A lot of people want to get into ecommerce. They want to have a product, warehouse it, and ship it off. They see this as the way to make money of the future. Sell lots of products to lots of happy customers at scale. It’s a great way to become a modern mogul, if you can pull it off. But I don’t think E-Commerce is really the way to go if you want to make money online. I personally have been fully converted to affiliate marketing. If you want to make money online, learning affiliate marketing is the way to go.
Manufacturing capacity in the west is limited
This is the unfortunate reality of most places in the west. Manufacturing capabilities are limited. If you want to change that, you need to either go into politics or get wealthy enough to build your own. So, unless you live in Asia, it’s probably pretty hard for you to come across a factory. This means it’s going to be difficult to get the value-add out of the product. You won’t be making a lot of money.
Warehousing is expensive and risky
The bigger you want to build the business, the more cash and space you need to build on the front end. At a certain point, you’re taking on a lot of risk. The rewards can be great, but this isn’t the best way to “brute-force” scale your net worth. It’s not a sure bet.
Manufacturing is a smaller and smaller part of the global economy
I found this by doing a Google search. It’s shrinking slowly, but the trend has been persistent since 1997. There will be a lot of value in global manufacturing, but it’s a shrinking part of the global economy. We’re getting more efficient as a species.
Consumer value is shifting, not increasing
Generally speaking, we’ve figured out how to make human consumption cheaper and cheaper. Humanity is becoming wealthier and wealthier, as people are becoming increasingly able to afford more stuff. This means that the premium for being able to make stuff is getting smaller and smaller. Meanwhile, the premium on having a storefront in a good location is also disappearing. People are shopping online. This means the money is moving to those who can market online. Not necessarily to those who can produce good stuff.
Affiliate marketing is delegation
Someone has a product, and they want to sell it. They have the warehousing and fulfilment all set up. Their website is polished. They just don’t know how to market. You basically only have one job. Get traffic. You’re an employee with the ability to scale up your pay simple and easy.
Affiliate marketing = ads with incentives
When you let Google plaster your site in ads, you get paid a bit. With affiliate marketing, you get to keep your site clean while driving your customers to better products. You get paid an incentive for finding good products to promote and making the “ad” (your content) feel seamless.
Higher profit margins
When you are in charge of just one part of the business, you might get less of the money, but you also take on less of the risk. If you do your own work and market solely organically, your profit margins are nearly 100%.
You control attention
This means all you need to do is figure out media and ads. If you can figure out how to redirect people’s attention from media to consumer products, you have become an expert affiliate marketer. You have a lot of power, because you pick the winners when it comes to the internet. Attention online is equity. You can garner a lot of equity quickly by doing things like building a blog or email list. This is because these formats allow you to get a lot of attention with very little effort.
The ability to pivot
If you control attention, you can pivot whenever you want. Just redirect your audience’s attention. This is why it’s key to understand what type of media you’re creating and to know how it can be used to drive attention. Affiliate marketing is a nimble business model, because you can always decide what you want to promote.
Organic power
The key to affiliate marketing is to actually spend some time doing organic marketing. If you have an organic aspect to your marketing engine, you have power and stability. If you’re just buying ads, the only thing you’re getting out of it is data. If you get into organic marketing, you create equity and keep margins high. The only downside is that it takes a lot of time.
E-Commerce platforms are a form of affiliate marketing
Whether it’s Amazon or Skip The Dishes, ecommerce platforms which connect businesses to consumers are fundamentally affiliate businesses. If you have a good idea for an ecommerce platform or marketplace, you should absolutely pursue it. Starting an ecommerce platform is the most overlooked form of affiliate marketing.
You can leverage software
All affiliate marketing is, is strategic link placement. If you create an app, directory, or online tool that has the potential to link to a product, you should include that link. A great way to make money from affiliate marketing is to combine it with software development. The more people use your tool, the more attention and money you get. Don’t be afraid to build a useful free app. You can always monetize with affiliate marketing.
Drop shipping is a form of affiliate marketing
All affiliate marketing is, is bringing a customer to a product, and taking a cut of the sale. When you dropship, you bring a customer to another person’s product and let them handle the shipping. In exchange, you get a cut. If you get into ecommerce, get into drop shipping, and figure out a way to spend on organic marketing if you can.
Influencer marketing has a long tail to it
This is why there’s still value to using them as a digital marketer. Getting in touch with the right influencer and getting them to post the right kind of post can give your brand a lot of staying power online. Drop shipping with influencer marketing is the ultimate way to spend while building equity. The idea is to have a large store and/or good and unique products. Become a mainstay of the internet. Build a business that can last.
Short video lets you try lots of things
It’s probably possible to run a short video brand that links back to certain products or services. It’s probably pretty tough though. The advantage to short video is that you can create something with staying power while ostensibly throwing spaghetti against the wall. If you can create a lot of good short video, you might be able to promote your self-hosted content.
