But then “reality hits.” Why doesn’t everyone have a business?
- “I don’t have the money to start a business”
- “I don’t have the time. I already have a job and other responsibilities”
- “I don’t have any good ideas”
Have any of these thoughts prevented you from starting a business before?
I was in that same scenario back in 2008.
I was about to graduate from Georgia Tech, but I wasn’t too thrilled about entering the workforce. .
I remember thinking, “People only get two weeks vacation a year? That’s it?” That’s not enough time for me to travel the world and accomplish all my other goals.”
That’s when I started looking for ways to make money. I needed a side hustle. There are not a lot of options when you’re 22 years old and don’t have any super useful skills.
I ended up making some cash by buying items on sale in “real life” and reselling them for a profit on eBay. The bad news is I got banned a few months later.
But that experience ignited something in me.
I realized that I could make money on the internet, and I loved it.
I needed to find a different industry since eBay didn’t like me anymore.
What do you do when you don’t know something? You google it!
So I googled…
What is Affiliate Marketing?
Definition: Affiliate marketing is when you get paid a commission for promoting products / services for other companies.
Here’s an analogy to explain it better:
A few decades ago there were salesmen that went “door to door.” They’d have a product and go around neighborhoods selling their goods.
Imagine if you were a knife salesman.
You’d go around your neighborhood and sell kitchen knives. The knives cost the customer $100, and you get a $20 commission for each set of knives you sell.
There are many departments of running a business.
In this case, you only focus on the marketing & selling.
The knife company does customer service, creates the product, does product research, etc.
You’re making great money, without a lot of the headaches.
You’re not an employee of the knife company – you’re an independent contractor.
What’s in it for the knife company?
Each knife costs $30 to make Knives sells for $100 Salesman gets $20 commission
The knife company gets $50 in profit for each sale made…risk free.
What happens if the salesman walks around for a week and doesn’t get any sales?
It doesn’t cost the knife company owner anything.
It’s a smart strategy for the company.
Why Affiliate Marketing is Better Than Door to Door For Sales
I’ve never had anyone try to sell me an item door to door besides Girl Scout cookies. The door to door model is dead because it’s inefficient compared to mailing or the internet.
The spirit of these salesmen has evolved into affiliate marketers.
Your income is not limited to your time.
You don’t have to go door to door to sell.
You can build a website, and campaign, and it’ll make money for you while you sleep. Websites don’t get exhausted from walking around all day 🙂
Our selling is not limited to our area.
Suppose it’s the 1960’s and you live in Georgia. Your selling area is limited to where you live.
With the power of the internet, you can make money in countries you’ve never been to before. This is powerful because some countries are much easier to make money in.
We don’t have to work for only one company.
There are no contracts.
Switching to another company is as simple as logging into a website (affiliate network), and grabbing a link.
Who’s Involved in Affiliate Marketing?
There are 5 parties involved in a typical affiliate campaign.
1The Affiliate also known as the “Publisher”
2The Affiliate Network
Affiliate networks (usually referred to as “networks”) are “marketplaces” for offers. Offers refer to the “products” or “services” that companies are trying to sell.
Networks serve as the middleman between affiliates and the product/service owner.
You can log into an affiliate network and find hundreds (sometimes thousands) of offers to promote.
- Weight loss products
- And hundreds more verticals…
Upon joining an affiliate network, you’re assigned an “affiliate manager” (commonly referred to as an “AM”). This is your contact person. Their job is to help you with any issues you have with campaigns, and to recommend new offers to promote.
Affiliate networks are optional. You can always work direct with the advertiser or merchant. Sometimes they have their own internal affiliate program that you can sign up with directly.
But it’s easier to go through an affiliate network when you’re starting.
This is the company that owns the offer. Every company has a marketing team, but affiliate marketing is a way for them to get more sales with low risk.
The advertiser only pays when the affiliate sends a conversion.
I know some companies who don’t have a marketing department and rely 100% on affiliate marketers for sales.
