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  1. #1
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    I’ve been doing a lot of thinking lately about affiliate marketing and where it is headed. It’s been a great ride, but we’ve got a lot of things stacked against us, ranging from the search engines’ natural dislike of affiliate sites, to cookie blocking software, to lack of control over the actual transaction, etc. Affiliate sites are still pulling in some great revenue, but I feel sort of like the stagecoach drivers in the old West – this isn’t going to last forever. I want to begin to transition to a new era, when revenues will be flowing from a different business model.

    So what to do next? Well, for starters, all of us are probably some of the most effective Internet marketers in the business. We know a LOT about page design, how to write copy to get people to click on our links, search engine optimization, etc. In short, we are highly effective Internet marketing machines, and as a group we probably outperform the small army of marketing professionals who run the true retail web sites.

    I’m looking to turn my Internet talents to develop websites that sell direct to the public, but with a twist. I feel I can publish “retail” websites that will do very well on the search engines, and can probably place better than the sites out there now. If I can find profitable niches where I can sell a lot of merchandise, I’ll be able to do very well.

    And now for the twist. I don’t want to stock inventory. I don’t mind taking the payment from the customer, and in fact would prefer to do so. But I want to set up relationships with wholesalers and manufacturers who are willing to drop ship their products directly to the customer. No inventory for me, no shipping hassles, and I still have control over the money flow.

    That’s all great, but where do I start? Has anyone had any experience with this? How do I find the wholesalers and manufacturers? Who “eats” the cost of returns? Are there issues to watch out for in contracts with the wholesalers and manufacturers?

    If you’re in this niche I’m not asking you to give up all of your secrets. However, one of the really strong points of this forum has been the willingness of the participants to help each other. I know, because I’ve done it myself.

    Looking forward to some replies to this post.

  2. #2
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    I'll reply just to the first part since these type of threads seem to pop up a few times a year. I should just copy and paste my other replys but i can't find them

    Affiliate marketing isn't going anywhere. It's been around for about 10 years now. Still growing. Lots of room for growth. Online shopping will continue to increase. This is a great model for merchants because they only pay for performance, very cost effective and they love it. There's always going to be merchants out there looking for more traffic to their sites (customers), more exposure etc. Affiliates help them with all that and are very adaptable to SE changes, market changes etc. So affiliate marketing itself isn't going anywhere but affiliates come and go, not all of them tho.

  3. #3
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    OK, then let's look at this another way.

    Let's say that affiliate marketing is here to stay, forever. Period.

    There's still a real opportunity to use the talents we have all worked so hard to develop, and to use them to supplement the income we're receiving from our affiliate sites. I'll say it again -- we're probably better at SEO and copy writing than most of the retail world's web experts. We can move into this niche and start displacing the retail sites.

    Please take a look at the second part of my post above. How do we get started in this area? Internet sales continue to increase, and there is a LOT of money to be made.

  4. #4
    ABW Veteran Student Heyder's Avatar
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    How to get products is not a secret. Get some money and call a distributor. Not stocking inventory is something you'll probably have to negotiate. Most likely you'll end up paying a lot more money to have someone else hold the inventory than you would if you stocked your own. Traditionally companies stock some amount of their own inventory. This is because in most situations you can get a better deal with larger orders. That is why Walmart is able to sell at such discounted prices. They order in major porportions. Buying in bulk keeps shipping expences at their lowest per item as well as product handling. They would much rather take a forklift onto a semi-trailor full of product than have a person wrap up one item for mail delivery. Using dropshippers and the like are not a path to success. Being a dropshipper isn't a bad idea though.

  5. #5
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    "Please take a look at the second part of my post above. How do we get started in this area? "

    We is not moving into this area. I like affiliate marketing. But there have been threads about dropshipping here, some good info there:

    http://abw.infopop.cc/eve/ubb.x?a=se...s=dropshipping

    http://abw.infopop.cc/eve/ubb.x?a=se...=drop+shipping

    also

    http://www.google.com/search?sourcei...hipping+forums

  6. #6
    ABW Veteran Student Heyder's Avatar
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    Sorry for making this two posts.

    I recommend small timers try to work with small timers. It isn't likely that you'll be able to land a deal with Sony ™ or some other large company from the get go. This is especially true if you aren't able to make a good sized order.

    Drive around in your area and look for local crafts or small time manufacturers. In my area we have a bunch of them. These small time people are just like you and me. They wan't to make more money. If you can sell their products for them, you both win.

