About a decade ago, a couple of college kids named Jerry Yang and David Filo built a Web site to post their golf scores and favorite Web sites. Pretty soon, their Web site became Yahoo. Tens of thousands of would-be dot-com millionaires tried to follow in their footsteps, but most stumbled.
The affiliate marketing frenzy picks up where the dot-com craze ended by providing a solid business model for doing business on the Internet, but success remains elusive. Only about 5 percent of affiliates make any real money, and only about 2 percent make enough money to change their lives.
We’d like to introduce you to five members of the upper crust.
If you’re looking for billionaires, look somewhere else. But if you’re looking for people who’ve found success on the Internet, then look no further. You’ll quickly see that the trick here is not a trick at all. Anyone can do this. Anyone, that is, with the patience, vision, wits and guts to make it work.
Money is good. But is it enough? Perhaps the best place to start the story of Rosalind Gardner is to note that the title of her book is The Super Affiliate’s Handbook: How I Made $436,797 Last Year Selling Other People’s Stuff Online.
Her story gets more intriguing when you realize most of her income now comes from helping people find true love. More on that later.
First, let’s go back to 1996 when Gardner was still earning a perfectly respectable income of about $75,000 (Canadian) as an air traffic controller in Calgary, a job she had been performing with few complaints for two decades. But the nights are long in Alberta, and Gardner soon found herself with a new hobby – creating a Web site about gardens and gardening.
Gardner, who “was married for eight months a long time ago,” then noticed something that changed her life: a banner ad for a dating service. (“I was prowling,” she confessed.) But instead of finding true love, she found opportunity.
She now runs about 10 active dating domains, makes $30,000 (U.S.) to $50,000 a month and spends most of her time traveling or hiking in the Canadian Rockies.
“I discovered who I am by running my own business,” she said with a lot of pride. “I never knew how unhappy I was working for somebody else. I’m basically an entrepreneur and that’s the only way I’ll ever be happy.”
Gardner said her affiliate work was an all-consuming passion when she first started, leaving time only for a quick sandwich and sleep. “I would go to work, come home and work on my sites. I’d ram-a-sammy and go to bed,” she said. “But now, it really is up to me. As far as the dating service and affiliate marketing go, I check my stats at the end of the month, and confirm that the checks are what they’re supposed to be.”
She estimates that now she only spends a few hours a month on the business, although it took a long time to get to that point. Asked why so many affiliates haven’t found success, she said she thinks affiliates need to work harder when they’re just getting started.
“I think the reason so few affiliates are making money is because the rest of them just aren’t doing it [right],” she explained. “They get to a point where they get frustrated and they give up. Perseverance and persistence are the hallmarks of entrepreneurs.”
She has more advice for those thinking about jumping into the business.
“If you’re serious about it, treat it like a business. Definitely take the opportunity. Don’t be afraid of it – just do it. Even if all you generate is $500 or $1,000 a month, it can make a serious difference in your life.”
It certainly made a difference in hers. Now she can’t imagine working in her old job: “I would have been miserable until I retired.”
Industry: Retail Merchant
Wendy Shepherd is a lot like most stay-at-home moms. Married for 16 years to a drug store manager, she home-schools her three boys, ages 9, 8 and 4. That alone keeps her busy from sun-up to story time.
Then she turns into Wendy Shepherd, Super Affiliate.
Working five to eight hours an evening, often working ’til the wee hours of the morning – Shepherd updates a half-dozen thriving Web sites, researches new opportunities, tracks her earnings, writes her newsletter and finds new ways to make money. How did this all start?
“I basically taught myself everything on a computer,” said the very cheery Maryland resident. “I just made a Web site. Then I found out there was a way to put advertising up on the Web site that allowed me to get paid per click.”
That was seven years ago, when her oldest boys were 1 and 2. Today, her flagship site, TipzTime, offers a wide variety of family and household goods. She also runs “about a half dozen” other sites and still finds time to do freelance design work through a merchant site called StudioMatrix.com.
Her nightlife is profitable, generating about $40,000 last year. “I’m pretty much doubling my income each year,” she said, modestly insisting there’s really nothing special about her approach.
“I promote product links for merchants. I mostly use the ones from Commission Junction because they provide easy access to searching the database for products that are available for all the merchants,” she said. “I just group them together. Some will be from one merchant, some will be from all different merchants. It doesn’t matter.
“Then I make up a page about them, list them and announce them through my newsletter to get traffic to the page,” she said.
She makes it sound so simple, it almost makes you wonder why more people aren’t as successful. Over the years, the circulation of her newsletter has begun to resemble that of a small newspaper. Some 30,000 people have opted to receive the newsletter, including more than 7,000 from TipzTime alone. “You get new subscribers every year,” she said. “You hang onto the old ones and it just grows.”
Her best advice to newcomers is “don’t expect results right away.” But she quickly noted that results will come if you stick with it.
“I had to work at getting out of my in-laws’ house,” she said. “So I saved up and worked hard and worked at night, very late sometimes, and I finally got my house. And I can now afford car payments for my new car.”
Industry: Free Stuff
Most 21-year-olds are content to spend money. Zac Johnson isn’t happy unless he’s making $200,000 to $300,000 a year from his own business.
This all started when Johnson was 14, way back in 1997, the dawn of the dot-com, when Johnson offered to sell Web site banners for $1 each. People started sending him dollars through the mail.
