Why are we trying to be the biggest fish in the pond? (14)
I'm new here and to affiliate marketing in general so I really don't know what I'm talking about at all but I've been reading nonstop and absolutely loving the angles and freedom of creativity in this industry. It fascinates me. But I have one question that's really bugging at me. Why are we working so hard building other peoples businesses? You guys make more than I could ever dream of with my current life as a freshly 21yr old waiting tables so don't take this as an "I'm smarter than you" type of thing and I'm surely not the first person to think this just very curious. Clearly these affiliate program offers are making much more money than they are paying the marketers otherwise they wouldn't be there. So what's the point in paying hundreds to thousands in tests and advertisements for someone else's product, building their brand, customer base and email list. Obviously affiliate marketers are making a killing but it seems like its a fight to be the biggest fish in the pond. Wouldn't in the long term it be much more profitable to go for the big picture and invest in your own product?
If I invested however much money and time in hiring a writer or two to write me an ebook, a nice sales pitch, and a website full of relevant information then put that product on Clickbank for other affiliate marketers to promote wouldn't I be much better off? Once I've built the product I can only go up from there. Then all of the money I'd be spending on advertising would get recycled back to the brand I'm building. Even without conversions my name is still out there building social proof and recognition within the niche. Also I feel like if I advertised to affiliates instead of those interested in the niche my money could go so much further. Because once my affiliate program has caught the interest of a few strong affiliates they will carry the rest of the weight by paying for advertisements for me.
I know that building your own product isn't easy otherwise everyone would do it. But who cares, neither is affiliate marketing. You need determination to succeed in anything you do so why not shoot higher than being the top salesman and instead have that top salesman selling your product? Again please don't take this as discrediting anyone's career as I have none and don't know what I'm talking about.
Very good question and I'm looking forward for the discussion that will follow!
There could be many reasons, but let me pick my own points of view:
First, it may have something with the affiliate marketers mentality.
Most of us likes the freedom and adventure that it gives us in the first place.
No dealing with the end product, shipments, stocks, post sale customers support, brand positioning etc. etc.
Ability to make thousands by launching a campaign and in minutes driving thousands of eyeballs to the creatives you just created and watching what happens next is something that never gets old!
On the other side for many online entrepreneurs affiliate marketing is the starting point where they learn the ins and outs of online marketing and sales.
Then they take it forward and start they own "offers" / businesses afterwards.
The skills you learn here are transferrable, so it's not an end station, it's a part of the process.
Of course, like you're saying, having your own product / offer can mean better and more stable profits, and has the potential of becoming an asset that can be sold later on.
However, not everybody has the know-how, and not everybody has enough cash to float.
Setting up an offer page to collect leads is easy - but if you don't know how to monetize them properly, you'd either end up not making back the commissions you pay out to affiliates / aff network, or the payout you set will not be competitive enough for affiliates to make profits from your offer.
For many types of offers, there is a time-lapse between when the offer owner pays out commissions, and when they make their money back from the leads they bought. So the offer owner will need to have enough cash to float until they can reinvest the money they get from monetizing those leads.
Also - for affiliates, there's a certain appeal to setting up a camp and seeing revenue roll in as soon as 5 minutes later. This kind of instant gratification can be addictive.
However - as you've pointed out - it would certainly be a good idea for the more established affiliates to invest time and money into building long-term assets, and many of them have. For one of the most motivating examples of this, see this thread:
http://stmforum.com/forum/showthread...er-to-millions
At the end of the day, everyone has their own preferences and experiences, and will meet with different ideas and opportunities at different times. We all do different things and that's what makes the world interesting. 
Amy
Interesting question!
Even though you picked quite a few details that everyone I think is questioning themselves before entering AM world, I would come with an answer to "WHY?"
Well, on my personal experience, I've gone through a lot until now and I would like to emphasize the last 11 years as a manager in 3 different companies.
First, what is the type of worker you belong to? Are you working as if you're working for yourself or just those 8/10 hours a day? If you're giving the best of you there, no matter how amazing the result is, you still won't get credit for it. Bottom line, you get pissed!
Have any idea that you would like to test in order to improve results? Well, talk to your boss first, most of the time, he/she wont even listen to what you're saying. You'll just walk out of their office and the plan you worked for days just sits there on his table for moths.
Teamwork, well this is the best and worst part, there are teams that you enjoy working even the extra hours with. But there are others that will leave the whole work to be done by 2-3 members, and if you're one of those few, you can't choose differently.
Trainings and improvement, you have to learn and get certified when partnership status needs so and you need to do it fast.
