Use Physical Products to Increase Profits & Reduce Refund Rates

Brett Chesney Vendor Tips

Written by: Allen Baler, Guest Author

There’s no question that ClickBank vendors face increasing challenges these days, including:

  • Higher refund rates, even if your product is solid
  • More competition and “copy-cat” products
  • Higher traffic costs, as well as the risk of getting “Google slapped”
  • Super affiliates demanding higher commissions and bonuses

Smart ClickBank vendors are addressing these challenges by taking advantage of a relatively new, under-the-radar feature in ClickBank; the ability to offer their customers physical products such as DVDs, CDs, or printed books.

These “hard copy” versions can be offered as an upgrade, upsell, or even included free with every digital order.

Why Should ClickBank Vendors Offer Physical Products?

Many vendors think that physical products are too complicated to set up, are too expensive to produce & ship, and require too much administratoristrative time.

The truth is that physical products can significantly improve an info-publishing business’ bottom line and is usually well worth the effort!

Based on our experience in developing and managing the physical products programs for top ClickBank vendors over the last 2 years, vendors offering physical products have increased net profits as much as 28%, cut refund rates to as low as 1.5%, and have increased customer satisfaction. These results have had a powerful impact on these vendors’ overall bottom line.

Here are the top 5 benefits we have seen with ClickBank vendors that have implemented physical products:

#1) Significantly lower refund rates
How many times have you had a customer refund because they were having trouble downloading your product? Or had a customer ask for a refund because they were confused because they saw a “virtual product shot” of a book or CD on your sales page and thought they were getting something physical, not a digital file? Offering a physical product component to your offer can eliminate both problems and will significantly reduce your refund rate.

#2) Higher perceived value among prospective customers
Your digital products might be state-of-the-art and contain great information, but for most of your customers there is significant perceived value to receiving something tangible in the mail that they can actually hold in their hands. This allows vendors to build the value and legitimacy of their products.

#3) Differentiation from the competition
By offering physical products, you offer greater value to your customers than your digital-only competitors. Discerning customers who are shopping and comparing offers will often decide to buy from you because you offer “more bang for the buck” than a competitor who only has a digital product.

#4) More money per visitor
Physical products work great as an upsell or post-sale purchase! Conversion rates can be as high as 30% and top vendors who push a significant volume can add many thousands of dollars in incremental income with their physical products. Increasing your profit per visitor enables you to afford higher bids for traffic and test “slap-free” traffic sources.

Here’s a tip that can jump-start the sales of your new physical product: offer your new physical version to prior customers who bought the digital version with a discounted price for a limited time. A couple emails is all it takes to get a nice surge of sales and we’ve seen these promos convert as high as 40%.

#5) Easier to attract super affiliates to promote your offer

Adding more money to your bottom line through physical products means you can offer higher commissions to your affiliates and offer bigger bonuses to attract super affiliates. Also, your lower refund rate will attract the smart affiliates who recognize the huge impact of refunds rates on affiliate ROI, especially for those affiliates who drive paid traffic.

How Do You Get Started Offering Physical Products?

OK, hopefully you are starting to see the benefits, and now you want to learn more about how to actually implement it.

The truth is that adding physical products to your digital info-publishing business does require set-up work plus ongoing maintenance. Creating, producing and shipping a tangible product can be a very different experience from the all-digital world most ClickBank vendors are used to operating in.

Here are the 3 steps to get started offering physical products:

Step 1: First you’ll need to create your physical product, such as artwork and files for CDs, DVDs, layout for a printed book, etc. It doesn’t hurt to spend a little extra time and money making sure everything is polished and professional, for example by designing a nice cover or including an informative insert. Remember, this product represents you and your business! Use the highest resolution artwork and video/audio files as possible since production specs for physical printing and viewing videos on TV need much higher resolution than for the web.

Step 2: Next you’ll need to produce your physical products. You can do it yourself which is a good option when starting out, or there are companies out there that can produce CDs, DVDs, and printed books at relatively low cost. Start with small initial production quantity so you avoid inventory risk and cash flow problems of investing in a lot of product upfront. You will also need to decide how you are going to package and ship your physical products to your customers. Again, you can do this yourself or there are companies that can handle this for you.

Step 3: Finally, you will need to set up your customer service process to incorporate the physical product aspect of your business. You will need to be able to communicate with your customers about their shipments, send them tracking information as well as set up a process for handling product returns and refunds.

The good news is that ClickBank has been making the process easier for vendors by recently adding tools and features to support “shippable media” products. This makes a lot of sense as ClickBank benefits directly from lower refunds, more successful vendors and happier consumers.

Here’s The Bottom Line…

Top ClickBank vendors have proven that offering physical products yields a significant boost to their business by increasing profits as much as 28% and cutting refunds as low as 1.5%.

No, it’s not a magic pill. Yes, it does take some extra work.

But the results can be well worth it.

So if you own a digital product and want to add incremental sales and cut your refund rate, consider developing physical versions of your products now!

About the Author

Allen Baler is the owner of Reboot Fulfillment, a company that since 2008 has designed, sold & shipped over 200,000 physical product shipments as the strategic partner of top ClickBank vendors. To learn more, watch the video presentation on how to increase profits with physical products.