Can You Believe it can be as Easy to Earn $1.45 or $400+?
This month, I had an experience that triggered an "aha" moment for me. It was something I knew, but something I obviously needed to be refreshed about.
I had 6 sales from one affiliate program that amounted to $8.74--that means I earned approximately $1.45 per sale. While many people here would say I should celebrate about that, I felt I could do much more.
I know how much time and effort I'd invested in those articles to earn the $8.74 and I know by way of my choices, I paid myself less than minimum wage. I learned from it though and I want to share my learning lesson with you. Hopefully, my learning lesson can expedite your growth and earn you some good money!
The Requirements and Costs of Using SEO
Using SEO, it takes 1500-2000 words of content to rank for many keywords nowadays, then, it takes 6 months on average for the article to rank. Now, my articles I wrote 6 months or more ago are ranking, and I'm getting the chance to learn from the results I'm reaping.
I wish I had done the math on how much expected revenue would come out of each article 6 months down the line (if it were to rank) based on the affiliate promotions I'd included. If I had done the math, I'd know that each transaction could average $1.74 to $4. It's funny, I always tell my referrals (or others who are new) to find a good niche with good products to promote and give them clear guidelines to follow, but I didn't think it all out for myself.
Our Responsibility in Business
In affiliate marketing and sales, we have the option to choose what products and services we promote. We choose what commissions we get.
Our time is valuable. We don't know how many more posts we'll be able to hash out or how many campaigns we'll be able to do, and regardless of our physical, mental, or emotional capabilities, it's each and every choice that determines how much of our potential we truly harness.
My Mistake
I chose to be in an affiliate program that paid me 40% yet the commission changed, and is now 12%. Even with the 40% commission, the average sale from my site is too low to achieve my financial goals without alot of traffic and sales volume. However, since I didn't really think it out, I took my time to create articles around something that wasn't really a good opportunity to make good money.
Learning lesson #1: Choose affiliate programs that are stable and have a track record of taking care of their affiliates.You don't want to bother with companies that will pay you 40%, then within 16 months (my affiliate journey so far), they will drop the commission more than half. It can really mess up your income projections.
My "Aha" Moment
Alternatively, I took less time to write an article and promote a product that sold from my website for $997. That product earned me a commission of $398.98.
The contrast of the two experiences: one higher price and lower sales volume, and the other lower price and higher sales volume triggered the "aha" moment. I need to be much more careful with each post and each promotion to be strategic.
Business is about helping people and to stay in business, you have to make a profit. I can put myself out of business by making decisions like spending too much time on campaigns that pay pennies.
You can too.
The Business Tragedy
I've heard of alot of people who get into business and go back to jobs because of simple mistakes like this one, so let this post serve as your warning. They may do this several times without noticing they need to pivot and choose a niche or affiliate programs that pay them better.
The Optimal Situation
I don't want that to be you. I want you to make this business work. Let's win together.
Choose good affiliate programs and products to promote based on:
- The stability and reputation of the company
- The relevance to your target audience
- The quality
- And, the math and how it plays into your overall business plan
Even worse, the higher ticket product was easier to sell, and I think the buyer might even be happier with the outcome. There are good opportunities out there to earn from high ticket affiliate programs without sacrificing quality. You and I have to take out time and spot out good opportunities for us.
What the Success Stories Seem to Have in Common
Watch most of the great success stories. Many of the success stories of people who are earning tens of thousand of dollars selling products or services aren't because they're promoting products and services that are $50 or less and selling in high volume to new customers.
Even with companies like McDonald's, their success isn't based on high volumes of new customer acquisition. They're not making their money off of one burger on the dollar menu! In essence, they earn "high ticket commissions" from each customer because their retention and lifetime customer value is so high. Starbucks is the same way!
Lifetime Customer Value Craziness
According to Business Insider, Starbucks has a lifetime customer value of $14,099! That means when they get a customer for the first time, they're not looking at that customer as a $4 drink purchase, they're looking at the customer as $14,099 over the life of the customer relationship. We need to think this way as well.
