When eBay still allowed the sales of digital products via digital download it was one of the hottest money making products around. Literally hundreds of sellers were doing this, and selling them for next to nothing. Can you remember seeing them? Just like me, you probably wondered how on earth these people could make money from products selling at such ridiculously low prices. So I decided to investigate this a little bit further……
The basic idea was this:
You added someone who paid a few cents for your eBook on say, Dog Training, to your customer list. A few days later you followed the sale up by selling them a more expensive product. All the money was in the so-called ‘back end’ rather than the ‘front end’. Someone paid 50 cents for “The Basic Dog Training Guide”, you then added that person to your customer list.
Maybe a week later, because that person had bought from you, he or she was more receptive to buying from you again. You were a familiar name rather than some business they had never heard of. Still with me? So you sent them an email with an offer for, say “The Expert’s Guide to Dog Training – set of 4 DVDs” selling for $37. A percentage of people who had bought your original “50 cent basic eBook” then bought your “$37 advanced package”.
That’s standard marketing that works all over the world, on the internet or off it – large companies and small companies.
However…..
The system of selling 50 cent eBooks via eBay depended on one very important thing to make it profitable – “automated digital downloads”. That ‘mouthful’ just means that it was possible to set up your eBay account to AUTOMATICALLY email your customer the link to the eBook as soon as they paid.
Your costs of processing the order were ZERO (no cost in materials or postage), your time spent in processing the order was ZERO because all this happened automatically. So the eBay part of your business ran on auto pilot and this system worked pretty well for a lot of people.
That is until the fateful day at the end of March 2008 when, without warning or discussion, eBay suddenly changed the rules….and the hundreds, even thousands of ebook sellers shrank to just a handful.
With the above business model there was no thought of trying to get get “front end” profits out of eBay. Many sellers sold their products at a loss but they felt it was worthwhile because they would make their profits on the back end. Fair enough.
However, I soon discovered that with the new system of selling actual physical CD-ROMS that you could charge far higher prices and that customers were prepared to pay higher prices.
The profile of the “ebook” buyer also changed, from someone who was basically buying cheap feedback without any interest in the product to someone who wanted to resell the ebook to someone else. And they were happy to pay a premium for this. In short the “quality”, if that’s the right word, of someone buying an ebook off eBay improved.
A final thought about making profits on front end sales – every single product I have listed on eBay makes me a profit….not just the back end but also the front end.