Is affiliate marketing too risky as your main income?

Olov

Olov

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I couldnt find a good forum section to post This in, hopefully This is ok. Please mod send to The correct one, if this is wrong. Thanks!

I'm reading "The millionair fastlane" at The moment. A very good read. However, he mentions affiliate marketing in one chapter.

He mentions that you dont really own anything. Everything could fall flat and you'll lose your income if the network or company changes their policies, provision or just stop offering affiliate. Quite risky.

My dream is to stop The 9 to 5 and affiliate marketing will help me do that. I have several sites in several networks to minimize The risk. But im still in The hands of those networks and Google.

What do you guys think? Are you only using AM to get your p's up so that you can start investing in real estate or some other business? Do you think AM is a poor long term strateg as your only income stream?

The thing that tells me no is all them big sites that we all know of. Those that promote Amazon, sells sponsored posts, banners, have adsense etc.

What's your thoughts?

Excuse The poorly written post. Im laying in a Hospital bed and This autocorrect is pissing me off!
 
Well ANYTHING can happen to any business if you think in those terms. Example, if you only rely on SEO traffic it can take a long time to come in and even then Google can stop your traffic tomorrow if they think a “Video” strategy are better results for your niche or industry you are in, or better for their overall strategy. What are you going to do then? Close down your website?

Think it can’t happen? When Google started placing Map results in the organic a ton of “directories” lost their organic results like “Chicago Pizza Directory”. They either evolved or died.

This is why as a business you have to have multiple sources of traffic and ways to generate customers. This is why it is important to capture your audience members into a CRM for retargeting and email marketing. This is why growing your followers on multiple social platforms is critical cause one of the platforms can decide to stop sending you organic traffic or reduce your organic reach like Facebook did.

The biggest risk is not being able to get the traffic. If you were capturing the audience and the affiliate network or product/service you were promoting stops you can go to their competitors OR create your own competing version of the product/service and send your audience to it.

Another risk is a competing service/product can decimate the product you are selling and they do not have an affiliate program.

The biggest risk for ANY business is thinking your traffic source is going to be there forever if you use a single marketing strategy. The biggest risk is not thinking ahead. Basically lack of marketing diversification.

So many SEOs got wiped out in the Panda and other animal updates that thought Google traffic would be easy forever. Time for you to evolve.
 
So yeah, like @CCarter said, anything could happen to any business.

I'm actually on the forum for the book you speak about written by MJ. My handle is the same there as here.

If you are reading that book, you probably know the meaning of CENTS. If you do, then you know affiliate marketing ( according to CENTS ) violates a lot of what CENTS is about.

Does that mean you can not cash out big time in a non-CENTS business? No.

Myself ( and many others ) were able to cash out 7 and 8 figures NET profit in a year or less while violating control and entry.. and many times need too.

I feel the reason MJ put that in his book is that having a framework where you put the odds on your side ( like CENTS ) makes better sense than not to. CENTS ( sometimes written as NECST ) tries to help do that.

If we move away from that and focus on affiliate marketing, I can tell you what I didn't like about it as someone that worked for an affiliate network and went on my own to be one of the top affiliates for several networks. Some of what I list can happen in any business though too...

1. Networks and product owners will steal from you in the form of shaves and scrubs.

2. You typically only get paid once, while they benefit from a conversion many times. They will also sell off and cash in on non-converting data that comes in too that you brought them but did not get paid for.

3. They will cap at any time how many conversion you can bring in per day

4. They will see where you conversions come in from ( LPs, traffic sources ) and compete with you once they see it's working for you.

5. For a long time, most ad networks hated affiliates. It was extremely difficult to even get ads for products up because the product was banned at that network, or the claims being made, etc.

6. Once you find something working for yourself, some other affiliate will see it and spot it and ruin it for you. Trust me on this.

7. Networks make you wait absurd times to get paid sometimes. Also if they decide to not pay you, you are pretty much never going to get it.

As an affiliate, you are the bottom of the totem pole. But you provide the most needed item when it comes to marketing and sales ( leads and conversions ).

If you are willing to live with that and accept those risks, you could make a ton of money still that gets you into some other business later.

.
 
The thing is, pretty much any 9-5 I can think of can fall apart at any time. Many years ago, my Dad had worked at a company for over 20 years as a Bank Manager/VP and one day the company decides to cut corners, close down a few Branches and they let my Dad and many other people go, not for performance reasons but because they could get some kids fresh out of College to do the same job (not as well) for less money. There are always risks to take with anything in life. I take a risks every day I do freelance work. Will I get paid on time? Will I get paid at all? Will I run out of client work? A solid contract can help the first 2 but not the third.

Agree with @eliquid and @CCarter about the affiliate life. You're starting at the bottom of the ladder and getting into an industry where the volatility is high. Depending on your niche, there is still tons of money to be made. I'd also recommend maybe doing a bit of freelance on the side and promoting the skills you have if moving away from the 9-5 quickly is what you really want.
 
I worship the ground MJ walks on. The guys genuinely altruistic and not a bullshitter.
Check out his book unscripted.
Its way better the millionaire fast lane.