How can we get repeat business? How can we get the same customers to stay with us for the long haul?
We can go on spinning our wheels over and over, if we're not thinking about how to keep customers when they come to us. I would hope my $1.74 customer will come back and purchase based on my recommendations again, and doesn't leave me feeling like, "why did I spend all that time on an article with low pay potential?". Regardless, in the future, I'd prefer to be on the safer side and choose my promotions a little smarter upfront. I'd recommend, we find either:
- Recurring affiliate programs with high lifetime customer value (like WA)
- Or, one-time sales with high commissions
It's Okay to Avoid Worrying about CashFlow Sometimes, But...
It's okay to sprinkle brand awareness and low ticket offers here and there. I'm not suggesting at all to skimp on quality or customer satisfaction--that should be a given.
However, if we want to build a full-time income, we need to be careful to do the math, be realistic, and choose products and services to promote (even if they're our own) that will help us reach our goals.
I just wanted to leave this food for thought.
Other Resources
If you haven't already, check out my case studies and trainings. I create each training module to encourage you to grow your business and motivate you with my wins and mistakes, so you can benefit.
Here is my 15 month case study: https://www.businessinsider.com/lifetime-value-of-a-starbucks-customer-2016-1
16 Month case study: https://my.wealthyaffiliate.com/training/my-16th-month-case-...
The Beginning of my 6-part Business Planning Series: https://my.wealthyaffiliate.com/training/intro-to-the-minimu...
My Questions for You
That's all I have for this post, but I'd love to hear...
- Are you selling low ticket products?
- What's your strategy for achieving your financial goals?
- Have you considered finding higher ticket products to promote (whether making your own or working with an affiliate partner)?
- What's your reservations about promoting higher ticket products with good commission terms?
Leave your comments, questions, and concerns below.
Recent Comments
122
Good post!
On the flip side, I have seen newbies promoting sketchy clickbank products with high commissions and outrageous prices, focusing only on the money. So it's kind of a balancing act.
Unfortunately for me, my current niche has to use Amazon Associates with a notoriously low commission rate, though the products I'm promoting gives me a couple dollars, yet Amazon links convert so easily because of the stability and reputation of the company.
But you gave me something to think about when I switch my niche soon.
Even if it converts well, alot of times, you need lots of traffic, and that traffic may not return to go thru your links multiple times, so your lifetime customer value would be low. Be careful is what I'm saying.
I definitely don't condone promoting low-quality products regardless of commissions. People are wrong for that.
Oh, definitely don't think you're condoning that. You've definitely given me something to consider though. :)
Good post. I have thought about the low-ticket vs. high-ticket question many times. Many of my items are low ticket, as I sell a lot of books and stuff needed by my readers, so have tried to add in some higher-ticket things. Not easy with my niche. I am hoping that my WA website will pick up the slack.
Fantastic post Tiffany! Thanks for sharing your aha moment, it's sure is a mind opener.
I realized way back that promoting cheap products with very low commission (mine is 4%) will definitely make me go out of business.
However, I plan on sticking to it until I finish the whole OEC training and try my luck on the black friday sale. I don't want to just leave the hard work i've done on my 1st site, just because it's taking me forever to earn from it, considering the fact that i'm learning the basics through it.
Once I'm confident enough to create another website, i'll definitely shoot for either a recurring sale or a high ticketed sale. It always makes me wonder to every time i read a post here at WA that 1 sale earns then $1000-$3000!
The question now is HOW to spot for those high ticketed products with high commission?
I would chart out the customer journey (where they are and the path to take them where you're taking them), the pain points and solutions they might use. Then do some research about those, find out who has affiliate programs, and find out who has good terms in your niche.
Most niches have the option of either promoting high ticket products, recurring affiliate programs, creating your own products, or building a tribe that's connected enough that you have people who come back over and over to buy from you. This route takes more attention to branding and reputation building. Then, if they're coming back, you can inflate your lifetime customer value, and it can work out.
