The Info Product Business Model Explained
Info products are often the first introduction people have to the world of internet marketing and online business.
Whether that info product covers how to rank on Google, how to build a marketing funnel, or the finer details of running a Facebook ad campaign, there are info products out there for almost every topic and sub-niche of the marketing world.
However, info products also exist outside of the marketing niche, whether they’re in the dating world, such as the Double Your Dating course, or in the health niche such as The Truth About Abs course.
An info product is usually a long, detailed explanation of how something works, delivered in a consumable method to a hungry audience in need of information. While info products started off as PDFs in the early days of the digital info product business, nowadays many are high-end videos and recorded webinars.
Such videos tend to offer more value to customers than just reading through a PDF, and many info product creators now prefer to offer courses in this recorded webinar style.. Since video is an awesome tool for building relationships online, many product owners exclusively do videos, in the hope that their customers learn to like and trust them, as usually the product creator will have more than one product to offer their customers.
The business of providing information earns money every time someone buys an info product. Money can come in as a payment through Paypal, Stripe or some other online processor; or the product might be integrated into a shopping cart that converts traffic to customers at a higher percentage.
Examples of Info Product Businesses
Info product businesses can run the gamut, from internet marketing to dog training ebooks. Here are just a couple of examples to showcase what an info product might look like in action. All of these info businesses are very successful, so it is worth taking notes on how they created their funnels.
This business teaches people about the world of dropshipping. It explains how to start a dropshipping business, find vendors, and market products. It is a testament to their product that they have produced some very successful dropshipping students, as many of their students have to come to us to sell their e-commerce businesses on our marketplace.
As with most info products, Drop Ship Lifestyle focuses on one very specific task or aspect of a niche. In this case it is the make money online niche, with a specific focus on the dropshipping portion of that niche.
This is an info product business based around a community. Instead of just taking a course in the traditional sense, members pay a recurring monthly subscription to have access to a forum filled with advanced Amazon FBA business owners, who can then mastermind with each other by sharing advice, tips, and strategies.
This is a different style of info course, because the majority of the value here is user-created by the actual customers of the course. In order for an info course like this to work well, the owner will either have to put out a lot of great information inside the course itself, or be influential enough in the niche to attract advanced users en masse on the launch of the community, so that new members will be provided with value right away.
If you become a master of converting traffic to customers, you could create several community-driven membership sites like this in many different niches, and have your customers actually create the majority of the content for you.
However, if you do decide to go down this path, you should still be adding some value and unique perspectives within whatever niche you do end up targeting.
While ClickBank is not an info product business model, you can sign up for free as an affiliate and browse their products. Clickbank houses hundreds of info products in many different niches which can give you ideas and inspiration for your own info product if you want to create one yourself.
One of the best ways to find popular info products is to simply check out the gravity. Gravity is a metric Clickbank uses to show how many different affiliates have sold the product in a certain rolling time period. The higher the gravity, the more popular the product. Any product with a gravity of over a 100 is going to be an extremely popular product (and perhaps very competitive to promote, since there are so many affiliates promoting it).
That said, you can view info products with 100+ gravity as case studies when it comes to creating your own info product.
The Pros of the Info Product Business Model
There are a lot of benefits to an info product based business. Perhaps the most noticeable is that unlike other models such as Amazon FBA or Amazon affiliate, an info product business model has much larger profit margins.
After all, there are no actual costs to delivering an info product, other than sales taxes (depending where you are) and merchant processing fees. The cost to manufacture an info product is either nothing (if you create it yourself) or a one-time spend on design and production. Because of this, the net profits from an info product can be substantial, even with only a handful of sales a week.
Without the need for shipping (since the customer usually either downloads the product or is given a login to a special website), you won’t face the logistical hassles you may have with a physical product.
An info product in your niche may also set your website up as an authority on the subject matter. Whether your product is good or bad, you will build a reputation within the niche. Obviously the better the info product, the more influence you will wield with your audience and the niche overall.
