Affiliate marketing is one of those business models that gets touted as an easy way to make money and inexpensive to run. Because you can join most affiliate programs for free many people get misled as to what exactly will be involved in operating their affiliate marketing business. First of all, it is true that you can join most affiliate marketing businesses for free. This is a benefit in that anyone can get started, no matter of their current situation.
It is a disadvantage because many people do not take their business serious, and the long-term costs to them could be literally thousands if not millions of dollars in lost revenue. Certainly another benefit is that you do not have to inventory in the product. The affiliate merchant will handle all the shipping for you.
Your true physical costs would be having a computer, Internet access, and possibly an office set up somewhere in your home. There are couple other benefits that really allow you to limit your out of pocket costs. One of these is that your business never closes. Unlike a traditional business, with an affiliate marketing business you can be open 24 hours a day which allows you to make more sales and increase your business. Getting traffic is the biggest obstacle that you will face.
Once you are set up and ready to roll, even if you use free advertising methods such as article marketing or forum marketing, you still have a cost associated with that and that cost is your time. The more money you begin to make the more you will pay attention to what your time is worth. For example, if you are making $1000 a week and spend and 40 hours to do it in your time is really worth $25 an hour. Every time you spend one hour in a forum making posts you should hope that you are going to derive at least $25 back in the form of income from the traffic you get. The same is true for doing article marketing.
Writing and submitting articles does not cost you anything in out of pocket expense. Depending on how fast you can write articles you can bring your cost in terms of investing your time down as well. But you do want to pay attention to the type of traffic that you are getting back from these articles, and how that is converting in the form of sales. Because you are not using your credit card to pay for them these are costs in operating an affiliate marketing business that you may not consider.
Because your initial raw costs are virtually zero affiliate marketing is a great business to start. As your business begins to grow and expand, you will be doing other forms of advertising which may cost you real dollars. The key in determining how much does it cost to operate an affiliate marketing business will be in calculating the return of investment on your time.
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