Top Passive Income Online Business Models & How They Work [Part 2] • Income Prodigy

This is the second session of our 5-part series of episodes on the top passive income types of online business.

In episode #5 of the “Online Business FM” podcast, we’ll be focusing entirely on one of the top online business models that can generate passive income for you.

I’ll address one of the most — if not “THE” most — popular one: Affiliate Marketing.

What You’ll Learn

What is Affiliate Marketing?
How does Affliate Marketing work?
Who is Affiliate Marketing for?
How to do Affiliate Marketing the right way?
My best Affiliate Marketing rules.
How I rediscovered Affiliate Marketing after my biggest failure as an online business owner.
The Affiliate Marketing training course that changed everything for me and taught me how to build a passive income business that still makes money for me today.
If you interested in starting a digital marketing or online business career, Affiliate Marketing may be the best for you.
This is a value-packed session of the OBFM show you won’t want to miss, it will be totally worth your while.

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Links and Resources Mentioned

Affiliate Disclaimer: Some of the following links below may be affiliate ones, which means I earn a commission — at no extra cost to you — if you end up purchasing anything after clicking through those links.

Thanks for Listening!

Thank you a ton for listening to this episode!

Do you you have any questions or feedback you would like to share? Please leave a comment in the appropriate section below.

If you enjoyed this episode, please share it using the social media buttons you see on the floating bar at the left or bottom of the post.

Also, if you’d like to help my show, please leave an honest review for the OBFM podcast on iTunes and subscribe to the show there to get notifications when new episodes are released.

Ratings, reviews (and more subscribers) really help the show grow and climb the charts and ranks, plus they motivate me to keep going too as I read all of them.

Thank you again and I see you in the next episode of the Online Business FM podcast!
Louie

Transcription

Hello, hello everybody! Olá a todos!
How are you all doing this week?

This is your host speaking. My name is Luís Miguel Correia but, as I’ve told you before, people know best online as “Louie Luc”.

Today we’re celebrating episode number FIVE of the OBFM show! Five episodes already… who would have known? That’s quite a milestone, don’t you agree?

Okay… before you go: “Wait, what?! Five episodes… a milestone… and the guy is celebrating? Is the dude out of his mind or what?!”

Before you go thinking like that, give me just a moment to explain.

I could have waited for episode 50, 100 or even 500 to start the celebrations, order the anniversary cake and throw the confeti up in the air, that’s true… but why should I? Why wait so long for that?

Why Is It Important to Celebrate Even Your Smallest Wins

Instead, I believe that I, you, we, should always celebrate even our smallest wins. Doing so is of paramount importance in your entrepreneurial career in that it keeps you motivated, it pushes you forward.

It’s our way to acknowledge all the hard work, effort and time put in and all the sacriffices we’ve made to reach as far as we have.

It’s our way to thank ourselves, kind of patting ourselves on the back and say “well done, mister” or “nice job, ma’am!”.

Think about it:

If we tend to get upset even with the most insignificant of things (or not quite so insignificant, if you will), those small failures or mistakes like: feeling we weren’t productive enough this day or the day before, arriving late for work, not 100% accomplishing our weekly tasks every time, etc….

(And I definitely do… honestly, I go beyond getting upset, I generally get mad at myself; it’s something I have to work on.)

If we usually get upset with that, then it is more than logical to do the exact opposite which is celebrating our everyday wins.

Besides, taking into account the amount of planning, money, work and time it took me to get this show up and running, I should definitely celebrate.

That being said, celebrate your wins no matter how small they seem. Give it a try and prove me wrong. I defy you! 🙂

Previously on Online Business FM…

Getting back to our episode here…

This fifth episode is the second session of our five-part series of episodes featuring the top passive-income online business models that can you earn money online.

In our last session, Episode 4 — which you can find by going to onlinebusiness.fm/4 — , the first of this five-part series, I talked about the two different approaches you can follow to build online businesses which may (if you do things right) open you the doors to passive income opportunities on the Internet.

