Is Affiliate Marketing like Trading Shares?

So I mentioned in a previous post that I’ve been investing in shares on the ASX (Australian Stock Market). It hit me yesterday that investing in shares is very similar in a lot of ways to Affiliate Marketing. I find that I’ve been using a lot of the patience, cunningness & techniques learned from pushing affiliate products to make calculated decisions, do research & ultimately pick which stocks to buy.

So far I’ve been doing quite well, although I’m still getting to grips with a lot of new terminology & ways of thinking. I’ve found that many of the following fundamental principles apply to both stock market trading & affiliate marketing:

DYOR (Do Your Own Research): Don’t just follow the crowd, learn to investigate & dig deeper yourself. Just because someone says an Affiliate Program or a Share is good doesn’t mean that it necessarily is. Watch out for the Gurus or people who seem to “know it all” & be very wary of what they say (I don’t claim to know it all :P).

Don’t Believe the Hype: Lots of people like to try & ramp up stocks to make them sound more appealing. Just like people write convincing sales letters to get you to buy their products.

Newbies find it Frustrating: Of course when you get into a new area of expertise or adventure you’ll initially find it very tough. What’s the best place to learn in these types of situations? Forums. When I was originally getting into Affiliate Marketing I spent a lot of time lurking on Forums & trying things out myself. Same with the Share Market, I’ve found 3 solid forums & I’m lurking, taking in as much as I can, watching for trends. THEN making calculated decisions on what to do with my money.

It’s easy to Make a lot of money very Quickly: With enough backing & the right idea you can make a LOT of money with affiliate marketing. Making the right decision at the right time with a stock can yield the same results. Either way, no-one can put it on a plate for you & there’s a certain amount of risk involved with every venture.

It’s easy to Lose a lot of money very Quickly: We don’t always get it right all the time. When things go wrong they can go very wrong. Risk calculcation should always play a big part in both the Affiliate Marketing game & the share market.

Diversify, Don’t put all your Eggs in the One Basket: Easier said than done, especially when one stock or ad creative is working much better than others. What happens when that market drops out or that creative stops converting? Learn to spread out your ideas & reduce your overall risk.

You need Money to Make Serious Money: Not always the case, it is possible to start out small & work your way up. But to make SERIOUS money you need the initial capital. For example If I place down 1k on a stock & it goes up 300% then I’ve got 3k. Whereas if I put down 50k & it goes up 300% I end up with $150k (Minus capital gains tax etc). Same goes with Affiliate Marketing, more PPC budget means more opportunities to convert.

It’s all Taxable: Don’t forget that all your earnings from Affiliate Marketing or Shares are taxable. Shares in the Australia fall under Capital gains tax (which is 50% in the first year & 25% in the second), unless it’s your full time gig. Affiliate Marketing falls under income tax, so the more you earn the more tax you pay.

Either way, I have now added another income stream to my portfolio, quite a profitable one at that.

Good luck.