A lot of us here are dreaming big results and big numbers, but keep in mind that work isn't just your income.
You live everyday with your job and you have to do one you enjoy doing.
In my opinion, all the above mentioned issues are better solved in affiliate marketing.
Its all about the capital you have.
Building a business is harder (you need a big cashflow for most business and bigger luck). Lets say you make a quality infoproduct (most infoproducts fail), it will take you 1 to 4 months to make (you need a great copywritter also (it cost $4000 to $40,000 for a great copywriter)., if you fail you just lost 3 months of your life. If you do not have a lot of capital this can be a serious problem.
If you want to make a software business (leadpages, clickfunnel, twitter) it can take you 5 to 10 years to get your money back.
And do not forget that 80% of business fail in the first 5 years.
On the other site If you make an affiliate campaign, you can fail 10 times in a day and try until you get a profitible campaign. You dont need a big cashflow for this. If you are newbie you can make it work in 1 to 3 months.
A business can take 1 to 5 years to make your money back. An affiliate campaign you can get your money back in 1 to 3 weeks.
If you have a lot of capital you can build 5 business at the same time and see what works, hire everyone to the all the work you only invest the money and manage the business.
Which is better? Owning a profitable business its better, but you need capital to start it (cash flow).
And being an investor is better than owning a business (you just make your capital work for you)
It is the wrong way to think about it.
Most successful affiliates also run other businesses and reinvest their profits in other areas. Indeed, one of the problems (!) most successful affiliates have is what to do with all their cash. Some of them put it into investing in other companies, some into real estate, some into stocks, etc. some of them buy splashy cars.
Ultimately, business is about risk adjusted reward.
Each industry, and each part of the value chain of an industry, has its own risk reward profile.
Each has pros and cons and different risk-reward profiles.
If all these options has the exact same risk-reward profile, certainly the last one is the most appealing.
All the work you need to do is take out a pen, and sign a check for $100K and a few years later, you get back $5 billion.
Of course, there lies the rub. All of these have wildly different risk reward profiles. And where exactly you feel comfortable playing (and hopefully succeed) is in many ways driven by the risk reward tradeoffs that are specific to you.
You cannot be the biggest fish in the pond from day 1, or project 1.
All of the bigger fish you mention there that are having it better than the affiliate have started lower. Being an affiliate is usually step 0 for many. Some are happy with the earning they make and stay there, and others start expanding. STM is great example of expanding: forum, events, investing, etc.
Your described scenario is a general fallacy people make when thinking of winners: "Oh, they just did this and it worked, why isn't everyone doing that" - The answer is that winners suffer from survivor bias which skew your perception of probability of success. Why do you think there are tens or hundreds of tasks for "build a website like Facebook", on UpWork and other freelance sites, with a budget of $5k? Many people don't know what they don't know and make wrong assumptions.
What makes a difference between many winners and most losers is that when they go into a new venture they expect to not know everything and they expected to have unexpected things happen. Then they are solution oriented. They don't just have a 4 step plan and stick to it. That's not how business works. They adjust to ever changing conditions... I haven't yet met a successful person whose success was not full of difficult times that would make the regular person go crazy.
It's the reason many entrepreneurs are disgusted at the remark that "they just got lucky". While chance plays a part, they've been taking that chance all their life, and it's insulting to say luck is the only thing that mattered when they fought day and night for their business. They risked a lot to "get lucky".
You only have the successful parts in sales pitch that want to coach you how to succeed... And that's appealing to the lay man... If someone successful would give me 1 hour of their time, I'd rather spend it talking about as many failures that they had as possible. I think there are many ways to do it right, but failures have more things in common, thus avoiding those mistakes will make you more likely to succeed.
I know I went a bit off track here, but I felt the question warranted a longer explanation of why it's not a choice between black and white, of deciding over night you will be building Facebook, Space X, or a real estate business on Mars. Nothing ends up as it was planned on day 1. You always change the plan with more information, but being an affiliate is an easy entry step to start getting that information.
What does it takes to pull in reasonable profits as affiliate.
- 3-6 months time
- 5k budget
- one traffic platform
- one affiliate network
- a spy tool and a tracking solution
- a stm subscription
- lots of persistence, stamina and a bit stubbornness
What does it takes to pull in reasonable profits as business owner.
- Scalable product or service idea
- Branding
- Production / Sourcing
- Fulfilment / Delivery
- Payment Provider, Invoicing
- Website / eCommerce Solution
- Market Share/Penetration
- Marketing
- Customer Service
- Employees
- Funding of start-up cost
- Legal & Accounting
- 12-36+ months funds for cost of living
- Barriers of entry
- First mover advantage or 10x improvement
- Timing, luck, boldness, persistence, stamina, stubbornness
I have been on both sides of the continuum. Affiliate marketing is ridiculous easy compared to running a "real" business.
