How Much Can You Earn From Affiliate Marketing?
Two questions I often get asked:
“How much is it possible to earn from affiliate marketing?”
“If I quit my job, how long will it take me to earn X/day?”
Both answers depend on your competence, but I realise there’s an insatiable hunger for concrete figures. So, here’s my take on the matter…
There are five earning brackets in this industry.
• Affiliate Apprentice – Losing money.
• Low Level Affiliate – Anywhere from $0/day up to $300/day.
• Intermediate Affiliate – Anywhere from $300/day up to $3,000/day.
• High Level Affiliate – Anything above $3,000/day.
• The ‘Bag of Dicks’ Affiliate – He who considers anything less than $10,000/day to be ‘doing it wrong’.
Bare in mind that we’re talking about profit here, not revenue.
Technically, a guy earning $300,000/month in revenue could be worse off than the guy making a steady $100/day with no outgoings. Admittedly he would have to be blind, dumb, deaf, drunk and stupid to continue swallowing such a skinny margin, but it highlights one of the rare laws of affiliate marketing:
Revenue is vanity, profit is sanity.
A unique characteristic of our industry is how the mighty can fall overnight, often in spectacular fashion.
You can go from earning $3,000/day to sod all in the space of a lunch break. And vice versa.
An Intermediate affiliate may drop a level after losing his best campaign, while the Affiliate Apprentice can turn Top Doggy Baller overnight if he stumbles in to an unsaturated niche and makes it pay (a daily occurrence in 2009, rare in 2013).
The Bag of Dicks Affiliate may continue to prosper, or complacency may bite him in the arse, but he’ll always be a bag of dicks as long as he judges others for how happy they should be with their income.
$300/Day vs. $300/Today
Many affiliates can’t seem to tell their daily income from their today’s income.
The volatile nature of the business makes it mindless fantasy to calculate your annual salary on the back of one day’s profits.
If this is your first day of affiliate marketing and you earn $1000, don’t assume that you’ll bank $365,000 in the next year.
Your current earnings, in relation to a salary, are $2.73/day.
Repeat your success tomorrow, then the day after, and so on in to the foreseeable future. Only then can you start throwing out whimsical multipliers on an income that isn’t yet yours.
What Are Established Affiliates Earning?
In the established affiliate community, I would say that most of us operate in the Intermediate earning category.
Note that by ‘established’, I’m talking about affiliates working full-time in the CPA space.
Just recently a poll was held on the STM Forum (I recommend you join) asking, “How much do you earn in a year?”
Here were the results:
Obviously, what an affiliate says he earns does not always correlate to what he actually earns, but it says a lot about the competence and/or the bluster of these affiliates in that almost 20% reported over $1 Million per year profit.
That’s a lot of moolah in anybody’s currency.
If you take the median of this small sample ($81,000 to $120,000), it translates to between $221/day and $328/day in profit. I would put this at the very start of the Intermediate bracket, partly because the income has to be sustained over the course of a year. And this bracket is where most established affiliates stay.
Note: Not all affiliate forums are created equal. If you were to take a median sample from The Warrior Forum, I’d bet my shit that the average earnings would barely cover the typical London gas bill.
The jump from earning $300/day to earning $3,000/day and sustaining it is what separates a successful, established CPA affiliate from the very best in the business.
It’s worth noting, the best in the business are not always the happiest with their incomes.
Aligning Expectations with Earning Potential
My answer to the question, “If I quit my job, how long will it take me to earn X/day?” is often a swift “Forever“, and here’s why.
Many affiliates fail to align their earning expectations with work that is actually capable of delivering the desired income.
Here’s a breakdown of where each type of affiliate is likely to invest his time:
Low Level Affiliates: Focuses on pockets of profit around the web. He ignores economies of scale in favour of high margin campaigns on smaller traffic sources that tend to be extremely volatile. Examples include POF dating campaigns, small scale Facebook Ads, Juicy Ad buys.
Intermediate Affiliates: Focuses on high volume traffic sources with smaller margins than the Beginner, but more volume. Obscenely clustered around the dating niche (and more recently adult dating). High competition on large traffic sources reduces the size of the pie for all. Smart movers in this category target mobile marketing and pop traffic.
High Level Affiliates: Focuses on mass market media buys and hugely scalable traffic sources. Often trades convenience (self serve traffic sources) for direct buys with better margins and all of the pie. Greater risk involved, more capital required.
Apprentice Affiliates – Focuses, invariably, on all of the above, to his own detriment.
Bag of Dicks Affiliate – Focuses on Fox News.
So, what do you want to be? What are you happy to be?
If your expectations are such that you are delighted with an extra $100/day, then fuck anybody who tells you to throw down $10,000 on a costly media buy. POF is a brilliant low-level traffic source (with a few Intermediate exceptions who rely on economies of scope) and you need never risk your coat.
If you are happy with the intermediate earning bracket, then likewise, you can afford to avoid direct buys and risky investments but you will probably need to advance beyond the low-risk pockets of profit favoured by newbies.
However, if you are the type of affiliate who’s going to feel like he has a ball missing until he’s earning $5,000/day, then take a reality check.
Are you committing your time and energy to the types of campaigns that are statistically and logistically likely to open up the earning potential that represents what you want?
There’s no point in carving out micro-niches on POF if your heart beats for a million dollar salary.
It’s basic strategy.
What are you going to work on that can deliver an income that you’re happy with?
Fuck, that’s a commandment for life, not just affiliate marketing.
We CPA affiliates tend to gravitate towards High Level income targets, probably because we are young, greedy, obnoxious, unshowered mountain trolls with an appetite for life’s luxuries.
And that’s fine, but there’s a catch.
Everybody has an earning threshold that represents a point of diminishing returns. And many fail to recognise it.
Your life situation might dictate that $200/day is the pinnacle of financial motivation. You can drive yourself to attain this goal, but any further and the motivation begins to slip. That’s a point of diminishing returns. Call it your comfort zone. Any work to advance beyond this point comes with the additional burden of pushing you out of that comfort zone. And so procrastination sets in, along with the dual crippling fears of failure and success.
Many affiliates struggle to take their businesses to the next level because the nature of the game is such that you can be an ‘Intermediate’ banking one of the top 1% of salaries in the population.
Why push it further?
Well, there’s a good reason why we have to be aggressive, greedier and pushier than most. Affiliate marketing is not a career ladder in any traditional sense.
We are only ever as successful as our last campaigns.
We can’t progress through the ranks. There aren’t any. There are no fallbacks, no safe landings, no room for a performance marketer to live off past glories.
The guy at the top can become the guy at the bottom in the time it takes to shit his pants with campaigns burning around him.
And that’s a good thing. If you’re sporting shit-stained pants and a negative balance, you might not believe me, but it’s true.
Performance marketing is what it is. An industry that rewards the deserving and punishes the lazy, the unworthy, the bullshit mongers and the just plain wrong. It’s everything I wanted but couldn’t find in a 9-5.
The amount you can earn is almost as staggering as the amount you can lose, which is one very good reason why you should focus less on counting notes and more on your value as a marketer.
Enjoy the ride, and get a good accountant.