A good info product will be mentioned over and over again by other thought leaders in your niche. This will build your authority even more. It is really the only business model that builds this kind of authority, in which you or your entire brand can be considered a thought leader.
Depending on your style of traffic, the model can be relatively hands off. For example, if all your traffic comes from SEO, then you may only need to put an hour or two into the business a week. Of course this is dependent on other factors such as customer service issues.
Speaking of those issues…
The Cons of the Info Product Business Model
While the high profit margin of info products can make them quite lucrative, there are a few disadvantages that you are going to have to take in stride if you want to make this business model work.
First of all, as we mentioned above, customer service issues can exist. The refund rate on info products tends to be a lot higher than physical products. Some info product owners get around this by having a zero refunds policy plainly stated in their sales letters. However, this can create ill will in your community and niche, so it is not recommended in most cases.
Ideally, you want to have a good customer service system set up in advance, before scaling sales of your info product.
You can cut down on the need for customer service by creating a few self-service pages. Cover topics that would be most relevant to your customers, such as:
- Frequently Asked Questions (FAQ)
- Support Pages for Troubleshooting (the most common problems)
- Community Forums (allow other users to offer solutions)
While you will still need people to handle and process refunds, these kind of self-service pages can cut down on the amount of tickets and requests for support.
For actually outsourcing this process, there are many companies available.
When creating the actual customer service portal, we recommend Zendesk. It is what we use here at Empire Flippers, and has one of the easiest ticketing systems out there.
In addition to effectively managing customer service problems, you need to make sure you are operating in a niche where information is highly valuable. People are willing to pay from $40 right through to $8,000+ on a course designed to show you the intricacies of making money online. People spend hundreds of dollars on courses about weight loss and fitness, but very few people are going to spend even $10 on how to trim your beard.
This is important, especially because most information products are not really ground breaking.
Almost all information products contain information that can be found for free with some clever Google searching. By Google searches, I don’t mean finding the actual product that people have put up as a free download (though there is that too). I mean researching, at no expense, the information presented in the course you’re trying to sell.
At the end of the day, the reason people buy an info course is not because you are delivering unique information. It is because you deliver a unique perspective on that information. Many people are willing to pay premiums to learn an authority’s perspective on different subjects, and this is the main strength that info products really sell on: expertise.
Because of this, it can take a lot more marketing acumen to effectively sell info products.
Often you will need to build out entire funnels and email follow-ups if you are hoping to sell the product with any kind of regularity. This extra marketing also begets the need to make sure your product is up-to-date. In industries like health and wellness, this can be important to make customers aware of new discoveries. In industries like SEO, having an updated product is important to reflect the most current updates from the Google algorithm.
Depending on the info product, keeping it revised and “up with the times” will be paramount in making sure it stays relevant to your audience.
What Buyers Need to Know Before Buying an Info Product Business
Before a buyer purchases an info product model business, they need to have done their due diligence on a few different things.
First, the product should not be based around a personality brand or a “guru”. This could severely hamper a new buyer’s ability to grow the business, or even to keep it at the same level. If the buyer wishes to grow the business by releasing new products, doing so without the personality that the other products were branded with could be a difficult task.
Since people are buying info products for the expertise, it makes much more sense to buy a brand that is separated from a personality or a guru.
The niche should be lucrative as well, preferably full of opportunities for more information products. Usually, these niches are fairly broad, but they typically have an audience that has a strong hunger for information about the niche (such as weight loss, no pun intended).
You will want to research the info products and see what people are saying about them. Is there goodwill and positive reviews for your brand — or is there a bunch of negative publicity? An info product can still make money with negative publicity, but it also means that your customers will likely have to be new people, and the opportunity to sell more products might be limited because of this reputation.
Info products tend to galvanize people more than other products as to whether they like or hate a brand, so it is worthwhile to do a little deep dive research before making a purchase.
The buyer should preferably know the niche well enough that they can understand the info products at an intimate level. This includes having enough knowledge on the subject that they could create new info products if they want to, or at least hire someone to create the products and manage them effectively.
