A quick head’s up on buying resell rights
Many product creators follow a very predictable marketing strategy… They normally start by selling the product without any rights, i.e. “personal rights only”. As is often the case, especially as far as ‘how to make money online’ products are concerned, sales start to drop after a period of time.
Note: The ‘shelf life’ of a ‘how to make money online’ product is often limited. A new report that may be selling like hot cakes today will probably be outdated or old news by next year…
So what do these marketers do to revive their floundering fortunes? Yes, they offer Resell Rights, often followed by Master Resell Rights and last but not least Private Label Rights.
It’s not a bad strategy! Many top marketers swear by it!
However, it can present a problem for the buyers of these rights and this is what this head’s up is all about…
Let me explain by giving you a practical example of something that happened to me today and made me decide to quickly write this post…
I received an email this morning from a marketer offering a limited number of resell rights to a software product he has developed. The name of the marketer is not important…
It’s a great product, he will only sell a very limited number of resell rights and the product may not be sold below a certain price level (I reserve my judgement on the enforceability of this), may not be given away for free, may not be offered as a bonus to another product and may not be added to a membership site.
Sounds like a good deal right? Yes, it is except for one thing… On his main site (from where he is currently selling the software) he states that all buyers of Version 1.0 will get a free upgrade to Version 2.0 when it’s released. However, on his sales letter where he is selling the resell rights he only states that all resell right buyers will receive free updates of Version 1.0.
I contacted him and asked him if resell right buyers will also get a free upgrade to Version 2.0 when it’s released to which he replied that this won’t be possible as he has invested a lot of money into Version 1.0 and developing Version 2.0 has been very expensive.
My dilemma? Should I buy resell rights to Version 1.0 knowing that my customers will not receive a free upgrade to Version 2.0 when it’s released? By the way, if you buy the product from his site it will only cost you $10 more and you will get a free upgrade to Version 2.0 when it’s released.
I don’t think so…
Don’t get me wrong… I am not saying this marketer is doing anything wrong. He has sold many copies of Version 1.0 and with the imminent release of Version 2.0 he is trying to make some very nice additional income by offering resell rights to Version 1.0. In fact, he will fully recoup all of his development costs of Version 1.0 by selling the resell rights to it!
If I was allowed to offer the software as a bonus to another product or use it as an incentive for people to join my list I would not have hesitated in buying it. But, I realized that I would not really be helping my buyers by selling them a product that is soon to be upgraded and where the product creator is in effect penalizing them by allowing me to sell the product to them. Makes no sense…
Bottom line…
Always be diligent when buying the resell rights to a product, especially a great product! Why is the product owner selling resell rights? Why doesn’t he or she simply offer an affiliate program?
Most importantly…
Don’t make assumptions! If you are not sure about anything ask the seller!
You should always have a good idea what you intend on doing with the product once you have bought the resell rights. You may want to offer it as a stand-alone product, burn it onto a CD and sell it on eBay, offer it as a bonus to another product, list it on Clickbank, give it away to your list, offer it as an opt-in bonus, etc.
One of the biggest mistakes I made when I just started online was to buy resell rights to products without a clear strategy in mind. Most of these products just ended up gathering digital dust on my hard drive and when I finally had a closer look at them they were often really bad, completely outdated, and full of affiliate links. Very often I couldn’t even find my “rights” meaning that I didn’t want to do anything with them because I simply could not remember what rights I bought!
If you are not sure about your rights send the seller an email. For example, “I understand that I may not offer my buyers resell rights but I assume I am allowed to sell it through affiliates. I also assume that there is no restriction on the commission rate I can offer affiliates. Please confirm.”
Tip: When buying resell rights to a software product or script always ask the seller if you and customers will get future upgrades at the same terms and conditions (if any) as his own buyers.
Make sure that you always save the resell rights license as well as any correspondence you had with the seller.
Oh, and by the way, always read a report or ebook, for which you have acquired resell rights, cover to cover. By the same token, always test software or scripts that you bought resell rights for. Your name may not be mentioned as the author of a report or the creator of a software product but if you promote it you have a duty towards your customers to ensure that it lives up to its expectations!
