INFOMERCIAL KING Kevin Trudeau! Tells All His Secrets To Become A Billionaire! Disc 05

INFOMERCIAL KING Kevin Trudeau! Tells All His Secrets To Become A Billionaire! Disc 05

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00:00
[Music] so we're carrying on now with picking a product some products didn't pass the first test and some products did pass the first test if the product idea passes the first test still doesn't mean it's an automatic so we have to go to now the second phase so let me just tell you what the procedures on the second phase and the second phase is really just mechanical second phase there are
00:35
three things I look at to determine whether or not I want to get involved so after I go through that first phase and let's say for example when John Abdo presented the Abdur which is a great great great product when you go through the first phase with AB doer it passes because people would be interested in something that's quick and easy that can help you flatten your stomach so it's a
01:06
good product so it passes the first phase but now you deal with phase 2 and phase 2 it's really just more mechanical and there's three three things I look at the first one is what is the markup what what's the margin or markup on this product when you're dealing with direct response marketing you need it generally you need a pretty big markup and it will
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vary depending on what the price of the product is so I'm going to give you just some basic parameters if if the retail price of the product is $100 or less you want a minimum of a three times markup a minimum of a three times markup which means if you're going to sell the product for $100 your cost should be around $30 that's a little
02:15
more than a three times markup so that's the minimum somebody would say well where do you come up with that number and the answer is twenty years of experience in the industry knowing how the math works so without getting into all the details and spending an hour with all the math I'm just giving you the answer you know why is 2+2 4 it's 4 so that's the basic theory there if it's over $100 then your markup can be 2
02:52
times but that's that's really you know pushing the limit so let's say you were selling a product where the retail was $200 your cost should be no more than 100 and that's kind of pushing the limit okay so that's your basic parameters now yes good question it's just cost of goods it's your actual physical cost of the product so if you're physically going to be selling let's say you're you're
03:31
deciding on mega memory and say well what's the retail price of the product all right the retail price let's say is $200 so then you know that it's over a hundred bucks so your cost to actually buy this should be a hundred dollars or less and that's the maximum obviously the the the the bigger margin you have or the bigger markup the better now the reason that this is important is this this will knock out certain products right off to give you up certain
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products will just go away because like I can't do it so maybe you're looking at a product and it kind of passes the muster on the first test for Dean you think and well it's a ten dollar product but you know like my cost of goods is gonna be seven bucks you know that's not a direct response product that's it that's a that's a retail type product that's an you know it's if you don't have the margins because you can't you can't afford to pay for the media just not gonna be like this you're wasting your time you there are so many other products out there you
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know just put that aside pass on that one go to something else yes good that's a very good question the question is is there a minimum price point the answer is no there's not a minimum but I'll give you a general rule of thumb you really want to be no less than 29 bucks maybe you can push it no less than 19 but that's just a rule of thumb because you could actually sell something for
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$9.95 provided you have enough upsells and continuity and back-end marketing and so that could be a very effective campaign but you're not going to make money when you run that ad you have a big cash flow issue and project made a cash flow management procedure that has to go and involve in that campaign it gets that becomes a very complicated campaign and it's a very dangerous campaign you need a lot of cash and capital because going to be going blowing through a lot of money losing a lot of money before you hope and pray that you actually turn the corner so Jen
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rule-of-thumb $29 no less than that general rule-of-thumb maybe you can push it to 19 okay that's the general rule of thumb can kiss general rule of thumb yeah good question the upper limit let's just look at some of the infomercials or products that are sold successfully on television anyone here think of a really high priced product remember Soloflex how about Teeter Hang Ups you know a big piece of equipment they can sell for 3 4 or $500
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the there's a cycle on television there's a Tour de France cycle that's being sold on TV it's a pretty high priced product when you get into higher priced products then you have to what's called use what's called a 2 step for a mattress that tempur-pedic mattresses are sold on television through direct response right for a long time but they may use what's called a two-step process and the two-step process again you're dealing with cash flow management because your advertising doesn't generate any revenue it just generates a
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lead now you have to work the lead and then you can sell it two or three thousand dollar item not a bad project and I will talk about that later it's kind of an advanced thing and if you want to go into that area you know for those of you here in the room I'll be happy to work with you one-on-one of that but that's really a little more complicated enterprise and usually requires some pretty big capital upfront to get involved in those type of enterprises when you're dealing with those two steps because just takes longer so the first thing I do and this is again a very simple thing what's the price of the product what's the cost to
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manufacture now when you're looking at this remember let's say you're looking at mega memory and this is a perfect example if you're going to produce a let's say your product idea is for an educational based product which is you know books or CDs or DVDs something that's educational based the question is what's the cost of this well like many products that answer is going to vary based on how many you buy so if you let's say you meet you you authored this
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you went into the studio you did the recording you took the masters down to a duplicator and you said okay I want you to put together a package and I want you to make me a nice final binder I want you to you know print the workbook that I wrote up and you know print up this blow pocket guide and put it in this nice little binder and how much would that cost to make and the manufacturers going to say how many do you want well like a hundred okay will cost $150 a piece well it seems pretty high well
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what if I bought 10,000 well then it would cost $23 apiece oh well what if I bought a hundred thousand well then it would cost seventeen dollars apiece mmm now that's significant because that couple dollars can be a big difference in terms of profitability it can make the difference between whether you have a profitable campaign or not so the cost of goods can be very very significant but now again you're dealing with you know issues in terms of what are the price breaks at what volumes and now
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that's a whole other aspect in terms of inventory control and management when you're getting into products if you haven't if you have enough money in the show and things are working well that one or two dollars doesn't make the difference between profit and loss it just makes a difference between profit and more profit now you're in a better position and the good news is there's plenty of situations that you could get involved with where you're not working on whether I make a profit or whether make a loss because you're your margin
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that are just so tight you want to be in a position where I'm making money and now I can go out there and I can even make more by getting the cost of the product down by shaving a few dollars or a few percentages off the price of the product so you'll run into both of those categories so the first thing I do is I find out okay what's gonna be the cost of the product and then I always find out is there a big difference if I get in volume so if you're looking at a cream for example okay well what's the cost to manufacture
