KaChing: How to Run an Online Business that Pays and Pays

by Comm, Joel

  Reporters aren’t interested in telling the world that you have a new product. That’s what their publication’s advertising space is for. They’re interested in telling their audience about things that are going to affect their lives.

  When you come to write your press release, don’t announce the launch of your new book or your new DVD course. Instead, write a press release that announces the changes that your new release will cause. If you’d created an information product that explains how to telecommute, for example, then your press release would sell the idea that no one need sit in rush hour traffic ever again. That would be the hook that would bring the reporters in. Quotes from the author of a new book, e-book, or course on telecommuting would prove what the reporter is saying—and give your product the publicity it needs.

  Figure 4.7 Freelance writer Robert McGarvey looks for help on Twitter—and hands out an offer of free publicity to companies with the knowledge he needs.

  Press releases like these are certainly useful, and you should be looking to shoot out a batch of them to support your release. But they aren’t the only way to get publicity, and you shouldn’t rely on them. There are also lots of reporters on Twitter who are looking for stories and sources, and connections with them can also be valuable routes to a newspaper’s pages or even a television station’s airtime (Figure 4.7).

  The key here is not to pitch to them directly. No one likes being pitched to on Twitter, and waving at reporters in public is likely to turn them away. Instead, in the weeks leading up to the launch, add journalists to the lists of people you’re following on the site. Listorious (www.listorious.com) will help you to find them; you can see lists of reporters broken down by region and even by newspaper. Join their conversations and be sure to answer any questions they might have. Reporters on Twitter also occasionally ask for help with sources, giving you easy interview opportunities and a chance to build a lasting contact. Make sure that you lend a hand whenever you can.

  The real secret to winning tons of free publicity is very simple: Be successful.

  Reporters are rarely the first to notice when something happens. They only notice the behavior of people who have already spotted it. My iFart app, for example, didn’t cause a ripple in the press when it first came out. It was only after it had sold thousands of downloads and reached the top of the app charts that the press began paying attention.

  When you want to attract the media’s attention, try waving at your market.

  All of these things will help to prepare your market even before your product becomes available. It ensures that potential customers already know you, like you, and trust you, and that they’re ready to pay you as soon as you launch. On launch day—and in the days immediately following—you want to be ready to convert as many of those leads as possible.

  Perhaps the most effective strategy to generate those sales is a time-limited offer. Again, Darren Rowse has shown just how effective that can be. In late 2009, his Digital Photography School site launched an e-book about portrait photography. Although Darren is a hugely experienced blogger whose sites give him a very handsome income and the author of a book about professional blogging, this was the first time that his Digital Photography School had launched a product. In a blog post on his site, ProBlogger.net, Darren explained that his launch strategy consisted of the following:• An e-mail to his newsletter list

  • A post on his Digital Photography School web site

  • Promotions to members of his forums

  • Further mentions on Twitter to supplement the tweets he’d already posted

  • A message to his community on Facebook

  • Promoting through affiliates using E-junkie’s affiliate service

  • Asking friends and members of his network to give his book a mention and a link

  Within 12 hours, he’d sold 950 copies. The e-book cost $19.95, but for the first nine days, customers could buy it at a 25 percent discount. By the time the nine-day launch period had ended and the e-book was available at full price, he’d sold 4,800 copies, grossing a total of almost $72,000. Not all of that was profit, of course. PayPal’s fees meant that actual revenues were slightly smaller, and there were production costs to pay for the e-book’s design, proofreading, and commissioned content. Affiliates also took their cut. But there’s still no doubt those nine days were extremely profitable, helped by an offer that came with a clear deadline. And it’s the deadline that’s important, not the price. Sales continued to come in at the same rate even after the price went up, pushed by the momentum created by the launch. The deadline pushed leads to buy immediately instead of putting the decision off till later—or never.

  Those nine days might have been more profitable, though. The graph showing sales of the e-book over the nine-day launch period looked like a V More than 1,000 copies were sold on the official launch day, creating an immediate spike. Sales then declined before spiking again at the end of the launch period, when Darren sent out a second e-mail reminding readers that they had only 36 hours remaining to buy the book at a 25 percent discount. That e-mail generated almost 1,200 sales.

  Other marketers have pointed out that that’s a fairly typical pattern, but it can be improved. Jeff Walker, for example, did a midlaunch promotion, turning the V shape into a W shape by adding some additional bonuses halfway through the launch period. Leads who had seen the first e-mail and decided to think about it were converted then, and fewer were lost before the end of the campaign.

