The Art and Science of Royalties: Strategies, Insights, and Success Stories with James Foster

Count us down, and good, we're live. Okay everyone, this is a live-a-thon. I've got 7 interviews. I did zero prep, which is why it's called No Prep Needed. I love that. And this is how you do an interview when you don't know someone, because it's all about the focus of who is James Foster. And you know what, after this, I bet you James and I are gonna be like the closest friends ever. James Foster, welcome to No Prep Needed. How are you?

Thank you so much. This is going to be fun. I'm excited.

You're brave, you're bold, and you're brilliant to do this because not everyone says yes to opportunities like this.

Right? It's fun. Let's do it.

Okay. So first, James, I have to have you introduce yourself because I don't know who you are. So who are you?

Yeah, my name is James Foster. I basically work with coaches and experts and agencies sometimes about creating royalties for, from their, from their work that they've already created. You know, a lot of experts and coaches, they create a lot of different courses to help different people. And you know, you can only focus on so many things at once. It's normally the latest thing you've created. I tend to work with the stuff that you created earlier, the products that maybe you're just kind of collecting digital dust and I help experts get those out into the world and get them into other people's flow so other people can sell them for them as opposed to them having to do it themselves.

Okay, so I'm 61 years old. I've been in business for— grew up in a family business 35 years, have my own business for 9 years. Never thought of royalties and something that you could sell. So give me like, do you have a case study of what that really looked like for someone?

Sure. I mean, there's lots of different things. We want to go super popular that everyone will know. We can think of, say, J.K. Rowling's Harry Potter, right? So writing Harry Potter made her famous. The royalties from Harry Potter made her rich. You could say the same thing about George Lucas. Star Wars made him famous. The royalties from Star Wars made him rich. So there's going to be a lot of scenarios where, like, a great example is combining two, two things you wouldn't— they go together, but they're complementary, but you wouldn't think they go together. Like, an example would be one of our Royalty Rockstars was a, was a, um, fit pro, right? It helps coaches and coaches fitness programs. He teamed up with a supplement company, a fitness supplement. So naturally, when they came together, they created a bundle. And the supplement company who had all these customers coming in left and right, now they created this bundle that they could sell. So not only did they get the supplement, they got the training course with it. And that was, of course, at a higher price. So there was a higher margin. And that way, of course, the supplement company made more money because they got— because an info product costs basically nothing, right? So they had that benefit. But another benefit was that with this fitness product included, people knew what to do more. They didn't just have the supplement, they knew how to use it. They would use it more because they were also doing the exercises. So the supplement company also made more because people were using the supplement more instead of ordering it once it sat there and never got used like most fitness equipment or supplements or things. Now these people are actually using it. And of course, and then if you go to the FitPro side, he had the benefit of he was getting all these buyers all into his audience. He got their names and email addresses, and of course they already knew him, liked him, and trust him because he, he was part of this package that people had already bought. So it was really easy when he got these people into his world to sell them the more expensive things that he has, the personal training. Training or the group coaching, those kinds of things, because they made those— because they made this kind of connection and did effectively license their two products together.

Okay, so this is so interesting to me because when you're looking at it, you know, I think of royalties, you know, movies and all, you know, dolls. And, you know, my parents have a toy museum and all the toys have royalties to it. But you're saying the average person could actually work with you and have whatever it is— it would be a book, would it be a speech, it would be products like you're saying— and then you help them to create a royalty package?

Yeah, essentially. So yeah, we have the community, RoyaltyRockstars.com. We would like to think of it as that's the talent, right? If you have a course, if you've created a book or a series or something, you you are the talent. In Royalty Rockstars, you can work with other people who maybe have similar audiences that you can sell their product, they can sell your product. And we also have people in there who also want to work like, work like an agent. They will take your product and they will go out and find people who will sell it for you. You know, like the people between say a board game and Walmart, right? The one who gets the board game into Walmart, that kind of scenario. So yeah, there's lots of different ways that, that, that this can work.

Would I, would I be wrong if I thought of royalties as kind of like a commission?

