Home > General > Affiliate Marketing Forum

How Much Money Do I Need To Start Affiliate Marketing? (5)

04-24-2017 02:51 PM #1 STM Member Blogs (Member)
How Much Money Do I Need To Start Affiliate Marketing?



[Reposted from MalanDarras.com with blog owner's permission.]



Today I’m gonna answer one of the most common questions I get about affiliate marketing.

"Hey Malan! I want to get into the affiliate marketing game. How much money do I need to get started?"

I used to answer by just saying: “The more the better”.

While this answer is 100% true, it doesn’t provide any real guidance for someone who is brand new and lost about how to get started.

So today, I’m going to share a better answer and then break it down the reasons why, based on my personal experience.

Ready? Here we go.

Short Version: You need at least $3000.
*There are a few caveats, read below.



My Experience

I only give answers based on my personal experience. So to begin, I’m going to tell you the true story that I am getting the $3000 number from.

When I started affiliate marketing I had a life savings of $15,000.

This was money I’d saved from my full time job and almost two years of SEO work that I’d been doing on the side.

I had initially saved the money because I was moving to California and the rent prices were through the roof. With the $15k I could survive for about six months while I figured things out.

My first week in LA, I got a strange email from an affiliate manager and ultimately decided to give paid traffic a shot.

I had the nest egg sitting there, and I decided to take a gamble and risk my life savings.



The First Month’s Profit/Loss

I spent the first month learning the ropes. I screwed up everything and lost money almost every day.

This is very common for new affiliates.

Most newbies come into the game with $150 and think they’re going to turn it into $1,000,000.00. This almost never happens.

Most of the time, the first month (or four) are a total loss.

Not because affiliate marketing “doesn’t work”, it’s because the new affiliate sucks at playing the game.

Think about it:

If you could really turn $150 into $1MM, wouldn’t everyone on Earth be rich by now?



You Will Lose Money In The Beginning

Just knowing that you’re supposed to lose in the beginning should help the new marketer tremendously.

Because most people have been brain-washed by Gurus who talk about their “secret system” or “silver bullet” so “anyone can make millions” using a “push button system”.

This is bullshit my friend.

Real affiliates laugh at these guys.

The truth is: You will lose your ass until you learn to play the game.

Expect it.

For example, here is my first month:



This is the brutal truth of what the beginning will look like. And this is with an amazing affiliate manager helping me along the way.

If you’re all alone, you can expect your results to be much worse for a much longer period of time.

So after my first month I was $3,000 in the hole. This freaked me out so bad that I almost gave up and quit.

But a little voice in my head told me to keep going.

So I did.



The Payoff


In your first month or two (or ten) you may lose a lot of money. In my case I lost $3,000, or 20% of my life savings.

Any smart person would have stopped. But smart people fail at affiliate marketing all the time… because they don’t get it.

Sure, the math looked horrible. But what I didn’t understand at the time was that I had just paid my way through affiliate college. After losing $3,000 – I had a “college degree in what not to do”.

If I quit then, I would have wasted that education!

During that first month I made every mistake in the book! And I learned from each one.

So when I dangerously decided to continue into month two, I took those lessons with me.

Here’s what happened:



If I’d stopped after that $3,000 loss, I wouldn’t have ever seen the gold on the other side. I was so close and had no idea!



The Breakdown

Okay, so that’s the story. Let’s break down the numbers and give you a real takeaway that you can work with.

You need at least $3000.

Why?

If you’re going to make it in online marketing you need to spend a minimum of $100 a day. Spending less than that means you’re hardly getting clicks and you’re never going to get any real data.

$10/day budget with .30 clicks = 33 clicks
$100/day budget with .30 clicks = 333 clicks a day

See what I mean?

You can’t get any information from 33 clicks. Even if you make sales the numbers are so low that they won’t mean much.

I started my campaign with $50/day budget and slowly raised it to about $150/day over the course of that first month.

I spent $5000. But I think you could steadily spend $100/day (or $3000) and achieve the same results.

The key is to start VERY slow.

I recommend $50/day or $100/day MAX until you know what you’re doing. Because if you don’t know what you’re doing bad things WILL happen.

Day 1: Your link won’t work and you’ll lose everything. So you fix the link.
Day 2: Your website will go down and you’ll lose everything. So you get new hosting.
Day 3: The offer will cap and redirect to a pin submit and you’ll lose everything. So you’ll get some cap allocated to you.

Over and over.
It’s a trail of tears.

If you jump in and start blowing through $2000/day you’ll be broke before you figure out what you’re doing. It happens all the time.



The Big Losers

I regularly hear from people who are $40,000+ in the hole and want help making it all back. They’ll say stuff like “I’m going for broke!”

And my answer is: “Yes. You are going to go broke unless you slow down and spend $100/day.”

They never listen, saying things like “No way! I’m tryin’ to make a million man!”

