How Much Money Do You Need For Affiliate Marketing?

A common perception on affiliate marketing is that it all sounds great, and there are people sharing knowledge, helping each other out on forums but… You need money to start. Can I afford to spend time on it? How much money do I need to not waste my time studying all the theory but not being able to put it to practice?

There’s no real minimum or maximum you need to start out. Do some simple calculations and see how many tests you could do with a certain budget you can spend on campaigns. To be on the conservative side, I’d say 10x payout for ONE test. Very rough rule of thumb, can change a lot based on experience, and also some luck. That’s the reason it’s recommended to start with low payout offers so you can perform many split tests and LEARN.

What is a good vertical to promote if you are starting out and have limited budget?

Offers that pay around $1 per conversion are app installs and some leadgen in Tier 3 countries. Don’t get fooled by the low payout, you can definitely still generate significant revenue, since the offers are often uncapped!

In your learning period you are gathering data, learning what is statistical significance, what factors affect your campaigns. You are looking for IMPROVEMENTS, not profit. The profit will come as a consequence of improving. You can choose the vertical based on your budget, or wait to gather enough budget to tackle the vertical you want. You are usually faster by acting based on your current status (choosing a vertical that fits your budget), instead of waiting for things to change.

Let’s say you ran some tests, slowly improved your ROI, and now you are positive, like I did in my first profitable campaign. How much money do you need to continue running that campaign? What about scaling it? You worked hard to get it profitable, and now you wanna know how much you can make out of it.

I like to say there are 2 budgets required: one for media buying and one for operational expenses.

First of all, you need money to buy traffic. You are pre-financing everything here, and only get paid on good results. You will get paid weekly by some affiliate networks and monthly by others. When you mix them together, you will probably need about 3-4 weeks of cash to pre-finance all traffic. So you have to be floating approximately one month of your advertising budget to make sure your campaigns don’t get paused for running out of cash. This keeps you reasonably safe against delays in payments or chances to scale campaigns a bit more, on short notice.

Next, you have to set aside a budget for your operational costs, what you have to pay so that your business is running and can actually buy the traffic. The list includes hosting, tracker, employees, translations, etc, Without covering these costs on a monthly basis, regardless of how your campaigns perform, you will not be able to continue buying traffic.

For this it really depends how risk averse you are. You can be on the crazy side and have budget for only 2 months of operational costs and rely heavily on campaigns bringing in the money. A safer and usually better approach is to have a budget for ~6 months. The reason 2 months is not enough is because it takes sometimes 1 month to get paid, and any problem with payment puts your business in serious danger.

Now, these 2 budgets, campaigns and operational, are not entirely separate. You can certainly make smart and informed decisions when to be more aggressive with the operational budget and vice-versa. You will learn more about this with experience but it’s good to have a rough idea before expecting overnight riches.

The affiliates who build businesses are usually those who manage their money correctly because this is a marathon, not a sprint, and you gotta pace yourself.

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Emanuel Cinca, aka Manu

My story starts in Lipova, Romania, a town of about 10,000 inhabitants, where I was born in a working class family. Growing up in a family that had a shaky financial base and relied solely on month to month wages, and sometimes on short term loans from friends, I knew that I a) didn’t want to get a regular job EVER, and b) I want to have true financial independence.

Fast forward to my high school days, I got admitted into the number one high school of Arad county, “Moise Nicoara” National College. Don’t ask me why they call it a college, that’s just the translation from Romanian. I had a passion for technology and computers, so it seemed natural that I wanted to get into the so called informatics class.

The 4 years here taught me that:

1. Where you come from has little to no impact on your ability to learn, your skills and their value

2. Being number one high school is overrated

3. In the standard educational system, you are not allowed to excel at something, until you have proven to be above average at everything else.

4. Grades are an extremely flawed measurement of someone’s skills

5. I know myself better than anyone else, so I should make my decisions, not anyone else, and I should be OK with the consequences.

These learnings will be reflected in some of my posts here.

After high school, I quit University after 2 months in… TWICE! One time I quit Computers and Information Technology, and the second time I quit Business Administration.

During these years I also developed a passion for poker. I was a content producer at the world’s biggest online poker school for 2 years, and I wrote a book with a Maths professor from Nottingham and TT, who also blogs here. The book is called The Education of a Modern Poker Player.

I moved to Vienna in 2013, at TT’s initiative, and had several failed ventures together, all leading up to what is now Adefy.

I have a keen interest in psychology and in data, which makes performance marketing such a great industry for me. I blog about these topics, sometimes adding education, personal development, and management to the mix.

Interested in: Psychology. Marketing. Management. Investing. Startups. Entrepreneurship.

Hobbies: Reading. Fitness. Football. Travelling.

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