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Comment by vaksel | Hacker News Reader

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it's bullshit...that's $60-$120 million profit a year from a single book. These numbers just don't exist.

If most of his sales are from affiliates, who typically get 75% per sale...that means the book would need to sell close to $200 million.

If the book costs $1,000, that's 200,000 sales.

If the book costs $500 that's 400,000 sales

If the book costs $250 that's 800,000 sales

If the book costs $125 that's 1,600,000 sales.

If the book costs $50 that's 4,000,000 sales

Then you need to take into account conversion rates. If the book sells at 1:200(average more or less)...

@$1000 that's 40 million uniques a year

@$500 that's 80 million uniques a year

@$250 that's 160 million uniques per year

@$125 that's 320 million uniques per year

@$50 that's 800 million uniques per year

And as far as I know the #1 site in the world is Facebook, not makemoniezonline.com

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Your numbers are way off. Take the conversion rate for example - 1 in 200 is absolutely ludicrous and if that's what a marketer is averaging, then he should quit. I sling ebooks aplenty and I average around 10% CR, and I'm just an above average marketer.

Same goes for the affiliate commission. No seasoned marketer would give away 75% (unless there's a backend upsell). It's more like 25%-50%.

I think I know what ebook Tim is referring to here and if it's the same one, then the author is selling 100,000-200,000 units at $100 a pop with the affiliates making 40%-50% in commissions.

P.S. It's interesting that your comment got so many upvotes. I have a feeling a lot of ppl are voting based on their gut reaction of '$10,000,000 a month? No way. That's bullshit!' rather than actually thinking the numbers through.

conversion rates depend on your traffic. You can get 1:50 or you can get 1:200...or you can buy some paid traffic and get 0:25,000

I'd like to see the product that you are getting 1:10 conversion rates on. Frankly that sounds like bullshit. And if you are really getting those numbers...then you wouldn't be saying you are "just an above average marketer".

The only way to get numbers like that is by pitching a product that has 0 competition(something like water bottle art making)....which usually means there is almost 0 traffic there.

conversion rates depend on your traffic. You can get 1:50 or you can get 1:200...or you can buy some paid traffic and get 0:25,000

This doesn't even make any sense as an argument, it's like saying water is wet and air is dry. And 'buy some paid traffic'? Virtually all marketing traffic is paid traffic, that's what marketers do, they buy traffic.

So my fault is being modest? Fine, I'm a kickass marketer. Either way, my product is an ebook for which I buy traffic via ppc, ppv and media buys and avg a CPC of $0.40, an EPC of $0.90 and a CR of 10%.

The only way to get numbers like that is by pitching a product that has 0 competition(something like water bottle art making)....which usually means there is almost 0 traffic there.

You have no clue what you're talking about. My numbers are peanuts compared to those of my colleagues (and no, they don't make them by pushing scammy rebills). Take some time to actually study the mechanics of the industry and you'll see what's possible and what's not. Maybe work with an experienced marketer or 2.

by paid traffic I meant media buys.

actually the third matters a lot...you can get .05 a click, but it won't matter if that particular keyword converts at 1:200.

I know the mechanics of the industry...nothing can actually convert at 1:10. That's bullshit and you should know it if you actually do affiliate marketing.

ESPECIALLY if you do ppv and media buys like you say.

Hell...most products don't have 1:10 conversions for the actual order form. That means that for every 10 people that actually tried buying the product...only one actually paid.

So you are going to tell me your colleagues are converting at 1:5 for an ebook product? How about 1:1?

If you are going to bs...at least make it believable.

Like I said...the only way you can actually get 1:10 conversion rates...is if you do VERY targeted CPC...which usually means you are getting low volume(which explains the 40 cents CPC).

How many actual sales do you have every month at that 1:10 conversion rate?

You're making an awful lot of assumptions but since this is HN and not a gay webmaster forum, I'll bite.

you can get .05 a click, but it won't matter if that particular keyword converts at 1:200.

