I received an email from one of our clients who was over the moon because she had discovered a 100% sure-fire way of making money online.
The technique she had heard about is called “Affiliate Marketing Arbitrage”.
It has been around for many years and some entrepreneurs have used it with great success.
It’s very simple.
You setup a website to promote an affiliate deal which earns you commission. You then pay to drive traffic to the site to increase sales.
The skill is ensuring that the amount you pay for traffic is less than the commission you earn.
Here’s an example:
You find an ebook about dog training to promote which earns you $10 commission for each copy sold.
You create a web page to promote the book.
Then you buy traffic.
For example you could choose to use Google Adwords. Say you pay $0.06 per click and discover through testing that one in every hundred visitors to the ebook landing page makes a purchase.
- Commission = $10
- Advertising = $6 ($0.06 x 100)
- Profit =$4
In theory, simply by buying more traffic you can increase the profits you make.
Pros and Cons
If you can find the right product to promote and a cost effective way of driving traffic this can be a very good way of generating profit from your website. One experienced entrepreneur I spoke with makes over $10,000 a month using these techniques and he has been achieving these results for several years now.
However there are a few things you should be aware of:
• Success is dependant on being able to accurately measure how many visitors make a purchase. This conversion rate, as it is known, rarely remains the same over time. For no obvious reason it can suddenly get worse or better. You need to be able to track these changes so you can stop (or increase) advertising spend depending on the profit being made
• It is often difficult to easily increase the amount of traffic without increasing the cost. If you increase the amount you pay for traffic you decrease the profit. Again this require very careful monitoring
Affiliate Arbitrage is a well tried and tested way of making money online.
If you have the tools and patience to closely monitor the performance of all your offers then it could be a very good opportunity for you. If you get it right it is a powerful way to scale your online business.
The SubHub platform enables you to both easily create affilate product promotion pages and monitor performance using the excellent integrated web stats. To understand more about the SubHub service click here.