Diversification Strategies For Affiliate Marketing Income  
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Diversification Strategies For Affiliate Marketing Income


So you come a long way and are finally enjoying the fruits of your hard labor -- months or even years of promoting your merchants' affiliate programs. What's next?

If you are getting a decent income from affiliate sales, don't for a moment think this is it and that you will never have to work again. Think again. A hundred and one things can happen that will jeopardize all your hard work if you are not forward looking.

Here are just some things that can happen (I'm not saying they will happen) :

1) your most profitable merchant go bust, perhaps from paying out too big an affiliate check every month or for whatever reasons

2) your sole hosting company goes belly up and leaves you without a money earning website

3) demand for your winning affiliate product dries up

4) you suddenly lose all your search engine rankings due to sudden changes in search algorithms like the recent Florida and Austin updates at Google

What can you do to lessen the adverse impact of such changes? The answer is one word : DIVERSIFICATION.

Although you may have made your money in affiliate marketing by focusing on a few products rather than diversifying among many products, you still need to adopt a smart diversification strategy as you start to earn a good income.

Call it "defensive-diversification" if you want, it is still better then sitting around waiting for the inevitable to happen.

You should therefore, as far as possible, do the following :

1) spread your risk among 10 to 15 good merchants instead of relying on 1 or 2 super performers. This way if one goes bust, you still have over 10 to rely on. It is highly unlikely that all 15 will collapse at the same time if you follow step 2

2) diversify among different industry groups to prevent a certain misfortune hitting one industry from wiping out your entire income. For example, if you are marketing prescription drugs for 15 merchants, you would have been hit badly by the recent clamp down by the DEA on online pharmacies. So it is important not just to have many merchants, but also merchants from different industries to cushion any wild swings.

3) own at least 2 domain names , each hosted at at least 2 different hosting companies. Same reasons as above. If one goes bust, you still have some to keep your warm.

4) start exploring other means of website traffic if you are currently relying on free traffic from Google (who isn't?). Pay per click, e-zine advertising, classified adveritising, paid inclusions, offline advertising, viral marketing, whatever. Just do something or at least start to seriously think about getting alternative sources of traffic. You can't afford to be too dependent on one source of traffic anymore.

In conclusion, never, ever be contented with your current earnings from your affiliate programs. Things don't stay the same for long periods. If you wish to be in your business for the long haul, you seriously need to diversify your risks.

And if you can, put aside a certain amount of hard earned money to invest in some income bearing assets -- you never know what will become of your affiliate marketing business in the next few years.... good luck!

By : Gary T _______________________________________________________________

Gary T is the owner, editor and webmaster of an affiliate marketing website. You are invited to visit Gary's website and discover what are the top performing affiliate programs to sign up for a lucrative, residual income. http://www.astrowhiz.com/affiliates.html ________________________________________________________________


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