Walk into a car dealership, let's say Ford, and ask the owner why he's selling Ford cars and making the Ford family rich. When in reality, he could be building his own and keeping all the profits
Very interesting and smart question that you are asking here. But there's a few flaws and misconceptions in it.
1. You say "You guys make more than I could ever dream of"
This is not true for two reasons. One, you should never underestimate yourself and have confidence in your abilities to one day make a lot of money as well.
Two, affiliates always and everywhere over exagerate the amount of money they make. It happens regularly on fairs that affiliates tell me "oh payday offers that pay 100$ CPA, I can do 10,000 conversions A DAY on that... for sure" - they say it without blinking, without smiling, without thinking that this would mean they would be making 1 million $ in one day, 365$ MILLION in just one year. How many companies in the IM space make that amount of money? Not many I can tell you. And if they do they have a very large staff (+100 people). So this is lesson one. Affiliates over exagreate their earnings all the time and as an affiliate network owner with +10K affiliates I know how much they really make and its a good amount yes, but its nowhere close to what they claim to be making. So dont think you are less than anyone out there, and dont underestimate yourself
2. You say "If I invested however much money and time in hiring a writer or two to write me an ebook, a nice sales pitch, and a website full of relevant information then put that product on Clickbank for other affiliate marketers to promote wouldn't I be much better off?"
That sounds really easy, like a toddler could pull it off. An important lesson in business is that if something sounds too good to be true. It usually isn't true. Building and scaling a succesful business is never easy, although it could look like that from the outside;
Just one example. The biggest retailer in Europe - Zalando - just turned its first-ever profits last year. They have been years without making profits because they had to invest massively in, among other things,...Marketing! So as an affiliate you get paid every month and make your profit every month, whereas the big advertisers need patience, investment and time on their side in order to build up momentum and scale that will eventually lead to profits.
3. Being an advertiser of an affliate - one is not better as the other. one is not superior to the other. both just occupy their own place in the entire value chain and both need each other in order to live. You can have the best product in the world, but without marketing, without people knowing your product exists, there won't be any sales. The other way around, the affiliate needs the advertiser, to get paid and for getting his campaigns.
4. People say being an affiliate is easier than being an advertiser. Also not necessarily true. If you approach being an affiliate as a serious business, whereby you want to become consistently profitable and build something you can scale up and make really big. then this will require huge investments in time, money, staff, technology. A lot of sweat and tears will go into it. Building a business, be it an affiliate/media buying house or an advertiser/product owner are both equally hard. Of course, if you just wanna run a few campaigns to make a decent profit then turn everything off and go to the beach until its all gone and repeat that process. Its easier yes, but you won't build something that will last on the long term as you are not thinking in scaling and establishing your company/brand. Its important to be professional about it, and as Matuloo has said in another post, approach it as a BUSINESS
Originally Posted by brandonsharpe
One other point on this debate, from someone who has done most of the stages on cmdeal's list, from affiliate to owning the product to owning the platform - a lot of the decision-making here comes down to what you're personally good at, and what you enjoy doing.
For example - I've created successful ebooks (and non-e books) in the past. I find it fairly easy to create and market books that get very good reviews and sell well, because I've been writing professionally, building those skills, for 20 years and I had a fair amount of talent in it when I started. I also enjoy writing.
If you're very uncomfortable with writing, don't like doing it, and aren't good at it, you'll find it much harder to get those results. (Sure, you can hire a writer, but that's a whole different story.)
It's easy to have this sort of debate in a vacuum, but at the end of the day if you're considering what's best for you to do, then you need to look at your personal strengths and unfair advantages. And you also need to look at what you personally find satisfying and enjoy doing, because if you find something satisfying, you're much more likely to stick at it when it's not producing other rewards.
One of the best tips I've heard for this is to look for the thing that you personally find easy and don't understand why other people don't do. That's harder than it sounds, because you probably don't notice the things that you can do really easily - you just think everyone can do that. Figure out which of those things everyone can't, in fact, do easily, and that's a good starting point.
Really intelligent group of people here all great answers I've been looking for. Really enjoying this community!
Interesting discussion here.
I have to say that for me - Caurmen`s line of thought hits the spot. Money no doubt is very important, but at some point you also need to think about balancing the money with what gives you the most satisfaction and helps you through the day feeling as good as you can with what you do and who you are.
Originally Posted by affiliaxeoran
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