Just because it converts at 1:200 for you doesn't mean that that's the rate for someone else. 90% of marketers can't make dating work on facebook, but the rest of the 10% make a killing. If you take their average CR, it'll be something atrocious (not as bad as 1:200, but bad nonetheless), but it makes no difference for those 10% of marketers. My point is that industry averages don't mean anything. It comes down to how good a marketer you are.

I know the mechanics of the industry...nothing can actually convert at 1:10.

Then we are in different industries.

ESPECIALLY if you do ppv and media buys like you say.

80% of my traffic generation is via media buys, 18%-19% via ppc and 1%-2% via ppv.

Hell...most products don't have 1:10 conversions for the actual order form.

Again, this comes down to the marketer. If that's all you can pull in with your landing page and copy, then that's all you can pull.

So you are going to tell me your colleagues are converting at 1:5 for an ebook product? How about 1:1?

1:1? No. 1:5? Yes. But they care more about the CPC and EPC than the CR.

the only way you can actually get 1:10 conversion rates...is if you do VERY targeted CPC...which usually means you are getting low volume(which explains the 40 cents CPC).

Of course I laser target my CPC, only a newb marketer wouldn't. But while low volume = low CPC, the inverse isn't necessarily true. It comes down to the marketer - a newb will pay $5 CPCs but an experienced one can get high volume traffic at a 10th of that price.

How many actual sales do you have every month at that 1:10 conversion rate?

Here are my numbers for July (rounded from memory) -

  price of ebook - $8
  visitors - 71,000
  CPC - $0.40
  expense - $28,400
  CR - 10.9%
  buyers - 7700
  revenue - $62,000
  EPC - $0.87

My advice is still the same - try not blanket everyone in a niche with your experiences or the avg #s for that niche. There's a reason why 90% of marketers barely make any profit and see dismal CRs and EPCs. It's because the rest of the 10% take everything (ever hear of 'Truth About Six Pack Abs'? that ebook's author used to net over $500,000 a day while the majority of the marketers in the health/exercise niche were barely breaking even.)

ah I see what it is...I thought you were promoting a more expensive product. At $50, the 1:10 is a lot harder to believe...for $8 it's still pretty far fetched but it may be possible...has to be some hot product though.

And yes I know Geary...and he never made 500K a day. It went $30K the first year, $100K the second, and $1.1m the third. Now he makes something like 5-10K a day.

Think less like a technically savvy HN reader who does not pay for content online, and more like an info marketing huckster who has an email list of 50,000 people who have bought a similar product in the last six months.

Let's be careful here. Patrick, you and I both know how the conversion models in this area work, and while the info-marketing world is filled with scammy sleazebags, there are also some very credible ones.

For example, I sell information products as well as a New York Times best-selling book. My students do very well, whether it's learning how to automate their finances or earn more via freelancing. If they don't, they request a refund and I eat any costs of my online products.

Virtually every info-marketer offers generous guarantees and has to live up to their product's hype...or they go out of business. This is an extremely competitive area.

Vaksel, let me also offer some feedback on your numbers. You're analyzing them without knowing how the field works, and frankly every Web2.0 company could learn a LOT from studying the direct-response field. Want to know how to increase your AOV by 200% or 300%? How about finding undiscovered 6-figure revenue sources in your business (like I did 2 months ago)? Why not look to the people who have been doing this for decades?

You assume that most of the money is made from the sale of the ebook itself. That's not correct. Most of the revenue is actually made from the "back end," or other products that are either cross-sold, upsold, or repeatedly sold. Every direct marketer knows that you profit more from having a dedicated group of customers who buys from you time after time...which is why the very best ones take INSANE care of their customers. I'll speak for myself, but I continue to send lots of free material to both my free users and my customers. I email them free stuff. I call them. I write them hand-written cards (seriously).

As a result, on the rare occasion when I sell something, I can sell it for premium prices (often 100x more than my competitors charge for their products) and people happily pay it because they trust me and they know it's the best.

