Mr Green: Alex from FlipSiteMedia a.k.a the angry Russian Yiddish Chutzpah b-boy is back for another guest post.
Alex: In August, right after my 26th birthday, I made arrangements to move back to my parents’ house.
Mr Green: Can’t hack it huh?
Alex: I know most of you snarky types think it’s because I can’t hack it as an affiliate, but the truth is I make over six figures a year (profit), and this year is lining up to be no different.
No, it isn’t the cash flow that made me decide to move home. We have to go a little deeper into what is affiliate marketing to understand why I made such a radical change.
Tell me if this sounds typical to you: You wake up and check your stats before you brush your teeth. You lose sleep over the FTC and lawsuits. You are at the complete mercy of your network, advertiser, or traffic source. You’re paranoid someone is going to steal your campaign. You can’t predict how much money you’ll make in next month, next week, tomorrow. You chase the next “hot thing” just to watch it burn down the following week. This is what I call the “Wicked Fire” mindset.
Mr Green: I hear ya!
Alex: What I’ve come to terms with is that the “Wickedfire Mindset” is not how you run a business. In fact, it is not a business mentality at all. It is along the same lines of day traders, forex, or online poker.
Mr Green: But aren’t forex and day trading regarded as legitimate businesses?
Alex: Yes, but, a business, in my opinion at least, is an enterprise that generates you income and has value on its own. In other words, someone can buy it from you and in theory with similar skill set make the same kind of revenue and profit. Ask yourself, do you have any assets in your business currently? Would anyone even consider buying your business?
Mr Green: No, probably not.
Alex: Well recently I had a chat with an acquaintance who made the same kind of profit as I did last year with a “real” business. She bought a franchise that involves a party van that is rented for kid’s parties and events. She hired a driver and a salesperson, and her business makes her money without her direct involvement. This leaves her time to focus on growing it without worrying too much about the
day-to-day. She can also make predictions about her income and growth of the business based on reservations months in advance. Lastly, she can sell the business to ANYONE and they will make money running it right away.
Mr Green: But, if you’re making good profit with your own projects, why care about forming or selling a business? Yes you can’t predict your income, but a good month of profit can cover many bad months.
Alex: Well the main difference between her and me is that at the end of the year I have nothing to show for my work except for some cash. Most of the campaigns that made me money have been wiped out by either offers going down or traffic sources banning their promotions. Every campaign I am currently running has been built in the last 3 months, and I know it’s just a matter of time before they go down too. It’s a never ending battle that leaves me with little more than commission checks at the end of the month.
I’m sick of living in standby mode waiting for big campaigns. I decided to try a “lifehack” and move back home to give me time to think about how to use my skills to develop a real sustainable online business.
What this new business is or what it will look like I’m not sure, but I’m hoping by taking one step back I can take two steps forward in the future.
Mr Green: That’s very courageous of you…by any chance is your next guest post going to be revealing all your campaigns since you have no use for them anymore? LOL JK. No seriously?
Alex: Die.
Who is this guy? I like him! haha
Some say he's fictional others says he's real. But they all agree that he's as mysterious as Edward from Twilight.
his writing style is just like yours Mr. Green…while this is definitely a cool format, I think you're pulling a fast one on us.
now i'll go back to my unprofitable hole and dream up a real business model.
bai.
That's how a loser thinks!
Hey Kevin,
You look like you're 12. So I don't know if I would be taking life advice from you.
HaHa This made me laugh!
hahahah
Loser?
You serious?
Better do some real thinking yourself.
For longer lasting campaigns (so you don´t have the chase the next "hot thing" all the time):
- Switch from promoting short-lived CPA offers to CPS offers that will be (and have been) around for years. Find them at Commission Junction, LinkShare, Tradedoubler etc.
- PPC promotions (usually) have better longevity than FB, PoF, PPV or Media buy promotions. For ex. I have profitable PPC/CPS campaigns running that I haven´t touched for years.
Regarding assets, and would anyone even consider buying his business, since he seems to be successful, what does "Alex" do with his money?
- Invest in real estate, valuable domain names, stocks, classic cars etc etc. Whatever you´re interested in, that brings long-term value to your company. A company that has cash and/or
valuable assets, is alwasy going to be interesting to buyers, even if they don´t want to run that business.
No need to "live in standby mode"
I completely agree with you, and that is the kind of stuff I want to find out for myself including what's important to me and focus on those things.
Agreed.
Serious why not buy real and paper assets that pay dividends.
Still to what you know best.
Way tooo practical. The non IM world isn't that different. Everyone is still afraid of losing their jobs or their work going under.
Great post. Thinking for the long-term.
My favourite bit: "Die". Haha.
seriously, what a whiney bitch. tell this guy to man up and stop the bleeding from between his legs.
Man up coming from someone that posts behind a fake name…oh wait, doh!
I think he is just too afraid to lose…
yawn.
Great article !