  7. #7
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    Tom,

    What you are referring to is nothing more than using a dropshipper. You setup the site, take the payments and the dropshipper ships your items. There are many limitations to this business model. Specifically you are limited by the pricing structure your dropshippers set. You are also depending on their speed and quality of shipping. Profit margins are not that great either. Alot of dropshippers offer 'plug n play' CSV product files and if you can setup a site with these products, well so can your competition. So alot will depend on outranking them in the SE's. Even still expect to join a flooded market.

    Why not consider developing your own products, specifically software products? That way you are in complete control and can hold profit margins over 50%. You mentioned you don't want to ship, so with software products, you can deliver all products instantly & automatically to your customers. There is a lot of money in the software industry. I suggest having a look.

  8. #8
    Affiliate Miester my2cents's Avatar
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    Tom,

    Stop your whining... and get a day job!

    Joe
    ++++++++++++++++++++++++++++++++++++++++++
    that's my2cents, 'cuz I'm a legend in my own mind....

  9. #9
    Domain Addict / Formerly known as elbowcreek Thomas A. Rice's Avatar
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    www.thomasregister.com

    30,000 or so manufacturers, many will not interest you, but surely one or two will. Check your region for manufacturers listed there, and see about either dropshipping, or buying from them as you sell online.
    Following everyone else is a GREAT way to become average.

  10. #10
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    Tom

    I just wanted to say that I did this for over 5 years. There are pluses but also quite a few minues..mainly dealing with the customers.

    For instance, the customer places and order, you send it on to the drop shipper who ships it, then the person turns around and cancels the order after it has already been shipped. You end up eating that shipping.
    OR,
    the customer doesn't cancel. They receive the product; you've paid the drop shipper, now the customer decides to dispute the credit card changes. The way this works is that the credit card company ALWAYS take the side of the consumer and yank the money right back out of your account. It is the responsibility of the merchant to prove their case. I've had signed delivery receipts and still lost this battle. Then if this happens to many times the credit card company will increase the fees they charge you because of your charge back ratio. It doesn’t matter if the charge backs have been resolved in your favor. It is based solely on the number of charge backs.

    This was just some of the downside that I experienced with doing business this way. You can make money; so don’t let me discourage you. Just realize the drawbacks before you jump in.

    Kristen

  11. #11
    ABW Ambassador Jane's Avatar
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    Affiliate marketing isnt going away. SEO is going away. Google wants to make it impossible for anyone to manipulate the serps. Looking at this from an industrial product perspective where there are no affiliate sites and no shopping carts, just product information.
    The most popular 2 word search brings up the Thomas Register and several other catalog sites, second is the large companies because they have the most products, most pages. This makes them more important in Googles eyes. I work for a small company and there is no way I can get the site to the top for a 2 word search because we just don't have enough products and pages. I can get to the top for 3 word searches, very specific. Our site is linked from the Thomas Register and all the other online catalogs. We certainly are not going to exchange links with the competition. Traffic power did SEO for 3 of the small companies and they were number 1 for 2 word searches, now they are banned. SEO is dying out and the big guys win. I liked it better when you could optimize a page and the smart guys won.

  12. #12
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    Well, SEO is not going away. And you don't get to the top of the SERPS just because you have more pages or products. Not sure where you picked that up from, but that is incorrect.

    "second is the large companies because they have the most products, most pages. This makes them more important in Googles eyes. "

    Not true.

  13. #13
    ABW Ambassador Jane's Avatar
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    Not true? Do a search for level switch and see who is on the first page. endress has 22,000 pages, control has 52,000 pages. The company I work for has 45 pages. Before google changed it's algo it was easy to get the site on the first page results for a 2 word search. Now it seems impossible.

  14. #14
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    You're basing your assumption that Google favors sites with more pages, products on 1 example? Or just examples with your company? There are a lot of factors involved on where you get ranked and number of pages isn't one of them.

  15. #15
    ABW Ambassador Jane's Avatar
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    I am seeing the same thing with affiliate sites. Just using something that has nothing to do with affiliate sites as an example. Talking blue widgets doesn't get us anywhere.

    The first page that endress shows has 1 back link and a 4 page rank. My pagerank is a 4 and has more backlinks. So what else can I think when I see these humongous sites moving to the top.

    It is still possible to make it to the top for more specific searches with 3 words. But needless to say that puts a big dent in the traffic.

    My largest personal site is the one that does well in google. I have to think it has something to do with the amount of pages. Though I am not saying just making a ton of pages on one domain will do you any good by itself.

  16. #16
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    Maybe i'm missing something, it's possible i'm sleepy but even the example you give disproves your point:

    http://www.google.com/search?sourcei...q=level+switch

    "endress has 22,000 pages, control has 52,000 pages. "

    endress who has less pages is ranked higher up than control who has more.