  Darren also felt that he could have put more work into encouraging his affiliates. Only two or three, he said, generated significant sales. That’s an easy mistake to make, especially for people with experience of earning as an affiliate. It’s easy to forget that not everyone understands the importance of recommending the product, talking about it, and making the affiliate link both unobtrusive and easy to find. It pays to make affiliate work part of the preparation by ensuring a good choice of banners for publishers to use, keeping them informed about the launch campaign, explaining what they can do to increase sales—and recruiting as many as possible.

  It’s a lot of work, but when the rewards are almost $8,000 a day, it’s worth putting in the effort.

  That’s the story of information products. They’re another way to transmit the information that you have about your passion or your profession to people who want to learn that knowledge—and get paid for it. The products themselves can come in a range of sizes and formats; they can be sold online using a team of affiliates and delivered using an automated shopping cart system that’s a breeze to add to your site.

  They take effort. While you can be up and earning with a web site in days, a good information product may well take weeks to put together, as well as the time and expense to create an optimal sales page promoted by a cadre of affiliates.

  But once that’s finished, you’ll be able to relax. The money will come in by itself, in a constant stream and entirely automated. You’ll be able to kick back and enjoy the chime of the KaChings.

  5

  Earning from Affiliate Programs

  In Chapter 4, I talked about selling your knowledge to others in the form of an information product, and I pointed out that a vital part of the marketing process is creating a network of affiliates to do the pushing for you.

  Those affiliates aren’t promoting your product just because they like you. They should like you—and they certainly won’t help you if they don’t like you—but that’s not the reason they’re selling your goods. They’re promoting your product because you’re paying them. You’re giving them a share of the sales price, turning them into sales reps working entirely on commission. Clearly, should those affiliates find that they’re not making money out of the deal, they’re going to be doing something else. The fact that affiliates continue to promote your goods shows that they’re winning.

  If those affiliates can make money from selling products on a commission basis, so can you.

  This isn’t a case of either/o
r. You don’t have to choose between making money as an affiliate and making money by creating products for affiliates. I create and market information products, selling them through affiliate networks. I’m also an affiliate, selling products created by other producers. In fact, my sites generate five-figure monthly incomes from affiliate sales alone. As always, when you’re looking to make your Internet business KaChing, you want it to KaChing in all sorts of different ways.

  Earning as an affiliate is different from the revenue strategies we’ve seen so far. When you make money from the ads on your web site, you’re trading on your expertise. Users will come to your site to pick up your free knowledge. Put the smartly targeted ads that companies like Google and Chitika supply in all of the right places and you’ll earn money as users click through to other sites offering information on the same topic.

  When you create an information product, you’ll be selling your knowledge directly. The format is just a way of transmitting that knowledge. The sales page, sales network, shopping cart, and launch publicity are just the technicalities. They’re the methods you use to deliver as many copies as possible to as many people as possible—and earn as much money as possible. Just as it’s the quality of the information you supply in your content that will determine how popular your site becomes, so it’s the quality of expertise in your information product that will influence how many downloads you achieve.

  When you sell as an affiliate, the quality of the information is still important. But you don’t get to change it; you only get to choose it. If the product you’re thinking about promoting doesn’t contain knowledge good enough to help your users, then you should give it a pass. The amount you’ll earn as an affiliate won’t depend on the quality of your knowledge but on the quality of the seller’s knowledge.

  What you bring to the party is trust.

  Your web site will give you an audience. As they’re enjoying your content, you’re going to bother them by letting them know about a product that they didn’t know they needed and have probably never heard of. They may buy it, if you tell them they should.

  The product could cost $97, $199, or even more. If your audience saw it in a store, they would probably walk on by. But because you’ve told them that this is a product they need to own, many of them will click the link, press the shopping cart button, and make a purchase, thus putting money in your pocket.

  That’s the power of a good web site, packed with reliable, quality content. That’s the power that the trust of your users can bring.

  In this chapter, I explain how to make money as an affiliate. I start with a brief description of what being an affiliate means, then discuss how to find merchants and how to sign up for their programs. Finally, I share details of the strategies for success that allow me to enjoy a deafening level of KaChing from the affiliate ads I place on my web sites and deliver to my e-mail subscribers.

  So, What Exactly Is an Affiliate?

  Publishers call themselves affiliates, Amazon calls them associates, and people more used to selling in the offline world tend to use a simpler term: sales rep.

  The offline term is wrong. Amazon’s term is wrong, too, even though the company was one of the first to offer an affiliate program back in 1996. Affiliate systems have developed a lot since then.