I won’t be getting into too much detail about that episode’s content here (I want you to go and listen to it) but, just as a quick reminder, those two approaches are: a) building an online business by using your own platform or existing audience and b) without a platform or an audience of your own.

Today we are going to be focusing directly on the top online business models that can generate passive income for you.

I’ll be addressing three different categories to which those models belong to: Affiliate Marketing, Advertising and Selling Your Own Products.

Affiliate Marketing

Affiliate Marketing is promoting or recommending someone else’s or some company’s products and earn a commission, a cut, a percentage of their profit margin at no extra cost to the person who ends up buying such products.

Think of Affiliate Marketing as having someone or some company pay you to advertise their products, except that you’ll only get paid if you drive a sale for them which is better and definitely easier than with regular advertising.

Why?

Because companies will only sponsor or propose to buy advertising space from you, if you have a large audience and are able to send them tons of traffic.

On the other hand, this performance-based system that Affiliate Marketing is, it’s a win-win-win combo for everybody: you, as the affiliate marketer, the owner of the product or company and the end customer.

Everybody wins. You earn a commission for promoting stuff, the company gets a new customer and sells a product, and the customer buys it at the same price as if there were no commissions to be paid whatsoever.

Plus, the customer feels more assured of his or her purchase since they followed your recommendation (which is hopefully something they can trust) and not the company’s own advertising or marketing.

How Does Affiliate Marketing Work

Here’s how Affiliate Marketing works:

First of all and preferentially, you find a product that you like, use or have used.

Then, you check if the company behind that product has an affiliate program by going to their website and looking for a link that mentions “affiliate program” or something similar. That link can usually be found on the footer menu of their homepage.

An affiliate program — as the name implies – is a way for people like you and me to establish an affiliate partnership with product sellers in order to help them make more sales and get paid for it.

Next, you sign up to that company’s affiliate program. You’ll get a customized link that’s unique to you because it contains your affiliate ID in it.

Finally, you go and promote that product by driving traffic to that product’s sale page through your customized link. That sales page sets up a cookie on the visitor’s computer containing your unique affiliate data.

Cookie is a technical term for a piece of information that websites set on and read from people’s computers. They contain information about visitors’ preferences on the website they’re visiting and have a pre-determined lifespan.

People can leave that sales pages to come back to it at a later time and the website will know who’s responsible for taking them there.

In this case, while your affiliate cookie exists — or isn’t replaced by someone else’s — you will be credited for any eventual sales that may occur.

Simply put, if people arriving on that sales page through your link end up buying that product, you’ll earn a commission.

Affiliate Networks

Another way to find out if you can promote a specific product as affiliate is to look for it on one of the several affiliate networks that exist.

Affiliate networks are basically websites that bring together hundreds or thousands of different affiliate programs in their database. Clickbank, JVZoo, CJ and ShareASale are examples of those affiliate networks.

You just need to search their databases for the product you want to promote and join.

Amazon Associates

Amongst the thousands of affiliate programs out there, I would now like to refer to one of the oldest still in existence: the Amazon Associates program, which is actually one the first affiliate marketing programs online having been launched in 1996.

A few things you need to know about Amazon’s Affiliate Program:

First: Unlike what generally happens with the majority of the other affiliate programs, Amazon pays very low commission percentages ranging from 1 to 10%.

Some other programs will pay up to 30, 40, 50 or even higher percentages; other programs will pay you a very generous sum of money for each sale, instead of a commission percentage.

Second: Nevertheless, since Amazon is one of the most trusted brands on the Internet, promoting Amazon’s products as an affiliate will make it much easier to make sales and earn commissions.

The interesting thing here is that the traffic that you’re able to drive to them converts highly due to Amazon’s years of experience turning visitors turn into customers.

Third: Plus, the people you send to Amazon through your affiliate link doesn’t necessarily have to buy the exact same product that you’re promoting for you to earn a commission.

