Pay to Play affiliate programs

No pay to play

In the affiliate marketing world, pay to play affiliate programs refer to a requirement, imposed by the vendor, that all affiliates must purchase the vendor’s product before they are allowed to market it.

First things first: this is not illegal. It’s also not a scam, as long as the vendors follow the usual laws and regulations about things such as making promises that they can’t keep.

That being said, here’s why I don’t like this practice.

Is it necessary?

First, it’s totally unnecessary. Think of the example from the web funnel design in our course, where I use an e-book for learning auto repair as an example. As I said in the course, I’m not a mechanic. All I have to know as a marketer is what the needs of the audience for the product are, and how the product can help them. Being a mechanic wouldn’t hurt in understanding these things, but it’s certainly not essential. Also, there’s one more major reason that pay to play is unnecessary: most vendors don’t do it. You are very likely to find competing products that are just as good and that don’t have a pay-to-play requirement.

What message does it send?

Second, it’s bad for business, both yours and the vendor’s. Never forget that your affiliate business is still a real business, with the same top-level goal as any other business: to maximize your profit. If the product that you’re required to buy does not move your financial needle in a net positive direction – then it’s a waste of your money, plain and simple. It absolutely must create more business for you than it costs. And how is it bad for the vendor? It sends out a loud message that “This product is so mediocre that we can’t make it profitable unless we force our affiliates to buy it!” If I were a direct vendor, there’s no way I would be willing to send this message to my affiliates, much less the buying public!

In the final analysis, you as a business operator need to carefully look at any offer before you decide whether it will bring in more customers for you. An offer that comes without strings attached tends to be better than an offer that has them.

Top ten mistakes affiliate marketers make


Nobody is perfect; we all make mistakes. Unfortunately, making mistakes in business translates into losing money. Sometimes, a mistake won’t begin to cost money until after a while, so that you’ll have time to detect it and make corrections before things become too unpleasant. Other mistakes can cost you money almost immediately.

Whatever business you’re in, it’s always good to be aware of the most common mistakes that others have made. This article lays out most of these mistakes for affiliate marketing.

10. Expecting to get rich quickly

The only legal way to get rich quick is by winning a lottery. Sorry, but I don’t know how to do that.

9. First Offer commission is too low

The primary purpose of your sales funnel is to get people to purchase the first offer, so that your profits can come from the upsells. Of course, this means that your earnings on commissions for the first offer must match (or at least come very close to) what you pay for advertising. If not, you will need an upsell or two merely to break even, and that’s not a good situation.

8. Target market is too large or too small

Some marketers want to conquer all of e-commerce, but the fact is that not even Amazon has been able to do that. At the other extreme, a market that has only a few hundred buyers worldwide will never generate enough sales to make affiliate marketing worthwhile.

7. Over- or under-communicating with your list

For almost every audience, one email per day is plenty. Some people even prefer no more than one email every two days. This may sound obvious, but don’t bombard your list with emails: it gets them to unsubscribe, and you lose all those potential upsells.

Of course, the same thing can happen when you ignore your list. Eventually they will simply forget about you. At an absolute minimum, send at least 2 emails per week. Emailing more often will considerably improve the open and click rates.

6. Not running A/B tests

It’s well known that even a very minor change to a funnel page, a paid ad, or even an email can cause a major jump in audience engagement. Once you have enough traffic to do valid testing, you should be testing almost all the time. Let the data guide you, and the differences are likely to be a pleasant surprise.

5. Promoting products that are low value (for the price)

A lot of marketers promote overpriced, low-value items because of the short-term boosts to their profits. However, the long-term price they will have to pay is much higher. People will complain, unsubscribe, and delightfully talk down your business all over the Internet. It’s not worth it.

4. Relying on free traffic

This is a tempting route to go, but the tradeoff to paid traffic is that free traffic methods slow you down considerably, even to the point where there aren’t enough hours in the day to build a large enough audience.