Thanks for reading and I look forward to reading your comments.
To YOUR Online Marketing Success!
Francois du Toit
Tags: Resell Rights
Your Host Francois du Toit
August 21st, 2008 at 9:27 pm
Right on, Francois! What you are saying is to consider where the product you are buying in to, IS on the product life-cycle curve, and where it’s likely to go from here. Then consider how your plans and needs fit into that…
Guarantees, product support, future upgrades… all figure in. And be careful that you don’t “paint yourself into a corner”!
Good post! Useful insights! Thank you!
August 21st, 2008 at 9:32 pm
You raise some good points Francois,
I would not buy a resell rights product with such tight restrictions. I’d rather wait until PLR were offered because I can turn it into my own product.
Chances are you know the type of additions which will be added to version 2. You can add these to your PLR version which means you have a comparable product (and is one of the reasons I don’t like to sell PLR to my products – it creates competitors).
August 22nd, 2008 at 3:36 pm
Thanks for the comments!
@ Jorge – Yes, spot on!
@ Colin – Personally I also prefer buying PLR’s instead of Resell Rights. Just so much more you can do with them…
All the best,
Francois
August 22nd, 2008 at 4:17 pm
Interesting insights and you hit it right on the head… I prefer to wait for the PLR also since I realize that the Resell Rights usually come at an unjustified price considering the life cycle…
I also found your comment “It’s a great product, he will only sell a very limited number of resell rights and the product may not be sold below a certain price level (I reserve my judgement on the enforceability of this),…”
Why do all marketers think they can control the market this way? This is clearly “price fixing” and violates Federal Law… somewhere back when, some marketer put this into his license and everyone else followed suit… I get into many arguments over this and my lawyer friends concur, this is “price fixing”… you can “suggest” a selling price but you may not require a selling price… by doing so you’re try to control and monopolize the market… Federal law dictates otherwise… and just because everyone is doing it doesn’t mean it’s right or legal… if your guru jumped off the Empire State building would you do that also?
Marketers put in legal threats into their licensing to scare buyers into only selling it at their “required” selling price… but I doubt very much if they would take anyone to court, simply due to economic reasons and because it wouldn’t hold up in court and be enforced…
I appreciate your insights… would’ve appreciated it more if you had told us who the marketer is so that others won’t be caught unaware…
August 22nd, 2008 at 6:50 pm
Thanks for the heads up.
Most people tend to overlook the fine print when they are in a buying frenzy but customer should do due diligence before purchase.
It is caveat emptor and the buyer has to necessarily satisfy himself in all aspects before going ahead. Software products are essentially a minefield and even top marketers tend to manipulate the market for short term gains.
As Francois says it is far safer to contact the marketer directly than making any assumptions.
August 22nd, 2008 at 9:48 pm
Hi Linda,
Thanks for posting your comments!
I agree that it’s a good idea to only ’suggest’ a minimum sales price or to give a recommended sales price.
Thanks,
Francois
August 22nd, 2008 at 9:55 pm
Hello Primus!
You are absolutely right! Many people buy the rights to a product without really knowing or understanding the rights. You should never hesitate to request some clarification from a seller even at the risk of sounding stupid.
I always say that there is no such thing as a stupid question!
All the best,
Francois
August 23rd, 2008 at 12:58 am
Hi Francois,
I nice post. And I think the points you brought up are for most newbies true.
When I read your post I remember all the stuff I’ve bought as you and a lot of it is just covered with digital dust.
You hear something like buy products with Resell Rights and Private Label Rights and so on. But in reality I didn’t even know what to do with the products. Because I didn’t know how to put all that stuff on my first web site.
When I read your post I remembered all that wasted money in that time and for what…?
All the best
Anton
August 23rd, 2008 at 12:54 pm
Hi Anton,
You are not alone! I think most newbies go through a stage where
they waste a lot of money buying rights to products without
knowing how to apply and monetize these products.
It’s also very true that many people know what to do but they
don’t know how to do it…
Kindest,
Francois