Any product whatsoever that they add to their shopping cart counts to the total amount of commissions you will make for up to 24 hours since entering Amazon’s website coming from your website.

(24 hours is how long Amazon’s cookie with your affiliate information lasts on a visitor’s computer. But there are ways to make this cookie last longer if you use some specific WordPress plugins.)

The last things I want to share about Amazon Associates Program is that it is pretty easy to get started. Just google for “Amazon Associates program” or “Amazon’s Affiliate program”, join, pick your favorite products and start promoting them through your affiliate links.

Amazon Associates is a great way to get started in Affiliate Marketing and know that the more experienced affiliate marketers are making fortunes every month solely from Amazon’s commissions.

My Public Niche Site Project

Back in 2015, I decided to run a public niche site project. I set myself to build a niche website from scratch and take it from nothing income-wise to profitability.

I decided I was going to monetize that website through the Amazon Associates program. I was then able to rank my posts high in the search engines, especially my main review article that reached the #1 spot on Google for a while.

Thanks to my search engine optimization efforts, I had a good amount of organic traffic coming from Google. (For niche websites you don’t really require a ton of it, you just need it to be highly targeted.)

The initial money goal was to make at least $200 a month — not much I agree — but my main aim with this case study was to provide my blog readers with a good resource on how to build a profitable niche website.

Slowly but surely, as I wasn’t working solely on that project, I grew my niche website’s earnings up to a point where it earned me over $1,500 in commissions in December of 2016, with the particularity that I only focused on promoting one very specific category of products, just one kind of item whose average price was below $200.

The reason I’m sharing this story with you is to make you see how much you can make from the Amazon affiliate program even with the small commission percentages they pay.

Who Is Affiliate Marketing For?

The type of person who would find Affiliate Marketing a great bet is… well, almost everybody just starting out in digital marketing / online business.

If you don’t have your own products to sell yet, are willing to review other company’s products on your website or blog, promote those products to your email list or spend money on ad campaigns to do so, then, yes, Affiliate Marketing may be just right for you.

Affiliate Marketing Pros & Cons

As with everything, Affiliate Marketing has its pros and cons. Let’s quickly review some of them next.

Pros

We’ll start with the “pros”, the advantages behind Affiliate Marketing.

It’s easy to get started and set up, all you need is to join an affiliate program or affiliate network, pick a product, and promote that product through your affiliate link.
You don’t have to spend energy, time and money on creating a product of your own to sell it, especially when you’re not entirely sure which needs and wants your audience has.
You can make a serious amount of money if you do things right and even make a living from Affiliate Marketing alone.
Some affiliate products (such as services) allow you to earn recurring commissions. Meaning: you just need to spend time promoting those products to make some sales now, and you’ll keep earning commissions in the future on a recurring basis, month after month after month (or yearly, depending on the chosen payment frequency by the customer) as long as the customer keeps paying for that service.
It takes you the same amount of time and effort to promote $5 dollar products than it does to promote $5,000 products. The only difference is how much you will make on commissions.
It’s a great and rewarding learning experience that will prepare you for the next stages of your online business career (which I’ll refer to in a moment).

Cons

As for “cons” or disadvantages:

Solely focusing on promoting affiliate products and being happy with how much you’re making, may prevent you from taking the next step in your internet marketing or online business career: coming up and selling your own products, tools, services, books or courses.
Since you’re not promoting your own stuff, you don’t have total control over your future. Amongst the many things that might happen and that are out of your control is the possibility of those affiliate programs shutting down without notice, “robbing” you of an income stream overnight.
There are strict laws that say you must always state that the products you’re promoting are affiliate products and that you earn a commission if people purchase through your links. If you don’t mention that, you may get banned from the affiliate programs you’ve joined and lose all unpaid commissions.
In very much the same way, you can’t use your own affiliate links to buy those products for yourself at a lower price (i.e.: normal price minus the commission percentage you normally earn). That kind of action can also get you banned.
The last and most important “con” I want to mention, is that because it is so easy to get started with affiliate marketing that everyone can do it, there are a lot of ill-intended people that usually take advantage from it and try to push every product they can think of just for the sake of making a quick buck here and there. They don’t care whether or not the products they’re pushing are good or not, if they’re useful and helpful to their readers or not.

