Affiliate marketing does it live up to it’s claims?
If you’re looking to make a ton of money online, then the best option for the most people is undoubtedly affiliate marketing. This is the online business model with the lowest barriers to entry that anyone can learn and everyone can master. At the same time, it is potentially one of the most profitable business models you can use online. Certainly much more profitable than blogging for AdSense revenue or similar.
The Carrot Dangled On Facebook
And this is a hook that advertisers on Facebook often like to pursue. Chances are that you’ll have seen plenty of adverts for online money making schemes and ‘programs’. And no doubt 9/10 times, they’ll be based around affiliate marketing.
You’ll know these ads if you see them. They’re the ones where people talk to you from their private yacht and tell you how they make a 6-figure salary in just a few hours of work each week.
Likewise, you’ll have probably have seen the videos of online ‘billionaires’ talking about their money-making systems. They wear smart suits in very pimped-out offices. They’ve created a ‘digital empire’ using affiliate marketing techniques. Now they’re rich and powerful and you probably want to be them…
But is this all true?
Can you really accomplish all that through affiliate marketing? Is it really that easy? Or is there more to it than that?
How Much Does an Affiliate Marketer Make?
First of all, let’s assess the claims about earnings. We don’t have to guess at this. During the 2014 Affiliate Summit over 1,800 affiliate marketers answered a survey describing everything from their methods to their earnings.
How much were they bringing in?
Well, only 46% earned less than $20K while 8% earned $50K-$100K and 12% earned $100K+. At the very least, this shows it’s certainly very possible to earn big money. The rest were around the middle, but note that 19% elected not to answer at all.
What’s also interesting here though is the sheer spread of earnings. Affiliate marketing is bringing in from $20K to $100K and beyond, which you just don’t find in traditional careers.
So what’s making the big difference here?
It’s the skill of the individual.
As an affiliate marketer, you’re self-employed and working alone. There’s no need to ‘climb the corporate ladder’ or to compete for promotions. You can get to the top overnight if you have the right skills because it’s all on you.
The Affiliate Marketing Lifestyle: What Does Affiliate Marketing Involve?
Perhaps the biggest draw of affiliate marketing though is not the money. Instead, for many people the appeal lies in the fact that this is a completely ‘passive’ business model. Once you’ve set everything up such as your sales funnel, your affiliate network account and your blog/sales page, then you can be earning money while you’re sleeping.
When it balls down to anything, it’s the freedom that is important. Most people want a better lifestyle. Usually the common denominator that better lifestyle is freedom.
But again this can get twisted. This lifestyle is what you can achieve once you’re at the top of your game as an affiliate marketer – it doesn’t come overnight.
The Affiliate Marketing Myth
In fact, affiliate marketing is likely to initially involve a lot of work. The idea here is that you put in the work up front so that you can sew the seeds of your labor further down the line. To begin with, you need to be willing to put in a lot of hours for very little reward.
Specifically then, what does affiliate marketing involve?
If you’re reading this , then there’s a good chance you have a general idea but we’ll recap in a little more detail for those who do not.
The devil is In the Detail
Essentially, as an affiliate marketer, you sell products for commission. This means you’ll be finding products online and promoting them using your own affiliate link. If someone clicks on your link and then buys the product, you’ll get a cut of the profit. Often, affiliate marketing involves selling digital products and you can expect your cut to be as much as 50% all the way up to 100% of the RRP.
There’s no risk involved for you because you’re not creating the product and there’s nothing for you to ship or for you to store. All you have to do is sell but you earn more than the creator.
The art of Preselling
The hard part though is in doing that selling. This is where the ‘marketing’ part comes in and your job from here is to find yourself a large audience through a blog, through an e-mail campaign, through advertising or through social media; whichever tool you find the most effective.
This is why there’s no steep learning curve or barrier for entry for beginners. All you’re literally doing is making sure people see your affiliate link. There’s no product creation and no investment. You can get started tomorrow in minutes and it won’t cost you a penny.
If you’re a big blogger and you already have an audience of 10,000 readers a day then you’re going to find this very easy. All you need to do is put some very persuasive text on your website along with the link and you’ll start driving traffic. If this is your first attempt at affiliate marketing though, then you may well find this process a little more complex and little more hard going.
You now have two options:
- Build your own audience
(Actually, there are other methods and growth hacks you can use which we’ll come to later, but for now this will suffice.)
Advertising – Scary for Beginners
If you’re going to use the route of paid marketing, then that means you’re going likely going to be using PPC. This is ‘Pay Per Click’ and basically means that you pay for every person who clicks on an ad and thus gets sent to your site. The more you pay, the more visitors you get.
If you design your site well and you can really convince people to buy your products, then you should be able to convert a predictable amount of visitors into buyers. This in turn means you can work out your precise ROI. So if you pay a certain amount per visitor, and N percentage of those visitors earn you X amount of money, you can tell whether or not your strategy is profitable.
How Much Are Adverts
The amount you pay per click will depend on the amount of competition available for your ad. PPC ads work on a ‘bidding’ system, whereby the advertiser offering the most per click is the advertiser whose ad is most likely to show.
Meanwhile, even if your website is very effective at convincing people to buy, you’ll still only get 0.5%-10% of visitors converting. More often than not, you’ll be at the bottom end of that spectrum. So you’ll need your ad to be seen by about 1,000-2,000 people in order for you to get a single sale. This means you’ll be paying a relatively high amount for your ad to be seen 10,000 to 20,000 times for about 100 sales.
This is a formula that takes a lot of adjusting and you can expect to lose a certain amount of money before you get it right. With a good set-up, you can expect to spend $600 a day on PPC to make about $200 profit. That’s quite a big risk when you’re first starting out and for the first few months you probably will be operating at a loss (until you learn the right keywords to target, the right products to sell, the right sales pitch etc.).
Building an Audience The Wealthy Affiliate Way
If you don’t have that kind of money to play around with, then your only other option is to build your audience naturally over time.
That means creating a blog and then using it to promote yourself through social media and to build up a mailing list full of subscribers. Again, you can’t expect your conversion rate to be all that high and you’re going to need about 10,000 views daily to make even close to a full time living.
Getting to this point is slow going. You can expect it to take at least a year before you’re on 600 visitors a day and while you’ll accumulate exponential growth at this point, it will still likely be a few years before you’re at 10,000.
Oh and at this point, affiliate marketing is anything but passive. At this stage, you’ll be investing huge amounts of time into writing a compelling blog that people will want to follow, emailing your subscribers and managing advertising campaigns.
It is very much possible to be highly successful at affiliate marketing. You definitely can earn hundreds of thousands from it and once you’re all set up, the money will come in while you sleep.
But it also requires a big upfront investment of time and/or money, along with the right knowhow and strategy. If it didn’t, then everyone would be rich, no one would work for an employer and the economy would have collapsed.
So it’s a good thing really…