That there, there you go. That's a very good question. So if, if I take a step back, what I think you might be asking about, and if this is something your audience would be familiar with, is what's the difference between licensing and affiliates? Uh, a lot of people are, a lot more people are familiar with affiliate marketing than they are with licensing, for example. And the difference is gonna be really your focus. So if you have the product, right, and it's— that product is your focus, it's your main baby, you are probably going to want to stay in control as much as possible of the marketing, of the message being put out there. That's generally a situation where you're going to want to use affiliates, and affiliates are gonna get commissions. And that way you are— that way you stay in control. You know exactly, like, like I was saying, what the message is, what they're saying. The only downside of it is that affiliate promotions tend to be one, um, kind of one-off and also focus on the commission. So somebody might come in and promote your product for a day or a week or maybe a month. Maybe they do a webinar with you. That's great and that's fantastic, but it is pretty much going to be focused on the commission. The, they're kind of in, they're kind of out, and they go on to the next product. Whereas where I work with the people I work with in licensing, it's more focused on a specific problem. Your audience has a problem that maybe you don't address, just something related to it, not just not your focus. And so you might work with somebody else who fit, who does have that focus. So I work with— I work in the B2B space a lot, in a lot of the online marketing space. So say somebody has a course on how to run Facebook ads, and the people who, who buy that course, they learn to run Facebook ads and they do great, but they might not exactly then know how to convert them. They might not know how to write a landing page or how to write email sequences. So it would make sense for that person who has the traffic product to work with somebody who can fill that other gap for them, that conversion. So it's about solving the problem, another problem that the same customer is going to have in licensing. And it's more of a long-term situation because if you're selling this product about traffic, people are— that keep coming in are always going to have the problem with conversion. It's not going to be a one-time thing. You know, it doesn't necessarily make as much sense to promote one conversion course and then another conversion course and then another conversion course. You probably, if you want to do the most for your customer, is you're going to find the best one possible and you're going to continually promote that. And that's the kind of case that licensing is going to make more sense. The reason for it is you have this traffic course, you— one, they're your customers, you've done all this work to build them up, and it's going to make sense that you would want to keep keep them as customers instead of an affiliate promotion where you're going to give them your customers. If you have a licensing setup, you can work it out so you keep your customers and you can also set it up. The splits don't have to be just 50/50. The more work that you're willing to do or put into it, the more of the profits you can get. I do, I love to do deals where I give away 90% of the profit. Where my clients just have to fulfill. They just have to give— make sure the customer gets their login and get the product that they've bought. I love giving away 90% of the profits because what that means for me is that that, that client is doing 90%— is doing all the work, right? So they're doing all the work, they're doing all the marketing, they're going to probably tweak the copy, the positioning, so it makes sense to their audience. and they're doing all of that. So I am happy to give them 90% of whatever the sales price is and just take a little bit. That, that Mariah Carey, that she wrote the album, the Christmas album, 20 years ago and still makes however much every year, every Christmas from it, be from that other work because other people are— the radio stations are promoting it, they're getting it out there, they're doing all the real work. She just recorded it however many years ago and it's still collecting. So that is, that's kind of the big difference. One is either going to be in and out, collect the money. Licensing is going to be solving a problem and it's gonna be a longer term with licensing as opposed to a shorter term with affiliates. It's neither right or wrong, it's just whatever is appropriate for the situation.

Amazing. So, okay, so here's the question for you. Who have you said no to? I wanna hear where you said, 'Nice idea, nice try, but not for me. I'm not going— we're not doing royalties for whatever that is.' What would that look like?

So that, that's a lot of different questions wrapped into one. So if it's me personally, as far as if I'm going to take on a client, then one, it has to be in kind of the marketing business-to-business world. Uh, I, I just don't have the connections in the fitness world or, uh, music world or, you know, other industries. Another thing is a lot of people will come to me with a brand new idea, a brand new offer, and those are great and they could very well be home runs, but they could also be flops, right? So for me, it's important that an offer has already been tested, that they already have a customer base. People already like the offer. And of course, their, their customers are getting a result. So yeah, if it's a new offer is generally a no for me. And if it's not in the marketing world, it's generally a no for me. Now, that doesn't mean I can't refer them to somebody who can help them. It's just, yeah, that's— that just wouldn't be my ideal client.

Amazing. So I wrote a book. It's not my secret to share. And so if I think of my book, I would continue getting royalties from like Amazon, correct?

Yep. Yep. That'd be the same type of situation. Yep. You're putting it in someone else's distribution.

That's okay. So this is so interesting. So what even made you go into this? Like, what were you doing? What does your resume look like that all of a sudden you're just like, I'm going to do royalties and start a business? Like, how did that go for you?