Being an affiliate sucks if you're sitting around slinging garbage network offers and tweaking landing pages. Tools like what runs where pretty much guarantee someones just gonna rip your campaign the moment you try to scale.

That said, its still totally possible to hit home runs. You just need to watch like a hawk for a potentially viable offers and move REALLY fast. Slam jam thank-you mam is stressful, but your top couple of days can get so huge. Who cares about sustainability when you have a couple weeks of 100k+ margin days.

Affiliate marketing really shines when you've already got an audience. Product development is a pain in the ass. Its nice to be able to just cycle offers for variety. You can't usually sell people the same thing more than once, so there are some real merits to the variety of offers the affiliate model gives you. This is especially true when you have a media site or niche email list with a bunch of manic obsessives. Digital advertising models tend to do a very poor job of capturing value with recurring traffic from a small but loyal group of visitors. There are way more niches with cult like followings than most people realize.

If you're willing to play hand holder, complex products are where I think most of the opportunity currently is.
B2B saas or marketplace models often pay very competitive commissions that reflect the lifetime value of the customer.

Look to for segment leading products that haven't achieved much market penetration and go ham on the tutorials.

Youtube and other video site traffic is still very undervalued and really easy to get a ton of. It just requires getting your hands dirty and actually investing in creative.
 
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Entry - need not be $500m for a spectrum license ...sometimes it's untapped, underserved / boring / opaque niches no one understands or has dared to think off due to fear, everybody copying everybody again due to fear, 0 initiative

Control - Think of control as influence, cos hey you don't control anybody...even as a business owner ...what you do is influence, persuade, inspire your employees to give you their best.

Your specific implementation of AM also determines how much control & barrier to entry you have to cash in on cumulative brand image & revenue e.g 5 years worth of educating content, reviews & goodwill is a barrier to entry

Bharti Airtel does nothing other than financing, sales & marketing
SoftBank was nothing other software bank... (sales of other people's software)
Apple is a software company that makes 80% of it's money on hardware it got from other people

you could argue that's high level affiliate marketing IMO...
hint: don't restrict yourself to join a network and running paid traffic to landers

https://www.cultofmac.com/636438/apple-paid-samsung-683-million-for-missing-oled-display-targets/
 
Get well soon man. Hospitals are never a fun place.

Affiliate marketing as a revenue source is definitely not 'too risky' IF you aren't relying on one program/company/website/strategy.

What is dangerous is becoming complacent or satisfied with earnings/revenue and your overall success. This industry is constantly flowing. Tactics, algorithms, standards etc, never stay the same.

You need to constantly stay on your toes if you want to be successful long term. If you have a wide range of different sites that do not depend on the exact same sources of traffic --100% Google organic for example -- you should be just fine. It's when we become overconfident that disaster generally strikes. Pretty sure that it has happened to every single one of us at one point or another. I believe it's all part of the learning experience.

There are massive brands that rely heavily on affiliate revenue and have been for over a decade. To think that it may suddenly disappear is not very realistic.
 
Isn't entrepreneurship supposed to be risky? That's the game, we hold the big risk and reap the big rewards.

Anything can tank in life. Google's algorithm can kill your white hat sites. Your black hat sites will get penalized or deranked. Local SEO will change and the easy money will dry up. Facebook reduces fan page reach. Silicon Valley is cheating conservatives. Your boss could fire you. You could end up in a car wreck, or god forbid die. Your boss' business could die off.

The one thing that really isn't going to go away is advertising, but having the cash to fund it is tough. PPC campaigns and the like can be instant money if you can hang in there and optimize the campaigns and float the losses.

I don't like it myself, but I know what's right is to build assets and sell them for multiples of profit to someone more willing to hold the risk (because the loss will mean less to them). Here it's all about knowing when to sell.

It's risky. A lot, if not most, of these big online magazine sites are getting by by the skin of their teeth or losing money for investors. A lot of them exists for reasons not related to making money (like serving a political agenda). Being a small player puts you in a better spot a lot of times. Cashing out is how we get rich in this game.

Then take that money and move into something more stable like real estate, restaurant franchises, etc.
 
Samwise89 said:
It's risky. A lot, if not most, of these big online magazine sites are getting by by the skin of their teeth or losing money for investors. A lot of them exists for reasons not related to making money (like serving a political agenda). Being a small player puts you in a better spot a lot of times. Cashing out is how we get rich in this game.
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It all depends on the angle. Declining revenues might not matter to someone playing with valuation multiples. Amazon Associates niche sites sell for 36x monthly profit "SDE", or 3x annual profit. It's not far from EBITDA. To veteran buyers that is "expensive".

But if you look at a list of valuation multiples for larger companies, it's "cheap": http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/vebitda.html

Advertising is on the low end yet it can do 7x and we all know software is sky high. Then take a look at the stock market.

The first guy to buy a billion dollars worth of sites, find a way to manage them at scale and IPO is going to make a ton of cash, even if those sites see a decline in earnings over the years it takes for him to IPO - all because of the multiple that the underlying "asset" is valued at.
 
One thing you can always do is do affiliate offers in spaces you would like to grow into.

