Affiliate Marketing VS Product Creation

This is a huge obstacle many people face when entering the online marketing world: Should I become an affiliate marketer or should I create and sell my own product..?
Before I get started let me quickly define the two business models so that we are clear as to how
money is generated with each.
• Affiliate Marketing: In this business model you will be making income by referring customers to another person's product or service. So basically you will sign up with the vendor as an affiliate and for every sale you generate you get paid a commission.
• Product Creation: This business model is pretty self explanatory; you will be creating a product and selling it in the marketplace for 100% of the profits. In this example we will be assuming your product is an information product of some sort.

There are a lot of marketers that will say the easiest way to start making money online is affiliate marketing. Just because of the simple fact that you can choose a vendor whose product you want to promote, sign up as an affiliate, start sending traffic to your affiliate sales page and BOOM! You make money. Sounds pretty easy. You don't have to deal with creating a product, setting up websites, dealing with customers, etc.
At the same time there are marketers that say creating your own product is easier and the more profitable of the two and allow you to be more in control of your business.
It really all depends on what your strengths and weaknesses are and what you're looking to accomplish in your business.
Let me get some of the pros and cons of each and put things into perspective so you can have a better idea of where you want to get started.
Affiliate Marketing
It is a strong argument that affiliate marketing is the easier of the two to start with which is why it is recommended as a starting point for beginners.
Here are a few of the pros of affiliate marketing:
• Most affiliate vendors/networks are free and very easy to join. Most of the time you will answer a few basic questions, set up a username and password and get instant access to the affiliate member's area within a few minutes.
• Marketing materials are provided. Once you set up your profile in the affiliate member's area you will have complete access to all marketing materials needed to get you going such as banners, pre-written emails, etc. In the members area you will also be provided a unique affiliate link which will take your prospects to a complete sales page which has already been created for you. Armed with these materials all you have to focus on is getting traffic to your affiliate site.
• All websites are already created for you. As an affiliate you do not have to deal with the headaches that can come with setting up a website. The vendor has done this for you and as long as you use your affiliate link your sales and commissions will be tracked through that link and paid into your account.
• Do not have to deal with customers. We all know how difficult it can be to deal with customers but as an affiliate you do not have to worry about this problem. Once you make a sale as an affiliate all you have to worry about is cashing your check and the customer is passed on to the vendor.
As you can see being an affiliate marketer definitely has its perks. It's quick and easy to join a vendor/network, all the marketing materials and sales pages are provided and you do not have to deal with customers. You can focus your time on generating traffic, making sales and cashing checks!
Now let's take a look at some of the cons of affiliate marketing and how you can overcome them.
• The competition. Even though it can argued that affiliate marketing is the easiest way to make money online it can be strongly argued that it's the most difficult due to the competition. There are hundreds of thousands of affiliate marketers you have to compete with to make a sale. At the same time many experienced marketers agree that most new affiliate marketers do not know what they're doing since it's such an easy business to get into.
- One of the best ways to overcome this obstacle is to educate yourself. Always be a step ahead of the competition by learning what the top affiliates are doing to give them that edge needed to make the sale.
• Profit Margins. As I mentioned before with affiliate marketing you are making a commission for referring a customer to a vendor as opposed to you being the creator of the product and earning 100% of the sale. So there can be a lot of profits you are leaving on the table by promoting someone else's product instead of your own.
- This obstacle is really not in your control when it comes to affiliate marketing but the best thing you can do is promote a product with a higher payout of 60-80% as opposed to 25-50%. This way you will be making more income with less sales.
• Building someone else's business. As an affiliate not only are you generating sales and profits for the vendor you are also helping them build their business instead of your own. Once you make a sale and are paid a commission that customer is now in the hands of the vendor which can continue to sell additional products and services to that customer for the lifetime of their relationship.
- The best way I know of building your own business through affiliate marketing while also sending customers to the vendor is to set up a landing page of your own that requires the prospect to input their name and email before they get access to the sales page. This way the prospect is on your customer list as well and you can now email them future offers and affiliate products directly. Now of course you will have to provide an incentive to the prospect for them to enter their email like giving away a free report, video training, audio file, etc. We will touch on this in a future report.
• Lack of control. With affiliate marketing you really don't have much control of anything but generating sales. Should the vendor/network decide to shut down or no longer sell the product you are promoting you are left back at square one. When it comes to product creation you have a lot more control of your business and can profits but we'll be touching on that in a few.
- Unfortunately this is a huge downside to affiliate marketing and something you really can't prepare for. Building your email list as mentioned before is the best way to ensure that you still have an ability to make sales with your current list of customers while you set up a new campaign with a new product.
There are just as many cons as pros with affiliate marketing but none of these reasons should stop you from getting started if it's a business you wish to pursue. One important thing that you want to keep in mind is to take time to invest in your education and skill sets to put yourself ahead of the curve. By doing this you set yourself apart from the competition and a step ahead to making the sale.
If you are interested in learning more about affiliate marketing and jump starting your way to success visit my author resource box.
Now, just for a second picture yourself being the product creator and having an army of affiliates promoting your products as we move into the pros and cons of Creating and selling your own product.
Product Creation
Product creation can be a scary subject for many because as a newbie you are most likely skeptical and completely in the dark as to how an online business operates, let alone creating a product from scratch. But to your surprise it can actually be one of the easiest ways to make money online.
Let's get into some of the pros of creating and selling your own product and see why it can be an avenue you consider:
• Control. When it comes to product creation you are in complete control of just about everything. You are in control of how you market your product, the price, its delivery, and you are in full control of every customer you bring into your business as well as any future purchases they make from you.