Since information is at the core of this business model, it is very important for the new buyer to understand the information their customers will want, at least if the new buyer is hoping to grow the business in any meaningful way.
One last point that a buyer should realize is that a lot of times information products receive a huge spike in sales from their launch date or the launching of other products but remain relatively quiet otherwise.
You want to make sure that the business you are buying is not reliant on constantly launching new products. Find out what the profits are during the “downtime” between launches to get a more accurate picture of what this business is doing.
What Do Info Product Business Sellers Need to Know?
First things first.
A seller of an info product business should have solid proof of earnings and traffic. In addition to earnings, you will want to point out the average refund rate that you have with your products, since this is something a buyer is going to want to know.
A way to help buyers feel more comfortable about entering the niche is to create a “resume” or job posting for what kind of writer or info-creator they should be looking for, if they plan on growing the business by introducing new products.
In preparation for the sale, make sure any kind of reputation damage is under control and that your customers are happy with you. You do not want anything marring the expertise of your brand and the information that the brand delivers. Consider offering an incentive to customers to provide reviews and testimonials on their sites, to build your positive perceptions (especially if there is some reputation damage).
If your brand is currently personality based, attempt to switch it to more of a company brand, so there is less pressure for the new buyer to explain your departure. After you do this, wait for a few months to see how sales come in with the switch in branding.
Offer training and support after the sale on how your specific merchant account and customer service system works.
One of the nice things about using ZenDesk as your customer service support is that it is pretty easy to hand off to the new owner. Keep this in mind if you are in the process of building an info product empire yourself.
What Buyer Persona Best Fits the Info Product Business Model?
Depending on the info product, this might make sense as an investment to add to their portfolio. Some information products can be very hands-off, with the right systems and info-creators in place. Obviously, this will be very dependent on the type of info product business and the current time commitments needed to run it.
In some regards, info product business models are made for DIY Daves. People that like to get into the nitty-gritty of a business can find a lot of puzzle pieces that they could fix or make better. For instance, a DIY Dave might become really intrigued by cart abandonment issues and suddenly look to fix this by tweaking various portions of the checkout process.
In addition, there are other areas a DIY Dave might become super fascinated with, such as the sales letter and where to place the buy buttons and other split-testing minutiae, which abound with info-based products.
An info product business model might suit a Strategic Sally really well. If she was building an authority weight loss site for instance, she might be very intrigued about buying a lucrative info product on jogging or health, specially if it has proven numbers of customers. Buying an info product business could cement her business as the “Go-To Authority” on the subject and increase her overall brand value.
Due to the high profit margins with information products, a Flipper Fred might be super attracted to this business model. After all, owners only need to increase the sales by a little and optimize the earnings to make a pretty serious return on their investment when they go back to sell the newly optimized information business.
That would make a lot of sense for a Flipper Fred, who specializes in conversion optimization, or even in traffic optimization.
There are a ton of different strategies to grow an information product business, and it will be different for each business, since they will likely be utilizing different marketing methods.
However, you can always add new traffic channels as experiments. For example, if the business makes most of its money via Facebook ads, try sponsored tweets on Twitter or Google Adwords.
In addition, if it does not already exist, create a brand around the product you are selling.
By creating this strong brand presence, it will make it much easier for you to introduce new products to your audience, because you will become a trusted name in your niche, where people value your expertise. You can incorporate building an email list around your brand, though most info products likely already have some kind of email list in place.
You can take this email list and offer other pieces of content to them, effectively turning your brand into an authority site. When you have fleshed out a site and built value with your readers, you can add new streams of revenue without building new info products, but by simply adding affiliate offers that your list members would value.
Resources to Learn More
While there are a ton of resources out there on how to build an info product, this tends to be a good article — especially for someone just getting started in creating these kind of products: Mixergy on Info Product Creation
Interested in purchasing an info product business? Check out our current listings to find the perfect one.
Or maybe you have been building a business like this and you are ready for a big payday? In that case, you can sell your site with us by clicking here.
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