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and then I you know well it's already being manufactured and we're gonna private label it for you which means we're gonna take that cream and put under your label so this we already make hundreds of thousands of bottles so if you buy you know one hundred or a thousand the only cost variable is your label so you could get it at a good price and that price may not be very different from a thousand bottles to fifty thousand bottles at a time and then when you're buying from manufacturers you can also I'll show you how you can actually start working with
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what's called standing orders so you can sit down with somebody and say listen I can't buy a hundred thousand bottles or fifty thousand bottles or 25 thousand bottles now but I do I will commit to 25 thousand over the next year on a standing order basis but I want to get the price I don't want to pay for them now I want you to follow me but I want to get the 25 thousand dollar price but I want to take them you know every month or every two weeks because that way you can manage your cash flow then you can you know that that's a negotiation
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okay so the first thing is price next thing I look at is I'm just going to call it ease of manufacturing and storage ease of manufacturing and storage ease of manufacturing and storage when we look at the Abdo er the ease of manufacturing and storage was a
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little bit above my my threshold because in order to get that price down for that product it had to be manufactured in China you couldn't manufactured in the US you couldn't manufacture it in Japan these days you had to manufacture in China to be able to get the price low enough and now you're dealing with you know overseas a manufacturer you have a language issue you have quality control issues what happens if you buy from the manufacturer you place an order you send
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them the money and then they say sure we'll ship oh the container didn't go out yet you know the ship got you know attacked by pirates it's gonna be delayed and now you have cash up front you don't know when the products coming in and then the product arrives and you open it and it's not to your specifications the quality of the steel was different than you thought it was gonna be you gave them the prototype they said they
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will duplicate it and they didn't they give you a cheaper product they didn't weld the pieces together they bolted them together which means now the whole thing is flimsy and you're like this is not what I ordered so you could have a problem there so I look at ease of manufacture and storage is there a life span to the product if you're buying a cream you know what is the expiration date does it go bad you're dealing with
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food for example food goes bad certain supplements may go bad so what is the ease of me facture and storage and and I'm not saying what's right and wrong here I'm just saying this is something you have to evaluate when you're deciding whether you want to get involved in this product everyone's threshold was different and some people find it very exciting to get involved in negotiating manufacturing contracts and storage facilities and quality control issues and they they really enjoyed that whole process and that's it can be really fun and you know I'm finding the best you know in the go
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shading the right price and all that stuff and getting involved in the manufacturer of something you know can be very very exciting and can be very lucrative but again it's your threshold your particular threshold okay when I'm when you're dealing with informational products which if you if you look throughout my career in 1989 I started selling mega memory the other products that I've sold that you may be familiar with include mega speed reading mega math Ellen Crichton's relationship
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instructional program dr. mortars dynamic health doctor de Juarez health alternatives dr. Atkins Atkins answer videotapes back then it was videos before DVDs master ties protect yourself and private lessons with master tie again video tapes back then before DVDs natural cures more natural cures reveal the weight loss cure if you look at everything we've sold your wishes your command it's pretty much what I've sold
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with the exception of coral calcium everything I've sold has been an informational publication and the reason is information in terms of pricing pricing you have a good margin because it's information it's hard to establish what the retail price can be so you can always get a good margin on information ease of manufacture very easy ease of storage very easy so it's always I found
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a very effective product to sell also when you go through the picking process they're always associated with an individual which makes them completely unique in the marketplace it's hard to get competition even when you had five courses on memory improvement being sold there was only one that was my memory course and so the question is you know is mine better well it's definitely unique because it's mine you know anybody could you know people's opinion you could say whether it was a better course than Harry Lorraine's or Billy burdens and
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they're excellent courses they're fantastic I mean I think in terms of the way this is presented in the way people can learn this it's kind of like a language course okay there are a lot of language courses out there if you want to learn a foreign language most common which is advertised on television is rosetta stone is it the best language course well there's the pills were method there's fluids which is another method and there's two or three other ones that I know about that all claim to be far superior than rosetta stone and what I
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mean by that is you'll learn to speak the language faster and easier using these other methods than with rosetta stone I don't know if that's true or not but rosetta stone is by far and away the best-selling language course whether or not it's the most effective in other words if you're going to invest 20 hours and going through a language course let's say we did a test here we're all gonna learn to speak Chinese and you know we took five different language courses and we took four of you and you all use one language course and the
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other four used another language course and the other four use don't let another language course and we said we're gonna do this for 20 hours on your own and then we're gonna test each group and see would was one group superior than another and we could do an official test right to say well there's there's no significant difference or there is a significant difference you know this people who went through this one were infinitely better speakers of the language and better understand it it could understand the lines better than the other three courses then you could
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really determine so the point is information is always a good thing to sell information is always something that you know may want to consider selling so ease of manufacturing and storage and the last thing I look at when picking a product actually it's two more the next thing I look at when picking a product is legal is is this product going to cause in the region in which I'm gonna sell it let's say you're selling it in Switzerland or
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let's say you're selling it in Australia or you sell you want to market in Canada or you want to market it in the UK or the EU or the the Arab Gulf states or South America or India or wherever you want to market it the question is does this product lend itself to regulatory challenges is this opening myself up to some issues now everyone's threshold is different so people say well certainly
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this is going to have a higher level of scrutiny but I'm willing to do the due diligence and go through the legal protocols to make sure everything is fine because I'm really excited about this product and the profitability and what it can do for people and so I'm willing to handle that extra amount of work to make sure all the legal T's are crossed and I's are dotted and the potential scrutiny their other products have a very low threshold generally speaking books and information have a lower
