What are "toll positions"? (A refresher post!)

Originally Posted by GordonJ

Can the person take a year off, conduct no business and not lose income?

Even 100k a year consultants can't do that.

So, maybe if Don Alm sets his businesses up on an automatic renewal, where they get invoiced and just pay to continue, yes, he has a good toll position. And with all the programs he's done and they simply renew, he has a great toll booth.

This one year off is one way to test a toll booth.

Many in ownership or CONTROL positions of products can easily do this, most gurus or Experts can not.

Gordon

I don't know if a zero-hour workweek is an applicable test...

Just because many that sell just another me-too product can set up there business so that it takes no hands-on labor in order to keep it going...

Retailer A submits and order and Off-shore VA sends an email to Off-shore manufacturer B who ships the order directly to Retailer A.

To me a "Toll Position" is one ultimately where the customer has to go through me in one manor or another in order to get the product or service they desire... They can not get it from anyone else... I may be the wholesaler in that instance, and the customer is getting it from a retailer who gets it from me, but they still have to go through my "toll" in order to get the product.

Now if you want to combine that POV with the zero-hour workweek that's A-OK.

Me personally, I like to work and wouldn't know what to do with myself if I were not spending a chuck of my week working on by business hobbies.

Originally Posted by Ankesh

Thanks Gordon and Michael for this awesome conversation.

In my mind, I have 2 definitions.

1. Toll position. A place that you create for yourself in the middle of a lucrative field so that everyone who wants to be a part of the field has to pay you a cut. Dan Kennedy does that with his info products (from what I know, Dave Dee sold more Dan Kennedy products than Dan Kennedy himself - at least that was true a few years back) and consulting (he gets royalty / commission on good performance).

2. The moat. As Warren Buffet says. Create a moat around your product or company so that others can't compete with you.

Dan Kennedy lacks a moat because anyone else can become a marketing guru too. But Sean Ellis has created a moat by coining a new term "growth hacking." He is the first person people will think of as a guru when it comes to growth hacking. Jay Conrad Levinson had done this too with the term Guerilla marketing.

There are various ways to create moats. Patents and trademarks and using legal options (for eg: many restaurants can only either sell Coke or Pepsi products - not both. This is enforced by an exclusivity contract). Keeping price really low so others can't compete (Walmart). Out innovating others. Being the first one to create a platform (Stock exchanges, airbnb.com etc).

I think a lot of Don Alm type ideas are toll positions because no restaurant or hotel will spare adspace for 2 guys. But they may not necessarily be deep moats unless you employ legal contracts to keep things exclusive.

Hmm - lots to think about.

Hey Ankesh!

Good point about the moat.

In one instance Dan does have a "moat" IF they person is so convinced that only Dan Kennedy can help them, then there is a "moat" present.

And really that's the magic of the Dan Kennedy system.

In his program "Never Be Out of Work", he gave the time frames involved from the first time a client entered his funnel (think either one of his books or the "No BS Newsletter") to the time they scheduled the $19,000 per day consultancy and the length of time is very large. We're talking many months on average. And over that time the client becomes more and more convinced that DK IS the answer to their marketing problems so you have both a "toll position" and a "moat".

The other "moat" that DK has is that he's an offline guru... anymore those folks are few in number and growing smaller.

[Dien Rice]

Originally Posted by Ankesh

In my mind, I have 2 definitions.

1. Toll position. A place that you create for yourself in the middle of a lucrative field so that everyone who wants to be a part of the field has to pay you a cut. Dan Kennedy does that with his info products (from what I know, Dave Dee sold more Dan Kennedy products than Dan Kennedy himself - at least that was true a few years back) and consulting (he gets royalty / commission on good performance).

2. The moat. As Warren Buffet says. Create a moat around your product or company so that others can't compete with you.

Hi Ankesh,

Thanks for this... I'll have to ponder this...

I do think there is a relationship between "toll positions" and what economists call "barriers to entry"...

I think a lot of Don Alm type ideas are toll positions because no restaurant or hotel will spare adspace for 2 guys. But they may not necessarily be deep moats unless you employ legal contracts to keep things exclusive.

I agree with your point here...

That was partly my point in an earlier post, see the P.S. here...

http://www.sowpub.com/forum/showthread.php?p=35260

How easy it is to set up such a multi-year contract, I don't know... Without a contract, I don't see what's stopping someone from coming in and giving the restaurant or hotel a "better deal"...

Of course, the likelihood of that happening may be small. It might also depend where you are - the likelihood is probably smaller in a small town than in a big city...

Best wishes,

Dien

Originally Posted by Dien Rice

We talked about "toll positions" and retail stores... And how most retail stores do NOT have a toll position. But, in very specific circumstances, it's possible that some do...

We also talked a little bit about copyrights and trademarks as toll positions as well...

What are some other toll positions? Well...

A patent is a toll position. If you have a product which is patented, then nobody can legally sell a product covered by the patent without your permission, while the patent is in force...

