At some point, you bumped into a virtual item auction on ebay, where the seller was exchanging a downloadable product for cash. You probably wondered why the seller was offering the product for such a low price--and you probably also wondered how he was making money.

There are two answers to this question: the first answer is that the seller had no idea what he was doing and, in fact, wasn't making any money on ebay.

The second answer is that the seller was highly-experienced and was making hundreds of dollars each day, even though his auctions were only showing one-dollar sales.

This sounds totally bizarre, especially if you haven't sold information before, but it is absolutely true: there is a fortune in selling information--especially on the Internet.

Now, in the case of the ebay seller I mentioned above, she was probably using information products as a "loss leader" to make back-end sales. She might sell 10 copies of an ebook for $1 each and might end up being $2 in the red at the end of the day after paying seller's fees.

But she knows this--and this is okay because she now has 10 highly-qualified prospects for whatever product she is using her ebook to sell.

If her ebook is about teaching people how to make money selling on the Internet, she might list purchasing a domain name and hosting as one of the steps the buyer must take. To the buyer, this may seem innocent enough; however, when he follows her plan and purchases the hosting and domain name as directed, she will earn a commission on the domain name registration and a recurring commission on the hosting for as long as his Internet business sticks around.

If you want to try this system out, you can search google for "re-brandable" ebooks with "resale rights." You can also search ebay for similar products. A number of people make money on ebay selling these ebooks.

If the rights permit, you can purchase the product and then sell it as a downloadable product on ebay.

If you want to maximize the effectiveness of this strategy, you should keep prices very low. Your goal should be to use ebay as a medium to disseminate the book for free or for a very low price. Unless you are selling a book that contains no back-end sales mechanisms and no affiliate links, your goal should be to sell a powerful system (contained within the book) to a customer who will use it successfully to make money--and, in turn, earn you a residual income by sticking to a system that earns you money.