Many of my coaching students have asked my advice on setting up their first joint venture deal ? they have created a new product after doing market research to find a need, but they haven?t yet built a customer list of their own, and they want to make the biggest paycheck they can for the least amount of effort possible.
While this a natural goal for most people to aim for, the problem is that they are approaching the deal with the wrong mindset.
The fact is, the person with the CUSTOMERS has the power in every transaction, while the person with the product has very little leverage most of the time when you are brand new to a market.
Finding and nurturing a responsive, loyal group of customers is much more difficult and time consuming that finding products to sell to them, and the customer list is where the power is in any business.
It doesn?t matter what your product is, it can be copied, knocked off, simulated or plagiarized until the cows come home and there?s very little you can really do about it unless you want to tie yourself up in legal action for a good part of your life.
The best way to approach a potential joint venture partner, especially if you are brand new, have a brand new product, and are inexperienced at doing JV deals, it to realize that you don?t hold many cards and act accordingly.
What do I mean by this?
Well, remembering that you are basically being a parasite on your potential joint venture partner?s customer base, you?d better be prepared to compensate them for helping you to get your product to market.
If you think you are going to be able to go to one of the big dogs in your niche and offer them a 50/50 commission split on a digitally downloadable information product, you?re in for a rude shock.
Even giving potential JV partners 75% of the initial sale proceeds may not be enough incentive for them to promote your product to their list.
Many novice product developers find that by giving away 90% or even 100% of the initial sale proceeds (after processing fees) they create a compelling reason for potential joint venture partners to help launch their product and get it into as many hands as possible quickly.
But if you give away all the profit, what is the point?
Good question?there are many reasons you should consider giving the lions share of your initial product sale price to your joint venture partners.
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