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threshold generally speaking supplements anything you take in ingest have a much higher threshold again generally speaking yeah yes yeah well we can we can provide you with with the lawyers and the lawyers specialize primarily in extracting money from people in the infomercial business that's where their speciality is but there are lawyers that
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do the work in terms of legal compliance for example in Australia I give you the name of the gentleman that we use their excellent we use them for 15 20 years and then the US will give you names as well and other names of a big firms that handle most of the people in the direct response industry yeah and they're familiar with the FTC and they go through the protocols and they know how to make sure that things are are compliant but without getting into all the details of legal it doesn't matter especially in the u.s. in Canada and the
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UK EU Australia it's much easier because you have to go through the clearance first and once you go through that process then you just run it in America you don't do that you go through your legal team and they give you the okay but they don't give you an okay they'll never say yes we're going to defend you and we're saying this is compliant and if you get sued by the FTC we will defend you free you know they don't do that they go well in our opinion you know there's always risks you know so
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it's impossible for them to ever say this is 100 percent compliant so they just do their protocol because they're lawyers and unfortunately in America you can't talk to the Federal Trade Commission which does the regulation on advertising and saying listen I want to run this I want to make sure it's compliant can you and let me know if it is because if it isn't I'll make some changes which the other countries do yeah good question on the daily supplement the Kevin sure - approved daily nutritional supplement being a nutritional supplement there are certain
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regulations in every country even within the EU I know switch no it's not part of the EU but even in the EU there's not one one set of rules for all countries in the EU regarding supplements Switzerland has its own set of rules so when you're dealing with a supplement like Katie daily there are a little list of ingredients and every country determines whether these ingredients are controlled substances or not or whether or not you can use them in a supplement and if you can
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to what degree what percentage and what level of disclosure so there's a certain set of rules for every country we just for example finally got clearance on the Katy daily for Canada because the Canadian regulators are even stricter or I shouldn't say stricter but they're different than the US regulators so the product that we have manufactured for sale in the US was fine in terms of the Food and Drug Administration rules regarding supplements but that same product even though fine for the US distribution was not acceptable in
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Canada because in Canada some of the ingredients that was used were controlled substances so you couldn't put it in the product and ship its Canada so we had to make some adjustments and the end the decision for example with Katie Daly was do we then make one product for the US and another product for Canada well from a logistical standpoint made no sense so we looked at the ingredients made a modification which didn't affect the efficacy of the product at all so now the product that's compliant for Canada is the one that we also ship in the US
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now the next procedure is what can we do to get the product compliant in the EU countries or if not all of them at the same time you know which ones Australia as well you know what are the rules there can different different set of rules than the UK different set of rules than the US and Canada and then same thing in South American so we're so that's a process it's not about just the shipping in that the customs and so forth is one issue but it's really the legal issue on a supplement yes good question question is about where do
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you will you manufacture if you're marketing a product globally and that's that's really the question right and the answer is initially you manufacture one manufacturing plant and then you ship to a distribution center in those countries or that zone so I'll one option is for example on Katy daily or mega memory or anything if we were marketing this in the EU we manufacture in the US and then ship to the EU because it's a zone to
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one fulfillment center which would then then ship the other option is and you have it manufactured in that zone and then store there as well the answer is that's way down the road the volumes have to be really high for you to determine what's gonna be the best cost-effective way to do it you're adding a level of a business management involved as well and inventory controls so it starts getting a little complicated the key is initially always keep things very very simple just keep it as simple as possible and as things
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grow then you in a new unit of time based on the new landscape then you can make some different decisions or at least re-evaluated and a lot of people don't understand that in business they think that when you start a business on day one you plan out your entire five-year plan well business is similar to a military operation and for those of you who've never been in business or started the business it may be a little bit hard to grasp for those of you who started and owned businesses you have a better idea
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but if you haven't built a company that's done a hundred million dollars right in 12 months or had a company with hundreds of employees you know when we were involved with mega systems with all the limb of the phone room we had would blame running it I mean how many staff members tina do we have like two three four hundred you know we had hundreds of people there and then later we opened up an operation in australia we get hundreds and hundreds and hundreds of people there as well Lee Kenny from the UK went down there to manage that
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operation so we had operations in the UK we had operations Australia we had a parade in the United States you know with hundreds and hundreds of staff members and then when you added up the companies that were doing that 90 percent of their business was us we're talking a couple thousand staff members but in order to get there in order to build any company or any organization when you start it you write a battle plan and that battle
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plan starts to change the day after its implemented think about the landings in Normandy at the Second World War think about the attack in Iraq by general Norman Schwarzkopf when him and I were traveling with President Gorbachev in Australia we were talking about how that military plan was written how long it take to write and how many contingency plans were written and he was explaining the same thing that
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happened that Dwight Eisenhower and Bernard Montgomery talked about during the Second World War when they hit on Normandy the battle plan was written and Normandy is a perfect example Montgomery was supposed to hit the beaches drive into France and reach Conn the City of Khan in one day and he was to take Conn in one day after the landing and Patton said he won't be able to get the kind of one day he won't be able to get the kind in one week but that's what the battle
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plan said well when the invasion happened the first thing was the troop strength that was that was thought to be there was different the day the Andy and the aerial troops that went behind the lines missed their mark within two hours after the launch of the Normandy invasion the battle plan was modified it was being changed based on a new unit of time and new information and the fact that Montgomery couldn't get the con new
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unit of time the hedge roads which were these big mounds of a very thick dirt and incredible thick brush the tanks couldn't get through so the push of the Allied tanks to their objectives we met on time battle-plan modified again so the point being is this when you run an organization whether it's a small organization to start or you want to become a big organization or if you're going to launch a direct response business your battle plan is constantly
