@rabbithunter 231735 wrote:
That’s kind of what I remember the 8ish mill but they had like 70% expenses or something crazy. Dunno.
Exactly. Any newbies reading this post don’t get discouraged if you’re not making 6 figures a month.
Do some people clear $200,000 their first year – or even month – in the business? Yes. But there’s always a catch: they might have had to spend $150,000 on PPC and media buys to do it, leaving them with $50,000 in money that actually goes into their pocket. Don’t get me wrong, that’s still a nice income compared to working a desk job 50 hours a week.
I would say one should gauge earnings based on how much they spend. If you spend nothing to advertise and run your websites, but make $10,000 a month, that’s really good.
On the other hand, if you spend $10,000 to advertise/run your business and make $2,000 after expenses, I would say you need to reexamine your budget.
There are actually lots of expenses that add up: web hosting (a big one) can be expensive if you run a high volume website. Someone spending $150,000 on PPC will probably want a dedicated server with the fastest processor possible, plenty of RAM, and a ton of disk space. These types of servers start at $500 bare minimum per month. Throw in RAID and a backup hard drive, and your cost goes to $600, which is $7,200 a year. Reseller hosting won’t cut it for this project.
Don’t forget payment processing costs. In this day and age, especially for US based affiliates, one can lose 5% – 6% a month of gross revenue just getting paid. This doesn’t include the occasional rogue affiliate program that slow pays or doesn’t pay at all. No one is immune to bad affiliate programs. If you’ve been doing this for a while, no doubt you’ve been ripped off once or twice already, if not more. It’s part of the game.
Other things cut into earnings as well: if you work at an office, how much is rent? If you work at home, what’s your mortgage payment? Do you outsource content writing, if so, how much does that cost? If you do most of the work yourself you can save some money, but there’s a limit to what one person can do. We all only get 24 hours a day.
What list of expenses would be complete without taxes? If you’re in the USA, chances are you’re paying 25%-30% taxes a year if you are truthful on your tax return. European affiliates pay even more: 35%-45% isn’t uncommon in some countries with socialized health care and medical insurance. These costs definitely add up and one must put money aside each month to pay the government its fair share.
The upshot of being an affiliate is that the business model is scalable. Someone can start it as a hobby and given time can make it into a full time job. After that, with further investment and maybe some employees to help run the website those 6 and 7 digit incomes are possible.
In the meantime, be both patient and stubborn about improving your earnings. This is a competitive vertical and short of landing a million dollar whale player, it’s going to take time before you can really lay claim to making big money.