Sure. You know, it's kind of in retrospect, it is kind of— it's been winding, but it has kind of led to this. I'll try to make it quick. But back when I was 25, I'm 40 now, so Back when I started on the internet, I quit my job at a nice safe bank and because I wanted to go to Vegas for my birthday, didn't want— they didn't want to let me go because my birthday is around the holidays. Anyway, I quit the job, came back, went online, had to figure out how to make some money. So I got into this whole how to market online kind of world, eventually kind of stumbled into creating some info products, made some friends around that world. Eventually got into the what is now the Fulfillment by Amazon world where people will buy products, ship it into Amazon, and sell it that way. I happened to— took a— I had to take a course on that, and there was a process that they were doing at the time that was very— that was manual. You had— it took a lot of time. You had to go sift through tons of listings to figure out what products were selling well but didn't have a lot of competition. It was just, you know, there's thousands of products on Amazon, so it just took a lot of manual labor or time. You could either do it yourself or hire a virtual assistant to do it. I went the other route. I went to what is now Upwork and had somebody create some software that would do it for $300. Uh, $300, had the software, started using it, worked great. Realized that it wouldn't take anything off of my plate if I let other people use it as well. So from there, I, I didn't know anybody or didn't have any connections in in that world. I sent a few cold DMs to people who were already in selling products in that Fulfillment by Amazon world, told them what I had. One of them said it sounded great. We wound up being— creating a little partnership. So it worked out really well. We created the 6-figure— I call it a micro SaaS— that he did— the partner did all of the marketing, all the selling of it. The person who created the software I didn't, I didn't create the software. I spent about an hour a month running the reports that people got as the, as the actual service. And that was about it for a six-figure business and all of my time. So that kind of, that was a big, that was a big aha for me that I could kind of, um, that, yeah, that there was money to be made that didn't require a whole lot of work and I could kind of put the pieces together. To make these things happen because a lot of people just don't like to do that kind of outbound legwork. Now, I know you're a really outgoing person, so that would probably be right up your alley, but so many people, especially in the internet world, would prefer to sit behind the computer and not mess with a whole lot of people personally. So I was fine doing that. So that worked out. So that was my first success and I just kind of gone from there and parlayed that into one thing, another things. And yeah, the kind of theme has been this, recurring either licensing or royalties that was leveraged. I love leverage. I, I, I, I, I steal the quote from Sean Vossler, another marketer, but he says, I'm lazy and I like big margins. And I, I kind of agree with that. That is, that is what I prefer to have as well. So that is, that is the kind of deals I like to create or find or work with.

So James, I'm thinking right away, in my mind, I'm thinking the risk, the challenges. What if, what if all of a sudden the company says, no, we're not paying royalties anymore, or goes out of business? Could that happen? And then all of a sudden there's no more royalties?

Yeah, absolutely. I mean, yeah, businesses go out of business all the time. I like to think of things just like people. Businesses are essentially people, and people, when you're forming a relationship, you generally go on dates, right? So I will do a first date with somebody, something very small, you know. You know, it might even just be a matter of making sure they keep a timeframe. They say they're going to show up at a certain time if we have a meeting. If they don't show up and don't call, that's probably not a good sign. Or, you know, we have something— oh, you're going to write all I'll write this email for you. You're gonna send it on this date. Okay, perfect. They don't send it on that date, or, you know, there's an excuse as to why it didn't happen. Again, not a good sign. So I think of things in a series of dates. You do something small, maybe do something a little bigger, and then eventually you have the long-term relationship. Um, working with that and staying, staying to those kind of, um, restrictions, boundaries, however you wanna call it, that's kept me pretty safe most of the time. There's, there's of course always gonna be situations where, you know, people for whatever reason have things come up and if they communicate, you know, it can normally be worked out. But if they just ghost and all of a sudden you stop getting royalties, yeah, it, it does happen. But it's kind of a, you, you find out who that person is and If you're ever asked what, uh, what it's like working with that person, you just say, hey, my experience is they don't keep their agreements. And so that's a long way of saying it can happen. I find it more productive to, um, flip the coin again, right? You flip a coin once, it comes up tails. You flip the coin again, it comes up heads. If you want heads, just keep flipping the coin. Especially if you have any, if you have more reward than risk. The risk with licensing is very little. If somebody, if somebody gets a, if you sign up an agreement and they don't do anything, well, you're not really out anything except a little time. If they do something for a while and then cut you off, well, you find out what kind of person that is. But generally they do it, they keep up their end of the bargain, and you have the upside of those royalties. So to me, the, the, the benefits outweigh the risk.

James, so incredible. But I, so you, you gave a couple tips here. You, you have a strategy that every business actually should use. You know, the old saying, the customer is always right, really is not good for a business person. That, so what I heard is that you're in essence saying as a business, you know, you also— it's a two-way street. And so if you're working with your client and your client is not being compliant, they're not giving you what they need, they're, they're making promises that they're not keeping, they're not credible, even though maybe everything you've seen, you know, for the first week— and once you make sure that there's not something health-wise or something personal going on, and that maybe they're just sloppy or complaining all the time, they're too busy, so that maybe they're too busy for, you know, what you need to work with them. But this is something that really is not discussed a lot. But I think as a business owner, it makes sense. It's okay to say to your client, it's just not working out because the direction is not going in the same flow. And if you're both going different directions, this is what I hear. Am I correct in what you were saying?

No, yeah, I absolutely— there are going to be times when you're going to come to somebody and say, This is my situation. This seems to be your situation. We either have to figure something out or this doesn't work.