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being changed based on new Intel new intelligence new information and based on the results on the statistics that you're getting it's constantly being modified it's easy for someone to look back and say you should have done this you should have done that you should have done this hindsight's always 20/20 it's perfect because it's easy today to look back and say I should have done that back then but when you were here under the heat of fire you had to make a decision based on
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the information you had then because you didn't have the information that you have now so you make decisions and that's why things you know get modified but the only way to win a battle or grow a company or grow organization is to have a long-term battle plan with an objective we're gonna reach Baghdad we're gonna reach Berlin you have your objective but the method in which you get there the timeline in which you get there the casualties you take along the way the lost battles that you may encounter
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those things you deal with as they come up that makes sense so same thing when you're running these are business your your objective of being in the direct response business is I want to make millions of dollars maybe that's your objective your objective is I want to make maybe just a couple thousand dollars a week so I can have an income to replace my job so I can be in my own business and I want to you know make that much now maybe you can only see so far but have your objective and have your battle plan but always be modifying and changing that battle plan so the
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reason I brought this up is you don't have to think that far in advance in terms of do I have to have manufacturing in other countries because you're not there yet you know the old saying is we'll cross that bridge when we get to it right so right now in the beginning we just focus on what we have at hand so don't don't make the error of thinking too far in advance but but what happens what do we we're down here you're not there yet okay let's just let's get on the beachhead first sure we have a general battle plan but you also have to know
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that that battle plan is gonna be modified and changed anyway every battle plan has been changed every business plan ever written by every company has been changed the day they launched that company you look at every business plan that was put when company started when they are raising money here's the business plan there's not a business plan in history that's been followed because nobody knows they write a business plan it's really just one hundred percent guessing it's just to
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let the investors know that we have a general idea of what we're doing because they know the business plan is not going to be followed I mean it's an automatic it can't be followed because nobody nobody has ever figured out exactly what's gonna happen in the future in terms of every particular scenario so investors invest in people who have at least a general working knowledge of what they want to achieve and investors invest in people saying these generals will be able to handle whatever is
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thrown in front of them and get us to the finish line so that's that's how people choose companies to invest in that's how they choose management they choose you know things that they want to embrace it's really is the general plan and objective solid and secondly is the leadership capable of handling anything that's thrown in front of them so that's really who you have to be you have to be that person who has a
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general working knowledge and the confidence to say I can handle whatever is thrown in front of me whatever situation and challenge may come up and you order product and we've had it happen before we've ordered product where we have back orders because we sold more product and we had bad information on our inventory there was an inventory error the number that we thought we had we didn't have so we charged the customers credit card and then we went to look for the product to ship the customer
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there's no product there that's a situation that came up one time and we had to scramble we need to order more what's the timeline what's normally six weeks you can't wait six weeks we charge the customers credit card so now what do we do well we have to give the customer the money back well the challenge there is we already use the money to pay for the media we have a challenge and so how do you deal with that challenge and that's that's what leadership is that's
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the ability to handle situations on the fly and deal with them as they come up and work with people and get things organized to make sure things get sorted out I remember one time we got a bunch of orders into to fill we were thrilled we met our deadline the orders came in to ship the product and then half of the orders were crushed and all destroyed and and what do you do you have to call customers explain the situation and work it out you deal with that crisis situation at the moment in time handle
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it and then go forward I mean that's how it worked I remember Herbalife when Herbalife was starting off in their business and today they're a multi-billion dollar company I remember Herbalife for example you would buy product from Herbalife for Marcuse you would have to send him the money and then a week later pick up the product and his pickup points were at parking lots in Los Angeles because he
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was delivering the product out of the trunk of his car he was just starting and distributors say yeah one time I met mark he opened up the trunk and there was no product and he said the manufacturing plant screwed up it's going to be another week and how did people handle that some people quit other guys didn't they said listen them we understand so you go through things in the beginning when you go into the beginning of this type of organization when you're
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when you're when you're running infomercials when you're producing ads sometimes things are not going to work out right you're gonna deal with a pretty production house and they're gonna screw up they'll push the wrong button then you tape something and it's not there the editing will get screwed up the audio was bad sure your show and the home you know looks great and all sudden go up the audio was bad we have to do it again what do you mean do it again can't do it again the audio was bad we can't use it sound like that okay
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well I guess we can't use that yeah okay so you deal with those type of things but the point is you're gonna be involved in direct response you're gonna have a battle plan it's going to morph and change but don't think too far in advance about all the what-ifs make sense okay yes oh yeah yeah there's yeah in the US there are several firms that specialize in direct response and so we'll give you those references if they're not in the book that we passed out which is V okay
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yeah we can we can provide that for you yeah we can provide like venable and the different guys that we use yeah so let make sure we email out everybody and for those of you watching on the video tape we'll make sure that's in the package so when you get this it will have that supplement okay so the next thing we look at when I look at this product to determine what I want to run with this product is is there a personality attached to it if there's a personality attached to it and I wanted to put a slash is their
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personality attached to it or story is there a personality attached to it or story attached to it and again you can you can I love you can buy books on infomercials I don't know if there's any other how to make winning infomercial I know some guys who do some consulting on infomercials I know one particular gentleman was a very popular consultant
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and his claim to fame is he's made and produced more infomercials than anybody else in the world he has made in other words people paid him people paid him to produce an infomercial and the fees that he charged to produce infomercials range from a hundred and fifty thousand dollars up to a million dollars for one infomercial that doesn't all go to him
