authentic affiliate marketing?

Hi, I'm George Kao and I am a recovering affiliate marketer. So I should let you know my history is that when I began my business 10 years ago, for the first three years particularly, I was intensely into affiliate marketing because it makes a lot of money. If you've never done affiliate marketing before, you should at least understand what it's all about. Basically imagine that somebody else already has an audience that would love your product, that would love your service, that would love your program or event. Now wouldn't it be more efficient if that person who already has an audience promoted your product or service or event? And why would they do that? Well, the main reason why people do it is because it makes them money, because you'll be paying them 50% of whatever you earn from that product or that service. Now if it's a service, it's usually less than 50%, but if it's a product like an online course or something, then you typically pay 50% to the, to the person who's promoting your online course for you. So much easier, so much easier than trying to build your own audience. Right? So that's what I did for my first three years back from 2009, 9, 10, 11 and 12. Really the first four years I was very intensively doing this. Some people call it joint venture or jv. Some people call it strategic partnership, strategic alliance, referral, promotional partnership. Lots of different names. Nowadays the more popular name is influencer marketing. But the idea still is you are leveraging other people's audience, other people's fame, other people's existing tribe and community for them to share your thing. Okay, so I, you know, within my first year in business, 2009-2010, I reached $10,000 in sales for a month, for a single month. And then within, within three years, my third year's income, I should say top line revenue, was $350,000. And this was almost entirely through affiliate marketing, meaning other people promoting my online courses. And then of course, now here's the interesting thing. In 2014, I turned against affiliate marketing. So what happened? Well, I was doing so well, 29, 2009 and 2012 particularly. And then 2013, I got disillusioned by it. In 2014, I turned against it. So what happened? What was the disillusionment? Because it was because in the affiliate marketing industry, in the industry where people are promoting each other, joint ventures, JVs, it is a shark like world. It's so money driven that people really just promote other people because they're hoping to be promoted back and Some of you know exactly what I'm talking about. And so it's like every week or every two weeks I was emailing my whole list and say, let me introduce you to my friend Bob. Let me introduce you to my friend Mary. It's like every week I had a new friend who had a wonderful free webinar for you. And then you attended their webinar. And they basically is a carefully designed sales pitch to get you to buy the thing. And I would be, you know, sometimes I would be on the webinar and helping them to pitch their product or service when I didn't even experience their product or service. And that's another dirty secret in the affiliate marketing world is a lot of the times the person promoting it hasn't even experienced or used that product. They're just promoting it because there's a good commission and they're hoping to be promoted back. So these are some of the reasons I got burned out and I got disillusioned by it. I have a whole article that I've written that you can read more about it. So I really shut down my affiliate marketing business in 2013. Part of 2013, 2014, I shut it down. My income dropped from hundreds of Thousands down to 20,000 a year or whatever. It was really low back then. And then really starting in 2014, 2015, I basically started from zero income again to build from scratch this time without using any affiliate marketing. So starting 2015, I started building my own clients, my own online courses without any affiliate marketing. Started from zero income again. So I'm not making the 350,000 anymore. Now I'm making about 100,000. But without affiliate. Well, with some affiliate marketing, I should say some. I have some very kind partners like Tadhar Grave and the Healing Touch Professional association and yeah, a couple other. Couple other partners. Anyway, so I have, I basically am coming to a kind of a moderate position on affiliate marketing. I am trying to figure out what the principles of authentic affiliate marketing are. I've written an article about this five principles. But I'll kind of share it with you in this video, summarize it for you and I would love your thoughts, I would love your opinions about it, about affiliate marketing and what you think about my principles of authentic affiliate marketing. And if you have any your own experiences to share, please feel free to add your thoughts in the comments too. Okay, so here are the five principles of affiliate marketing. Principle number one is that we only promote products or services that we can totally vouch for. Okay, so we can vouch for something when we either use it ourselves and find that it's really beneficial and we would love for other people to know about it, honestly. And it makes sense also. Maybe this is another principle, but it makes sense for us to sell it. So for example, I might be really into a supplement, a vitamin or whatever. That's really great. But it doesn't make sense for me to sell it because that's not part of my business. I sell marketing and business trainings. I'm not going to sell your vitamin supplement. Okay? Do you see what I mean? It has to make sense. We have to wholeheartedly say, yeah, it makes sense for my, my tribe building, my audience building for me to. I'm not going to start selling vitamins and start selling essential oils and start. That just doesn't make sense. I'm going to start looking. Well, that's actually another principle I'll mention later but we can wholeheartedly vouch for. That's principle number one. Have you used the product and do you, can you honestly say that it's tremendous or alternatively have your clients, a lot of your clients have used the product and, and keep telling you, my God, this is really helpful, really good. You should tell more people about it. Okay then if I, even if I haven't used it, I'll say many of