How to Make a Benjamin in Profits/Day

Yesterday I did read following post at Linda Buqets 5 Star Affiliate Programs Forums in the Newbies forum.

Hello Linda,
I am yet to be making $100 per day. I am still very far from it. Could you, please, let us into some of those programs where one can earn up to $100 per day?
Thanks in advance,

Linda provided a brief and correct answer and I wanted to elaborate on it via a post response myself.

And as it happens so often when I am indenting to write a “short” response, the things gets longer and longer and eventually decide to make it a full blog post of its own, because I believe that it is too precious to get lost in the vast ocean of messages in a webmasters forum.

I will post a link to this post at the forum instead. Linda is fortunately not against linking to highly relevant posts and articles on other websites and even encourages it. The emphasis is on “highly relevant” somewhat distant related does not qualify, except for the qualification as spam.

Down to Business

Okay, now back to my answer of that post.
$100 in profits per day from a single program is not that easy.

If it is a revenue share offer you have to do the following math to find out the amount of sales you need in order to make $100 in profits.

$ Profit + $ cost

-------------------        = $ Sales

% Commission / 100

Now we have to assume that you spend less than $100 for every $100 in commission, because if that is not the case, then you are losing money and not making a penny.

$ Profits = $100, $ Cost = $0 - $99.99 (let’s assume you are doing PPC and a cost of $50 for every $100 in commissions, = $100 in costs in order to make $100 in profits). I will assume a 10% commission by the advertiser for this little example.

Based on that equation would be the sales that you have to generate for the advertiser to be $2,000.

Now look at the average order size of the merchant, which really depends on the type of products the merchant is selling. DoubleClick reported $139 as average order value (across the board) in Q3 2004. Let’s be pessimistic and assume $125 per order. That means that you would need 16 orders to make $2,000 in sales.

Conversion Rate Considerations

Conversion rates differ from merchant to merchant. Everything less than 1% of the clicks resulting in a commissionable transaction is poor and should make you think about if it is worth to promote the merchant. Everything above 1% is good. Anything in the double digit range is terrific (if not accomplished by brand bidding or other methods that might/probably be prohibited by the merchant).

Since PPC and organic search as well, is “pull” marketing where you provide an offer for something that the user is searching or looking for, conversions tend to be higher than the 1%. A study by WebsideStory from 2006 shows a median order conversion rate of 3.4% for paid search listings and 3.13% for organic search listings).

Let’s take the 1% as measure (to be conservative).
1/100 converts and you need 16 conversions = 1,600 clicks.

Now you have a figure to work with as a rule of thumb. Details vary of course per industry. You can redo the calculation for any combination of merchant and industry.

Higher commissions and higher sales tickets usually cause the market to be a bit more competitive than for smaller ticket items and lower commission niches. This is specifically true for pay-per-click.

To extend the calculation to pay per click campaigns, consider that based on a MarketingSherpa survey from 2004, the average click-through rate for PPC ads the asked advertisers were getting was 3.6%, which means that you need about 45,000 ad impressions (give or take a few hundred) to get to the 1,600 clicks. That’s a lot of searches on a single day and chances are good that the PPC positions are well filled with ads by others already.

The bid price is probably high as well and you as a beginner will have a hard time to compete with some of the pro’s up there who not only know what they are doing, but probably also have a much older and trusted account to get around some of the issues and penalties a new account can become subject to.

The Backdoor Approach

So you have to go long tail and search for phrases that are relevant (the less relevant, the lower the conversion, if the ad is not skewed to make it seemingly more relevant than it actually is. If it is skewed, then you click through rate will remain high, but your conversion rate will suffer, because people will find out that the advertised product is not really what they expected and were originally looking for.

You can do the same calculations for organic search, only that you have the disadvantage there that it takes a while to get any results back and to find out if the keywords and phrases you optimized a page or site for is actually driving the amount of traffic that you hoped it would. Not to mention to find out, if the phrase is really relevant for your potential buyers of the advertised product(s) or not.

You can do some research with the numerous free and commercial keyword research tools. I have a large list available on my site for every need and budget. However, figures from such tools are only educated guesses. How good the guess is depends on the quality of the source of the data that are used by the tool. The higher price for the more expensive tools is usually justified by the fact that their sources are much better (and usually cost the tool provider a lot of money) than any of the free tools is able to provide.

$100 per Day is Not That Easy!

You see, $100 profit per day is not that easy, even for experienced marketers. If an affiliate makes $100 in profits with a single merchant, chances are good that the affiliate deploys multiple methods to generate traffic to the advertiser, from PPC, organic SEO, and social media, Email marketing etc. If you would break it down to $10 profit per day, per advertiser, you might be better off, because the requirements to make the $10 are much easier to meet than for the $100 profit goal. If you figured out a way to make the $10 profit, find out, if you can replicate the same methods used for the one merchant to use it with another merchant in a similar (not the same) or entirely different niche.

Many successful internet marketers are successful, because they are able to figure out certain methods that seem to work well and apply them to several different merchants. The details of the methods used might be different and for an outsider is maybe no similarity to recognize between one and another campaign by the same marketer, but there is one and that is exactly the edge the successful marketer has over the beginner and inexperienced one.

They learned those things by trial and error and I can tell from my own experience that I am not able to quantify everything to provide you with a detailed description of how I do it, even if I would want to do that. You might want to call it instinct or gut feeling. That instinct was developed naturally over the years. All the mistakes and errors made play into this as well as the successes. More the mistakes I would say, because my instincts tell me more often that I should not go a certain route than they tell me to go with one particular one.

Conclusion

Use this guide as a check list to calculate potential for an idea and to double check if it is worthwhile to spend time and energy on something or not.

You have to figure out the details for yourself. That is what makes up you, the marketer. If there would be a one guide fits it all system out there, you as marketer would not be necessary, because then the merchants could easily follow that guide by themselves and cut you out of the action.

In cases where specific details for an offer etc. leaked out for some reason, only a few were able to leverage it and make a decent profit, because the place becomes crowded quickly and everybody is doing the same thing, which changes the factors in the above equation again and make it quickly look not so good anymore.

That is the reason why no marketer will tell you any specifics for something that is profitable for him, unless he is out of his mind or has a different reason for telling you this. Once he tells somebody, the avalanche was put into motion and makes the nice and cozy space to advertise a lot more crowded and much less profitable.

Good luck with the discovery of your profitable methods and specific campaigns, merchants and products.

Cheers!
Carsten Cumbrowski

References

Conversion Rates PPC vs. Organic – WebSideStory Statistic from September 2006, via ClickZ News
Avg. Order Size, Double Click Q3 2004 E-Commerce Trend Report via ClickZ News
MarketingSherpa, IT Marketing Survey Results 2004
All Data researched via e-Consultancy’s Internet Statistics Compendium