If you create a paid digital product for one-shot payments (as opposed to monthly subscription services), you can use vFunding to attract users with an unique offer to differentiate from the competition using the regular model.

It can be applied to any one-time delivery product yet since I'm a programmer it is easier for me to explain the concept with coding.

vFunding goes like this:

1) The user contacts the digital creator (programmer) exposing his idea.

2) The programmer sets a price to code it.

3) On completion, the programmer posts finished program to his online store.

4) The user gets his copy of the program + 50% profit-sharing on all sales at the online store.

Benefits:

- The user gets the program he paid for.

- The programmer gets paid for the coding hours.

- Both the programmer and the user benefit from lifetime residual income thanks to the unlimited sales possible for digital products once created.

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Extra advantages:

An user who truly believes in the program he wants can show more willingness to support its creation. Especially if he's confident it solves actual problems to deliver solutions to other willing users.

The programmer gets an increasing passive income source the more he uses vFunding with a larger pool of users.

The user can re-use funds from previous profit-sharing revenue to re-invest in new programs, creating a virtuous circle both for him and the programmer.

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Note:
Step #3 can also be divided as a group, with proportional % split according to the funding provided by each person; with a fixed percentage agreed for the programmer.

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When given the choice to buy from a regular seller without any further benefit after the download versus a seller applying vFunding who offers money-back or even a profit-making opportunity for the same dollars, which one do you think users will choose? [smiley]cxp/glasses.gif[/smiley]

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If you are a payware maker, you might want to motivate your users to choose you by becoming part of a profit-sharing endeavor with the product they believe in and are willing to fund.

Vic

The concept is very good. Win...win...as far as I can see. 

Of course, overall profitability would be largely depend on the amount of traffic visiting the online store.

Without specific strategies regularly applied to encourage and increase traffic (i.e. effective  marketing) the concept would wither on the vine. (He said, stating the bleedin' obvious! LOL)

Ideally some sort of "limited/lite version" version or free trial is in place to allow the product itself to attract more users.


An online store with a free collection of downloadable works can do wonders to attract users. Then those users can be offered paid products matching the audience.


(Good ol' marketing of course should work too, even using a steady share of the profit for further perpetuating the virtuous circle actively funded by means of itself)


Plenty of possible fine-tunings for this vFunding business idea!