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because he would write the scripts he would hire crew to film testimonials that money he was used for travel expenses to shoot maybe on location things it was also used to shoot the studio work and and film the infomercial and do the editing of the infomercial produced what's called the call to actions run focus groups on the infomercial and so forth and he would deliver you an infomercial again ranging from 150,000 ballpark up to close to a
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million he's produced more infomercials than anybody else in the world none of them have ever made any money so there are certain things that when I'm sharing with you about what I do I would I would suggest that you don't gloss over any of these components because these are very key components and this is one of them when you're picking a product is their personality attached to it example speed-reading
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howard burg the world's fastest reader is attached to it personality mega man scott Flensburg who is on Larry King the human calculator is a personality attached to it with me so is there a personality attached to it a person personality I didn't say celebrity said personality secondly is there a story is there a story about this product for example
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with the pawpaw the story was guy burned his hand he was you know next to a pop-pop plant he didn't have anything else to put on it he threw it on there and all of a sudden it healed there's a story behind it right so there's a story so that's something to consider as well that's a very good question question was can you attach a personality to a product and the answer is yes you can and I'll give you the most famous example of that the George Foreman grill
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George Foreman did not invent this grill George Foreman did never use this grill George Foreman ever heard of this girl this crow is being sold not very well and it wasn't doing well and the producers at the company said we got a product here we think is good we think it's a good product it's no one's buying it what's missing let's attach a personality to it let's get a spokesperson let's get somebody with a
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name and we'll make it bears and then magically it became the George Foreman grill and it worked knock out never knock out the fat right it knocks out that that so yeah you can I've never done that because when I talk about how to I produce ads I used a different technique where that wouldn't work and you'll you'll see why when I get to that part yes
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he hasn't good question question is about the personality that's attached to the product did they have to have something amazing or some talent no they just have to be the personality attached to the product so the question is is there a personality attached to the product and here's an another example professor only professor only was the inventor of the word is a will there's an a program on how to get better grades in school he had not a
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personality that would be effectively used as a salesperson right he wasn't a good communicator at all but he was still a personality it's a person that's attached to the product maybe the inventor the founder the developer okay and the person doesn't have to be alive for example thinking Grow Rich there's a personality attached to the product Napoleon Hill he's dead but he's still a personality attached the products because he's not alive it's a person the
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key here is a product people will buy products the Snuggie doesn't have a personality attached to it okay but ShamWow does Jim I'll had you know Vince right he was the personality attached to it or the salesman so he was the one who was so excited about it like I found this when I was in German let me tell you about it so you follow me he he wasn't the inventor but he found it and he's the personality attached to it Dalton McCreary straight-shooting golf
42:41
he invented the system so he was the personality attached to it so if there's a human being attached to the product that either is the inventor or developer or somebody who just found it and it changed their life and it's just like I mean flipped out about it that personality is now attached to it they don't have to be the inventor they're gonna be somebody who found it they just you know they discovered it they you know it benefited them and now they want
43:11
to share it with other people so it's the spokesperson if you will right so it a personality is really important because we you're selling a product you can absolutely sell a product without a personality you have an advantage if there's a personality because people buy people people buy people in the infomercial world or direct response everyone wants to sell their product product product product product product
43:42
price it's all about the product product product product product they forget that sales 101 does anyone know the axiom of sales 101 throughout history sales 101 the first thing any and every salesman was taught and on email if it's taught today is what people buy you or sell yourself first sales 101 is sell
44:13
yourself first if you are the salesman selling this product of water and I'm trying to sell it to you I'm selling you the product sales 101 says sell yourself first I get you to like me first before I start talking about this that's sales 101 and it's not used in infomercials it's not using direct response except by
44:45
me I'm really the only guy who understands that there are a few other people too sometimes did it by accident but they don't understand that the first thing you have to do is sell the personality first people have to buy the person before they'll buy the product general rule of thumb there are exceptions to the rule question the question is about known personalities and testimonials well in
45:26
terms of picking a product and I will talk about the big difference when we talk about producing an ad which is coming up next but in terms of this particular question when I say is there a personality attached to it again the definition here is is there an inventor developer a founder that's you know it's his product or is it's a product that was out there for a while that somebody happened to find and now in effect is the spokesperson for it that was just like listen I took it's kind of like
45:57
well Ray Kroc did not invent McDonald's right but he became McDonald's and the spokesperson in effect because he said I'm gonna you know buy the franchise rights and it wasn't his idea but he was out there saying how great an idea it is that he found it okay any other questions on picking a product yep okay question was what if one personality is attached to one product today but that same personality is
46:48
attached to another product later does that work well I think the example is that's exactly what I've done since 1989 because in 1989 the product that I was attached to was a mega memory then the next product that was attached to if you look down the road was Dalton McCreary straight-shooting golf because I was the person who improved my golf game by that and talked about it I was also the personality that was attached to Atkins but he also had a personality as well
47:18
I interviewed Howard Birds I wasn't attached to that he was I interviewed Scott plants Berg Elin crimen dr. Doherty doctor mortar master ty but I wasn't attached to those I was just the interviewer so the answer is yes one person can be attached to more than one product but and even at the same time there are guys on television who are attached to three or four you know kitchen items you know I got the ninja I got the steam iron and it's the same guy pitching all of them and he's kind of
47:49
known as a pitchman at that point now that's a little different because if you become a pitchman like my friend Anthony Sullivan and you know the late Billy Mays you know with oxy oxy clean those guys are pitchman and so the difference there is they are pitchman so they are gonna be attached to a bunch of products because they just our pitchman Ron Popeil pitchman that's a step down so if you look at there's three categories of
48:19
what I would call credibility the the highest one is the inventor the developer that's that's the highest level of credibility like I invented this pillow or I invented this you know machine so the highest level is the inventor look I found the problem there was no solution I went out there and I figured out a way that I could you know solve the problem and I developed this
48:50
pasta maker you know or food dehydrator you know I like beef jerky and I got tired of paying all the money for the beef jerky and having all the chemicals in the beef jerky not knowing where the beef came from and I thought you know I should just make my own jerky just I think that hard but the only machines out there we're very expensive so I designed a machine that was inexpensive and now I get the the Ron Popeil food diet dehydrator so he's the inventor okay so the first level of credibility is to have the inventor second level of credibility is