To be fair, there IS one method of free traffic that does work: you need to have large amounts of popular content on your site. There are a few bloggers out there who have done extremely well with this approach, but the tradeoff is still present. Building this much content by yourself takes months, if not years. Or, if you hire assistants to build it for you, you would be paying them more than you would pay for advertising.

3. Not having upsells

Several new affiliate marketers make the mistake of thinking that, once they have a great funnel, they can sit back and watch the profits from their first offer roll in. This plan doesn’t work. Those who try it will lose money, or just barely break even. Profits can be achieved only with your upsells. Fortunately, you already have a list of people who are likely to be interested in many of those.

2. Not having a funnel

It amazes me how many people who just came across affiliate marketing actually BELIEVE that they can just stick affiliate links and banners here and there and expect the world to beat a path to click on them. This “strategy” doesn’t make a penny, of course, and it never will. No successful company attracts buyers without some form of sales funnel. It’s that universal.

1. Not having an email list for a specific market

I can’t say this often enough: if you don’t have a list, you don’t have a business. And it can’t be just any list, because you’re not a spammer. That’s why the first page of any online funnel absolutely MUST have a form for capturing email lists.

I hope you enjoyed this top-ten list. If you have any other top-ten ideas related to affiliate marketing, I would love to hear your suggestions: just drop me an email.

Coach Dave

New online affiliate course for beginners

I’ve got big news, everyone.

Affiliate Swim has just released a free, 8-part course in the “Coaching” area that covers one of the best strategies for affiliate marketing, with step-by-step instruction for how to set it up. Even if you’ve been successful with affiliate marketing before, this course might still be worth a look, because it likely will discuss some details that you haven’t considered before.

Since we don’t want the content to be swarmed by bots, you will need to register an account here on Affiliate Swim – and that’s also free, of course. Once you’re registered and logged in, all you have to do is click on the Coaching link in the main menu, and you’ll see the complete contents of the course.

Have fun!

Affiliate networks: what newbies should know

The best way to think about an affiliate network is that it acts like a Tindr for the world of affiliate marketing. Although each network has its own niche or variation on the business model, all of them are in the business of pairing vendors with affiliates so that more affiliate sales get made.

So here’s the standard model for how it works:

  1. A vendor pays the network to be added to their database and to list products that the vendor chooses, along with commission rates for each product and any marketing tools that the affiliates might use (like ad banners). The vendor can pay the network a flat monthly rate, although there are many other types of payment structures.
  2. Affiliates join the network for free, although they are often vetted for other things, such as how much volume they’ve sold recently, or how much traffic one of their websites has. By the way, networks often refer to affiliates as “publishers,” because it has become so common for bloggers and other online publications to use affiliate ads to generate revenue.
  3. Any affiliate can request to advertise any vendor’s products; the vendor is entitled to say yes or no. Similarly, the vendor can contact specific affiliates and ask them to advertise the vendor’s products: again, the affiliates can say yes or no.
  4. When a vendor and affiliate have mutually agreed to market a product, the network automatically generates a link to identify the affiliate, vendor, and product (all encoded, of course). Whenever a potential customer clicks on that link and later purchases the product, the network records the sale and transfers the commission from the vendor to the affiliate.

And now here’s why it works:

  1. The vendor wins because the cost of belonging to a network is less than the cost of developing and maintaining the vendor’s own affiliate program. And of course, both are less expensive than the vendor paying directly for ads in order to bring in more clients.
  2. The affiliate wins because the network is a convenient one-stop shop to find vendors who want to work with them. Also, a good network has vetted its vendors, so there is less risk of the affiliate not being paid the agreed commission.
  3. The network wins because it’s the type of business that can scale extremely well. There’s no limit to the number of paying vendors it can sign on, and no significant increase in overhead when more vendors join.

Should you join a network?

That depends on whether the kind of vendors they feature would be a good fit for your own goals. In any case, it doesn’t do any harm to belong to a network. You certainly don’t have to be exclusive to them.

