Monday, November 26, 2012

Tim Ferriss - How to Discount Products for Profit


Tim Ferriss is certainly one of the more interesting figures in today's internet. With a track record of exiting one company, BrainQUICKEN, and investing in great web 2.0 start-ups like Twitter, Posterous, DailyBurn, Reputation Defender, Foodzie, Badongo, RescueTime and SimpleGeo (He is also known to be an advisor for equity to Stumble Upon and Shopify), it is interesting to see his new promotion strategy for his new book, The 4 Hour Body.

In order to get the ball rolling and to get the book to critical mass, so that he wouldn't have to do all the promotion himself, he pushed really hard for pre-orders. Although the pre-ordered edition was significantly cheaper than the book would be once it's out, he was aiming for the bestseller lists right off the bat, so being listed would drive more people to buying the book, making up for the initial loss through cheaper pre-order pricing. On top of that, the way he promoted the pre-orders was all through affiliate links to amazon, giving him at least a 4% cut per book through the Amazon affiliate program.

To drive the pre-orders to critical mass even quicker, he launched a huge incentive, giving away $4.000.000 in free prices if you purchased the book in bulk. For instance the Bonus Packages for 1 to 300 books was a Digital copy of 'The 4-Hour Workweek' ($20), Slow-Carb Cookbook ($20) and "Find Your First Profitable Idea" with Ramit Sethi ($100 for full course).

And the efforts paid off: Before the book was even out, it was already of the Amazon bestseller list, driving even more people to buy. Each sale giving him at from $0.58 up to $1.31 per copy sold. All the affiliate royalties are net profit for the author, since they don't have to be shared with the publisher. The book has been up for 75 days in the top 100 and still is Amazons number one bestseller for health without even being out, resulting in a couple of hundred thousand dollars from affiliate marketing alone.

Pretty smart move.

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