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What are
Affiliate Websites?
Affiliate programs are the
road to riches. You have all heard of affiliate websites and how
they make millionaires out of average people.
But is that really true? And
who actually benefits from affiliate websites.
Well, you do benefit from
affiliate sites since you get a commission from every sale. But
ultimately the retailer is the real winner.
So how does it all
work?
You build a website, lets say
for the sake of argument about "The Value of Jewelry &
Gold". Now you market the site and get people to come and
read what you have written, take part in your forum and discuss
the topic of the website. So far so good, right?
Now, you place a banner on the
website and your visitors click on the banner to buy "a
diamond ring". The sale is $3000.00, you get maybe 15% or $450.00
in cash.
You really can't argue with
that scenario. It has the potential to make you loads of money.
Thats if you can get people to buy high ticket items on a regular
basis.
But the staple of affiliate
programs are lower end items generally in the $25 range. So
commissions are more like $2 than $200. Still, you make something.
And if it does not interfere with your normal site operations
growth and revenue, then go for it. It is a nice supplemental.
It you are building a website
for the sole purpose of generating income through affiliate
traffic. Save the money.
It is a tough market and the
cost of running a website is generally more than the commissions
that you can earn. Unless you have a huge following and work the
website regularly.
My experience has been
that the people making $10,000.00 a month or more are spending $5,000.00
a month to do it. Not to mention running hundreds of websites and
working long hours.
Most of the big guys give up
pretty quickly because of the rate of return and the obvious risk
involved.
If you have to spend $5000 to
make back $10000, you could just as easily loose the $5000 and
get back nothing. That is a lot of cash to risk with very low
returns.
If you run a website
and the product fits, it can work for you. But if your
business plan is to build a site that will generate an income
via an affiliate program, your likely going to regret it.
The biggest advocates
of affiliate marketing is young people under
18. They run blogs, home pages and such and
earn a few hundred dollars a month in their spare time.
Its great for them, extra cash and they learn the net from the
inside before they enter the work place.
When they graduate high school,
they know more than most seasoned IT people with years in the
industry. Its a win win. But most of them quit, because $200 a
month wont buy gas or pay their rent once they grow into adults.
Since the market is such that
the web is saturated with affiliate websites to the point that
they only earn a few dollars, unless you do something spectacular,
that is all you can really expect to earn from a single website
that consumes all of your time and effort.
At the same time, a website
that is successful can derive a large income from affiliate
marketing to its existing base. If you have 100,000 visitors a
month coming to see new fashion tips, you can surely sell them
clothes, shoes or something else they need.
Of course if you have a
website that is already up and not making and money, it is always
nice to monetize it and that can be done by simply placing
affiliate based ads on your pages. It does not cost you anything
and can potentially earn a nice paycheck.
The main problem with
affiliate marketing, is you only get paid if people buy. So you
are 100% Dependant on the merchant to hold up their end, track
your sale and pay you.
If you sell ad space on the
same website you might get paid for page views or banner
impressions which you can depend on a regular income.
Use Affiliate
Syndicates not Merchants Directly
Then dealing with merchants
that are only paying you a few dollars a month they never feel
like it is important to get your money out. So if you do use
affiliate programs work with reputable companies like CJ.com,
Shareasale.com or Linkshare.com. They will track and pay for
sales and it is because that is how they get paid.
If you use these companies you
can usually get a monthly deposit directly to your bank account
and depend that the results are reliable.
My experience in working with
merchants directly was poor and in fact sometimes I did not get
paid for months at a time and when the payment came in it was one
check for 3 months indicating they never made the checks out the
previous 2 months.
Waiting 3 months for payments
just does not work.
Affiliate Marketing
is Getting Harder
Over the years, affiliate
marketing has been getting harder and harder. Companies have 50,000
affiliates or more making their products so prevalent online
there is no reason for anyone to buy them via your links.
Affiliates that were making
thousands of dollars a a month now make hundreds of dollars a
month with the same amount of work.
There is more competition and
less money being made overall.
Google was even in the market
with their own affiliate marketing program pairing advertisers
and merchants but in 2013 they closed their program entirely.
This tells me that my analysis of the profitability of affiliate
marketing is correct.
Less, people are doing it,
less money is being made and getting sales are that much harder.
If google can't make money with it, then who can?
My advice is to stay out of it.
I did it for many years and it was a huge headache, if I had
worked the same time at 7-11 I would have mode more and they
would have paid my heath insurance.
There will always be a place
for affiliate marketing but to enter the industry without a
website is not advisable. You need the website first and then add
the affiliate programs later.
After all, running a website
requires the same effort whether it is affiliate based or
otherwise. So having an affiliate based website is not going to
be any easier than having any other website.
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