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License Your Information Products
for Extra Cash Flow
by Jennifer Tribe
What do Mickey Mouse, Jimi Hendrix
and the New York Yankees all have in common? They are all licensed
brands that make their owners millions.
When you have content that other people want
to buy, you can obviously make money by selling directly to
your end consumers. But as Disney knows perfectly well, you
can generate additional revenue streams by giving others the
opportunity to sell for you.
With licensing, people pay you to market your
products all over the world. You give up some or all of the
actual revenue on the indirect sales but you earn money on the
licensing fees. Plus, you gain exposure to new audiences and
new markets without spending a penny. Once you have this exposure,
you can often sell those markets additional products directly.
In a nutshell, you gain revenue and exposure
with few marketing costs. Your licensees earn money without
any product development costs. Everybody wins. You might also
consider purchasing licenses from other information marketers
to supplement your own suite of products.
== Level 1: Resale License
A resale license gives the license holder
the right to sell a product -- in other words, to take orders.
You (as the owner of the product) typically fill all the orders
and provide all the customer support. The licensee does not
have the right to reproduce the product.
A resale license is similar to participating
in an affiliate program but with one key difference -- the amount
of money offered. A typical affiliate program is free to join
and will offer between 10% and 20% commission on each sale.
A resale license is purchased for a fee but will typically offer
upwards of 50% commission on each sale.
== Level 2: Reprint or Reproduction license
As the name implies, a reprint license gives
the license holder the right to reprint or reproduce a product.
(The terms "reprint" and "reproduction"
are often used interchangeably regardless of the product. For
example, you might see reference to a reprint license for an
audio product.)
The licensee purchases a master copy of the
product. Often, the license fee also includes marketing materials
to help sell the product. The licensee gets to keep 100% of
the revenue on any copies he or she sells.
== Level 3: Master License
A master license lets the licensee reprint
the product, but also gives him or her the right to sell reprint
licenses to others. This gives the licensee two income streams
from the same product.
As you go up the levels of licenses, the licensee
gains greater rights and greater opportunities for revenue.
The licenses are priced accordingly, with resale licenses being
the cheapest and master licenses being the most expensive.
Licensing fees for information products are
often calculated as a multiple of the product's retail price.
Below are some rough guidelines for fees at each level of license.
== Resale license: A nominal fee, from free
up to 1 or 2 times the product's retail price
== Reprint license: About 6 to 10 times the
product's retail price
== Master license: About 40 to 60 times the
product's retail price
For example, if you were selling the rights
to a manual that retails for $49.95, you could reasonably charge
$499 for the reprint license, and $2997 for the master license.
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© 2003 Juiced Consulting.
Juiced Consulting helps business owners package what they know
into information products - such as books, audiotapes and teleclasses
- that they can sell to generate new business revenue. For a
free newsletter and other resources, visit www.juicedconsulting.com.
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