They focus on their strengths, and they outsource the marketing to guys like us.
The companies range from dating, to gaming, to transport etc.
There are so many offers out there.
4The Traffic Source
This is where your potential customers come from.
You build a website that advertises your products…you need a way to get people to visit your website.
Most websites out there sell “ads” on their sites.
How do you think Facebook and Google sustain themselves?
There are two types of traffic sources out there.
You can purchase banners directly from the site itself. Example: Purchasing directly from TMZ.com or Facebook.com Here’s an example:
- You profit.
- The traffic source, affiliate network, and advertiser make money.
- And the customer gets connected to a product or service that benefits them.
How does this all work on a technological level?
How does the advertiser know who to pay?
Don’t worry too much about it.
Here’s a quick overview of how the process works:
The Benefits of Affiliate Marketing
- You can make a lot of money.
I made over 7-figures in profit my first year, and I have days where I make over 5-figures profit.
I’m not here to sell you the dream. I’m here to tell you that this is real.
- You can make money while you sleep.
Once you have a profitable campaign it can make money for you 24 / 7.
You can even build employees and systems to take over everything.
- It’s simple to get started.
All you need is a computer, internet, and some money to spend on traffic.
You don’t have to hire employees or rent office space.
- There are no commitments or contracts.
Don’t want to promote the offer anymore? Then stop. Want to go on vacation for 3 months? You can pause the campaign and go.
- It’s the best direct marketing training in the world.
The Downsides of Affiliate Marketing
1. You’re Not Building any Assets
We connect the customers and the advertisers together. The advertisers keep the data, and build relationships with the customers. We only get paid that one time.
You’re not going to have an “exit” and no one’s going to buy your business.
Affiliate marketing is a great business for generating tons of cash and building skill sets. Most people view affiliate marketing as a stepping stone onto other things.
2. Campaigns Can be Unstable Sometimes
You could be making $10,000 one week, and make nothing the next.
Here are some reasons why:
- The offer you were promoting went down.
- New rules and regulations occur that restrict how you promote or what you can promote.
- Another affiliate steals some of your campaign ideas and competes against you with it. Some people don’t like unstableness, and rather go for something like “passive income.”
Here’s how I view it:
“It’s all about how much money you walk away with.”
Would you rather make $1,000,000 a year that’s up and down, or would you rather make a stable $5k a month from passive income?
$1,000,000 a year vs $60,000 a year.
Don’t let the allure of “passive income” blind you from making a ton of money.
3. Some Campaigns Can be Unethical / Shady
Affiliate marketing doesn’t have the best reputation.
Affiliate marketers have been behind some dirty campaigns.
Since affiliate marketers are paid on a commission basis, they’re going to try to squeeze as much profit as possible.
Affiliate marketing is just a platform. You can promote legitimate campaigns like Amazon products, Teespring, or Shopify ecommerce, or you can promote dirtier campaigns.
There’s a ton of money to be made in all types of affiliate marketing so the choice is up to you and how you choose to promote your campaigns.
My advice is to check with your affiliate managers and advertisers to see what’s allowed.
4. There is a Big Learning Curve
Affiliate marketing isn’t as easy to learn compared to other ways to make money online.
The biggest reason is you have to spend actual money to buy traffic.
There’s a psychological principle called risk aversion. Basically, it hurts more to lose $100, than the pleasure of making $100. We’re programmed to avoid risk.
Affiliate marketing is a way to make money on the internet by promoting products for other companies.
There are 5 parties involved in affiliate marketing: the affiliate marketer, the affiliate network, the traffic source, the advertiser, and the customer
The benefits of affiliate marketing include being location independent, there are low barriers to entry, and it’s great direct response training.
The downsides of affiliate marketing include a large learning curve, there can be unethical campaigns sometimes, and the money can be feast or famine.
1. Read The Rise of Ngo. This is the story of how I got started in affiliate marketing.