I have been meaning to write a general guide to Affiliate Marketing but with some real life examples from my experiences for about hmm 4 years now. Â This is by no means a holy grail but I wanted to put something out.
When I started in making money on the internet it was through Google AdSense. Â But it didn’t last long because I learned very quickly that all the advertisers through AdSense were Affiliate Marketers. Â So I followed the money and signed up to these affiliates and that started my world of selling other people’s products as an affiliate.
The Affiliate Marketing world is composed of 2 core components and I have been on both sides of the coin:
- The Publisher Â – Commonly referred to in the industry as the Affiliate or affiliate marketer. Â You have a lot of creative control to sell other people’s products. Â And if you find the right way to present them and their perceived value than there are riches to be had. Â I don’t have access to full statistics back when I was an affiliate but I remember my record day was about $15,000 in profit. Â But Keep in mind that you take on all the risk here. Â You could spend countless hours/days and a lot of money and yield nothing. Â On several occasions in testing something new I have lost thousands of dollars in only a few hours. Â Most of the time you can expect to lose money until you profit. Â In the end you are just a commission only based sales person on the internet.
- The Advertiser – Commonly referred to in the industry as Â the offer or the product owner. Â This is the company that sets up the affiliate program in house or with a network. Â As the product owner you are in essence the business owner. Â Financially you have little downside. Â You know what your margins are and what you can pay a commission based sales person (an affiliate). Â If you are not doing it in house then a network will work directly with affiliates to get them to promote it. Â This is a double edge sword. Â The hardest thing is just that because affiliates have all the risk to sell your products its very hard to recruit them. Â You went to an affiliate network because they have affiliates in the industry your product exists. Â However most your competition is already making money for all involved so the barrier to entry as the product owner is VERY VERY VERY hard. Â You have a very low chance that anyone will even try your offer.
If you have ever attended shows like the Affiliate Summit or LeadsCon you will see 90% of it is people looking for affiliates. Â They all make claims of highest converting offers and best payouts.
Its a very high stakes and high swinging industry. Â The ups and downs are crazy.
On the publisher side when we took the ShoeMoney System to an affiliate network it took over 6 months to do anything. Â We went from making next to zero sales per day to over a thousand. It was insane. Â When your product/offer is hot then every affiliate will want it and every affiliate network will want to run it. Â When its not than its frustrating as hell. Â Either way most don’t last long. Â We only lasted about 3 months until we lost our credit card processing. Â We went from processing $0 per day to over $250,000 per day…. and only had a 3 million dollar cap on our merchant account. Â We had to pause the campaign and get more merchanting and once we did we couldn’t get anyone to try it again and the few that would try it said they were making more with some other make money online product. Â O well was awesome while it lasted.
But you need to start somewhere no matter what side your on.
Keys to success:
On the Affiliate side creativity is everything. Â You have to present the product, and more importantly the products perception BETTER than the company is/can do. Â Sure you can just send traffic to their landing page but if you make your own page that is where the magic happens.
On the Product Owners side – you have to do whatever it takes to get started. Â It might mean you have to pre-pay 1-10k (depending on quality) to get them to do a “test”. Â You might have to do a loss leader to get some traction. Â By loss leader I mean you pay out more than you make. Â For instance with our product that sold for $97/$79 we paid out as much as $130. Â We lost about $50 overtime we made a sale. Â But on the back end we put other monetization strategies in place to ensure we came out profitable to the tune of an average of $65 per buyer after the dust settled.
I will leave you with this. Â In my 10 years of experience in internet marketing the biggest keys to success are knowing your analytics and having creativity.
No matter what side you are on you HAVE to log every little component of data you can.
On the affiliate sideÂ you need to be constantly testing and measuring user behavior. Â What web browsers convert the best. Â Desktop or mobile. Â Geographic. Landing page optimization and testing. Â Tons of stuff here to make a huge difference.
On the publisher side analytics is the key to raking in money vs losing your ass. Â First you have to determine the LTV (life time value) of Â a customer. Â If your product is a subscription than this will take a little bit. Â Then back track it all to the source. Â Not only the affiliate network but what affiliate is making or losing you money. Â As a product owner I had this really drilled down that I knew not only the profit of every individual affiliate but also the refund/chargeback rate and lifetime value.
Affiliate marketing is an amazing industry that is rapidly being regulated and evolving. Â The most prosperous days were in the 2004-2008 era. Â However there is still a HUGE opportunity for both affiliates and product owners. Â But it will not last. Â The gold rush has always been regarded as the standard in a time when people could make an enormous amount of money. Â This is bigger.
20 thoughts on “Affiliate Marketing 101 For Affiliates and Product Owners”
Great post Shoe. Add it to your list of resources will help a lot of people.
Thanks for sharing from the publishers side of things. So does your offer currently exist?
I also moved to the next level and created my own product in IM niche but I was not aware that finding affiliates would be a tough JOB, anyway I’m not at ZERO sales a day but it is more than 10 a day and that is really a good deal for me specially when it is my first product.
Great post as always!
As for the 2004-2008 “prosperous days”…do you feel the change is more related to the
“economic crisis” and not necessarily the evolution of affiliate marketing (people having less money to spend since
Nice short post which gives a good insight.
Analytics and creativity! I used to think I was more analytical than creative. I have since found my creative side and am now melding the two. I wish I had know about affiliate offers a year ago or better yet how to leverage them 😉
Thanks for sharing your insight Jeremy, it is always great to see things from another perspective. Would you say it is better to be marketing your own product?
whoa!! What an insight – I never realised the trials and tribulations associated with launching a product using affiliates!
Would solo ads not work?
Great information for beginners. I have had some success in affiliate marketing so far and I don’t think it will ever die. Thanks for the info Jeremy, I have learned at least few tricks by reading your blog.
The above post was of great value !
Just a quick question i wanna ask..
Is product creation very hard to do? ( because i was thinking to do)
I think you meant “advertiser” in the second to last paragraph.
“On the **publisher** side analytics is the key to raking in money vs losing your ass. “
Very good post. Thanks for dropping few tricks.
Great post. Thanks for sharing!
Wow”. Thank you for sharing
Solid content Shoemoney! I absolutely agree with you about what it takes to be a successful affiliate. Another important thing to focus on is nurturing good relationships with affiliate managers. This is one thing I’ve been doing a lot lately and it’s really paid off. Have a good one!
Excellent written and informative, thanks
Great insights! Affiliate Marketing is the way to go using niche sites.
Great insights! Affiliate Marketing is the way to go using niche sites. Thanks for sharing!
Good to know your prospect, thanks for sharing.
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