“That’s where I got the idea I could start making money on line,” he said. “Then I came across Amazon.com and I started selling stuff for them.
I made them probably around $50,000 to $100,000 in sales and I got a 5 to 15 percent cut … depending on the item sold.”
Sound good? It wasn’t good enough for Johnson: “I realized this was a pretty small proportion of the cut considering the amount of money I was making for them.”
By the end of the 1990s, at the height of the dot-com era, Johnson was getting people to sign up for “free stuff” like coupons, samples and catalogs. “You would push free-stuff items on the Web site and get paid on a CPU basis for everything you pushed through,” he said.
He saw that some companies were “pushing” newsletter subscriptions through PostmasterDirect.com and he started working with the company to collect names, addresses, email addresses and other data through a “double-opt-in” system that respects privacy rights.
“I’ve been pretty much staying with that scheme for some time now,” he said. That’s resulted in an income “in the low six figures.”
What does a 21-year-old do with that kind of money? Fast cars? Hot dates?
“I’m not really much of a party person,” said Johnson. “I invest it back into the company, pretty much … I save it for myself as well.”
His parents are delighted. His father, an engineer, accompanies him on trips to conventions and sits in on some of his business meetings. His mother sells church banners on her own Web site. Even his 14-year-old sister is getting into the act. “She has started making celebrity Web sites,” said Johnson. “But she really hasn’t started making money yet. So I’m trying to put that idea into her head.”
Johnson tried college once, and may try it again some day. “But if I want to do that, I feel there’s time later when I can do it,” he said. “Right now, the opportunity’s here, so I want to make the most of it.”
Industry: Retail Merchandise
Elisabeth Archambault’s first online business flopped. She was going to sell craft patterns on line. “I was never quite able to pull that together, mostly because of the complexities and costs of credit card servicing,” she said. “But it was while doing the research and development for that that I discovered affiliate marketing.”
That was about three years ago, when Archambault was busy working part-time as a technical writing instructor at Assiniboine Community College in Brandon, Manitoba. She had already helped the college put some of its courses onto the Internet and, with what she learned from building her ill-fated patterns business, she quickly found herself selling products for other companies.
Today, her flagship site, BuckWorks.com, is a virtual mall, offering everything from auto parts to prom dresses. Her menswear section alone offers quality goods from more than two dozen merchants – mostly well-known name brands. Her writing background helped her create down-home prose, like advice from a good friend. If she can’t vouch for a product, she says so. Then, when she offers a recommendation, you almost can’t wait to click and buy.
The former teacher has many lessons for newcomers:
- “Start with something that interests you, because you’re going to have quite a learning curve. With myself, I have a much easier time selling clothes than auto parts because that’s where my interest lies – although there are buckets of money to be made selling auto parts.”
- Learn to calculate the return on your investment, including the time you invested in your site. “If you spend an hour doing this or that, there is an opportunity cost. You need to have some idea of what the returns are going to be.”
- “You have to learn how to make your own pages … I don’t think it would ever be cost effective to hire someone else to make them for you. You have to learn the basics of HTML.”
She said her revenue “goes up and down like a yo-yo,” a phenomenon known to virtually all retailers. Shopping is seasonal and Archambault estimated her revenue can range from $3,000 in a bad month to the low-five figures in a good month. It’s enough.
“Quite frankly, I could not afford to go back to teaching. And I’m having more fun with more freedom,” explained Archambault, whose income has allowed her 53-year-old husband to quit his job and return to college.
“My business is sponsoring my husband’s midlife crisis. I’m a chief breadwinner,” she boasted. “I’m not the bread-baker any more.”
Affiliates can live anywhere, and Ulrich Roth has chosen an idyllic setting – the Canary Islands – as home for himself, his son and his travel service, which focuses on travel packages, flights, rental cars, cruises and vacation homes.
“I work at home in a very beautiful area on the west side of La Palma,” said Roth, a native of Germany. “My house, with a view of the mountains and the Atlantic Ocean, is surrounded by a big blooming garden.”
Although Roth just entered the world of affiliate marketing at the start of 2002, he reported sales of $150,000 in his first year, with monthly revenues ranging from $10,000 to over $20,000 at peak season. He estimates sales are up 20 to 25 percent this year.
When he isn’t working on his site, Roth finds time for walking in the natural paradise around his home and traveling.
For Roth, the key to his success is concentrating on a niche he knows.
“I focused on the German-speaking market. I have no experience with the French, Spanish, Italian or English markets. Every country has its own specific peculiarity,” he said. “I design and program my own sites. For graphics, I sometimes employ a freelancer.”
His advice to newbies is to read Ken Evoy’s popular book, Make Your Site Sell. “It’s the best help for people to develop a basic comprehension for this business,” he said.
Beyond that, his advice is simple and straightforward: “Affiliate marketing is a job like others. To be successful, you have to work seriously and steadily. To put some banners on the site is not enough. The most important thing to becoming successful is to focus on one theme or business. If you are in a leading position, you can expand.”
Roth noted that his 20-year-old son, Dominique, is also working successfully in affiliate marketing for the travel industry, earning $1,000 to $3,000 a month. “Now, I’m teaching and consulting him, telling the secrets,” said the proud papa.
TOM MURPHY, editor in chief of Revenue, has been writing about business and technology for more than 25 years. He’s also the author of Web Rules: How the Internet Is Changing the Way Consumers Make Choices.