49:21
I'll call him the spokesperson and the spokes person is someone who legitimately found this and I think the best example or one good example is when I found Dalton McCreary straight-shooting golf because the story that I tell on the air is the true story I went to a Hawaii with Danny Bonaduce and his wife and my other friend Chuck and his wife Phyllis and we went out
49:52
there they wanted to go horseback riding on a horseback ride so we decided to go golfing so a couple of golfing couple of us went horseback riding so when I went golfing I said well I don't really golf but I'd rather golf than horseback ride so I went into the the Pro Shop and I said I'll take a dozen boxes of these Titleist golf balls and the guy says you want these wrapped at Easter gifts I go no I'm playing around I figure I'll lose a lot of the golf balls I've never golf really before there's a lot of lava here
50:23
so I got all these golf balls and I went out and I proceeded to hit 135 with cheating so I thought you know I'm an athlete I can't be that bad at this game so I went back and I started hiring all these top pros you know Butch Harmon who was Tiger Woods coach David leg right call him Lud wrecker David Leadbetter Jim McLean spent you know thirty forty thousand on on golf I couldn't improve my game but I thought this is ridiculous I started buying video tapes and books and I couldn't improve my game I was my
50:55
mind was all full of thoughts and I was pretty much gonna after year gonna just this doesn't work for me I'm an athlete used to play baseball I understand this so I see this one day I'm going through a newspaper and I see an ad and it says golf genius discovers secret of hitting the golf ball as straight as you can point guaranteed or his video golf lesson is free and it'll give you 10 bucks for wasting your time that's the headline so I begin to read it it talks about this guy named Alton McCreary who
51:26
invents this technique that in one lesson 1 lesson you'll learn how to hit the golf ball as straight as your complaint and farther than ever before it's the last golf lesson you'll ever need and you buy this videotape and if it doesn't work in just one lesson send it back I'll give you your money back plus 10 bucks so I bought it I watched it I thought this is too easy I went to the driving range for two of my buddies Jules and Nicolas put down a bucket of
51:57
balls and I took my 9-iron I swung looked up ball with a mile in the air dead straight father never heard him hit a 9-iron I said that it's goofy so I did it again ball what in the same spot I said the heck with the 9-iron I grabbed a 7-iron but this ball down here I look at the yard yardage marker 150 yards well I can't hit a 7-iron 150 but I'll aim at that sign so I get up there hit the ball look up ball goes dead straight right over that sign about 165 170 I'm like you've got to be kidding me so
52:29
I grab my balls I ran down to my two buddies and said get out of the way let me show you this so I started hitting these balls one after the other like rapid-fire a crowd gathered around they thought it was a golf pro doing a golf demonstration as the bob was going boom boom boom boom boom their jaws are on the ground going where'd you learn how to do that and I said I ain't telling you guys then I thought to myself wait a minute this is a product that people will buy look at the big crowd sorry but that's
52:59
the story with me so the second level is a spokesperson and the something like that you follow me so I could I can talk about his program because what it did for me so the second type of personality is tax as a spokesperson and then the third one is we'll call him the pitch man what the pitch man has a little less credibility when you think it's like I don't really believe what this guy says he's just
53:30
being paid the pitch so you know I never use pitchman I just never do but they work they're just you know it's in terms of if you want all the advantages on making a direct response commercial or infomercial work you know I'm giving you the ways that you can kind of stack the deck in your favor doesn't mean they'll work it's just giving you an advantage makes sense okay yeah it asks the question again I wanna sure I understand the question so you have a
54:14
person who who has multiple products good question okay so here's a person who has multiple products well you have to look at each product independently and say does this product stand alone could it could it could it be a product that could be sold so we go through the basic procedure for product a and if the answer is yes that's fine I'll give you a good example I'm the author of natural cures they don't want you to know about I'm the author of author of more natural cures revealed and I'm the author of the weight loss cure so if we look at those
54:55
three products I'm attached to all three if we looked at natural cures is this a product that could be sold through direct response we go through our procedure yes if we look at more natural cures revealed which is the sequel could that be sold on a direct response not really it's weak it's kind of like it's the the sequel to the first one so that's the weak weight loss can that be sold on an infomercial yes so of the three two of them using the procedure could theoretically be sold on an
55:27
infomercial but the other two products could be the upsells so when I sell the weight loss cure book on television when people call I up sell natural cures and more natural cures when I sell natural cures on TV i up sell more natural cures and weight loss cure in addition no matter which one I'm selling I can upsell your wishes your command which I'm attached to and nega memory which I'm attached to if I sell your wishes your command on television I can upsell mega memory I can upsell natural cures more natural cures and weight loss cure
55:59
so does that answer your question oh so the question was when I went through that Gulf how did I proceed to get the product basically without getting into the whole story it was very simple I found him I reached out to him he had a videotape produced very amateurish and I said I'd like to put you on television I'd like to basically produce a new video series make it better that I'll pay for and I want you to sign a
56:48
contract as an author I will publish the course and I will pay you a royalty and so it's what's called a standing a standard publishing agreement so he got no upfront money he didn't have to put up any money he gave me the rights the worldwide rights to sell the product so I owned the product I owned the rights of the product I could sell there anywhere in the world and whenever I sold it you got a royalty just like an author of a book okay yes correct yeah
57:22
every contracts a little different in that particular case I was making this new product he had to stop selling the existing videotape and give me the right to do it but he you know rightly said but if I'm giving you the rights to this I'm making some money now selling my videotape so if you don't sell this on television I need to be able to sell my product so we put together a timeline where I had to be able to sell a certain number of units during a certain period of time and if I didn't I lost exclusivity I still had the right to
57:53
sell it but he had the right to buy that product that I made from me and then he could sell it as well via whatever method he wanted and that protected him that's how we it was taken off the market you know went through we called lifestyle life cycles which I'll talk about how products have life cycles but there's a good chance that product may be coming back and there's a good chance some of you may have an interest in that product yeah wagon which I could help you with exactly there's a lot of good things
58:25
like that Lenore yeah yeah there's a lot of good a lot of good stuff yeah golf lessons yeah okay any other questions
58:37
about how to pick a product yes yeah questions about customs and how do you deal with that if you're manufacturing or shipping overseas and the answer is it is very complicated it varies from country to country from product to
59:28
product and on shipment to shipment it really is not so easy and cut and dry at the end of the day if you're going to be marketing a product in a particular country and you're doing a lot of business then you should have a facility there that ships the product to the customer and you ship either have the product manufactured in that country or in that like the euro zone which isn't even like one country so you have it manufactured there or you ship it in to your fulfillment caleche you to your
01:00:00
