When I first started making big money as an affiliate I got really excited. At that time I was like wow, I’m making $1000/day in profit, this is GOOD STUFF!
At the end of that month I anxiously waited for my fat affiliate check to come in the mail. When I calculated how much I actually got in hand, I was shocked! Clickbank pays their affiliates twice a month, based on 2 weeks of sales, so I expected my net would be $14,000, it was only $6,000!?!
Who stole my profits!?! Of course, I had forgotten that my refund rate was 7%, and Clickbank holds 10% of your paycheck ransom for 3 months. Why? Because they can! But even figuring those two factors, it should leave me with about $10,000 profit in hand.
Then it hit me!
I had averaged a $1000/day profit the first two weeks of the month, then I had increased my pay-per-click expenses by the tune of $4,000 over the last two weeks of the month. At the end of the month I received my check for the first two weeks of the month (there is a two week delay for clickbank). But when I paid off my expenses at the end of the month they were $4000 higher so I only netted $6000 profit.
This is why if you’re aggressively growing a ppc campaign it will may take months before you see any significant profits. And if you’re smart that’s the way you’ll do it!
Why is that?
Because if you want to be a super affiliate and make a high 6 or 7 figure income you’ve got reinvest ALL of your profits in the beginning to buy more targeted pay-per-click traffic to your site.
A lot of people wonder, how someone like me can spend $3,000-$4,000/day on pay-per-click! It just seems unbelievable to a lot of people. “Amit, I don’t have the credit limit to spend that much a day nor do I have the money in the bank to pay a $100k to Google.”
Here’s a tip: neither did I in the beginning! Here’s how you can build up to over $10,000/day in sales with about $5000/day in advertising costs in 9 months starting with only $300, assuming that you double your money (100% ROI):
Month 1: Spend $300 on Adwords, and get $600 back
Month 2: Spend that $600, and get $1200 back
Month 3: Spend that $1200, get $2400 back
Month 4: Spend $2400, get $4800 back
Month 5: Spend $4800, get $9600 back
Month 6: Spend $19,200, get $38,400 back
Month 7: Spend $38,400, get $76,800 back
Month 8: Spend $76,800, get $153,600 back
Month 9: Spend $153,600, get $307,200 back
This is called pyramiding your profits, and if you have enough discipline not to take the money out and waste it on expensive doodads, such as sports cars, jewelry, etc; and you reinvest ALL of your profits, then you can grow your business at an exponential rate.
I’ve heard stories of affiliates that have made fast cash with affiliate marketing and have taken the money and blown it. How stupid is that. If you treat your affiliate efforts like an ATM machine, then you’re dead in the water. You’ll have no money to reinvest in your business and grow it, and as a result your business will die out.
However, if you realize that to build a long term solid and highly profitable business, you must reinvest what you make back in the business then you’ll reap some awesome long term benefits. And once you have a massive money machine on your hands you’ll only need to take a small percentage of your profits to buy all those doodads you’ve been lusting after.
clickbank checks growing your affiliate business reinvest profits
This is some great information. I’ve got to admit it’s a little intimidating using your own cash for PPC in the beginning, but I guess you’ve got to risk a little early on to be successful. I hear you on reinvesting your profits to continue to grow your business as I’m sure it can be very tempting to take that money out and spend it when you get it.
I agree. It’s tough however not to buy all the fun stuff with the money you make. When I first started I was very disciplined and was very careful about anything I purchased, so much so that within a short amount of time I had over $100,000.00 in my bank account! I had a tiny 13 inch TV, my rent was $375 a month, and I lived cheap! I was still able to buy a few things, but was really careful.
It was a good thing I saved that money because my prime online income at the time dried up and I had to invest in other businesses, luckily not only did I have the cash to invest, but I had the funds to support myself when my income went down.
Hi Miles,
Wow! It’s no wonder you’re so successful, you really practiced what they called delayed gratification big time! Having over a $100k in the bank is a great feeling, I actually hit that not too long ago.
What about someone starting the ppc/affilaite game? Spending a few hundred a month isn’t too bad but we all don’t see 2x profit margins right out of the gate. i see lots of people getting frustrated when they just break even.
Amit, what would you recommend to “these people” that they should be looking into why their ppc campaigns aren’t working?