  17. #17
    ABW Ambassador Jane's Avatar
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    I am only saying it is one factor. How can you compete against someone the size of Endress or Amazon. They both have a ridiculous amount of pages. All other things can be equal or even better but if you only have 100 pages forget it.
    If google counts links, why wouldn't it count pages. Doesn't having more pages mean you know more? Shouldn't that make you more relevant.
    Do a search for level switch in Yahoo. The first site is one that got banned by google. They made over 100 keyword stuffed pages with a mouseover redirect. They were number 1 in Google.

    When you get to that number 1 page in Yahoo keep your mouse at the top of the browser or you will be redirected. Hit your page down button and you will see the site map link. Do a veiw source and find the URL it leads to all the spam pages. Traffic Power has a class action suit against them for getting so many companies banned from Google. Don't try this at home!

  18. #18
    ABW Ambassador mailman's Avatar
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    Cultivate your local market. I think that some of us are trying to compete against millions of other sites for business when in fact we should be looking at our own local markets. Let's say for example you live in city,state or province with a million users. If we focused on that market and cultivated a good customer base we might do all right, kinda of like your local corner store.Advertising costs such as newspapers,flyers etc would be reasonable. Customers might have more of a sense of security knowing they are dealing with someone in their local.

  19. #19
    Moderator MichaelColey's Avatar
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    I'm more excited about affiliate marketing today than ever before. There's still a LOT of potential. I made more this last Christmas season than any other Christmas season (including 1999 and 2000!!!).

    I'm going to transition away from affiliate marketing, too. Just as soon as I find something better. In the meantime, I'm going to keep on doing what works.
    Michael Coley
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     Affiliate Tips | Merchant Best Practices | Affiliate Friendly? | Couponing | CPA Networks? | ABW Tips | Activating Affiliates
    "Education is the most powerful weapon which you can use to change the world." Nelson Mandela

  20. #20
    Affiliate Manager AffiliateBuddha's Avatar
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    I still use affiliate marketing as a fund raiser ... for projects that are not affiliate marketing related . .and it works wonders,mostly all the projects I've started with the help of affiliate marketing money have failed, but I can still start so many new ones and not loose hope thanks to the constant and increasing flow of revenue affiliate marketing provides month after month.
    Gift Shopping Zone Affiliate Program on SAS - 10% per sale with unlimited cookie duration, over 10,000 products.

  21. #21
    Super Sh!t Stirrer SSanf's Avatar
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    As an affiliate, the merchant takes the risk. If you use a drop shipper, you take the risk. One bad credit card can wipe out your profit on a whole lot of sales.

    I would rather let the merchant take the risk.
    Comments are opinion unless otherwise noted. Remember, pillage first. Then burn. Half of all people in the world have IQs under 100. You best learn to trust ol' SSanf!

  22. #22
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    Tom~
    There is a new and unique private label program that will probably be announced this week...

    This program fits the bill of what you are looking for...you own it!

    I won't spill the beans but suggest you e-mail:
    Brian@my-affiliate-programs.com and ask him.
    Just reference "Paul mentioned a new program..."

    Otherwise stay tuned!

  23. #23
    Full Member kapsat's Avatar
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    my opinion,

    i started on the web as a retailer. and found my self not making a profit and barely making a living after more than a year.

    That time was a huge learning excperiance. Then i came accross Affiliate Marketing.

    The Affiliate Marketing Business has been the Best thing i have ever done, for many reasons.

    The best would be the Fredom and that is something you will not have if you are a retailer or dropshipper. I can take a week, a day, last summer i took two months off.

    What business can you do that with, unless you have employees you can trust. Then you have many more expences.

    No matter what business you choose you will have obticals. Affiliate marketing has SE's, Parasites, Copyright Thieves, Affiliate Programs that don't convert and so on.

    If you think that any business is peachie keen you are dreaming.

    Note: I do have day's when i also think this business is getting saturated. Contantly battleling all the S@#%t heads can sometimes be overwelming.

    Don't know if i will alway's be doing Affiliate Marketing but i have know plans to leave. I make my living fulltime as an Affiliate Marketer and have life goals that are certainly obtainable that i would not be able to do unless i won the lottery (i don't buy lottery tickets)

    Everyone is Different,you, mabe happier as a Dropshipper or online retailer.

    sorry for the rambling
    dave

  24. #24
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  25. #25
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    Sandra,

    That's hilarious I was just thinking the same thing as I was reading the post all the way through.

    I have done all of the above mentioned. I have


    1. worked for someone else.
    2. Owned my own business in retail.
    3. Been a drop shipper from both end.
    4. Fulltime AM of several products.

    No matter how bad all the negatives get. This beats all the other alternatives. Now if I could only make a living at it.

    Later,

    Spider Man

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