One of the most popular online ventures is selling e-books. People are hungry for information; thats why theyre on the Web in the first place. And e-books are cheap to produce and distribute.

However, Ive come across quite a few new online entrepreneurs thinking theyre going to strike it rich selling a $20 or $30 e-book. Theyve failed to do some simple math.

Suppose you sell an e-book for $30. Deduct $5 off your $30 sell price to account for advertising and other costs. That leaves you with $25. Youd have to sell 1,000 copies a year to make $25,000. Thats a lot of copies! Even if you did sell that many, 25 grand isnt exactly going to put you on Easy Street.

Another factor is competition. Many e-books with resell rights have also be purchased by hundreds, possibly thousands, of competitors.And if youre selling an e-book as an affiliate, youre usually limited to 50% or less of the sell price.

The key to making large amounts of money selling information products is that you need resell rights for at least one higher priced item.

Say you have duplication rights to a product that sells for $400. If you sold just 6 copies of this product a month, youd be pulling in $2,400 in sales. Thats $28,800 a year. If you sold 12 a month, youd make $57,600 a year. Sell 24 a month and youre raking in $115,200 a year.

Wait a second you say. What about my costs to duplicate, package and ship the product?

Heres the beauty of the information marketing business: people pay for the value of the information, not the physical medium on which its delivered (e.g. paper, audiotape, videotape, CD etc.)

Its dirt cheap to duplicate information products. Its easy to duplicate a CD-ROM on your computer and blank CDs are less than a dollar each.

I have an info product that I sell for $397. To duplicate, package and ship it via UPS, costs me $60. Subtract $50 for advertising. That still leaves me with $287. Thats a huge profit margin.

So instead of concentrating all of your marketing efforts on low priced info products, be sure that you have one or two higher priced items that youre actively promoting.

Use e-books as a stepping stone to upsell customers. Once theyve purchased a product from you, youve established a relationship with them. Someone whos already down business with you is five times more likely to buy than someone who hasnt.