Good and depressingly true post. Warren Buffer looks for moats in his investments, affiliate marketing definitely has none.
Great article as always.
Is it really necessary to move back home when you make 6 figures/year profit?
No there is no NEED to move home.
It's more of a way to shock my system into get out of the same state of mind I've been in for the last few years.
Hmm… very interesting indeed. And kinda depressing. Thanks a lot.
Funny and very interesting post…
Thanks for the comments.
Just to clarify some things.
1.) 100k after taxes and when you're living in one of the most expensive cities in the US really isn't as much money as you would think .
2.) There are many other reasons why I want to be with my family that have nothing to do with the way my business is going, but those are personal and outside the scope of this article.
@Alex
Good on you.
I don't see the need to buy a big house or flashy car to prove to myself or others that i've "made it".
That kinda thinking will get you into the same hole that Mike Tyson and MJ got themselves into.
I figure if the world's richest, or 2nd richest or 3rd richest, depending on where you spot Warren Buffett is driving a clunker, living in the same house he's lived in for 40 years, I'm on the right track.
I would recommend you check out some talks by Gary Vaynerchuck, he has the right idea when it comes to this stuff. There's a talk that he gives to affiliates at some point (on his site), he tells everyone they're pro and everything (because they know how to monetize) but they should be thinking LONG TERM as well (i.e. start building a brand TODAY).
AM for me is a means to an end. I want to run my own online niche store, selling something I'm truly interested in (i.e. my own line of mechanical watches). Of course there's going to be a parade of 18 year olds who still think the holy grail is attendance at affiliate summits and lines of jagerbombs. But for those of us moving ahead through the mid 20s, it's time to wake up and build something of value.
Great comment!
Fo' shizzle. I got myself another employee and some temps to start building me some CPS/SEO/Social engineered sites… small money, but it's growing week by week, month by month.
Great post.
Too often affiliates, dealing mainly in re-bills, forget how to really sell.
…And as diversifying yo bonds (or the niches you deal in) becomes more important I know a lot of people are struggling.
I personally know of loads of people who did 100k+ months in re-bills now not even breaking even with dating and other now more popular verticals.
…I'd honestly say the first, and best asset, you can have is your ability to sell. Knowing how to word things, how to engage your readers, and how to make them open their wallets.
Some friends get higher EPC's selling e-books than most domestic acai and colon offers get. All because the re-bill ballers (myself included) take for granted how easy it is to sell something that's free*.
We become complacent 'copy-cats' not 'creative cats'.
…And often we neglect the fact that by actually learning how to sell – or using our knowledge instead of just ripping landers – we don't have to rely on FREE* and even if we wish to, no matter the terms on the page, we can get back to double-digit EPC's.
Preach it brotha.
It's very true.
I think most affiliates have a serious problem for their long term business.
Sure they know how to make a guy sign up an email into a great Landing Page for having a free game or a chance to win an Ipad, but how many of them can really sell ?
How many affiliates can tell that they master Copywriting and know how to really sell by themselves?
Maybe 5%.
Affiliate Marketing is easy.
Internet Marketing is not.
Exactly, Part of the mentality that our Commie Comrade is talking about says that ebooks, long-form sales letters (which make you master copywriting and sales) and other elements of "internet marketing" are uncool when in fact, like @FTCHater mentioned, people are killing it with those "uncool" tactics. These techniques require actual advertising, marketing and sales knowledge/theory, all of which I've been studying non-stop for the last few months as I try to distance myself from the FREE* mindset.
Alex,
Great article. A sobering one too.
It did give me some food for thought.
I think many affiliates are only thinking of short term gain instead of building a long term sustainable business.
Your article just reaffirm my belief that it's not about chasing all the hot CPA offers (or any offers for that matter) but rather how to build a response customer list that will bring you income for life.
Thanks again for this Alex and Mr Green!
Warmly,
Jag
angry Russian Yiddish Chutzpah b-boy. nice.
I think one thing people, affiliates specifically, often overlook, is the value of owning a hard asset. Imagine if you will the possibility of owning a portfolio of income-producing assets which earn regardless of your effort or input.
Now review the Billionaires list: http://www.forbes.com/lists/2010/10/billionaires-…
Yes, I did sort such that Zuckerberg is on top (hope it worked). The billionaires are wealthy because of all that they own, essentially (regardless of whether they're self-made, that is).
Back to Zuckerberg: I read somewhere that he made an estimated $635M in 2009. I think it was Revenue Mag, but I digress.
How would you like to own a website, which may incur a shit-ton of expenses like hosting and employees, etc (much like any other business) but that you could step away from while it earns for you, works for you. And to the tune of $635M.
Dude, I'd be happy with a few buinesses that ran themselves and earned me $20,000 annually. Because you can vanish, and do what you want, when you want, for however long, and still earn. Or perhaps you could build another absentee-run business, until you have millions growning independently.
