If you’re savvy and you have a keen eye for business, then you’re probably wondering whether it’s smarter to be selling your own product. After all, we’ve just seen how they stand to benefit by having legions of marketers selling their products… wouldn’t that be a better scenario? In truth, the answer is ‘maybe’ and there are certainly advantages to both situations. Let’s have a quick look at the key differences and hopefully that will help you to make the best decision.
You may want to read affiliate marketing Lesson 2
Advantages of Creating Your Own Product
On the face of it, you might initially think that creating your own product is the best option. After all, this means you’ll benefit from 100% profits whenever you make a direct sale and it means that you’ll be able to get at least 40% and possibly more from a ton of other people all promoting your hard work too.
Additionally, selling a product you created and that you’re proud of is also something that brings a lot of satisfaction and gratification. What’s more, it lets you easily align all your marketing efforts with the product itself and stay ‘on message’ all the way through. You can write a website promoting a certain way of life and then sell an eBook as a natural extension of that. This also means people will stay engaged with your brand –
instead of pushing people away from your site to buy something else, you’ll be keeping them on your page and the product itself will help to increase awareness, authority and trust. In other words, having used your product and hopefully enjoyed it once, they’ll be considerably more likely to come back to you to buy again in future.
And finally, when you sell products as the owner rather than as an affiliate, you’ll have the full control to change the price, to introduce special offers or even to make changes to the product based on requests. In other words, you’ll have far more flexibility which can be a huge advantage as a marketer.
Advantages of Affiliate Marketing
BUT while this might seem like a lot of wins for product owners, it’s actually not as clear cut as you think. For starters, creating a product takes a lot of time, effort, money and skill. You can outsource the process or do it yourself but either way this means a lot of work and time before you even get your first product out there to sell. And this is especially true seeing as your product needs to be very good. Selling products that are sub-par will only prevent people from buying from you in future and make you lose a lot of trust and authority. At the same time, people will normally be able to tell from the offset that your product is less than great quality meaning fewer sales.
So if you want to start earning money quickly then you should become an affiliate marketer. But it goes much further than this…
As a product creator you see, there’s no guarantee that your product will sell and there’s no verification. So this means essentially that you could spend months or years creating something and pouring a huge amount of hard work into it… only to find that nobody buys it. The result will be low or no ROI and a huge disappointment. In fact, this can often be enough to completely destroy your motivation and your enthusiasm and to put an end to your business altogether.
To interject briefly with some personal experience, I actually knew someone this happened to. They had a great idea for a website that would allow researchers to find people to cite in their studies. They were a researcher themselves and they had a good understanding of the industry – they knew this was something people needed and that it was something they would use themselves.
From there, they then went about investing a huge amount of time and money to create the product. They sought legal advice and trademarked the name, they built a website (from scratch – not in WordPress) that was responsive enough to work on every sized display (this was before the days when mobile web browsing was so commonplace) and they hired testers to use the product.
Two years and several loans later they launched the product. Two months after that , they filed for bankruptcy when their hosting charges (which were very large) drastically exceeded their ability to pay off the debt.
There was an awful lot wrong with this business model and the lack of cash flow projections or contingency plans were no small part of that. But what was really wrong here was that he never tested that anyone actually wanted the product and he hadn’t gone about finding a market first. He assumed that people would need his service because he wanted something like it himself. In business though, a ‘hunch’ just isn’t good enough – you need to be certain.
This is the risk that you put yourself in when you create a product of any kind. On the other hand though, when you work as an affiliate marketer, you will actually have the ability to choose products that are already selling. That’s right: you can pick a product that is a proven success. And when you do this, you have no fear that there isn’t demand for it. If you fail to sell the number of items you’d hoped, then you know with certainty that the issue is not with the product and you just need to sell harder! Why make things more complicated for yourself when you have a proven money maker you can simply start using? It gets better than that too, for as we’ll see later on, selling an affiliate product actually means that you can re-use the existing marketing material often. If the seller has found promotional sales copy that works then they have no reason not to share that with you. You’re literally taking an existing business and repeating it – meaning the risk is hugely mitigated.
And if it doesn’t work out? Then you haven’t lost anything. It takes you about a day to set up a sales funnel and to start trying to earn money if that. And it costs nothing – there is absolutely zero upfront investment and you will break even as soon as you make your very first sale!
Quick Lesson: For your own product use the Fail Fast and Verification method
One approach to selling a product that is popular in business at the moment is something called ‘fail fast’. What this means is that you minimize your potential risk by minimizing the amount of time it takes to fail. Your objective here is to find out very quickly whether your business model works or not and then to just get out if the answer is that it doesn’t. This way, you minimize your damage. As a product creator, the best way to do this is often to create an ‘MVP’ to test the market. An MVP is a ‘minimally viable product’ and only if that sells well do you then add to that initial concept by improving the product and building on it. This is one way to mitigate risk and it’s especially possible thanks to the fact that most apps can be updated remotely now.
An even better way to mitigate risk though is to avoid creating the product in the first place until you’re sure it will sell. This is called ‘verification’ and an example of how you might do this could be to have a sales page and then only tell the user that the product isn’t ready yet after they’ve clicked ‘buy’. You can then see how many people would have bought your product and thus make a decision whether to go ahead based on that. Better yet is to collect pre-orders.
When you’re an affiliate marketer though, all the verification is done for you already. You’re selling a product that is already selling well. Thus you know that you’re onto a winner and you absolutely minimize your risk.
Finally, when you sell something as an affiliate, the business model you’ll be using is still highly scalable meaning you can increase your revenue and you can increase your profits.
In fact, it’s an understatement to say your business model is scalable – it’s even better than that. Affiliate marketing is actually repeatable and what this means is that the business model can simply be repeated over and over again.
Remember when we said it potentially takes a single day to create a landing page and start selling an affiliate product? That means that there’s nothing stopping you from creating 100 landing pages for 100 different products in 100 days. If each one sells only once a day and you make $30 per sale… well then you’re now making $3,000 a day. And that business will be incredible resilient and therefore stable – because it’s highly unlikely that all the products would stop selling at once.
Affiliate marketing is the perfect business model in many ways then because all you need to do is to take an existing product with an existing promotional campaign and then share it. It’s literally a ‘copy and paste’ business and when you know a few key things it’s practically fool-proof!
Note: If you do decide you’d rather create and sell your own product then don’t worry – a lot of the information in this lesson will still apply and you simply have to use it to promote your own product instead of someone else’s!