Guest Post by Frank Sousa of Cash Machine & Cool Web Tips

The Money is in the Drop

Here’s a lesson I learned from a multimillionaire ex-taxi driver.

Wade Cook, a real estate investor and author, talks about how he was one of the highest paid cab drivers in the company he’d worked for when he was driving a cab.

Why?  Because he went against the crowd.

While most of the drivers would scramble to get the big ticket trips, that paid a lot per trip, he was doing just the opposite.  He’d scramble to grab the short trips that just took a few minutes, and then he could get on to the next one, and the next one and so on.

What he realized was that there was a "drop" charge that the people would pay before they ever started on their trip, and then the mileage charges accumulated over that…. By collecting a lot of little, easy to get, drop charges over the course of the day as opposed to one or two big mileage charge trips, he could make a lot more money.

That same lesson is one that I’ve found true in Internet Marketing as well.

Everybody wants the "big score".  By that I’m talking about selling the big ticket thousand dollar and above products.  If you were an affiliate for such a product you would make a $500 commission or so every time you sell one.  For the person who develops these products, you can make a lot of money quickly…  (or so it seems).

Many of the experts teach this model.  Their reasoning is that it only takes a few sales as opposed to getting a lot of sales.  That might be a good model for a FEW of the charismatic super stars in the industry, but for the most of us it’s a bad idea.

In my experience I have found that it’s MUCH easier to make a sale on the Internet of $30 to $100 than it is to make a sale of $1,000.

Let’s say for example that you have 10,000 visitors that come to your sales page…   How you get them there is not important for the sake of this discussion.

If you’re lucky you might sell 2 or 3 packages, for a commission of $1500.  There are a few top marketers on the net of course than can do better than that, but most people cannot.  Furthermore, it takes a huge campaign, with lots of follow ups, teleseminars, and big bonus packages to convince people to fork over $1,000 for a few DVDs and a workbook.

However, it’s not at all unusual for that same number of visitors to buy 3% or more depending on the offer, of a product that sells for $50.

Assuming a 50% commission, that means that you’d end up with $25 per sale.

If you sold 3% then you’d have 300 sales.  Multiply that times $25 and you’d have a total income of $7500.  Even MORE important, you’d also have a list of 300 BUYERS as opposed to 3 buyers.  Even at 1%, you’d still make $1,000 more than with the big ticket item.

Of course these numbers will vary drastically between offers, but overall I have seen FAR more money made on the smaller items that the FEW major marketers who have been able to make the big scores….

This holds true for most of my internet marketing buddies that I’ve discussed this with as well.

If you’re creating products, make them to sell in that price range.  If you’re going to market products as an affiliate, you’ll be better off in general if you target that price range as well.

So take a lesson from a multimillionaire cab driver.

The money is in the drop.

Best regards,

Frank Sousa