Think about all that you COULD do if you devoted the same amount of time to these concepts, as you did your fledgling AM business…
And yes, I am a major fan of the Four Hour Workweek by Tim Ferris. Hot damn what a gig. I'd be buying businesses on every continent right now in that scenario. You should read it too. Damn where's my amazon affiliate link when I need it.
-Wiggy
"I think one thing people, affiliates specifically, often overlook, is the value of owning a hard asset."
I've personally struggled with this mindset. After seeing ROI that affiliate marketing can give you, every other investment outside the affiliate world looks bleak uninteresting. Plus I'm also used to looking at the amount per hour I earn working on affiliate campaigns compared to anything else. It's a tough one to snap out of.
Shut up Lorenzo… you don't count with your 300% ROI shady campaigns
FYI for those of you who don't know Lorenzo is like a jedi when it comes to affiliate marketing he just thinks it and he makes money out of nothing.
Ultimately it's not doable unless you've got a stack of cash which you can do without [read: do without watching closely, as you indicate]. In the sense that affiliates have a 'healthy disregard for money' they may make the perfect investors, already focused on ROI. But agreed; tough pill to swallow for someone used to fast cash. But as our Russian friend so eloquently points out – the short-term nature of this fast cash flow is hard to manage. At some point trading the hours for the dollars just isn't worth it any longer.
I think taking that step to diversify however is what distinguishes the true businessman – the sophisticated businessman. (I'll let you know when I'm there.) Haa
Yes, it's a trade-off for sure. If you're good at AM, it's hard to switch out because AM gives you mobility, independence and way less liability than owning and nourishing a "hard asset."
Sort of like chasing babes for a while, before picking one and settling down. High ROI from AM can definitely provide more seed capital for those self-owned assets in future. But one has to learn frugality at some point.
Check check and check!
Alex and Lorenzo…thanks again for another moment of clarity. I have been thinking about this a lot lately after the many continuous days of keyboard thumping.
Say hi to mom and pops for me! =)
How is this new and surprising ?
The idea of building something that you can sell goes waaaay back.
I understand to the acai/ringtone/biz opp crowd this is new, but it is not.
Even a shill like Robert Kiyosaki "Rich Dad, Poor Dad" talks about the concept of being owned by work and owning something you can walk away from and still profit.
Its called creating real value and taking care of your clients for the long haul(something that is even lost on many conventional business's)
Bottom line is this.
People will always want to buy. Why not sell them something (or give) that they will look forward to coming back to you and bringing their friends and family now and in years to come?
There is not a country in the world that people do not LOVE to buy and spend. And the latest population growth charts do not seem to be waning. So, its safe to assume that their will be consumers in the future (in fact many of them)
When I first got into PPC and questioned the tactics and products at the time. I was pretty much told "I was a noob and didnt know wtf. I was talking about"
Well, maybe not about .php and cloaking at the time. But, I did know from the business's I have had. That pissing customers off and marketing for a one time deal was a short-term game. Long term loss. Unless, like some I have seen. You took the money and made a network, created a product, started traffic source or invested in bonds.
I do wish I had done more list creation and site generation than I have done and it is very interesting to see things come full circle.
2yrs ago talking about SEO and CB/CJ you would have been laughed at. Now, I bet people would give their left arm to have a great CPS site with a steady flow of customers.
Maybe we still can learn from history or be doomed to repeat it.
I wonder what the history of infomercials, direct response mailing and door-to-door salesman can teach us next?
how is andrew wee on your blog roll and i am not
You have always been on my blog roll, whacha talkn bout?
Because his in-depth PPV case studies, where he spends just under 42 cents, are invaluable to the industry.
As "lame" as it sounds to some, john reese said a few years back that the people that will absolutely kill it going forward are the ones that can say that their online venture makes peoples lives better. The more u can serve well the more u typically make.
Is this based on experience?
I'm sure these guru scum are serving people a lot by charging them an arm and a leg for repackaged information you can buy in a book for under $29.99
Read the classic books on direct marketing and you can tell guys like John Reese to suck it.
Making a six figures and moving back home??????
It doesn't make sense right?
This is what halts me from ppc, campaigns mostly have a couple of months lifespan.
Is it worth it to keep going?
Makes perfect sense.
$100k is not that much money. Maybe if you live in bumble fuck wyoming it is, but if you live in a city, have a gf, and like to go out and have a good time, that money won't last for shit.
Nothing wrong with PPC, just run it for something that will have a lifespan instead of direct linking to an advertiser who either start shaving your leads or decides to cap the offer.
Are you making money? If so then yes it is worth it to go on and if you have to change it up every few months and you continue to make money then what is the problem? You need to give a little to get a little.
"The safest way to double your money is to fold it over once and put it in your pocket."
Gotta move home @ Ryan Eagle by the way awesome article.
Wickedfire sucks. Anyone involved with it should be shot and run over.
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