And this sort of “putting money before their audience’s interests” behavior puts a negative image on affiliate marketing itself which is obviously bad for all of us doing it for the right reasons.

And it’s also the wrong approach if you’re in it trying to build trust and rapport with your audience to later come up with an ethical, long-lasting online business.

My Affiliate Marketing Rules

Keeping this last “con” in mind, let me now know tell you about some of the rules you ought to follow if you want to do affiliate marketing the right way.

Your first goal as an online business owner or digital marketer is to serve your very specific niche. Under that light, the most important rule of affiliate marketing is to put your audience’s interests (their wants and needs) before money.

Putting money first will kind of push you to the dark side of the force… I mean, to the wrong side of affiliate marketing. So… don’t push products just for money’s sake.

That takes us to the second rule or advice I have for you: stop seeing Affiliate Marketing as a type of promotional marketing technique. Instead of “promoting”, I prefer to use the word “recommending”.

The act of “recommending” is much more in line with serving an audience that trusts and respects you, whereas “promoting” is not quite that much.

Now you might be asking:
“But Louie… how is recommending or promoting products a way to serve my audience?”

Well, if you’re really interested in serving your audience, there will come a time where instead of just offering free stuff — like posts on your blog or goodies to your email list subscribers — you’ll need to start recommending paid products, tools or services that may genuinely be useful and helpful for them to achieve their goals and objectives.

Having said, we’ve come to our third rule of affiliate marketing:
Only recommend stuff that you believe might be helpful for and useful to your audience.

Especially together with this third rule I follow an extra one:
I only recommend items that I use and have used.

Now, I understand that this isn’t always possible to accomplish but that’s one of the things you should bear in mind at all times when doing your affiliate marketing efforts.

In fact, that’s precisely what I say whenever I get an email from someone asking me to review their stuff on my website:

I only review, promote or recommend products, services or tools that I personally use or have used and genuinely think may be useful and helpful for my readers, subscribers and listeners to achieve their goals and objectives.

A $500-Dollar Offer

I do get a ton of requests like this and I’ve been offered free subscriptions to lots of services for long periods of time many times, plus I’ve even had someone offer me money — $500 — to write and publish a review of their product on my blog.

I declined all of these requests because they don’t comply with my policy here, these affiliate marketing rules I’ve just shared with you.

The Wealthy Affiliate Training Academy

To close this section of the episode concerning Affiliate Marketing, it’s time for me to do exactly what I’ve just told you.

I’ll recommend something that may be helpful and useful for you that I have used and still use today (however not as much as before) and, at the same time, I’ll tell another one of my stories.

As I described in Episode 1 (go to onlinebusiness.fm/1 to check it out), when my viral-videos-website business was quote-unquote “destroyed” by a joint-conspiracy between Google and Facebook, I went looking for other ways to make money online.

I’m glad I did (so, in a sense, thank you G and FB for taking my business down) that allowed me to rediscover Affiliate Marketing.

I say “rediscover” because I had my first affiliate marketing experience in 1999. I made over $10,000 promoting online casinos in that period.

This amount might sound impressive especially when there was no Google yet, but to be honest with you, it was far easier back then. (I apologize if this doesn’t sound too much like following my own rules, but don’t forget, that was then, not now.)

In those glory days, people regarded this kind of activity more like Referral Marketing than anything else.

And it actually works more or less like Referral Marketing, which comes in handy to help you better understand Affiliate Marketing. There are still some companies today (like Tesla Motors) that offer their customers credits, discounts and other offers if they bring them new customers.

As I was saying, my business wreck permitted me to find out about Affiliate Marketing again.