I love it. I love it. I mean, I've been in that position before, and I think when you set things up in the beginning, it makes, you know, and their processes are set up, it really does help. But I really appreciate your telling me this because it's an interesting challenge that I wouldn't necessarily think. And I, I'm so blown away by the whole idea of royalties. Like, I've never heard of it before. Are there a lot of people like you that are actually in the royalty business?

It depends on the market. I haven't seen a whole lot of it in the coaches and experts space. You look into things like sports and television, of course, movies and, and physical products, then there's a whole lot more of it. Intellectual property, you know, it's generally— it often gets done by lawyers and they try to make it seem very, very complicated, which You know, it can be you might need a lawyer, you might not. It totally depends on the situation. But I think a lot more people could be doing it and should be doing it.

Oh, my dog is barking, so I'm going to let him out. So excuse me, everyone. Thank God I'm wearing pants. This is a good thing. Oh, he's dead. Okay, so it's live. So, you know, the dogs, I can't put this—

You're live.

But I love this. Okay, so thank you for that, because I was thinking copyrights, trademarks. You probably have to explain a lot of intellectual property, what that looks like. For someone interested in this. So, okay, so how does someone reach you? What are the first steps and what should they do to prepare? Because I'm thinking if I was going to meet with you, I would need like a guideline of what you would want and then what I would need to prepare for you to even say, you know what, Adrian, you've got something here.

Hmm. Well, you know, most of the people that I work with have a lot of the groundwork already done. Like I said, I work with coaches and experts a lot of times, or marketing agencies. So they already have the intellectual property. They've already created something. Now protecting it, that I can't go into a whole lot of just because that is legal stuff. For the most part, people, if you've created something, it's going to be protected by copyright. You know, trademarks and whatnot, that's kind of a whole different thing as far as like brand names and brands. That's a whole lot of hoopla. I don't, yeah, I stay away from that. But if you create something like a book, that is just inherently copyright, copyright, and that is your copyright. So you get to do what you want with that. There are of course lots of situations where I am wrong and don't take any legal advice from me whatsoever. But that is relatively the most general view on it. So they already have something that they're doing. And like I said, I only want to work— I will personally work with people who have already sold it. So they already have an audience, they already know the marketing for it and know who it's being sold to. So they— I, I luckily get in the situation where they have a lot of the pieces put together and then it's just a matter of finding complimentary parties or softwares that can use this. Um, it, it really comes down to solving solving their customers' problems. So, for me, that's, yeah, that's most of it. If you already have an established business, if you already have an offer that's working and you're selling it, you probably have 95% of the pieces in place.

Can I get your elevator speech?

You know, I don't know that I necessarily have one. Yeah, royalties, I just kind of, that's kind of what I say. I say we, I'll take a— I work with clients who have courses and products that it's not their main focus anymore. And I will get it. I will put them into situations where the creator can collect royalties instead of having to sell it onesie-twosie anymore.

All right, good. That's good. And then where are you located?

I am up in Minnesota.

Oh, okay. Okay. It'll get warm there pretty soon.

Hence, I'm sure, hence the hoodie. Yeah, it's— we have hoodie weather and we have t-shirt weather. It's— but it's hoodie weather now.

I'm Daytona Beach. I love it. Do you have a staff working with you?

We have a small team. We're all remote. So yeah, it's me, my partner, and we have a couple other people who work with us in Royalty Ronin's— Royalty Rockstars, I should say.

I love it. I thank you so much for coming on the show because I feel like this is something that's so different, so unique. So I'll have you— now that we met, I'll have you send me your your headshot, and however you want me to promote, and then I will put that together. So the live will also turn into a podcast. I love that you were brave and bold, but you know your stuff, and so I think that really is important. Do you have anything else that you want to mention? Do you have a book, an offer, anything that we can help you promote?

Uh, yeah, if people want to go to royaltyrockstars.com, that is the free community. And like I said, if people have courses or things like that that they would like to turn into royalty payments that get other people to promote and promote, that is a great place to meet others. I'm in there, of course, if they want to reach out to me, and there'll be other people who can also help them get that out there. Or if people want to find me on social, on Facebook, on Twitter, on LinkedIn, my, my handle is always James Makes Deals. So you can find me there.

I love it. I love it. Thank you so much for saying yes to the live. I really learned something new today. I really love this. James, I want your information too. I think that I want to share it with a lot more people. So thank you so much for being on.

We'll stay in touch.

I look forward— yes, yes, we're friends now. And I have a friend in Minnesota. You have a friend here in Daytona Beach. Come for NASCAR.

Perfect. I like it. All right.

Thank you so much. Have a great rest of the day. Everyone, we have more coming up. On No Prep Needed. James, admit it, we didn't meet, right?

We haven't met. I've never talked to you before.

No, I've never— I've never even Googled you. Now I'm gonna Google the heck out of you. All right, thank you so much. I appreciate it. End the stream now. Perfect. Thank