Joint ventures have been around a while now. But the rise of Internet marketing has made joint ventures even more popular over the last few years as a way to make money. But if you’d like to make money from a joint venture or JV what do you need to know, and how do you set one up?
Here’s what you need to know about joint ventures:
First of all, what exactly is a joint venture?
There’s nothing complicated about joint ventures. They are basically just a partnership between two businesses. But this is the important thing – they are usually ventures between a business with something to sell, and a business who already has customers to sell something to.
What can you joint venture in?
You can joint venture in absolutely anything you like. It could be a product or a service. Anything from electronics to clothes, and financial services to travel.
But – joint ventures are particularly suitable for anything that lends itself to be sold and delivered online. So it’s no surprise that information products like books and courses are very often the subject of joint ventures.
How to find a JV partner
First you need to decide which side of the fence you’re on – either a business with a list to sell to, or a business with a product to sell.
Let’s say you’re a business with a product to sell. You need to sit down and do some research and find businesses who sell similar and complementary – but not directly competing – products. Ask yourself, are THEIR customers likely to be the same sort of people who would buy YOUR product? If so, you they could well be interested in a joint venture.
What makes a good JV partner?
If you follow the above advice you should have no trouble tracking down lots of potential partners. But you want to be fairly discerning, and try and do deals with the best ones, to maximise your chances of success. Here are a few tips.
* Do they have a good sized customer list? It should have at least a few hundred (and ideally a few thousand) names.
* Is the list made up of actual buyers, or just enquirers? You can do JVs with either, but actual buyers are much better. Actual recent buyers even better still.
* Your product should be priced similar to the products buyers have already bought, or perhaps slightly higher.
* Your partner should have a good system for tracking sales, despatching orders and paying out your cut. (Many JV deals will use some kind of affiliate link.)
* The best JV partners are those who are switched on to the idea of joint venture marketing – and keen and enthusiastic to make it all work. There’s no point JVing with a reluctant partner, nor one who thinks they’re too important to work with you.
What sort of deal can you have?
There are absolutely no do’s and don’ts on what kind of joint venture deal you can set up. Your deal can be whatever you can agree with your partner, and which both parties will be happy with.
It’s normal for each party to take 50% of the profits on each sale. This will be after the product costs, overheads and any refunds/returns have been allowed for.
If you’re particularly keen to do a deal with a particular partner then you may well be willing to offer them a higher share of the profits. This can still be every profitable. Because, remember, once one of your JV partner’s customers buys from you they become your customer. And you can make extra profits by selling to them in future, or even offering them products or services in future JV deals with more and more partners.
If they’re correctly set up, joint venture deals are (or should be) a win-win situation for both sides – no wonder they’re so popular!