If I can sell you something without a sales call or expensive ad campaign, I can sell it cheaper.
If you want to buy a business development relationship but you’re not willing to negotiate, do contracts and invest a lot of time, you’re going to get a lesser deal.
It seems like a paradox, but it’s not.
Firefox is free, largely because it doesn’t cost anything for them to ‘sell’ it to you. If they had to meet with your IT guys and build case studies and fly people out to conferences and take you to fancy dinners, you’d pay a lot for that friction.
When the customer does a lot of work for the seller, the seller can afford to sell it cheaper. If you drive to the customs warehouse and pick up that rug that just arrived, you can bet it’s a lot cheaper.
Amazon offers affiliates a fairly lousy deal. The reason is simple: it’s easy. Easy to sign up, easy to get paid, no real hoops or hassles. The openness of doing the deal is a benefit of signing up with them, and so you get paid less in exchange.
If you answer a classified about making money from home stuffing envelopes, is it any wonder you’re not going to get paid much? If it’s really easy to get a job, the job probably isn’t worth much.
In every market, there’s an opportunity to create a more open sales channel and lower your price as a way of making sales.
And in many markets, there’s an opportunity to offer people a cheap way to affiliate with you and keep a bigger piece of the pie in exchange.
The cost and method of selling (and buying) have a lot to do with the ultimate cost (and benefit).
Image credit: Ian Lamont
