Affiliate marketing is an attractive business model, although the real reasons for this are rarely stated. They tend to get drowned out by all the hype. Contrary to what your average sales-pitch would have you believe, affiliate marketing isn’t super-easy and it very rarely, if ever, makes anyone rich over night. It also involves actual work, actual investments and actual effort. Just like a “real” business. Go figure. In spite of all this, there are still many reasons to love affiliate marketing. The foremost can be summarized in just one word: Scalability.
Why Scalability and What’s With the Awful Graphic?
With scalability I specifically mean how your return of profits scales against your investment of time. And yes, there is an actual reason why I chose the most clichéd, worn-out, caricature of a graph representing success. When you see that graph, you assume that the upwards trend pictured is a monetary one, right? Time advancing from left to right, we see that more and more cash is rolling in and that’s what us greedy bastards are all ultimately after.
So far, so good. What’s more important than the information given, though, is the information omitted. A very important question to ask is: How much am I investing to get this increase in profit? And I don’t mean the investment of money. As long as the returns are climbing at a higher rate than your investments, it’s all good. It’s your investment of time and energy that will have the greatest impact on your quality of life.
If your investment of time and energy scales 1:1 with your profit, that’s bad news. This is the predicament you often find yourself in when working 9-5: You can make more money, but only if you work longer hours. As long as the money you make is directly linked to the time you invest, there is always a cap on how much you can make. Much worse, the more you make, the less time you have to live, so unless what you do for a living is already your favourite thing in the world, it means you have to trade in life-quality for money. And that sucks.
Enter Affiliate Marketing
Let’s just look at affiliate marketing as a pure numbers game, for a minute. You are selling a product and you have a certain conversion rate. Let’s say you have a 1% conversion rate after refunds. In other words, you make exactly one sale for every 100 visitors to your website. Obviously, in this situation, there is still a link between time invested and profits made. But here, you can be clever about how you invest your time. While you do have to set up a site worth visiting, provide some content worth seeing, perhaps spend some money on advertising and much more, the number of visitors your site has is largely still independent of the time you spend. For one thing, people can be visiting your site and buying products whether you are present or not. More importantly, if you find the right angle, if you target the right keywords and if you invest in the right advertising, your site’s visitors can potentially sky-rocket. You can get ten times as many visitors (and therefore ten times as many sales) as last week, if you invest an hour or two cleverly.
To achieve this, you need a lot of experience and/or a good deal of luck. We often forget that overnight success is usually the result of years of hard work. But working in a highly scalable business such as affiliate marketing, you know that the time invested can eventually yield exponential results.
That, for me, is the Nr. 1 reason to get into affiliate marketing.
That, and the fact that I have a natural talent for writing scammy, overblown sales-hype.
Excellent basic stuff. Thanks Shane.
Rema.