Here's another example. I know an info marketer who pays a 200% commission for any affiliate who sells his book. So if you sell his $27 ebook, you get $54. How does he afford that? Because he's systematically built a funnel that offers his customers more products that they want and are willing to pay for, making it a simple no-brainer customer-acquisition cost -- even at 200%.

A skilled direct-response marketer could take a $27 ebook and turn it into $500 of LTV...and the customer would be DELIGHTED to pay it if the material is of outstanding quality.

IMHO, a lot of Web2.0 companies should stop poo-poohing marketing and learn how it really works. Virtually every Web2.0 company should be doing upsells, cross-sells, and partnerships...and as a guy who co-founded a venture-backed startup and know a lot of other startup CEOs/marketers, I know that very, very few do.

I've put together several bookmarks that might be interesting:

* http://delicious.com/ramitsethi/emarketing (direct-response stuff)

* http://delicious.com/ramitsethi/marketing (general marketing)

* http://delicious.com/ramitsethi/monetization

Hope this helps.

Ramit, much of the skepticism comes from the secretive and untracked nature of these types of sales. Take the original article, for example, with the unsourced "I know a guy who makes $5 million+ per month" quote. The comments here on HN are full of people who insist it is possible and a few people who "know what ebook he's referring to" but no one will provide any concrete references. In fact, no one has even pointed out what the subject of such an ebook would be, or what demographic would purchase it.

Without any concrete examples, I'm inclined to assume that it's some variation on the "get rich quick" scheme. This makes the numbers even less believable, as the ebook author has even more incentive to claim extraordinary sales numbers. No one wants to buy a get-rich-quick book from someone who claims to sell 10 copies per month. If an author claims to rake in $5,000,000 per month, then people are going to want to hop on the bandwagon and buy his ebook.

Back in the day I used to do a ton of affiliate sales for information products. Personally I stay away from the long-winded sales copy pages, I see them as insanely scammy, but they still sell to normal people.

Ramit has a way of marketing like a scammer, but delivering solid content every time. Seriously "I will teach you to be rich"? I was really reluctant to buy a copy, but after a few solid recommendations picked it up. I trust Ramit's opinion on finances highly, enough to bring my people to see him at sxsw and keep reading his blog. My copy of his book has been passed through probably 10 people by now (haven't seen it in a year) and I link to his articles from my University niche sites, because they have tremendous value.

When is "I will teach your business to be rich" book coming out?

Not for a while : )

I'm focusing on helping people earn more via my Earn1k freelancing course right now, so it's basically an IWTYTBR business course. We teach a lot of techniques that can apply to freelancing or even product-based companies.

Btw, thanks for the kind words!

Loved the briefcase technique, but Earn1k wasn't exactly for me. I just emailed you, if you have a minute. Keep up the good work Ramit.

I know guys with lists like that.

Lists like that get a 15-17% open rate(# of people who view emails)...and out of those 3-5% click rate(# of people who click on the link)

So that 50,000 list = ~400 clicks.

Even if every one of these converts(not going to happen), that's only 400 sales.

Even the biggest names who sell these info products, the guys who have their own lists with 2-3 million emails, and who have tens of thousands of affiliates...only manage to make 5-10 million a year in revenue. Before you take into account the 75% commissions they pay to affiliates(pretty much a must have now).

I think patio11's list is his customer list. the 50,000 people who have given him money, so that's not 50,000 clicks, that's 50,000 sales.

I doubt he made 1.5 million off bingo card creator

That's absolutely true Ramit. In fact, I even GIVE AWAY my eBook (litlefreebook.com, if you want to see how its typically done).

Reason: build a LIST ... the, build a relationship with this list (free monthly newsletter) THEN sell high-end product (eg membership system @ $19pm 7m7y.com for an example).

AJC

Although I tend to agree with you I'm not entirely sure it's not possible.

Danish internet entrepreneur Martin Thorborg sold a 1000 ebooks at 300USD per book.

Also not all conversion is done the way you seem to think.

I think your conversion numbers are very small. If the author is successful, he will get much better conversion rates.

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