Sunday, April 03, 2011

Making money from Resale Rights

If you're well connected on Linkedin (say, 500+ connections), you can make some money by purchasing the Resale Rights to an ebook written by someone else.

For instance, I wrote an ebook titled "Systematic Wealth Creation" which explains the little-known mechanisms and processes behind business and capitalism, and I'm selling the Resale Rights to Linkedin users.

What does "Resale Rights" mean?

It means the buyer of such rights can RESELL the ebook, in its entirety and without modification, to anyone else at ANY price, and pocket 100% of the profits.

For example, suppose you have 500 connections and you sell them an ebook written by someone else, but you have the Resale Rights. So you sell the ebook at $20 to 200 of them, and make $4,000.

You pocket all of this $4,000 and do not owe the author of the ebook any royalties. (He/she was paid already when you purchased the Resale Rights).

This sounds like a sweet deal where you get the legal right to resell someone else's intellectual property (the ebook).

Yet, the question is, how much would you have to pay to get the Resale Right? This totally depends on the price set by the author of the ebook.

So let's get into the psychology of this author.

But I must warn you that the "economics" here are not what you're used to. In other words, the ebook is NOT like a house which is physical and which, once you sell it, you no longer own the house.

Indeed, the author is NOT selling you something physical, but something intangible: the legal right to resell his ebook and pocket 100% of the profits.

This means that after the author sells you such Resale Rights, he can sell the same Resale Rights to hundreds of other people.

Theoretically speaking, there is no limit to the amount of people he (the author) can sell the Resale Rights to.

Here, you might think that the Resale Rights buyer has little power. Yet, this is not necessarily so.

Let's look at a realistic scenario.

The author wants to charge you $3,000 to get the perpetual Resale Rights (that is, you get such Resale Rights for life!).

You might tell him, "Whoa, $3,000 is a lot of money!"

The author might argue, "Yes, but you can make thousands of dollars per year from reselling my ebook. And you can sell it forever, and in any territory on this planet."

You might say, "True, but there are risks associated with marketing your ebook, and costs related to email marketing services I have to buy, like ConstantContact, etc."

So after such back-and-forth, you agree with the author that a fair price would be $1,000.

And so, for $1,000, you've bought a business asset (the Resale Rights to the ebook) which allows you to make money from it by offering it to Linkedin users.

This is just one way for you to make money on Linkedin.

I will talk about other ways shortly.