Riding The Wave of Change
Greetings from the snowy Isles of Great Britain!
I hope this post finds you warm, well and happy.
Last week, I spoke to you about the Power of Choice and how making the right choices can help you achieve your online business goals.
In my quest to make this happen, I’ve learnt quite a bit, but I’ve also wasted a fair bit of money and time trying and buying different ‘shiny objects’ which left me frustrated, overwhelmed and even worse – out of pocket!
It wasn’t until I read my mentor, Dean Holland’s book ‘The Affiliate Marketers Playbook’ that I realised the root cause of my frustrations.
Based on over ten years of trial, error and eventually huge financial success in the affiliate marketing field, Dean explains a worrying trend affecting affiliates’ ability to sustain a viable income. He wrote that the traditional affiliate marketing model as we know it today, is severely flawed and outdated because times have changed.
That’s why this week I wanted to share why I chose to ride the wave of change by partnering with an affiliate marketing business model designed to generate the level of profit I need to live my dream life and give me consistent results for LIFE.
Generating Sales Profitably
Dean Holland, CEO of Internet Profits has been in this industry for over ten years. Through trial and error, Dean has learned all there is to know about how to create and maintain a successful online business and I’ve been lucky enough to benefit from his experiences. He told me of changes that he has witnessed in the affiliate marketing industry, that could directly affect my goals for my business and I’d like to share them with you now.
As affiliate marketers our goal is to generate sales profitably by promoting products and/or services owned by others.
Each time a sale is generated I am compensated and this is typically a percentage of the value of the sale.
Here’s where the problem is:
There have been 2 major shifts in the industry that have been happening over many years:
SHIFT NO. 1 – Product Pricing
Product Prices for many types of digital products have seen a huge decrease over time.
Dean witnessed many product owners fall into the trap of doing product launches and lowering the cost of their products in order to get as many buyers as possible from their launches.
For the customer this is great news!
As an affiliate, this downward trend in product pricing has been hugely bad news.
Imagine you are being paid a 50% commission.
Say you’re promoting a product that sells for $100.
You would get $50 per sale
Just 2 sales per day puts you at $100 per day / $3,000 per month (just slightly above the average salary for most people).
Let’s imagine a different scenario:
Say you still get a 50% commission – but now the product price is slashed to $10.
You now get $5 per sale.
You now need 20 sales per day to make the same $100.
You went from needing 2 sales per day, to 20 sales per day for the same outcome.
That’s 10 x as many sales for exactly the same result.
You might be fine with getting more sales.. but there is another shift that has occurred..
SHIFT No2. TRAFFIC COSTS
As an affiliate we all need to be able to get traffic.
For now, just know, there are 2 ways to get traffic:
- We can use our TIME (aka: Free Traffic)
- We can use our MONEY (aka: Paid Traffic)
Since 2003 cost per click has gone from pennies per click.. to dollars per click.
2005 – $0.38
2016 – $2.14
Paid traffic works on supply and demand.
The more the demand the less the supply. The less the supply, the higher the cost.
This will continue to happen. FACT.
THE BIG CRASH
See the big problem yet?
There are more lower commissions are available now than ever.
Meanwhile the cost of traffic has increased.
This is a catastrophe for affiliate marketers.
Today, the commissions are so low and the cost of traffic is so high, that our profit is turning into a huge loss.
The good news is – there is a solution.
Whilst we cannot control the price of traffic we CAN control the sales process and experience for the customers we generate to increase the returns and allow us to be highly profitable once again.
A business online has two main parts to it; part one is known as the FRONT END and part two is known as the BACK END.
The front end of the business is where we get people to join our email list to acquire new customers.
The backend of the business where all the profit is typically where all the profit is made.
When we promote an offer as an affiliate, we are typically promoting the front end of the business, the lower prices products. Typically, we’ll be sending traffic to something priced anywhere from $5 – $50.
When someone orders that first product, a sale is made and we get paid a set commission for being the affiliate that referred that sale to the business.
Then, most business owners will present that new customer that you attracted to their business, with a selection of additional optional offers – ranging from $50 – $500. Here you’ll get paid a larger commission – which is exactly what we want!
But this is where the journey ends for us as the affiliate marketer who generated that customer for that business.
If they’re smart, the business owner will continue to offer and sell more services to them from the back end of the business. The back end of the business is typically where the much higher priced, premium, high ticket products are sold. They can cost anything from $1,000 up to tens of thousands of dollars. This is where the business will make a lot of money. Unfortunately, you as the affiliate won’t see any of it.
If all this talk of front ends and back ends means nothing to you, Dean has coined this entire phenomenon The Iceberg Effect which he has written about extensively in his free ebook. For more detailed explanation of what it is and how it can affect your business, click on the banner below to get your free ebook.
It is for this reason why I decided to hitch my wagon to Dean Holland’s star and become an Internet Profits partner. Whilst most companies keep all the backend revenue for themselves, Dean has created an Ultimate Funnel that compensates you on everything your referred customers purchase in both the frontend and the backend so you can profitably grow an online business.
Sadly these affiliate programs are rare, as I discovered for myself the hard way before partnering with Dean.
When you think about it, aren’t all things like that? Think about how you feel and what you experience moment to moment in every day. No day is ever the same. Consider how different our lives are compared to a year ago… a decade ago.. Fifty years ago. Everything is in a continual state of flux, have you noticed? At one time we were trading beads and feathers… Look at the currency of our world now?
Riding the Wave of Change
It seems the only constant in life is change.
So it’s not a big surprise to me really.. to consider that this business that we operate in is shifting and the parameters we operate within are shifting too.
I guess.. what matters more than the inevitable changes, is our ability to adapt. In business, as in nature, as with the evolution of all species, we must adapt or face extinction.
Over To You
So what about you? What trends or shifts have you noticed in the affiliate marketing industry? How have you adapted? I’d love to hear about your situation and how you and your business are riding the wave of change.
If you have any questions or comments about anything I’ve written, please submit them in the form below.