Commissions and Advertising Cash Flow
Thu, May 28, 2009
When you’re starting with affiliate marketing, most of your focus is on those magical commissions. One issue I faced was rolling my earnings back into advertising. After seeing a few sales I wanted to expand my campaigns right away!
If you have a “day-job” funding your startup, you should be fine financially, although you’ll be risking primary income. But if you’re reinvesting your earnings, like I am, be careful!
ShareASale was the first affiliate network I joined. It only took 5 days to earn my first commission, and while it was thrilling, I was still thousands in the hole from previous failed attempts. You can read about those in other posts . . .
This “earned income” was rolled right back into PPC advertising. As I only started with a few hundred dollars, refilling my campaign budgets significantly depleted my bank balance. This was fine, I thought, because my check would be cut in a few days.
Not knowing that ShareASale batches their payments on the 20th, the following month! This allows sales to be approved and deposits to clear. Now instead of having $5 in my account for a few days, I would have to survive on $5 until the 20th.
Oops, but it turned into a real failure as I had expanded my campaigns!
Sure, I could have backed them off, but I was already seeing an increase in sales. I pealed through my budgets in 2 weeks and had to shut down. I was offline for 7 days waiting for the check to come and clear my bank account. I never did the math on how much revenue I left on the table.
What I Learned:
1) Don’t put all your traffic in one affiliate network! Just as you don’t want to advertise with only one traffic source. Find niche programs that pay frequently. This will help your cash flow!
2) Don’t expand your campaigns too quickly! If you’re on the reinvestment model, you’ll want to expand your paid campaigns over time. Wait for commission checks to clear before reinvesting.
Side Note: Just because the “balance” is displayed in your earnings summery, doesn’t mean its revenue! I have seen plenty of commissions reversed. Its money earned when it’s in your bank account!
Tags: advertising, cash flow, commissions
Thanks for writing, I truly enjoyed reading your most recent post. I think you should post more frequently, you clearly have natural ability for blogging!
Cute Picture! Thanks for the spam . . .
Hey, great post, really well written. You should blog more about this.
Thanks for the useful info. It’s so interesting
IMHO anyone starting out should stick to as many free advertising modes as possible, like article marketing, bookmarking, building backlinks. Have u tried that and how did it work for you?
Tony
Cool post, just subscribed.
Tony, free ad sources are great, but they can take time to generate traffic. If your margins are right, you can run paid ads all day. I know a few people making a great living from this!
I have to agree with Tony here. All I’m depending on at the moment with my blog is Affiliate Marketing and Google Adsense.
But, I think we can all agree. I’ve definitely learned from this Failure.
Oh, and if I may.. I would like to add something to my previous comment. I’ve been making good money with Sponsored Tweets. My Twitter account isn’t active long enough for me to start tweeting ads myself, but thru my blog I have collected quite some referalls. Maybe it’s a nice idea for the other ‘failures’ (:P) out here?
Hi Daan, checked out your blog . . . looking good! So have you seen any returns from using Sponsored Tweets?
Hi!
Well, I’ve just started out using it a week ago. But my balance is up to $ 50,- now. It’s good enough for me, I expect it to increase when I’m finally able to tweet the ads myself.
Btw. Did you get my DM on twitter?
I signed up for the service with your link, two publisher accounts and one advertiser. Hopefully you’ll get a nice commission! I generally don’t read DM’s on twitter, to much spam. But i just emailed you so you have my email address.
I liked it. So much useful material. I read with great interest.