What I love about affiliate marketing

Affiliate marketing is a skill, and not much more. The more skill you have, the more money you are able to make from it. But the things that give me a true passion for teaching this skill – and improving my own skills! – go much deeper.

You reclaim your time.

In an afternoon of work, you can generate more income than most cubicle dwellers could make working 40 hours (or 50 or 60 hours) in the course of the same week. You never have to trade your time for money again.

Remember that time is far more than just money: time is life. And that’s all that any of us has.

You really CAN lead the fabled “laptop lifestyle.”

As long as you’re somewhere with a reliable – and safe – Internet connection, you can be at full productivity. There’s nothing like checking your commission payments with your toes in the sand!

Keep in mind that if you’re traveling internationally, there could be labor laws and tax laws in your destination country that affect you. That’s rarely the case if you’re staying for only a week or two, but eventually you might be required to apply for a work permit and be responsible for taxes. Do your homework before you go.

You answer to no one.

You have no supervisor or manager. You have no board of directors, or investors who need to be pleased by every quarterly report. There are no co-workers and no deadlines. You are the only one who controls when projects start or end. You don’t even have any clients or customers, in the usual sense. Even though the merchants you’re affiliated with are the ones who pay your bills, there’s no worrying about deliverables from you. It’s strictly an agreed-on commission rate for each sale, and you can enter into as many of these agreements as you want.

Some people are completely terrified by this total lack of structure, and for them, affiliate marketing is probably not a good fit. But if it excites you, take the plunge and see what we have to offer.

Myths About Affiliate Marketing

Unicorn with hoodie

There is no shortage of misinformation about affiliate marketing, and believing it could easily cost you money. Here’s the truth behind some of the most common myths that are making the rounds.

Myth 1: Affiliate marketing is Multilevel marketing.

Not even close. It’s worth mentioning that network marketing (aka multilevel marketing) CAN be an honest, ethical business, but it tends not to perform well for entrepreneurs who buy into it. As a result, a handful of unscrupulous individuals who promote these business models try to conceal them by calling them “affiliate marketing.” Fortunately, there are some easy ways to tell them apart:

The Brand Overlord

Amway. MonaVie. Herbalife. Multilevel marketing ties you to one company, or even to only one product that the one company sells. And if the company collapses (as they often do), guess what: you’re out of work.

In true affiliate marketing, you are never tied to any brand. You are completely free to enter into affiliate agreements with any merchant on the planet that has decided to support an affiliate program. Not all of them will accept you, but many will, even when you’re just starting out.

Uplines, Downlines

Commissions are very different between these types of marketing, and in network/multilevel marketing, some of the payout systems are mind-bogglingly complex. MLM companies force you to share your commission with various people in your “upline” (who haven’t done anything to advance your business), and they promise you wealth beyond your wildest dreams from commissions earned by your “downline.” I think we all know where this kind of ‘model’ ends up.

In actual affiliate marketing, there is exactly one level: you, and the merchant whose affiliate program you’re part of. And the entire commission is yours, period. If you’re not sure about something that’s called affiliate marketing, this is the best smell-test you can use.

Myth 2: Affiliate marketing is complex.

Many of those marketing ‘gurus’ out there love to make this claim, because it makes it easier to sell their course or webinar, along with the attendant upsells. (Big surprise, right?) A few of these courses might even have useful information, but nothing that you truly need. The same goes for a number of software vendors who hawk expensive tools to solve all your problems as an affiliate. Again, some of them may be useful, but are far from necessary.

The reality is that the concept of affiliate marketing is about the simplest working business model in the world today. And there are really only two software tools you genuinely need: an email autoresponder for building trust in your audience, and a system for hosting the web pages that you use for capturing signups and doing ‘handshakes.’ Some marketers use a funnel building tool for that purpose; others use a web host and write the HTML themselves. There’s not much difference in cost between the two. True, there are plenty of other software products and subscriptions that can be helpful. They just aren’t necessary to keep your business going.

Myth 3: Affiliate marketing is passive income.

Many marketers who are actually honest will mistakenly use this term because it’s a cool marketing buzzword. Unfortunately, they’re not using it right.

