instant download after payment. This affords your readers instant gratification and they will thank you for it.

Information Marketing – The Mistakes I Made Creating My First Info-Product

My first information product was an eBook called “Got Ideas? Unleash Your Creativity and Make More Money.”

Bet you didn’t know that, did you? That’s because it was a complete flop.

Yes, my first foray into the wonderful world of info-marketing was pretty much a train wreck.

So why I am talking about it now? Because I realized the other day the lessons I learned were invaluable and my failures could help you become a success.

So sit back, grab a cup of coffee and let me share the story of my first info-product. It was about six years ago (2004). This was my beginning of my 2-year “transition” period, where I transformed my business from freelance copywriter with 80% of my business coming from local businesses to entrepreneur/business owner with a national and international client base and having the resources and team to help my clients on a much bigger scale.

Needless to say this was a nerve-wracking time, filled with ups and downs and LOTS of “learning opportunities.” One of those “learning opportunities” came in the form of my first ebook.

When I first decided to make this transition from freelance copywriter to entrepreneur/biz owner, I did what many of you either are doing or have done — invest A LOT of time, money and energy learning stuff. And one of the things I learned was I should be selling an info-product.

Well, I’m a writer, right? I could write an ebook.

At the same time, I was also in the middle of a rebranding (remember, I was making a transition so everything was changing). Since creativity is one of my passions, I had decided to combine creativity and marketing/copywriting and have that become the foundation of my business. This would be perfect I thought. No one else is doing it, I could be the only one, and I’ll kick this whole thing off by writing a book about it.

So I spent MONTHS writing this book. I put aside HOURS of my time every day writing it. It ended up being 144 pages of solid content. I finally finished it that summer, put up a (pretty bad) sales letter and waited for all the money to come rolling in.

Needless to say, that never happened.

I did sell a handful of them. Maybe a dozen or two. Not nearly the amount I had assumed I’d sell.

Now, I wasn’t exactly discouraged after this but it was a shock. Like being dunked in the ice cold water of reality. It caused me to do a heck of lot more research into how to successfully sell online. I didn’t take my failure personally — rather I instead decided to use my failures as a jumping off point that would help me turn my next product into a success.

However, I know a lot of you DO venture into these murky waters, end up with a failure on your hands and become so discouraged you never sell anything online again. I don’t want that for you. You see, EVERYONE who has ever sold anything online has had a lemon or two (or ten or a hundred). It doesn’t mean the process doesn’t work (it does) it just means you need to know the pitfalls to avoid so you end up with a success and not a failure.

So what mistakes did I make? Well, let me tell you, I made a bunch and I’m going to share those with you soon. But one mistake I did NOT make was having a bad product. Like many of you who are struggling selling a product, your product is fabulous. The flaws are in the other parts of the process and that’s why you’re not seeing the success you deserve.