A secret formula can be a toll position. For example, take the product WD-40. It is protected by a secret formula. Nobody can make anything exactly like WD-40, without knowing the secret formula! (As you can imagine, they hold on to that secret formula quite tightly...)

By the way, Wired magazine analyzed WD-40, and claims it knows the ingredients! You can read their article here...

http://web.archive.org/web/201401190...st_whatsinside

What they don't tell you is that this may not be enough to duplicate the product. For example, it's like knowing the ingredients to make apple pie, but not having the recipe. What specifically do you do to these ingredients, and in what order? Unless you know that... You might end up with a heap of mush instead of delicious apple pie, even with the same ingredients!

An exclusive distribution agreement can be a toll position. For example, McDonald's will only sell soft drinks made by the Coca Cola company. That's a toll position for Coca Cola - it locks out Pepsi from every single McDonald's restaurant!

How about more "modern" examples? They exist too...

A list of email prospects for a particular type of product can be a toll position. For example, let's say you sell books on how to train boxer dogs. Your email list is a toll position for anyone wanting to reach these specific boxer dog owners!

A great domain name can be a toll position. That's why single word names can sell for thousands or millions of dollars. For example, PrivateJet.com sold for $30.18 million in 2012! https://en.wikipedia.org/wiki/List_o...e_domain_names

As you can see, there are lots of toll positions... Of course, there's more to it than this - but this is the foundation.

I'm talking to Harvey Brody, and again, we're hoping to bring everyone up to date...

Harvey's doing extremely well, and is very happy, healthy, no stress, etc. He still is doing extremely well, both from his "old" toll positions, and new ones... People know Harvey's "old" story, but very few people know the amazing things he's been doing the last 30 years or so... (Gordon and I are among the few who have been privy to this story...) However... If he feels there's enough interest in this topic, he may be persuaded to share more information with everyone...

If you could ask your toll position-related questions to Harvey, and get him to answer, what kind of questions would you ask?

Best wishes,

Dien

Dien, would Harvey Brody still recommend using the Thomas Register of American Manufacturers as a lead source for finding & acquiring injection molds as a toll position?

If yes, what specific type of injection mold would Harvey definitely recommend looking for with hidden stored value? Perhaps it would appear obsolete & totally worthless in todays market, but if modified or tweaked it would be a very profitable toll position?

Would either you or Harvey consider giving the steps & procedures step-by-step which should be taken & followed after the injection molds toll position potential has been analyzed or evaluated by either you, Harvey &/or?

Originally Posted by ascendedmind

Dien, would Harvey Brody still recommend using the Thomas Register of American Manufacturers as a lead source for finding & acquiring injection molds as a toll position?

If yes, what specific type of injection mold would Harvey definitely recommend looking for with hidden stored value? Perhaps it would appear obsolete & totally worthless in todays market, but if modified or tweaked it would be a very profitable toll position?

Would either you or Harvey consider giving the steps & procedures step-by-step which should be taken & followed after the injection molds toll position potential has been analyzed or evaluated by either you, Harvey &/or?

Boy, I'm definitely not a expert when it comes to injection molds and the whole premise of acquiring obsolete equipment but the way that whole industry moved off shore I would certainly do a lot of research into it. I have to think the initial costs would be large and with the ability of foreign entities to be able to "knock-off" products... it strikes me as being extremely risky.

I have buddies in the model railroad hobby business and they have shared some of the ins and out of creating products with injection molds and how it's still far less expensive to source from overseas.

Originally Posted by MichaelWinicki

Boy, I'm definitely not a expert when it comes to injection molds and the whole premise of acquiring obsolete equipment but the way that whole industry moved off shore I would certainly do a lot of research into it. I have to think the initial costs would be large and with the ability of foreign entities to be able to "knock-off" products... it strikes me as being extremely risky.

I have buddies in the model railroad hobby business and they have shared some of the ins and out of creating products with injection molds and how it's still far less expensive to source from overseas.

Yes Michael & that is precisely why I would like to have Harvey answer.

What Harvey taught was specific powerful moneymaking concepts w/o the specific step by step details. However w/o expert guidance or experience you could easily waste time on a losing proposition.

Perhaps Dien or Gordon with guidance from Harvey would consider providing a tutorial to the serious-minded who they want to align with in a win-win situation to eliminate any curiosity seekers, time wasters or losers.

A written non-disclosure could be provided if Harvey feels such is needed.

In other words use a system to streamline & make it virtually automatic to qualify & attract winning toll positions. Instead of using this as a gimmick to sell an information product like so many do to 80-90% & more of the people who never take the required action.

[GordonJ]

Originally Posted by ascendedmind

Perhaps Dien or Gordon with guidance from Harvey would consider providing a tutorial to the serious-minded who they want to align with in a win-win situation to eliminate any curiosity seekers, time wasters or losers.

A written non-disclosure could be provided if Harvey feels such is needed.

In other words use a system to streamline & make it virtually automatic to qualify & attract winning toll positions. Instead of using this as a gimmick to sell an information product like so many do to 80-90% & more of the people who never take the required action.

We're all ears if you have a solution.