In finance-speak, only two kinds of income exist: “earned income” and “passive income.” Any money you receive as a result of taking some action is earned income. That includes selling your time for a job that comes with a paycheck, along with income from a business you run, whether you’re the owner of a taco stand or the CEO of Apple.

True PASSIVE income, on the other hand, comes to you for no reason other than that you own a particular asset. This includes interest on a bank account, dividends from owning a stock, rent you collect from owning property, or royalties from owning the rights to a patent or a work of art.

So the bottom line is: there is no such thing as a business opportunity that provides passive income. Only certain kinds of investments can do that.

Final thoughts

I apologize for not blowing anything up like the Mythbusters, but hopefully I was able to clear up some of your confusion.

The Three Pillars of Marketing

If you don’t read anything else on this site, read this.

Every successful marketer in every industry knows about this concept, and you can’t afford not to. If your business doesn’t follow a marketing strategy with all three of these elements solidly in place, it’s guaranteed to fail. There are also a few extra details that are specific to affiliate marketers, which you’ll soon see.

Pillar #1: Audience

Broadly speaking, your audience is everyone who knows that your business exists. They could have learned about it by clicking an ad you placed, by reading an article you wrote, or even by word of mouth.

Every marketer wants as big an audience as possible, because a bigger audience contains more potential customers. The trick is to maximize your audience by spending as little of your resources – money AND time – as you can.

When marketers try to build their audiences, they have two tools at their disposal: the first is content creation, and the second is advertising. Advertising is by far the faster way, but of course it costs money. Whether it’s worth the cost is a completely different topic. Fortunately, a solo entrepreneur can usually buy a few ads at a relatively low cost, so it’s still an option. The free option is to create content that attracts the attention of your audience, but that approach takes much more time to show results, even in the online world.

As for affiliate marketers, most of them purchase ads when growing an audience. They maintain ‘micro-sites’ that are meant to get the viewers interested in whatever product is paying the affiliate a commission. If these sites do their jobs, their audience continues on to the vendor’s sales page.

One final point about audiences: every marketer MUST keep attracting new audience members continually. The reason is that many people will leave your audience sooner or later and forget about your business.

Pillar #2: Trust

Most people don’t spend their hard-earned money by giving it to some random individual on the Internet. They need to trust the person before giving any serious thought to a buying decision. That’s why building trust in your audience is so fundamental. No matter who you are, you won’t earn that trust from everyone in your audience, but a good marketer can earn it from a healthy percentage of audience members.

Nowadays, nearly every successful company that has an online presence uses one of more email lists to build trust. The goal is to show, over a short period of time, that the business truly understands what its email subscribers need or want, and is able to meet those needs. Of course, these series of emails are automated. The market has a number of companies that provide autoresponder services, and the costs are very low percentage of the company’s budget.

Affiliate marketers use automated series of emails to build trust, too. However, in the world of online marketing, it can be difficult to get some people to hand over their email addresses. As a result, affiliate marketers (along with most other kinds of online-only businesses), will use a free offer that they provide people in exchange for an email. This offer needs to be something that people in your audience would consider valuable: an ebook, a video, or a piece of software with an interactive demo, for example.

Pillar #3: Monetization

This is the area that almost every entrepreneur defines well, but – again – it’s useless without the other two. Monetization is simply one of the fancy words for describing what products or services the customers can pay for, and what their prices are.

For affiliate marketers, the monetization is in the commissions they’re paid. Not surprisingly, how much they make depends a great deal on both the commission rate and the size of the market. So unlike many other businesses, every time affiliate marketers choose a new product, they make a new monetization decision.

Final thoughts

One very interesting thing about these elements of marketing strategy is that they come together into the classic model of a sales funnel. The total audience has the greatest number of people (at the top of the funnel) followed by a smaller percentage who trusts your business to some degree, and finally ends with the smallest group: people who are ready to buy and then actually buy.

Most of the effective sales funnels out there are not much more complex than that.