Investing in the eBook business is a funny thing. The industry is a strange animal to begin with. But what is most unusual, is that if you approached a vendor with capital to offer them, they would decline your offer and simply refer you to their affiliate program. In this article we explore why this is so, and how the ebook business works.
In the traditional investment model, we apply our capital to a business in the form of shares. In this way we own part of the business and passively collect a dividend and any capital gains from the shares value. But due to the digital nature of an ebook, the costs to deliver and manufacture the product is very low indeed. People pay for the knowledge and information contained in the e book, and the creators of these product’s don’t need shareholders.
The reason for this is that most traditional businesses have overheads and cash flow is a constant challenge to keep the business running. However in the e book business, this type of challenge is very minimal. E book vendors actually do have a “type” of investment model and its called their affiliate program.
However, the marked difference is that this type of investment model is not about applying funds. They don’t want your funds, they want your time and effort. You see many e book vendors offer commissions on their quality product’s of up to 75% This is open to anybody. There is often little paper work or qualifying. If you have an interest they will take you. In this way they got what they want and need most, simply more sales. In this way you as an investor (of your time and money) can profit on the sale of their digital products to the tune of 75% per unit.
There are third parties like Clickbank and Commission Junction, that carry these vendors products. Often they perform the essential function of tracking your sales for you meaning there is never a concern about getting paid for the sales you are responsible for.
In this way, an individual can invest in the e book business. Obviously it is not the traditional style of investing where you just park your funds and collect a small return. But, just like traditional investing there is risk because you will be applying your funds to advertising in exchange for such a high return of 75%
The good news is that once the work is done and your automated advertising is in place the returns truly are passive and often a lot higher then being a traditional shareholder. A return of 30% to 50% on funds invested is typical. But that is the compensation you get for actively becoming involved in the business and investing your time to set up the advertising.