  An affiliate isn’t quite a sales rep. Sales reps have no say in the products they sell. Their companies give them a suitcase full of samples and tell them they can keep a share of whatever they earn. They are employees... even if their income depends entirely on their sales skills.

  Affiliates are really entrepreneurs. They choose which products they sell, they build their own markets, and they decide on the best way to persuade people to buy. They also don’t rely on those sales to make money from the market.

  That affiliates are independent business owners in their own right is important. It means that sellers have to treat them with respect—and pay them far more than they might be willing to pay an employee. And it also means that affiliates have to take responsibility. Your earnings as an affiliate will depend to a large extent on the quality of the product you’re selling, but they will also depend on your connection with your market and your ability to lead your readers to buy.

  The concept behind affiliate selling is very, very simple. You choose a product, present it to your market, and you take a share of the sales price when one of your users buys. (Although you might find a few affiliate sellers offering payments on a cost-per-action or even cost-per-click basis, around 80 percent of affiliate systems are believed to operate according to cost-per-sale basis, the model whereby you earn a commission.)

  Making a lot of money out of affiliate selling requires a little skill. That starts with finding the right merchants to work with.

  Choosing Merchants that Match Your Market

  Office Depot, Gap, Target, Toys “R” Us, Amazon.com, Zappos.com ... if you can name a big retailer selling online, in the real world, or both, you’ll find that they have an affiliate program that lets anyone help move their inventory.

  Why shouldn’t they have an affiliate program? There’s no risk—they only have to pay if someone actually makes a sale—and if they don’t offer an affiliate program, a publisher working in the field will put a competitor’s ads on that site instead. Retailers that don’t have affiliate programs risk losing market share.

  That means you’re spoiled with choices. But it also means that many of those choices will be bad. Some products will always sell better to your market than others, and some sellers will suit you and your users better than others.

  The first challenge you’ll have as an affiliate seller is trying to predict which items you should be recommending to your audience—and from which sellers.

  In theory, that’s not as difficult as it sounds... and yet so many people get it wrong. In a survey of 450 affiliates conducted in 2009 by AffStat.com, part of affiliate guru Shawn Collins’s Affiliate Summit, 23 percent of respondents said that they chose affiliate merchants based on their management systems. A similar number made their decision based on brand awareness, and almost a quarter made it based on the company’s payout level.

  Only 3 percent chose a merchant based on its relevance to their web site. That might explain why almost half of those affiliates were earning less than $500 a month. However, 4 percent were making between $10,000 and $20,000 a month, and 17 percent said that they were making more than $20,000 every month. If you get your affiliate system right, you really can make your business KaChing! But you have to get it right.

  That starts with choosing your merchants.

  You really have a choice of two different routes. Affiliate networks like Commission Junction and ClickBank act as clearing-houses for merchants. You can browse around, look for a product that suits your content, and add it to your site.

  This approach works best when you have lots of sites on lots of different topics and are hoping that affiliate revenues will give you a little extra each month. From the publisher’s point of view, the process couldn’t be simpler: Sign up, pick a product, and place the ad on your page. Whatever sales you earn will be a nice little bonus and could mount up when placed across a large network of different sites.

  The alternative is to take the ads directly, either from a trusted retailer or from the producer. I’ve already explained how you can create your own affiliate network to promote your product, but not all producers do this, especially when their products are physical. While creators of handcrafted wooden toys might be fine about shipping off their goods to occasional buyers brought in by affiliates, large producers usually prefer to send their products in bulk to a wholesaler or to large retailers. They then rely on those businesses to bring in the buyers.

  If you want to sell an information product, it’s likely that you’ll be able to join the producer’s own affiliate program. If you want to offer the kind of product you can find in stores, you’ll probably be looking at the affiliate programs of major retailers—giving yo
u a bit of a headache as you try to weigh up the benefits of each.

  Whichever approach you take—whether you’re looking at an affiliate network or the programs of different retailers—you’ll find there are lots of different criteria that you can use to judge their programs. Different affiliate merchants will offer different sales percentages, have different kinds of ads, provide different minimum payout levels, and offer customer service of variable quality.

  All of those things are important. But none of them are as important as whether your customers trust the merchant enough to buy.

  With a maximum commission of just 15 percent, Amazon has one of the lowest-paying affiliate systems (Figure 5.1). Yet its program is also one of the most popular, partly because it offers a huge range of products, but mostly because people trust the company. If they’ve bought from Amazon before, they understand how it works, and they know that it won’t pocket their credit card details for nefarious purposes.