Spend to get on YouTube
YouTube is a monopoly. This means you’re going to want to diversify across the YouTube channels with long form content. You’re going to want 20-100 ads across an equal number of prominent YouTube channels in order to make it. This will get you fast traffic while also lowering your levels of risk. The only risk is the quality of your creatives. Make sure you outsource your creative.
Self-host your content
If you can figure out how to host your own content and get traffic to it, then you’re winning. Self-hosted content always has more long-term value than stuff posted on social media. Figure out some content that you can put on your own website and figure out how to get search traffic and direct visitors. Sprinkle in some lead magnets on social media and you have a full-fledged affiliate business.
Build an email list
Your email list is your way of getting directly in touch with your audience. If you don’t build an email list, you do stand a chance of losing them if they only know you from one social media platform. The internet is fickle, and people won’t make an effort to find you again if one of you gets banned from a platform. You have to be pretty huge for that to make sense.
Apps for when you get huge
If you can build an app, you’re in a great position to make money. Apps are the way that companies reach their customers directly. It’s easy to interact with people when you’re right in their pocket. The only downside to apps is that they’re costly to develop and most of them flop. Only try and invest in an app if you’re looking to get huge, or already are huge. Otherwise it’s a complete waste of time.
AI will make the process faster and more competitive
This might lead to consolidation. This is why I say that until further notice, aspiring internet entrepreneurs should be aiming to break into the top 1% of asset holders. Increased competition online is going to lead to market consolidation as winners lock onto winning patterns. I’m not sure if we’re headed to a world of techno feudalism, but things are certainly going to get unequal. The best marketers and biggest crypto whales are going to converge on a few places, and inequality is going to continue to increase. You want to be on the winning side of this. Work hard and build a real organic brand. AI will just make your job easier.
Livestream and video content? Not quite viable yet.
AI and camcorders have brought down the cost of livestreaming and making video content dramatically. This has led to the rather interesting rise of YouTube and TikTok. Unfortunately, these businesses are not the best when it comes to hosting your own content. For now, it’s best to stick to the written word, short video, and software. Video will be a much better business model 10 years from now.
Want to make and sell stuff? Work in finance or healthcare.
Right now, it would be really helpful if we could all live longer so that insurance providers and healthcare companies could stop accruing capital at our expense. It would also be helpful if the markets were more efficient, and people at the top weren’t as easily able to accrue wealth. When it comes to the internet, you want to take advantage of the new eyeballs and get into affiliate stuff. Finance and healthcare are really the fields in which the world needs to innovate. There’s no reason either of these two aspects of life should be so costly. Don’t make and sell stuff for the internet unless you’re going luxury.
Digital products, the exception
Digital products are conceived with the effort of our minds and have little to no overhead. The only cost is the cost of our equipment and electricity, along with the time that we spend working on the digital products. If you’re going to build and sell anything online, you should be going for digital products. Marketing, marketing, marketing. That’s all you really need in order to sell digital products.
Luxury products, another exception
I can see a scenario in which someone makes a small fortune selling handmade soap that costs $400 per bar. If you have a passion like this and an interest in marketing, you should get into it. It might not be your main business, but running a small business like this has the potential to vastly and dramatically improve your financial life.
You can get into manufacturing when you have money
Sometimes, you see opportunities to make money. It makes sense to get into manufacturing in a lot of situations. If you want to get into ecommerce, make sure you have the manufacturing under control first. If you want to be an internet entrepreneur you should be focused on marketing, information, and tools. That’s what the internet is really about. Manufacturing is a seperate game.
You can sell your services
Being a skilled affiliate marketer basically gives you the opportunity to be a hired gun. If you can help people make more money from their businesses, you have a lot of skills and are very, very valuable. Marketing knowledge is quite difficult to come by. Most people never get the right amount of practice. When you become skilled at affiliate marketing, you can run an agency.
Affiliate marketing will make you a better builder
You’re going to be a better builder if you know what the people want. Affiliate marketing lets you test tons and tons of products against the market. You’ll know what to build and how to build it once you become a successful affiliate marketer.
Affiliate marketing is far superior to traditional ecommerce, because it is a way of making sure you get paid for your part of the ecommerce process: the marketing. Affiliate marketing allows you to leverage the scale of the internet, build your own skillset, and create an online business for yourself without having to specialize or take on too much risk. It’s a much better move than wasting thousands of dollars building, testing, and promoting new products. Don’t get hyped up by shiny objects and success stories. Focus on what has actually made people money. Generally speaking, those are the ecommerce platforms, the publishers, and the social media platforms. Affiliate marketing is the way. Embrace it sooner rather than later for maximum success.
Thanks for paying attention.