fulfillment center and then you pay for the customs and duties when it's shipped in and that's so standard import/export again you don't have to really think about that in advance if you're gonna be marketing in you know one country because then you only have to deal with one issue so if you're gonna be marketing in Switzerland for example and you're buying you know mega memories and we're shipping them into Switzerland then we have one issue to deal with we just ship them in and then when you're shipping it out do you notice Switzerland that's one issue if you're marketing in the EU and
01:00:30
a couple languages you have one issue to deal with where's gonna be your manufacturing for all the EU where we're gonna be shipping it into one point and once that gets handled the good news is you go through that procedure one time then once it gets done it's done then it's just going forward same thing in Australia or Canada then it's it's one issue you deal with and then then you're pretty much handled some of you may be marketing in India so okay we're gonna be shipping shipping things there if the volumes get crazy
01:01:02
then we can have a sit-down about manufacturing in India you know but again you know once feel saying one step at a time will kind of cross that bridge when we get to it question cures for cancer yeah I would highly encourage you to not sell any cure for cancer or cure for AIDS or
01:01:32
cure for any major disease so the number one problem you'll have anywhere in the world is the fact that the medical industry it doesn't want competition it doesn't want anyone affecting their profitability and the number one profitable disease in the world is cancer that's why Brazil ski if you watch that documentary you'll see exactly what the medical establishment and the
01:02:02
governments do to anybody who is effectively curing people of cancer without drugs radiation or chemotherapy yes it's a very good question it's questions how do you find products someone's trying to sell a product they have a product and they want to be able to market it but they don't know how to do the infomercial business I don't have the money they they think it's too complicated they think I can't afford it I don't know how I just have an idea and I'm looking for somebody to partner up with but I have a good product how do
01:02:40
you find that there's two ways and I'll give you the way that I use and I'll give you the way that everybody else uses you know I'm giving you the secret and and I just feel like I'm telling you the magic trick because it's amazing and when I show people how I did the trick it's like they don't believe that's how I did the trick I mean but that's how I did the trick
01:03:11
let's look at mega memory mega speed reading mega math Dalton McCreary straight shootin golf Ellen cried Minh dr. mortars master Tai doctor de soiree dr. Atkins called calcium with Bob barefoot natural cures more natural cures weight loss cure your wish is your command how to fix him right this is a vitamin scam Katie Daly who could all the products that I've sold and there's dozens and dozens more how did I find
01:03:44
these products let's ask that question how did I find these products and the answer is they found me they came to me they basically found me or I bumped into them and how and the answer is I used a technique that is described in a program called your wishes your command how to manifest your desires that's really the answer that is the absolute
01:04:17
answer that I use that technique I didn't worry about the how I just knew something would pop up I was in New York I'm walking down the street I see a Learning Annex booklet I opened it up I start flipping through it and I see Howard burn the world's fastest reader BAM I go that I bet you that would work on TV same thing with Scott plans Berg
01:04:49
the human calculator I saw him on TV and I thought like I should have an infomercial you should have a home study course because I think he was on Regis and Kelly or something Dalton McCreary you know I mean that story how I bumped into him they dis bumped into them I just called ya and sometimes it's not that hard to find your phone number but you know you just kind of track him down again it's you know and not everybody I have approached
01:05:22
said yes I want to do business with you there's a lot of people that said you're Kevin Trudeau yeah I don't know I don't want to do business with you you're too controversial I mean I can appreciate that it's a good question the question is if your reputation preceded you and allowed you to get out there not that really is not significant because this person has nothing right now so if you call them or I call them it's irrelevant they're not getting calls from anybody you know
01:06:01
they'll have an agent you know it's not like people are trying to put him on the Celebrity Apprentice so if you call say hey I am so-and-so I saw you know heard about you I'm in the direct-response infomercial business and I'm interested disgusting about maybe doing something together and infomercial I don't know if there's anything there but I thought maybe we'd have a discussion about it I mean it's it's really easy to reach out to somebody and say I'm interested but keep mine the guy has no offers so if if if I call you and I'm Joe Smith and you
01:06:33
have a toothbrush and I go hey I saw you have this colloidal silver toothbrush yeah what are you doing with it well the Simon the direct response business I may be interested in partnering with you on this to maybe do an infomercial or some type of that I don't know if it'll work I don't know if there's anything we can do together but would you like to have a conversation about it well nobody's calling you you're like thrilled somebody calling Wow right doesn't have to be Kevin Trudeau or bill Guffey or Greg rancor or Tony Robbins or you know any of these guys
01:07:03
that would spook them quite frankly you know so did that answer your question question excellent question question is one of those deals look like I'll give you the very standard deal so matter-of-fact I'm gonna be giving you if I don't deliver it to you here physically will email it to you and for those of you who have the videotape this will be a supplement in your package but I'll give you a standard my standard deal you just plug in the product and names and you can
01:07:39
also plug in the percentage but I'll tell you what the percentages are or you can change them my standard deal is this if you have a product let's say you have a product my deal is I want you to give me the rights to manufacture the product okay I will pay you a 5% royalty on the gross sales less shipping handling tax and returns and that's the deal
01:08:12
that's that's the deal now I always start with that deal because that's industry standard and generous generous right right Cathy rancor gives you 2% so I'd give five why because I'm generous quite frankly I'm an author too so I know what it's like on both sides of the fence I also know that if I run the show and I can't make a profit paying you 5% I will sit down with you and I will show you
01:08:43
the math and saying if you take 2% then I can make 3% I need to make more than you because I'm investing all my money will you take and change the deal to 2% because if so we got a winner and if you're not willing to you know to look at that reasonably that's fine make sense remember we had an author one time it was Alex and I said listen we're paying you I think it was 5% at the time and I
01:09:15
said but we can't continue to run the media so his royalty me I'll just make up a number I don't remember the exact number but it was someplace in this range his royalties at the time were only around $5,000 a week so I said I need to reduce your royalty rate your percentage from five percent to two percent because I will not accept that I says but Alex the reason you I need to do this is a lot of the media I'm buying is not profitable I can't afford to pay
01:09:46
you five percent because I don't make any money so I can only run a small amount of media and you're only getting $5,000 a week in royalties and she's huge money okay but you know when we look at big numbers it's scale I said so if you reduce your royalty rate from five percent to two percent you'll make more money I am NOT reducing my royalty rate okay but Alex I can run more media you'll make more money I am NOT reducing my royalty rate I said Alex let me ask you
01:10:17
a question would you prefer to get $5,000 a week in royalties or $70,000 a week these he said well 70,000 I said fine then you got a 2% royalty rate I am NOT reducing my royalty rate I said let me give you the math again if you get 5% royalty you can make $5,000 a week in royalties country I can only run so much media but if you think a 2% royalty I can run a lot more media sell more stuff and even though your percentage is lower we have more sales
01:10:48
you'll make $70,000 a week and he said remember this took forever to get this through his thick skull right right all right he finally finally accepted it and you know he was thrilled but always annoyed that he got a reduction in his royalty rate I was like you know net doesn't last forever by the way you know that media only runs for a certain amount of time where it's profitable and then enough people see it over and over again and then you start getting diminishing returns question