The only issue was:
How and where do I start?
What do I need to do next?
What are the best ways to make this Affiliate Marketing thing work?

I had many more doubts than certainties. I was learning about commissions, affiliate programs, affiliate networks and niche websites, all at the same time and I couldn’t quite figure it out.

I needed some kind of roadmap, someone or something to tell me exactly what to do and how to do it. I also needed some hands-on type of thing to learn as I went and to be held accountable so I wouldn’t procrastinate that often.

I decided to ask for help in business-related forums and Facebook groups and that’s when luck knocked on my door.

I said “who is it?” and someone suggested me to check out Wealthy Affiliate, supposedly that would be the answer for my needs and wants.

That’s what I did and I found out that Wealthy Affiliate is an affiliate marketing online course that’s been running since 2005 and was founded by Kyle and Carson, two very successful affiliate marketers.

They have a very hands-on training approach with tons of modules where for each lesson you take you need to check off that lesson’s tasks. That’s great because it holds you accountable and keeps you going.

Each new module takes you up to the next level in your affiliate marketing knowledge. In fact, to effectively follow their lessons you need to build your own niche website from scratch up until the point when you start generating an income.

And this is where Wealthy Affiliate differs from the other training courses I know.

For their paid membership fee, you not only get access to their training material and private messaging with the coaches, but you also get a ton of other stuff like high web hosting with one-click WordPress installation and themes and lots of other stuff.

By the way, WordPress is a blogging software.

Now, I’m not going to review Wealthy Affiliate for you here (that’s not the purpose of this episode) and I don’t recommend it to everyone, since it’s more geared towards people who haven’t really started yet and don’t know how to build their websites, don’t even know what WordPress is.

If you have some experience already with WordPress or Affiliate Marketing you may find Wealthy Affiliate to focus too much on the very first steps (building a blog, purchasing a domain name and setting your website up, etc.), at least in its initial modules. So it’s probably not for you.

For me, at that point and although I had tons of experience making money online and building websites due to my computer programming knowledge (since I’m a originally web developer), I felt I needed a fresh start.

I decided to be humble about what I knew and didn’t know. After all, I had just failed big time with my viral-videos business so… I went for it. Not long after I joined, I started building a website that earns money for me today.

Plus it was free to join for a period of time… it still comes with a free trial period of 7 days (no credit card needed to join either) so it was a no-brainer.

Now, to be super honest and transparent with you — and, as I said before, this is a recommendation and it’s a recommendation for anyone just starting out with little to no experience in Affiliate Marketing or any other kind of online business model –, to be super honest and transparent, I am an affiliate for Wealthy Affiliate.

As I taught you in this episode, that means I get a commission if I refer a paying customer to them. But also as I taught before I’m following my three plus one rules here:

1. I’m putting your interests, needs and wants first.

2. I’m recommending something, not promoting it.

3+1. And I’m recommending a service that I believe might be helpful and useful to you and that I use and have used.

With that said, if you want to give it a try and, again it is not for everyone, follow my affiliate link here: onlinebusiness.fm/wealthyaffiliate.

If you’d like to learn more about it, you can check my Wealthy Affiliate review too.

I’ll include these and all the other links and resources I mentioned today on the episode’s show notes page which you can find at onlinebusiness.fm/5 (onlinebusiness dot fm slash 5)

Conclusion

Alrighty then… this concludes our longest episode of the OBFM show to date!

Thank you for listening to the entire episode! I hope you liked it. This was long but I’m sure it was totally worth your while.

To get the show’s notes again… go to onlinebusiness.fm/5.

And don’t forget! Next episode, exceptionally, is next Thursday. We’ll discuss Advertising and Selling Your Own Products.

If you’d like to subscribe to our email list or subscribe to our podcast on the several podcasting directories, just head on over to onlinebusiness.fm and… it’s all there.

Thank you again for listening to the Online Business FM podcast with me, Louie Luc.

Adeus. Bye-bye!

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