• Profits. Of course this is a huge reason why many people create and sell their own products. As a product creator you get to keep 100% of the profits from every sale you make. Now there is an exception to this when it comes to setting up your own affiliate program and having other affiliates promote your products but we'll touch on the power of this next.
• Affiliates. Once you create your unique product you can choose to leverage others to help build your business. Setting up an affiliate program can be a powerful way to explode your business on autopilot. You can offer your affiliates a commission of 30-50% and have them sell their butts off for you especially if your product brings high value to the marketplace. Also you can make money while you sleep as you know your affiliates are working hard to make you sales.
• Building a Brand. Being the product creator gives you the opportunity to build a brand for yourself in the marketplace of your chosen topic. Since your product is unique you are able to name the product whatever you like and build a brand around that topic. This is very big if you want to build your business through word-of-mouth advertising which we all know is the strongest form of advertising.
As you can see there are also some great advantages to creating and selling your own product. You are in full control of everything, you will earn more money, you can build an army of affiliates, and you can build a brand for yourself and your business. But as in everything there is a downside so let's get into that next.
Here are a few cons of product creation and how you can overcome them:
• Time. When it comes to your time, creating your own product will definitely take up more of your time then simply signing up as an affiliate. Not only will it take time to create your product, but you also have to create a website to sell your product from. And that can be a headache of its own which we will talk about next.
- The great thing about product creation is you can outsource just about every process involved in starting your business. You can literally pay a professional writer to write your information product for you and you take the credit for it. Of course you always want to proof read it and modify a bit to fit your personality and style.
• Websites. Once your product is completed you will not be able to make any profit unless you are able to get it published online. For some this can be your worst nightmare. This can cause you a lot of headaches especially if you are not tech savvy. This can easily cause you to quit or never begin to try to make money online, or it can cause you to have to hire a web designer to build a site for you which can be a few hundred to a few thousand dollars in cost. This leads me to my next topic.
- Again building a website can easily be outsourced to a web designer who can build you a clean professional website usually within 48-72 hours.
• Cost. When it comes to creating a product it can easily be said you will have more start up costs then an affiliate. When it comes to setting up your sales funnel you have certain costs like buying a domain, hosting your website, hiring a web designer to set up you site unless you're doing it yourself, paying for the graphics to brand your product, etc.
- A lot of you may be asking yourself how much are you going to expect to spend on your product creation business? Don't worry take a deep breath..a lot of the things you will be paying for are really inexpensive. You can buy a domain for about $10 and hosting is about $5 a month. Now I want to introduce you to a site that will dramatically change the way you do business it's called http://www.Fiverr.com. This is a community of people that are willing to just about anything for $5. Go ahead and visit the site and see for yourself. You can literally have an information product created on a topic of your choice, the graphics and ebook cover created, and a website build for $25-$30.
• Customer Support. As the product owner you will be responsible for your customer service and support and this alone can drive you insane and drain a lot of your time and energy. As in any business on or offline you will have your happy customers and your not so happy customers. Your customers will have questions, demands, concerns, etc and it is your responsibility to make sure they get the support they deserve.
- Customer support can also be outsourced but unfortunately this comes with the territory of any business and something you will have to deal with. Yes you can have someone take care of your customers service but you should definitely be as involved as possible to make sure they are getting the best support possible.
As you can see as a product owner, yes you will be in control, yes you will make more money, and yes you can build a brand, but with all this comes a lot more responsibility then an affiliate marketer.
Before wrapping things up lets touch on a few things that we can all agree on in both affiliate marketing and product creation.
• Work from home. Whether you are an affiliate marketer or promoting your own products both allow you to be in control of your time and work from home. For many this a highly sought after luxury to be able to spend more time with family, friends, spouse, etc.
• Your day job. Unless you are a super marketer and were born with super online business skills most of you will still be working your day job as you build your online business. With that said you can build your online business on a part-time or full-time basis around your current work schedule whether it is one hour a day or ten hours a day whatever it is that works for you make sure you keep it consistent. Make sure you schedule your online business time just as you would schedule any other activity and make this non-negotiable.
• You're the boss. No matter if you're marketing as an affiliate or your own product, you are your own boss in both situations and your income is directly influenced by your efforts. This also allows you to make money on demand. If you're looking to take a vacation or buy a new car and you need a few thousand dollars you can just jump on your computer and set up a new marketing campaign.
If you are leaning more towards creating your own products visit my author resource box.
In conclusion there really is no right or wrong, better or worse, that was not the point of this article. The point of this report was to shed some light on both business models so that you can be more aware of what you can expect in moving forward with your online business. In my opinion there shouldn't have to be a choice between affiliate marketing and creating your own product. You should integrate both into your business plan and become educated in both arenas. By doing that you will quickly see that many top affiliate marketers make a killing selling their own products and many people who sell their own products make a killing as affiliate marketers.
One thing I do want to stress is no matter what you do it is going to take time, effort and hard work. Don't fall into the trap that many newbie's do which is consistently searching for the next plug and play system that is going to make you the next overnight millionaire. And there are plenty of "Guru's" out there who prey on the newbie community and put out junk products promising overnight millions with pretty sales pages and you continue to fall for them. STOP!! Map out a business plan, decide what you want to accomplish, find one reputable mentor you want to follow and get to work! Focus on following that chosen mentor all the way through to your first online dollar. Lastly, make a promise to yourself that you will not quit before starting the journey.