Let’s face it…affiliate marketing is tough stuff. It takes a rare breed to actually make a living off of affiliate marketing and be able to sustain this income. You need to make a decent amount on your investment in order to come ahead.
Let’s say you spend $500 on an affiliate marketing campaign and you make $750 in revenue. You say, hey…that’s not too bad. Well, now let’s subtract the $500 you spent on advertising your affiliate campaign via Google Adwords or whatever other advertising method you used. You are now down to $250 profit. So, you say, hey…that’s not too bad either. Okay…it’s not too bad but now let’s take out what you owe for taxes. If you are in a middle tax bracket you can take another 30-35% of that $250 profit away for income taxes, state tax, self employment tax and all other little things that eat away at your profit.
So, let’s say 35% is taken away from the $250. That 35% comes to $87.50. Subtract the $87.50 from your $250 profit and you now have $162.50. This still isn’t horrible but you can see where I am going with this. If you merely break even with your campaigns or come out a little ahead, you are still losing money. You need to figure out a way to make a substantial amount above and beyond your initial investment in order to reap the benefits of a true successful affiliate marketer.
I don’t know how many times I’ve seen a “Super Affiliate Marketer” hold up a check on their blog or website for $100,000 or $250,000 or more. What they don’t mention is that they spend $98,000 to make the $100,000 or $240,000 to make the $250,000. I’m not saying that there aren’t any successful super affiliate marketers our there because there definitely are. I am saying that most affiliate marketers trying to sell themselves don’t mention what they are actually spending on their campaigns to make their profits. If you spend $1.00 and get $1.02 in return. It’s going to take a hell of a lot of dollar bills to make a good living. You better have stacks of cash in the bank ready to use.
I guess…moral of the story is…affiliate marketing is hard and you need to make a substantial amount beyond your initial investment in order to become successful. Best of luck.
March 29th, 2008 at 8:55 am
You have to start with a good source of traffic, which starts by providing value to customers. Then incorporate targetted links. Best thing is to start with a niche site.
On the other hand, I guess an advertising campaign could work like you say if you do the numbers right. Tricky, but potentially doable.
March 29th, 2008 at 2:40 pm
I’m definitely not saying that affiliate marketing is not doable. It’s very possible to make a great income from affiliate marketing alone but people have to realize that it takes hard work to get to that point. You can’t just throw up a website with a few affiliate links and watch it prosper. It takes time to build traffic which is essentially your payday. Once you get the traffic then you must test the best way to monetize that traffic to generate the best ROI and profit.