It seems every month I end up in a debate over a so-called “expert” about whether your online business should be entirely “affiliate marketing” based (where you sell other people’s products and services) or if it is better to have your own product such as an infoproduct (ebook, book, course, membership site, etc…).
I’m not dogmatic about this…if someone wants to go crazy and market someone else’s product like crazy then far be it for me to put them down.
But since people ask my opinion and since I have been doing business online for nearly a decade and a half now, I think that what I have to say on the matter is worth sharing.
LEAD WITH YOUR OWN PRODUCT
You will hear pure affiliate marketers claim all of the benefits including not having to worry about being single-product focused, not having to worry about a product losing interest, not having to go through the “hassle” of creating their own products, of being more flexible, blah…blah…blah…
Yet, you rarely hear the other side of the story like…
- Affiliate marketers must CONSTANTLY be fighting for traffic – the minute they stop generating traffic, their profits are non-existent
- Traffic to small-time affiliates is getting VERY tough to generate…SEO has all but obliterated niche affiliate sites, paid advertising is too expensive and competition is brutal…so what’s left but to watch your visits go down, and down, and down along with your bank account
- You haven’t actually built ANYTHING that would provide equity if you wanted to sell, merge, license or otherwise cash out of your business. You have built a conduit between demand and supply, but as a niche affiliate website owner, how much is that worth?
- The rules of the game keep changing daily…Google changes the rules on traffic, paid traffic sources become less effective, affiliate product owners change the rules, commissions and terms of the game leaving you out in the cold…your entire business is in the hands of other people, you have NO CONTROL!
- What is your differentiation? Now, you may be getting 1000 visitors to your page and making dozens of sales daily, but days or weeks from now someone WILL come along and steal that traffic from you and when they do, how will you fight back? It’s all about fighting for traffic, you can’t differentiate on product because that belongs to someone else
On the other hand, when you DO have your own product, there are some very important (in my mind ESSENTIAL) benefits:
1. You have leverage…I am most fond of businesses where you create once and sell over and over. With your own well-targeted product you can attract affiliates to take on the toughest/most epensive part of marketing – generating leads and sales. With affiliate marketing you are constantly chasing traffic – with your own product you can let others do that for you 🙂
2. You get the branding advantage – what many people have found is that having your product gives you an edge in competitive niches that can a) get your more publicity (main reason for writing a book or ebook IMHO) b) get you an elevated status in the mind of customers which you can turn into premium positioning in your marketplace and c) pave the way to bigger lists and bigger affiliate profits.  I have done well as an affiliate BECAUSE of all the traffic I have received to my sites and customers generated by affiliates – they buy, they join my lists, they read my content and they buy my recommendations.
3. Having your own paid content can work to your advantage in many ways – you can sell it as products but you can also license your content. Over the last few years I have done a few strategic licensing deals where specific content providers have licensed some of my content for re-use in specific formats/sites for 4 and 5-figures – most people never even think of selling their paid content that way and to be honest I wouldn’t have either unless they had come to me asking.
4. Products evolve and grow naturally…many people think that coming up with products is hard and time consuming and certainly the first product in a niche can be significant work. What’s nice though is that once you have customers they will typically direct you from there as to what to do in future products…so future iterations and back-end money is much simpler than the original product in my experience.
My strategy in markets is to:
1. Enter with highly targeted market focus
2. Generate content and begin to get traffic and form a community
3. Promote some affiliate products first to test my thinking around what sells/demand and fine-tune the messaging (by seeing what sales letters convert) This can take from weeks to months depending on how much traffic and how good you are at finding winners
4. Evolve this into my own products to capture more market share, traffic and visibility within a given marketplace and to take advantage of the leverage of tapping into a pool of affiliates that can generate traffic for me.
5. Augment with affiliate recommendations, back-end products and services.
It is exactly this system that we have used across 4 different niche markets effectively to launching winning products with hundreds (and in one case thousands) of affiliates sending us traffic. It is this system we help others apply inside InfoMarketer’sZone effectively.
That said, there are a few markets where during steps 1-3 I found that non-information products (tangible products) were the real play and so for those I spun out pure affiliate niche sites – one of those I am now considering licensing products from overseas to improve margins.
However, the bread-and-butter of our businesses have always been driven from product out…before you listen to the few remaining pure affiliate marketing entreprenuers left out there, consider the benefits of having your own product.
Ok, let the heated debate begin!