A few weeks later, they’re $100k in the hole.
Finally, they quit the game and go find a job to pay their bills.

This is real.



Newbie Daily Spend Examples

Let’s look at my first month. I hope that by sharing these numbers you’ll be able to see why it makes sense to start slow and then slowly grow.



Here’s my breakdown.

The offer payout was $35. So on day one, I was spending about 1.25x offer payout per day.

These are not the real numbers. That was 8–9 years ago. These are just to show what the situation looked like. There were days of profits and days of total losses.



Don’t do the math on the list above. It will most likely not work out to $5000 spent and $2000 made back. Just imagine that it does.

The point of that list is to show how badly you may do in the beginning. In this example I didn’t get a single sale until the fifth day. And that was still at a loss.

Most new affiliates would have quit on day four.

They’ll scream “I’m losing money!!!” and either look for another offer or quit completely.

What they don’t know is that they are SUPPOSED to be losing money at first. It’s part of the game.

And that is the major point I wanted to make with this post.



You need $3000.
You’ll spend $50-$100/day.
You’ll lose money for 30–90 days.



Lower Payout Offers

There are some cases where you can play the game with less than $3,000.

For example, I was contacted by a guy who lives in a small country where he earns about $4,000 a year. It would take him 20 years to save $3000.

So what can he do?

If you have a smaller amount of cash to play with, you can play the game with lower payout offers.

Instead of trying to run an offer that pays $40, you’ll want to test an offer that pays $4.

Why?

Because you can get more data for less money.

To make an offer work, you need to spend a minimum of 1–3x offer payout. So if the offer pays $35, you need to spend at least $35/day to get anywhere.

If you can’t afford that, go with a lower payout offer.

If you only have $500 to play with, find an offer that pays $4 per sale. With this offer you can spend 1–3x offer payout and only be out $10-$12/day range.

$500 divided by $100/day spend = 5 days of data.
$500 divided by $10/day spend = 50 days of data.

Which would you prefer?

Blowing your wad in less than week or slowly spending and learning over the next 50 days?

And for those who think “I’d rather go hard in five days!!!” I have bad news for you.

You will fail.



How Much Money Do You Need For Affiliate Marketing?

In closing, let’s wrap up with a simple breakdown.

You need: $3,000



Too often, newbies come into the game thinking they’ll turn $100 into $1,000,000.

This never happens.



This is what I did.

This is what everyone did.

And this is what you will do.

If you want to win.

04-24-2017 04:08 PM #2 cbrughmans (Member)

I completely agree with your point of view. Start slow, learn the ropes, upscale fast when something is working.

Also the amount you mentioned of 3K$ is exactly what I always tell new affiliates. You'll need between 2 and 4K in order to get started.

Focus on one or two verticals and one or two traffic sources and start testing. Don't run anything without tracking and read stm/spy on top campaigns until you drop before launching your own campaigns!

04-24-2017 05:05 PM #3 Mr Payne (Member)

This post is spot on!

My additions would be this...

Have $3k for adspend to cover around 3 months of spending. $50/day times 30 days is $1500, you will likely lose some of that the first month so lets say your lose 50% (can be worse or better), that means you lost $750 but still have a total of $2250 for the next 2 months and some experience under your belt.

You will also need an additional budget of $1500 to cover around 3 months of expenses, this is on top of yoru $3k adspend. This will cover your $100/month STM, your $100/month Voluum or tracker, your $200/month spy tool (or just use it for one month, rip a bunch and cancel until you have more budget to work with), any outsourced lander fixes, translations, domains, coffee haha, etc.

I would focus on 1 vertical for 1 month, testing across 2-3 big or well known traffic sources with relaxed guidelines and low minimums for funding. Test offers that are under $1 payout. If you don't get anywhere the first month with vertical 1, then change to a new vertical and repeat.

Slow and steady wins the race!



Andrew

04-24-2017 06:49 PM #4 nolimits (Member)

Quote Originally Posted by STM Member Blogs View Post

To make an offer work, you need to spend a minimum of 1–3x offer payout. So if the offer pays $35, you need to spend at least $35/day to get anywhere.

If you can’t afford that, go with a lower payout offer.

If you only have $500 to play with, find an offer that pays $4 per sale. With this offer you can spend 1–3x offer payout and only be out $10-$12/day range.

$500 divided by $100/day spend = 5 days of data.
$500 divided by $10/day spend = 50 days of data.

Which would you prefer?

Blowing your wad in less than week or slowly spending and learning over the next 50 days?
I was actually a bit hesitant about paid marketing because I had this pre-occupied notion that I need big cash upfront to start anything worthwhile. After reading your thread, I'm much delighted that I can make this work even with low budget. Thanks.

04-24-2017 09:23 PM #5 matuloo (Legendary Moderator)

$3000 is very realistic figure for sure, with that kind of money, there is enough space for some failure and proper testing.

Home > General > Affiliate Marketing Forum