Use affiliate offers as a testing ground to get sales, then just replace their offer with your own product. Now you control the whole funnel and can squeeze out as much money as you want. You own the traffic and the customers.
 
Millionaires are literally made every day in affiliate marketing, let alone the internet marketing field as a whole.

They also represent the 1% of internet marketers. Is that because affiliate marketing is inherently risky? Yes and no. You can only get that kind of reward when you can reach a ton of people, and you can only scale that high that fast when a lot of the infrastructure is handled by other companies. There's very few industries that have ever existed where one person can spin up 7 figures in value by themselves in a year to two years.

For every millionaire though, there's gobs of people earning a respectable living. The rest are failing largely because they don't belong. They aren't entrepreneurs on the inside, where it counts. They make poor strategic decisions, self-sabotage, work out of fear instead of excitement at the possibilities, etc. And it's these people that create the portion of internet marketing that feels unstable. It's unstable because of them, not because of the landscape itself. Most of these people are the same ones that lose their day jobs over and over. Are day jobs unstable?

Yes, if you rely on SEO, it's unstable. Google's algorithm can wipe you out at any time, and as we're learning they'll even go after individuals if they disagree with their viewpoints relating to things that have nothing to do with SEO. As an SEO, you have to survive long enough to hit the snowball where you've now got enough cash flow and a nest egg to fund more projects which are backed in a way that almost ensure success.

If SEO wipes you out, are you really an internet marketer? Marketing implies you have tons of channels of traffic to from which you create conversions. And you can convert on products and services you own with higher ROI instead of taking a small commission off of making someone else rich too.

The thing with internet marketing is there's almost as many angles and ways of making money as there are careers outside of IM. To fail in this industry is to give up, not grow, not adapt and evolve, and to not think clearly and intelligently about what it is you're trying to do.

A lot of the big reward that comes out of this isn't even related to risk. It's related to the fact that we're in a new age of information and access to that information. It's like the gold rush, except we don't find gold, we create it. And we don't even have to travel out west. We can do it from our living rooms.
 
My two cents:
  • Your business should never rely on only one source of income, leads or traffic.
  • Any source of business income should not rely on one single contributing party.
    • E.g. if you're doing affiliate and all you're doing is Amazon, you ain't doing it right.
  • Meta: YOU should never rely on only one place of business.
  • Meta-meta: businesses shouldn't be your only source of income.
It's all about not using any one thing as a crutch and relying on it too much.

At the same time, you can't spread yourself thin either so you have to literally pick your battles, think through when you're going to make your next move in an entirely different arena and think multiple steps ahead.
 
I am unfortunately guilty of having my eggs all in one basket. All my revenue is from google right now, though I do completely agree to diversify is the best way about it, right now I am at a level where I have put in my 10000 hours and reached some level of mastery in affiliate and to start something else like youtube or PPC I would have to start from the beginning and not necessarily reap the same rewards I would by doing affiliate right now.

For me diversifying is both having many different sites and every once in awhile investing profits into something safe like rental property while I continue to run my own sites and milk google as long as I can. Mind you my sites are built to be brands and do command some traffic outside of google but if search died tomorrow I would lose probably 70% of my revenue. However if one site was penalized tomorrow I have a bunch of others that would pick up the slack, so I feel relatively safe.
 
tyealia said:
I am unfortunately guilty of having my eggs all in one basket. All my revenue is from google right now, though I do completely agree to diversify is the best way about it, right now I am at a level where I have put in my 10000 hours and reached some level of mastery in affiliate and to start something else like youtube or PPC I would have to start from the beginning and not necessarily reap the same rewards I would by doing affiliate right now.

For me diversifying is both having many different sites and every once in awhile investing profits into something safe like rental property while I continue to run my own sites and milk google as long as I can. Mind you my sites are built to be brands and do command some traffic outside of google but if search died tomorrow I would lose probably 70% of my revenue. However if one site was penalized tomorrow I have a bunch of others that would pick up the slack, so I feel relatively safe.
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Sounds just like me. Out of curiosity and to get some perspective on what diversifying through several sites mean - how many websites do you have?

I myself have around 10, but only actively working on 3-4 of them. Mind you, some are in a non-english (European) language, so I write most of the articles myself. Kinda stressful.

Thanks for all the answers so far, very insightful! I hope more will come in to contribute. :-)
 
Olov said:
Sounds just like me. Out of curiosity and to get some perspective on what diversifying through several sites mean - how many websites do you have?

I myself have around 10, but only actively working on 3-4 of them. Mind you, some are in a non-english (European) language, so I write most of the articles myself. Kinda stressful.

Thanks for all the answers so far, very insightful! I hope more will come in to contribute. :-)
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Currently I have over 10 sites sites that account for most of my profits with revenue split between all of them, but many other smaller sites. I have made it a point to have those sites use different link providers, half of them use pbns for those providers, the other half are whitehat using outreach and guestposts for the precise reason of this thread and thats to diversify if a link provider gets killed tommorow by google like BMR did back in the day, i survive, though i must say I have 4 sites with a particular provider and its a bit worrying to me :tongue:.
 
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