When it comes to affiliate marketing there seem to be two types of affiliates ... those who struggle and those who seem to always make money.
If you have been online very long, especially in the make money online, affiliate marketing, or business opportunity spaces, you know the names already.
You may be on their list or have seen them on an affiliate contest leader board.
This breed of affiliate has figured it out.
They have their systems working and can almost print money on demand.
- They win affiliate contests or are near the top.
- They win great prizes like Rolex watches or laptops.
- You can tell they know what they are doing and have a repeatable process.
So what is their secret?
Many people think their secret is some super-private traffic source that only they know about.
But it's not a traffic source, although quality traffic is vital.
Some people believe their secret is a great email follow up system that persuades people to buy in record numbers.
While follow up email is very important, it's not their secret.
No, it's not traffic or systems or experience. It's much more simple than that.
Their secret is ...
THEY KNOW HOW MUCH THEY CAN SPEND ON TRAFFIC BEFORE THEY COMMIT TO PROMOTE
Not very sexy, right?
Sort of anti-climatic actually.
But it is oh so true.
In fact, it is huge, and often overlooked.
I believe it's the #1 reason why some affiliates struggle and others succeed.
So if you want to flip the switch on your own success, read on.
By the way, I rarely hear this talked about outside of expense "inner-circle" type programs.
But all top marketers know this secret and almost all of them start with a specific number in mind.
Like any other business person, they know what is takes to break even so they can calculate their potential profits and weigh the risks.
This how business works ... all business.
- Hamburger joints know exactly how much it cost to get a person in the drive through.
- Large discount stores know exactly how many people walk though the door and what their average purchase is.
- Amazon knows exactly how much their average visitor spends and how many additional items they will add to their cart.
The good news is this ... you can know these things too!
And knowing them can make the difference between success and frustration as an affiliate marketer.
To highlight this, I'd like to share a conversation that took place with a member just recently.
I have removed his name to protect his privacy.
Here is his initial contact with me.
I want to promote XXXX and am wondering what it would cost for you to build a sales funnel for me to promote this product?
My reply was ...
Why do you want to promote this product?
His reply ...
Because it offers 100% commissions and is evergreen.
Now the interesting part really begins!
I analyzed the offer and sent him this ...
Here's the thing, the math does not work for cold traffic in my view.
The full funnel pays roughly $52.
$19.95 front end
$13.50 on upsell 1
$18.50 on upsell 2
$51.95 total IF they buy both upsells, which is rare.
If you are going to drive cold traffic to this that means advertising.
Let's say you pay 75 cents per click for traffic. And let's say the site converts at 1%, which I doubt personally.
So you pay $75 to get 100 people and 1 of them buys and then buys both upsells.
YOU SPEND $75 AND EARN $52
If you are going to promote this you are going to need to build a list and profit from it quickly OR find a way to create an upsell that makes you whole and provides a profit.
Wish I had better news but this is a non-starter as I see it now.
?To which he replied (in part) ...
Wow when you do the math like that (which I never have) it does not look promising.From looking at your example it looks like I should be promoting a product that pays at least $100 and that's without the upsells.
Here is the main point ...
You must do this math before you emotionally commit to promoting any product. Even a product you love.
In fact, especially a product you love.
You see, affiliate marketing is a business. A very profitable business when done right.
But like any business, you have to know the numbers.
So let me give you a formula to use before you go.
Commissions X Conversion = Maximum Expense Per Click
Here are three examples.
Remember these examples are to get to BREAK EVEN, not to make a profit.
Getting to break even is the first step, and one many affiliates never master. Which is why they are frustrated.
If you earn a $50 commission on a site that converts at 1% you can afford no more than 50 cents per click.
Here is what that looks like ...
50 X .01= .50
If you earn $200 on a site that converts at 2% you can afford $4 per click for traffic.
200 X .02 = 4.00
If you earn $1000 on a site that converts at 1%, you can afford to pay $10 per click for traffic to break even.
1000 X .01 - 10.00
You will notice these examples assume a 1% or 2% conversion. While this article is not about improving conversions, it is vital to understand this ...
You must be reasonably certain of the conversion rate before you commit to promote any product.
I'll write more about that in a future article.
For today, the take aways are these ...
- Your affiliate marketing business is just that, a real business.
- Any business that survives knows their numbers, so know your numbers.
- The main numbers you need to know are what you get paid and what the site conversion rate is from experience.
- Always remember what Dan Kennedy said, " The person who can spend the most to acquire a new customer wins."
I hope you find this helpful. If you have questions please leave them in the comments below.