If You Sell Anything Online
Your ePockets Are Being Picked
Copyright 2004 Shawn Pringle
You and I are a lot alike. We are both software publishers and eBook
authors getting hosed on a regular basis. You and I, my friend, are
victims of software piracy that accounted for over $24 BILLION dollars
in lost revenue over the last two years. There are so many ways people
can get your product for free these days. If we continue doing nothing
we will lose even more money this year as potential customers become
more and more aware of just how easy it is to obtain digital products
without paying for them.
The question is, why do we put up with this? When we sell our downloadable
products they are being easily and freely distributed (read: STOLEN)
by the very same people that we are trying to get to purchase. And don’t
be fooled, this still occurs very regularly today even though a lot
of us take precautions against it. This confirms that people want our
products, they just don't want to pay for them …because they don't
have to. In fact, 70% of potential customers won't if they can get it
for free.
We know the ideal scenario; what’s supposed to happen. Consider
Bob Jones and his knot tying eBook, “Scoutmaster Bob’s Guide
To Knots”. Bob uploads his eBook to his web server and creates
a sales link to sell it, and this sales link goes through to his payment
processor. After the order is placed the customer is redirected to the
download page, or "Thank-You" page, in order to automate
the delivery process.
Now Bob figures he’s all set up and starts his massive promotion
efforts. He spends lots of time and money getting people to visit his
site and convinces them to place an order because it really is a great
product. So, the customers place orders via the sales link then are
redirected back to the download page automatically to get what they’ve
paid for. Perfect automated system, right? Sorry Bobby, in a perfect
world maybe. But here’s what really happens.
“Back Door” #1:
Our boy Bob sets up a sales link, a download redirection link (where
people go after successfully ordering) and spends time and money promoting
his site. People come and
visit his web site and feel that they could really use such an extensive
knot tying resource and want a copy of it. A couple of people place
orders and Bob is happy. Because Bob
has created such a great product they tell their friends about Bob’s
eBook. But instead of telling their friends to check out Bob’s
web site they simply email them a copy of the actual eBook. Why not,
it doesn’t cost Bob any money right? Those people then tell their
friends, who tell their friends, who tell their friends. A couple of
weeks later Bob’s knot tying eBook is in the hands of hundreds,
even thousands of people…for free. And this is just the first “back
door”.
There are three (3) "Back Doors" that people use regularly
to easily obtain free access to your product:
Back Door #1: Get a copy via email, newsgroups, forums, eBay, whatever
Back Door #2: Get refunded and keep the product
Back Door #3: Locate the download page without paying
And here’s another scary fact: For every 10 copies downloaded,
4 of those are stolen. How lightly would you take it if you sold a tangible
product, like a t-shirt, and only 6 out of ten t-shirts that left the
store were paid for? These are lost sales and income forgone, there’s
no more blunt way to put it. If you can guarantee that the only way
they can get your product is through your payment process you’ve
just stopped that leak and increased your profits.
But right now online merchants have no idea who is really downloading
their products, or what happens after the downloaded. They lose total
control of its distribution.
Some thieves/weasels/snakes …whatever you want to call them…
even go so far as to sell stolen software and eBooks as their own for
a greatly reduced price. This is probably
the greatest risk to selling a digital product, and if you ask anyone
that’s been doing it for a while they will have experienced this
nightmare first hand. The people out there
that do this are much worse than one guy that just gets your product
for free. These people distribute hundreds or thousands of your product
and you don’t see a cent of it.
They saturate the market and decrease the value of your product, until
it’s virtually worthless. They have to be stopped.
“Back Door” #2:
Back to Bob. There is another big problem for Bob when it comes to
protecting his eBook. He doesn’t know that many payment processors
promptly, and without hesitation, honor
each and every refund request, no questions asked. Seriously…no
questions at all, one simple email is all it takes. There's usually
no need for the customer to explain anything, just that they would like
a refund. They will get their refund right away and then you, the merchant,
don’t have a say in the matter at all. And you guessed it, they
get to keep the product, for free. There is no requirement to return
the product like with a traditional refund, since there's no way to
be sure the product was really deleted. Imagine the absolute uproar
brick-and-mortar merchants would be in if customers were allowed 100%
unconditional refunds on request, and the customer gets to keep the
shirt, vacuum cleaner, DVD player, or whatever? Ridiculous right? But
it happens to online merchants like Bob every day.
“Back Door” #3:
Lastly, Bob’s uploaded product is also easily and regularly downloaded
for free by potential customers right from his own web site. People
can get to his download page in any number of ways. For example, open
up Google. Type this into the search box: “thankyou.htm ebook download”.
Now go to the second and third pages. Here are some free products for
you if you were the type to download copyrighted material without paying
for it. Of course I’m not suggesting you do that, in fact I ask
you NOT to download these products, just look at the thank you page
to see that the “back door” is certainly easy to find. These
people are just like Bob, and they work hard to create their web sites
and their products. They are simply unaware of the kick-in-the-teeth
they’re taking by not protecting it.
Some conscientious merchants claim, "I'm safe, I protect my download
location with a third-party tool that creates my download location on
the fly." This is a false sense of
security and it only blocks one back door. Basically this protection
method simply hides the download location, but the product is still
just as susceptible to being freely distributed after the download.
And it can still be kept if a refund is issued. This is equivalent to
the banks simply hiding all the money instead of putting it in the bank
vault.
So how are online merchants like Bob, and you, and me supposed to stay
afloat? As it is now, the only way to turn a profit is to rely on people’s
goodwill in hopes that they will do the right thing. And be content
in the fact that some people don't know how easy it is to get online
products for free, so these people actually pay for the product. So,
if you think about it, within this system it's pure luck that anyone
actually pays for a digital product.
But there is hope. There is a real way to stop all types of thieves
and freebie-seekers. We must protect the product itself with unique
identifiers and access codes for each customer. And until more of us
become wise to this one simple truth, rampant software and eBook piracy
will continue to plague online merchants.
1 - Average 40% worldwide software piracy rate for 2001 & 2002,
and dollar losses totaling $24.05 billion, based on intensive studies
by the Business Software Alliance
http://www.bsa.org.
2 - Based on the Business Software Alliance report - "Quantifying
Online Downloading of Unlicensed Software : Survey of Internet Users
for BSA - May 29, 2002",
About the Author:
Shawn Pringle is the owner and founder of the Virtual
Vault digital product security system. Read his story and how he fought
back at http://www.CBProtect.com
Email him at springle@cbprotect.com
.
