Don’t Go for the Donut!
January 29th, 2008 by 
Amit
Now I always talk about the importance of having a relationship with your affiliate manager, and how it’s a MAJOR key to success as an affiliate.
And that’s true.
However, you need to have a clear picture of what YOU want to accomplish and what your goals are. The affiliate manager’s goal is to have you produce as much revenue as possible for their offers, and they’ll tell you whatever it takes to make sure this is your goals too.
If you fall for that line you’re dead in the water.
Let’s do a reality check:
- Your affiliate manager does NOT care if your profit margin on your offer is 5%, they get paid on the gross revenues you produce.
- They don’t care if you spend 80 hrs a week as an affiliate day trader, as long as your bringing in the sales.
- What’s worst, they’ll offer you a donut if you accomplish their goal for them, that is if you bring in the most revenue.
What do I mean by donut? I mean an incentive, reward, bonus, whatever you want to call it. You may be offered a monthly gift certificate, vacation package, a car, if you’re one of the top affiliates for their offer.
I ‘ve chased after my share of donuts, and I’m tell you right now it’s a big mistake.
The fact is for most affiliate offers there’s a cost of diminishing returns for becoming the top affiliate (and getting the donuts). Becoming the top affiliate for an offer through ppc almost always means sacrificing ROI and considerably increasing your time investment in maintaining your affiliate campaign.
If you’ve taken my advice and opted for the steady but solid approach to building a million dollar affiliate money machine then you have to ask yourself this question :
Are you going to STOP building a million dollar affiliate business to go for the donut?!?
If you’re in this business to get a pat on the back from your affiliate manager, telling you how great you are, then go for the stupid donut. But if you have a clear vision of what type of affiliate business you want to create, then put on blinders and focus ONLY on that which will help you create that business.
Are YOU chasing after donuts or totally focused and committed to building the business of your dreams?
Posted in Super Affiliate Mindset | 
I totally agree at first I thought you was saying chase the donut and I was thinking no thats not me, but then as I was reading on I see what you was saying in the end.
Great Post Amit!
I am going to start affiliate networking right now. I think that your blog has inspired me to do that. I was curious to know if like Zac Johnson believe in the idea of 10 campaigns making 10 dollars each a day and building it from there. I know that your extremely successful at what you do and would be interested in what your view is on that subject.
Good persective, and I think if you’re an advanced marketer or aggressively building your brand, you might want to sacrifice ROI and shoot for top affiliate for an offer even if it means breakeven on commissions vs adspend.
I might do this if I want to crack into a top tier network or exclusive merchant program and build credentials by making top affiliate on a tier-2 network.
Once I have the social proof in hand, negotiating for the elusive super affiliate payouts becomes very easy. And if you’re getting 2x or 3x the standard payouts, you can justify your short term pain, with some medium term buckola from your shiny new super aff payouts…
I think in K-Mart or Wal Mart speak, this is the “loss leader” or the Bluelight Special strategy…
Did someone say ‘diminishing returns’? True that! It’s all about the ‘big picture’…
Andrew, some’s call it “makin’ it up on the volume”.
All this talk about the dismal science…
It just again underscores the fact that your true product is your time.
-leo
Andrew,
I couldn’t agree more, IF you know in advance there is a reward, so you won’t be wasting your time.
Excellent point indeed
Peter
I think Amit is pointing towards MAXIMIZING current ROI and stop chasing the perks. I mean, how the hell are you going to amass checking account if you have 5% profit…
WalMart et. al base them selves on the ultra-cheap labor in the U.S. terms, now ARE YOU AN ULTRA CHEAP LABOR?? I think not! I the cash ultra cheap? Not any more…
How are you going to get that Centurion,Black,Plum card? With big cash account, sure you can rely on credit 99% but if you get into trouble how are you going to pay it? You MUST have a cash cushion!
Erm, the other point is not to do all this stuff yourself, but to move more outsourced labor in to help you build the numbers.
Leo: Having covered dotcoms and Nasdaq companies, I can readily identify with churning volume and transfer pricing…
Peter: I think there’s always a reward - marketing’s about getting the maximum leverage out of what you’ve got.
Yes you can outsource but outsourcing although cheap is not free. To train cheap outsourcing crew takes time and money and it takes a good management skill to orchestrate all that.
BTW the only thing you must outsource is content creation & ad copy and for that it takes someone who has experience and experience is not cheap.
Good post Amit!
There’s seriously in chasing after donut with only 5% ROI. In that case arent you only exchanging money? ha
Well.. i think the approach shld be getting the correct ROI and at the same time.. try to get the donut!
That would be the bet of both worlds. Isnt it?
Good point, Amit. Reading this post I agree with you and it made me remember a post you made a few months ago about one of those donuts. I think you got an Alaskan cruise trip as a reward for nearly doubling your conversions on a competitive offer. Looking back, did that donut stop you from doing more profitable work?
Well said Amit! I’ve been guilty of donut chasing on more than one occasion. I don’t know if it’s my ego getting in the way of my judgment or the false hope of ROI riding parallel with my revenue.
Just like you said, you reach a point with many programs where you simply can’t do more volume without sacrificing profit.
Your common sense advice is very helpful to affiliates at all levels. Keep it up.
Best,
Jeremy
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