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Taking a loss on your products is very profitable

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product launch path

Recently a colleague was showing me a piece of software he built.

He asked me how he might take it to market – how to position it, who would be interested, and how much to charge. In my mind I said Whoa!

Too early to answer those questions.

My actual response was, “What are your goals?”

Are you looking to pay your mortgage with this product?

Are you looking for fame?

Are you using it to build a list?

Are you looking to build a list fast?

Sure, the end result is to make money…but there are different ways to get there, especially when we are talking about product launch marketing.

Consider this: you can make a ton of money by taking a loss on your product.

How can this be so?

Let’s say you produce a product, hire a product launch manager, build a list, do an internal launch, then a JV launch, gross $100,000…and break even. Would you be surprised if I sent you a bottle of Dom?

Ok, you didn’t make one red cent on the sales of your product. So what did you walk away with? A fat list of targeted prospects (many of them buyers).

Is that valuable? Considering you can sell to them for years to come (provided you maintain a good relationship with them), I’d say it’s very valuable. In fact, you’re going to make far more money than the net of your single product.

But this only works if you are clear on you goals from the start. In the above example, your goal would have been to break even in exchange for a fat list.

Alternatively, you may be continually producing your own products and intend on making the lion’s share of your income from the sales of these products. In other words, you do not intend to sell other people’s products to your list – you want your list focused on your products.

In that case, you may not want an affiliate program. You may want to build your list so you’re not giving away 50% to 75% of the sales. There are a number of reasons this could be wise, or even necessary to make your business viable…and other reasons that it could be foolish. It depends on the nature of your product, the competition and the numbers – the cost of traffic and profit margin.

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