What would that "system" look like? And how "automatic"?

Would the tutorial be the means to "qualify"? NDA's are a given in any business dealing with ideas.

So, if you have the idea for this system, describe how it works.

Gordon

Dien, would Harvey Brody still recommend using the Thomas Register of American Manufacturers as a lead source for finding & acquiring injection molds as a toll position?

If yes, what specific type of injection mold would Harvey definitely recommend looking for with hidden stored value? Perhaps it would appear obsolete & totally worthless in todays market, but if modified or tweaked it would be a very profitable toll position?

Would either you or Harvey consider giving the steps & procedures step-by-step which should be taken & followed after the injection molds toll position potential has been analyzed or evaluated by either you, Harvey &/or?

How Does Harvey Get Master Distributors to Distribute an Unknown Product w/o Advertising?

This question ties in with Bob Blaggs

Question: 5 What is the best way to get distribution for a product?

Harvey recommends getting master distributors to distribute your product via the major chain stores.

However according to Joe McVoy & Ken Hakuta you won’t get your product accepted by any master distributor unless it’s supported by national advertising or PR via the major TV Networks or National Newspapers.
The reason why because it’s not a proven & tested product for generating sales.

In fact, Joseph Cossman used PR to get his product exposed & accepted & likewise for Ken Hakuta to launch his Fads.

So how Does Harvey Get Master Distributors to accept & distribute an Unknown Product w/o any Advertising? & How does he overcome the objection of an unknown product w/o any advertising or PR support?

Thanks Dien, what kind of practical Real Estate investment opportunities does Harvey Brody generally recommend finding as toll positions in todays market?

In the "How to Become Financially & Personally Independent" course he taught the concept of stored value, not about the inflated or false real estate evaluations so commonly prevalent. Plus he avoided debt or mortgage when securing real estate or any other asset as stored value.

Btw, I was not sure if I was allowed to respond to this post.

Originally Posted by Dien Rice

Hi,

I thought I'd write a quick "refresher" for everyone on... what are "toll positions?" And also, why should you care?

A "toll position" is phrase often used by Harvey Brody. It specifies protection for a desirable product or service, such that, for a customer to get that product or service, the person has to go through you.

There is no way around it... Unless they go through you (and pay you), they can't get the product or service!

Let me first give an example of what is NOT a toll position.

Let's say you open an arts and crafts store. Is that store a toll position?

Generally, no. It's possible for someone to open an almost-identical store next door.

Let me give an example. I have a friend who had a store selling imported exotic products - things like traditional baskets, rugs, jewelry, etc., from overseas cultures.

His store was quite successful, until...

Another, very similar store, opened up a few doors down from him!

Immediately, his sales went down - because the other store was taking a big fraction of his customers!

My friend decided to really compete... He spent money, lowered prices, and so on, trying to drive the other store out of business.

Unfortunately... They must have had deeper pockets than he did. What happened was that my friend went out of business instead, and sadly, he lost so much money he even had to sell his house.

My friend's store did not have a toll position. Anyone could open a similar store close by, and compete with him. That means that customers who wanted to buy some kind of traditional crafts products didn't have to go through my friend... They could go to the store a few doors down, and buy similar products from his competition.

Now, going again with the example of a store, is there ever a case where a store can have a toll position? The answer is, yes...

Here's one example I know of. At the university I attended as a student, there is a "Sports and Recreation" (S&R) building. That building holds all of the indoor sports and recreation facilities - swimming pool, gym, rooms for aerobics classes, badminton courts, squash courts, indoor basketball courts, etc. It is about a 5 min. walk from the S&R building to the main building that had the cafes in it.

However, there is one cafe in the S&R building, and only one cafe. That cafe has a toll position - because there is no space for another cafe.

When I was there as a student, the people who ran that cafe were quite obnoxious. Nobody liked them. But, they still did well... Because people who participated in activities in the S&R Building had no choice!

If people wanted to eat or drink after doing their sports or exercise, without having a longish walk, they had no choice other than to buy from that cafe!

Unless they renovated the S&R building to fit in space for another cafe, they had (and still have) a kind of local toll position. It is impossible for someone to open a competing cafe close by on campus.

(Or off campus for that matter, because it's also a long walk from the S&R building to get off the university campus!)

Another example?

Walt Disney created the character of Mickey Mouse in 1928. The character became popular, through various cartoons, films, and also merchandise (like Mickey Mouse dolls, caps, clocks, T-shirts, games, apps, etc.). Mickey Mouse is copyrighted and also trademarked by the Disney company.

Because of that, nobody else can legally create any products with Mickey Mouse in or on them in the USA, and also in most other countries. If anyone tried to do this in the USA, for example, Disney would come after them with a lawsuit and take all their profits, and they'd probably also be fined.

In this case, copyrights and trademarks are also forms of toll positions. Toll positions stop people from competing with you. That means if you create something valuable - it's impossible for someone to just copy you, "jump on the bandwagon," and make profits from your idea and your blood, sweat, and tears!

I'll share some more examples of toll positions in the next post...

- Dien