Affiliate Marketing: Developing a Rock-Solid Business Plan

When I think of affiliate marketing I automatically think of all of the people in the “business opportunity” sector who tell you that you can make $250,000 a year working only part time from your home with no computer skills. These people are dead wrong! Affiliate Marketing is just like any business, there is no such thing as a quick buck. In order to succeed you will need a business plan that is strategic in nature and built around some competitive advantage that will keep smarter and more well, funded affiliates from stealing your business

The first step to crafting a business model is to stop thinking about the quick buck and start thinking rationally. Succeeding in business takes a degree of objectivity and rationality that is not conducive to acting on whims and hunches. When you are thinking about your business strategy in the affiliate world, think Warren Buffett, who has mastered the art of objective investing. Stop thinking like a day trader that is trying to make a quick buck.

Warren Buffett is someone who follows the mantra, “Invest in what you know”. That is how Buffett creates a portfolio and “bubble-proof”…he only invests in businesses that he knows are so solid that even if an idiot were running them, that they would be successful. That is how you should learn to pick your affiliate niche. See: Picking a Profitable Niche

One misconception that people have when they think about the affiliate marketing world is that you can just put up a slick landing page and then buy a few search keywords. How sustainable is that? If you make that your business plan then almost anyone can come in and steal your business model. You need to come up with a defensible business model that leverages some sort of competitive advantage.

Start with a SWOT Analysis

A SWOT analysis is a very simple business analysis performed by businesses as they are evaluating a business market. It evaluates their internally controlled strengths and weaknesses and their externally controlled opportunities and threats. When you are evaluating a specific niche market to get into with your affiliate business, you must evaluate where you lie in the competitive landscape by doing a SWOT analysis.

Here are some Strengths, Weaknesses, Opportunities, and Threats you should be looking at as you evaluate your affiliate business plan

Strengths

• More usable site
• More In-depth content
• More Product Selection
• You are a product/service expert
• You have a difficult site to replicate

Weaknesses

• lack of technical skills
• Lack of design skills
• Not a good writer
• You don’t know as much as your competitors
• You don’t have the money to execute the plan

Opportunities

• Market trends
• Sales Increases
• Lack of Competition
• Competitors weaknesses
• Macroeconomic factors

Threats

• Savvy competitors
• Your angle is already covered
• Your Site is too easy to relicate
• Macroeconomic Factors

After you have completed your SWOT analysis, then you must ask yourself if it is still worth your time to do it. If you find that you are an expert in dial-up internet and you know the customer better than anyone in the world and you have all the skills to make a great website…do you really think that you could be successful? Understanding all of the components of your market, both internally and externally, is key to being successful at affiliate marketing

Market Study

After you have done your SWOT analysis and you have decided that it is worth your time to get into your niche, then it is time to ask yourself the following questions:

Can you produce the site

do you have the programming and design skills, do you have the necessary software, do you have the time and budget? All of these questions need to be addressed. And, if you do not have the right answer to these questions, how can you learn the necessary skills, outsource the project, or obtain the capital to get what you need?

Who are your competitors?

Learn all that you can about your competitors, perform a SWOT analysis on them if you have to. Understand what their key value proposition is, where they do and do not meet the market’s needs, and how you can offer something unique and valuable to your customers in light of what they offer.

Is there enough demand

Use the Google Keyword tool. to understand search volume and map out potential keyword volume.

Look at print publications. If there is a print publication built up around your product then there is enough demand for it on the internet.

Do you know your customers

Type in some of your anticipated keywords and find the places where your niche community of buyers hangs out. What products do they like, what features are they looking for, what are the most commonly asked questions that they have. Do all that you can to get into the mind of your customer

Is your angle unique

You need to ask yourself if your particular angle towards selling the product is unique, if it adds value to the online community, and if you have clear key differentiators from your competition,

Get Feedback

Once you have formulated your business plan, come up with your key differentiators, performed a SWOT analysis, and then performed an in-depth market study, it is time to get some feedback. You never know what you have missed until you have bounced the idea off of somebody who has a different perspective than you.

Seek out trusted colleagues, subject matter experts, and anyone else who may be able to add a fresh perspective to your idea. Also, don’t worry about people stealing your ideas. Most people are too busy and lack the resources to steal an idea from you.

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