Most people that enter the world of online marketing are pretty quickly drawn into affiliate marketing.
Affiliate marketing is simple and can earn reasonable commissions for people new to internet marketing (affectionately known as newbies. I’ll use the term newbie in this article to equally affectionately to refer to relatively new and inexperienced IM’ers).
- Not much experience needed
- No website or hosting needed
- No list needed
- Just drive traffic to an affiliate link
While the above list is true, it’s by no means the best way to generate decent commissions. For example, as soon as possible, you should be building your own list – this is the single, biggest thing that newbies never get around to!
And for mainly that reason, newbies rarely become successful at making the bigger commissions that are available.
It’s said that it can take 7 views of an offer for a prospect to take action and buy. Luckily for the newbie, this is less true for cheaper products because without a list, you’re essentially showing your offer once to each visitor. It could quite easily be that a prospect sees your affiliate page and then later sees what looks like exactly the same page and buys, not even knowing who you were or that the second page was the same business but a different affiliate.
Program or product owners make far more sales and profit by selling via an affiliate program.
That much is obvious. They have relatively low advertising costs to get an army of affiliates that then do all the traffic generation to bring leads into the marketing funnel.
But more importantly for the owner is the fact the affiliate has brought someone on to their list. This is why owners will often give away a sizeable percentage of the sale to the affiliate. The affiliate gets commission on the front-end sale and any OTOs (One-time offers) for that product but from then on, the owner can market directly to those prospects (who are now qualified buyers) without paying the affiliate any further.
If an affiliate sent traffic directly to the affiliate link without capturing them first on their own list, they have to start over for the next product they promote – this is extremely wasteful. Not only that but the affiliate didn’t brand themselves so really have only gained the very temporary and short-lived benefit of a relatively small commission from a customer that could be worth thousands of dollars over time.
A Bettter Way
As hinted above, the biggest and most important step to take is to build your own list. Don’t send traffic to an affiliate link, send them to your autoresponder and from there to the affiliate link.
When the next promotion comes around, you can market that product to them and, if you’ve been branding yourself by sending them non-transactional, free information in between, how much more of a chance do you have of getting more commission from the same lead you captured just once?
Most newbies use free traffic methods, notably traffic exchanges, viral mailers, safelists, article writing, blogs etc. There’s nothing wrong per se with free traffic but it can be limiting.
Actually I believe that it’s the mindset that’s limiting. You see, the kind of people that promote using free traffic will tend to stay with free traffic, even after they’ve made enough commissions to be able to pay for higher quality traffic. By higher quality, I mean more serious and with deeper pockets.
When their mindset changes (most don’t), they re-invest their profits into buying traffic. They understand that they need to get themselves into a position where they have enough capital to start paying for traffic. Why?
Because once you have a marketing funnel that brings a positive ROI (return on investment), you can wind the power up and order more and more traffic every month and make more and more profit.
With free traffic, it’s not so easy to wind up the power, other than by surfing more, mailing more, writing more articles.
The Importance of Larger Commissions
The obvious benefit of larger commissions is higher profit.
But once you’ve changed your mindset to be prepared to pay for traffic, this is what happens:
- You buy a seed batch of leads or clicks
- You make sales and a certain ROI
- If that ROI is positive, you can scale up
- More importantly, you can get a measure of how much you can afford to pay for your traffic
This is a crucial thing to understand. Advanced marketers leverage their leads in so many ways, they don’t even need to make a positive ROI from the initial sales; if they’ve captured that lead on a list and know they’ll make income from that lead for months or years to come, they’ll get a positive ROI later.
So, here’s the not-so-obvious thing about large commissions – you can afford to pay more for your traffic!
When you can afford to pay more for traffic, you can sell high commission items, as easily as you can sell $47 products to free traffic.
And it’s just as easy to make 10 $1000 sales as to make 1000 $10 sales, probably easier – once you pay for traffic.
If you tried to sell a $1000 product to typical free traffic*, you’d be lucky to make 1 sale in 100,000. If you promote the same product to a rented list of prior $1000 purchasers, you might get 1 in 100 buy.
* SEO would be an exception (search engine optimization) – if people are searching for certain phrases, they’re looking to buy. But SEO is not for the newbie or the faint-hearted, it can be a lot of work.
This is why newbies rarely get that far – it might take an outlay of $200 to make that 1 commission of $1000. But what a winning proposition! I’ll do that over and over every day of the week, in fact I’d be spending that $800 profit on 4 batches of leads and making $4000 and so on.
But you can’t scale up in that way with free traffic.
If you’d like to go into much more detail on changing your mindset and making it big time, click the button below.