The lifetime customer value is the biggest key, but it's hard to predict in the early stages of the business unless you model something that's already proven. I'm working on branding, but I prefer to focus my monetization efforts on products that the math just works at this point. Predicting income and cashflow based on branding isn't that reliable in my opinion.
WA gives us their retention info and some affiliate managers will give you that information or insight about the performance of their program, what's giving success to other affiliates, and ideas to help you get good results.
Sometimes, you may have to think a little out of the box. You might even have to create your own products just to secure your profit margins and lifetime customer value.
Hopefully this helps.
Hi Tiffany
I think sometimes we get too into thinking we have to refer cheaper products because people might not buy and you have proved that people will buy and will spend money.
I love this post as I also need to look carefully at who I am affiliating with as I feel I need to lift my level too
Thank you so much
This is going to help me heaps
You rock my friend
Vicki
I LIKE THIS POST AND I SEE YOU HAVE DONE YOUR HOMEWORK AND KNOW YOUR NICHE', LOTS OF RESEARCH AND INFO IS ON OFFER FROM THIS TOO,
Though it seems hard going as my head is still spinning from then the course on WA apologies for that but for me i am not selling physical products or services,
i am selling my experience's in traveling in Asia and how it can affect your choices, fears, and language barriers, a blog or article based helping hand i guess, tips and tricks
now at i hope to gain from this effort and financial payout on WA is longevity and as you mentioned with Starbucks and MacDonald serious followers and retention.
i originally my site niche' was to be an online Chinese to foreigners Chinese classroom, rethinking has offered me alternative options on that.
thanks for the fantastic clarity on how processes worked though
chris
It sounds like you may have an alternative monetization plan? I'm referring to a business that makes its primary income thru product sales and affiliate commissions. It sounds like it could be affiliate potential in your plan, but you'd have to do your research and the math.
Be careful to do it up front is basically what I'm saying. Don't shoot blind and HOPE it all works out. Do the math and know pretty confidently that it will meet your financial goals.
hey
Thats Correct it is a little different, and as stated it is not a product related direction, more the affiliate route
yes CBA is being considered and assessed as we speak
so time will produce the outcome to that soon
That's interesting Tiffany
I'm curious. As you're in the MMO niche, is the high ticket product you got a sale for, a digital course, or a physical product such as a laptop? Just trying to get a handle on the diversity of sales in this niche.
Thanks
I wouldn't consider myself in the MMO niche. I talk about making money offline and entrepreneurship as a whole. The people I consider "in my niche" aren't in the MMO niche.
To help you get a handle on the diversity of sales, I've made money on physical products, services, and digital products. It's all about identifying a need for your target audience and pairing a solution. That can be a physical product, digital product, or service. If you're in the MMO niche all of those options are available to you as well.
I don't think how I made the commission (between digital or physical products) is the biggest factor in this equation--the opportunity exists in both and many members here demonstrate that. You can really miss the point if you focus too much on metrics like that because the specifics of what I (or anyone else) did may not work for you. However, this instance was from a digital course.
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I just started doing this myself,as far as looking for and recommending in most cases better higher ticketed items.
WA though in the high ticket realm but commission is high. LM high ticket with a lot of good value commission medium but popular program
You are right we need to think more on the bottom line and in recurring if we are to sustain.
It takes the same amount of effort to sell high and it does to sell low one off products.
It's great to hear you've been considering this as well. Regarding your WA vs. LM, I tried liking LM, but I can't promote them at this time. It doesn't pass my quality radar as of now. They do have high commissions. Many people are promoting Clickfunnels and others for the same reasons as well.
I need to know that it's the best option for a group of people before I can promote it in confidence. Reputation is worth more than a commission, so I'm unwilling to promote something at the risk of my reputation.
When you can preserve a good reputation and promote a product that pays well (either by way of lifetime customer value or upfront commission), that's the best scenario.
Cant argue there :)