Thalasar Ventures

One of the things that people don’t seem to understand is that you need to create value when doing affiliate marketing. Here’s an example site, Best Buys Zone. Best Buys Zone is an affiliate site I did three years ago. In 2006 it generated $31,910.44 in revenue and 129,027 leads for businesses.

Please note when I say revenue, that’s how much I received as revenue. It runs on a single server which costs me $70 to co-locate at a data center in Los Angeles. I spent $1800 building the site three years ago. This site’s net profit in 2006 was $31,070. Please note in 2005 gross profit was $6538.06, net was $5698.06. The machine is a Dell – it ran about $1300 (It has a Gig of Ram which was more expensive back then). Please note when I report figures for affiliate marketing, I will always report the gross and net figures.
It’s a perfect example of how even a simple mashup like bestbuyszone.com can generate value. Best Buys Zone is built on top of two seperate web APIs – Amazon and Shopping.com. Simply put we take the Amazon catalog and then find shopping.com results that match that Amazon product. However we didn’t stop there. Every single product at that site has an RSS feed which contains all the prices for the product from various merchants. So you can easily subscribe a product to your RSS reader and then as new prices come in, you can have them displayed in your reader. So on a daily basis people who are subscribed to a product’s RSS feed get the updated prices on the product. We update the feeds when we get new pricing information from shopping.com or Amazon. So users always get the latest prices on a product and if they see a great price they can jump on it!
So that’s a mashup that provides value to the user above and beyond the simple hawking of a product in an affiliate blog. Some affiliate marketers such as Shoemoney provide the value in their ability to be comprehensive in the long tail and use Adsense to drive traffic to landing pages which he constantly re-tests for their conversion effectiveness. It’s that continual testing that provides the real value.
Let’s take a look at what I have invested in Best Buys Zone. My hard costs were development ($1800) and the server ($1300). Please note I recouped my initial investment costs in year one. From that point forward it’s been nothing but pure profit moving forward. For your own online affiliate business think about how your site can provide additional value to the affiliate model – perhaps an affiliate model where you mix up shopping with blog posts on that product or class of products? Think about it – where can you add value and make the affiliate model a success?
You know what I did after making Best Buys Zone a success? With a few simple configuration changes I rolled out Best Buys Zone UK and bam! I am covering a whole new market with a proven product. Oh yes, it’s hosted on the same machine so I have incurred no additional expense other than the domain.