01:11:31
would you no cuz I couldn't buy any more media I couldn't buy any more me because I was losing money so I had to reduce it in order to just make a profit so if he didn't if he said absolutely not I already just moved on to the next deal you know I would have ran the media that we could effectively and that was it and just move on to the next deal no big deal you know it's always next people get so hung up on I don't want to lose this person I don't want to lose this deal I don't want to lose this product
01:12:02
why why are you so hung up on that you know wait I had staff members one time and a couple of more bitching and moaning about something I said listen I would encourage you to quit okay you're like threatening me that you're gonna quit I'm gonna encourage you to quit and it's matter of fact if you're done I'm gonna fire you anyway I said you understand the dogs may bark but the caravan moves on we're going to the top anyway doesn't make a difference if you
01:12:34
want to come along on for the ride gonna be on the train fine but the train is moving on baby you know it's going it has been going and it continues to move it's going that make a difference who wants to come along doesn't affect my doesn't affect me right so when I'm dealing with an author I love the guy whether it was Howard or Scott or Dalton but sometimes they get authors it can get a little old Tina will pop you share with you a little bit more and also Jeanine because you work with them all but sometimes I get a little egotistical
01:13:05
certain certain times you know they're making millions of dollars if it's a big campaign and you know it's sometimes they get a little hard to deal with well later when they're getting all these royalties it's just part of the listen if you're been in the movie business if you're in the entertainment business you have a big celebrity and a star who was a nobody and all of a sudden now they're a big star on friends and what happens to their personality right they were unknown before they were sweetest pie they became a big star and then all of a sudden a hard to deal with but does that sound familiar to anybody
01:13:36
yeah but I mean that's what happens in any type of industry happens with ever every type of movie industry and celebrity industry speaking industry television entertainment rock stars musicians you know now we see people like poor Whitney Houston I mean she went from the sweet angelic type of individual impersonality and so forth and did just change and other people who were so sweet and kind all of a sudden become really you know mean and angry later on so when you're dealing with
01:14:08
authors and when you're dealing with people that you're have a product you have a product that I'm working with you on one one part of the business that you have to be aware of when you're dealing with authors whether it's an author of a product like Howard Berg's you know Howard has always been one of the sweetest guys in the world and and scotf Landsberg always one of the sweetest guys the world never a problem you know never an issue other authors they start off a little sweet and then they get a little bit crazy a little bit
01:14:39
you know pushy and bossy it's part of the business just like if you were an agent dealing with celebrities you know sometimes you have you know personalities right so it's always going to be part of this business when you're dealing with people you're doing business with they'll think you're not you're not paying them enough royalty or they think you're making too much money well you're putting up all the money you're taking all the risk you know they don't want to be involved in the risk right oh I just lost ten tile off hundred fifty thousand this week can I
01:15:11
have half can you put in half please I have authors who get royalties they get royalties whether we make money or not I run infomercials and this week I make two hundred thousand dollars and your author cut is ten thousand and you're pissed off because I made more money than you but I put up all the money I did all the risk I did all the work you're sitting home watching television you're just getting your royalty I'm working 12 hours a day plus I got all my capital at risk but you're pissed the
01:15:42
next week the media shifted because there was a time zone change and it was a gorgeous weekend so nobody was home watching TV and now instead of me making two hundred thousand I just lost fifty thousand you still got your $10,000 royalty check you're with me but you don't look at it that way so when you're dealing with personalities and says something just have to be aware when you're dealing with personalities in the information world or direct-response world or author world or product guy world when you're
01:16:15
dealing with the product just be aware that you get a half that learn some negotiation skill some people skills some diplomatic skills because it's part of the business it's just part of the business yes no it's actually standard to pay either monthly or quarterly and the standard is quarterly right Tina these days standards quarterly standard is paying royalties quarterly I've always paid monthly because I like to
01:16:48
just get the money in and get it out right well yeah it's a good question in in in patent on leadership we talk about cherish your prima donnas and I'm talking about handling the personalities so there's a balance between letting the tail wag the dog and being a leader so there's always a chain of command and there always has to be a leader and you can never have insubordination now in an
01:17:38
organization structure which is what Patton was talking about you're dealing with a chain of command so in a chain of command when you have people in the chain of command who are strong-willed and so forth that's fine but there's one area where there's a line that's crossed in a chain of command that is insubordination where there's a subversive attack on the leadership and that is the that is where the line is crossed because you can never if you're if you're on a ship you can never
01:18:08
challenge the command of the captain especially in front of the crew so that there's a line there but what we're dealing with here is not a chain of command when I'm dealing with an author like a Howard Berg or if I'm dealing with a vendor who's selling me a product they don't work for me we're not partners either there's a relationship there it's a business relationship so it's a very unique situation we want to work
01:18:38
together and keep working together but you know it's my capital at risk I'm paying you an author royalty so the point is you're going to get demands from some of these people and my point is when you have an individual who may start becoming unreasonable be aware of it and at some times it's sometimes you just have to say we don't want to deal with the thought there anymore and we've had that happen right like this guy is way too much problems he's making money
01:19:08
he's not grateful he's not thankful so Tina tell this author that we're not running his infomercial ever again we're done with him because we don't need the hassle and then you just move on because you know you know so they just don't need it they go from sweet genial correct and it's um it's sometimes there are partings of the way so we've had partings with authors before where you know you just try to work together and if they just become too much of a hassle
01:19:51
life's too short it's just like listen you know just do your own thing go you know you can go with guppy rancor and I and I and and Tina will verify this when I when I cut somebody loose I didn't lock him up Kathy Rinker would lock you up for 10 years they cut you loose and say you can't even sell the product because we have a contract when I would cut an author loose I would say contract void cancelled here's the masters of your product I'm giving you everything go all go and be successful because I mean that's just my personality it's like I
01:20:22
don't want to harm you or hurt you I just don't want to work with you ever again because it's life is too short go and be successful please I encourage you and if quite frankly if you had any questions I would help the guy you know and these authors some of them you know they tried one guy took all of his royalty money to produce infomercials and lost it all I mean was just sad sad guy made three and a half million dollars in royalties and just blew through it all trying to produce infomercials and just it was just sad
01:20:53
yeah I I think so in terms of sending them off and good intention I think I think it is and look you know I I'm responsible for me and my life and I have to look at my life and what I've attracted into my life and if there's something I don't like and I have the ability to not have it anymore that's fine I wish everybody the best of them it's just fine [Music]

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