my clients have used it and okay, so that's principle number one. Principle number two is that the price, the product's price is not inflated. This is one of the issues I have with multi level marketing mlm because there's so many levels to pay, you know, and the product tends to be inflated in price. You just, we all have to agree. I mean, okay, I'm going to get a lot of flack for this. There are marketers like no, no, the price is really, really reasonable. Yeah, the wholesale price is reasonable, but the retail price is. So the problem with affiliate marketing, if it's done. So let me tell you why the product price gets inflated. Okay. Back then I'll use my own example. From 2009 to 2012 I was selling $2,000 online courses. $2,000 each course was 2,000. My course is now, maximum price is 100 to 150. Back then it was $2,000. Why? Because 50% of it was going to be paid out to affiliates and I wanted to excite my, I wanted to make it exciting. Every sale you make $1,000. Right? And, and then I made a lot of money too. But the problem is because I paid out $1,000. I only had 50% left of whatever my product price is. That means I could really only deliver $1,000 of value. I had a lot of Q and A and kind of like group, group masterminding, that kind of stuff. But I could only. You see what I mean? I could only deliver 50% of the value because the other 50% was taken by my affiliates. And usually marketing and advertising costs are not 50%. I looked it up. Usually it's about 8%, not 50%. So affiliate marketing is very. Makes. Makes your advertising cost way, way higher than the typical advertising cost. Even with Facebook ads, it's not 50%. Okay? So if you are selling your product entirely through affiliate marketing or mostly through affiliate marketing, you're paying out so much money that you can really only deliver the value that you receive for yourself. You see what I mean? So that's why the product price gets infl. Much. And, and so now when I do affiliate marketing, I make sure it's only a small percentage of my total sales. Most of my money these days comes from selling courses myself with my own audience, not with affiliate selling for me. I have a few courses that affiliates sell for me, like my Facebook ads course. A lot of affiliates or some of the affiliates who work with me like to sell that course. But even then, most of my sales is still through myself. So therefore, and so because if I sell a hundred dollar Facebook ad course, right? And Tad Hargrave, he's very transparent with his audience. Hey, I'm getting paid for this 50%. I pay $50 a tad. I only get to keep $50. Whereas if I sell it myself, I get, I get your $100 completely for myself. So to see what I mean. So it's like so basically if. Yeah, so, so why do I still do it? I still do it because I like Tad. I actually want to support. I like sending him money because I believe in him. I believe in his work. If you haven't checked out his website marketing for hippies.com great, amazing writer and teacher. So I like sending him money. So I'm like, Tad, it'd be nice. Please feel free to promote this. I'll be happy to send you 50%. And you know, you know, and what was also going to say, and it's like I said, it's a minority of my sales even for that course. Okay, so that's the second one is it's price. Make sure the price is not inflated. The third principle is only promote affiliates whose marketing you can vouch for. So what I mean is if you Promote somebody else, right? And your audience goes into their sales funnel and starts getting emails and all these things. Have you experienced your affiliate partner sales funnel for yourself before you promote them? Most of us haven't. And so we put our audience into this sales funnel that is oftentimes affiliate marketing is very manipulative, very hyped up, a lot of false scarcity and a lot of, like, fear of missing out. That kind all that's. All that stuff that is creating negativity in the world, which is not necessary for marketing to be. To be effective, if you follow me. Hopefully you realize that by now. So you need to join somebody's email list for a while before you decide whether you want to promote their stuff. Because if the way that they're emailing or the way that they're putting their stuff on Facebook, whatever, the way that they're marketing themselves is not something you would vouch for. Why are you promoting them? Because your audience is going to just have a bad taste to say, well, why is George promoting somebody that you know? So, okay, so that's that. And then the fourth principle is to be transparent about receiving commissions for a product that you're promoting. Now, this is not just a principle. It's also United States law. It's legally required that you tell people, hey, I'm receiving commissions for this thing. In my article, I linked to an FTC website webpage about that. And it's just a good. It's just good, honest marketing. It's like, basically, why is it important to be transparent? Is because, listen, we're all human beings. If you are promoting and praising a product because you, because you're secretly getting some money for it, okay, your audience deserves to know. Because no matter how pure, okay, this is important. No matter how pure you think your promotion of that thing is, it is 100% going to have some coloration based on the fact that you're getting money for it. Because why? Because you're not an angel. You're a human being with normal human excitements and fears about, oh, I hope I make some money doing this. Oh, I'm so excited. I'll make some money doing this. People should know that you're financially connected to this thing that you're praising, okay? And people don't mind knowing that. You know, if you could say it in an authentic way to say, that's kind of what Tad does. Tad says, hey, I really like George. I believe in his work. Lots of my clients have benefited from his work. And I'm selling, I'm helping him to sell his course. So when you buy his course through my link, I'll get 50% of it. Thank you for. You know, I don't know if he says this, but I would also add in thank you for helping to support my business too by doing this. So it's a very charming and authentic way of saying I'm getting some money for this. And, and just FYI, so if I'm praising this product too hard, you know why? Because I'm getting paid to do this, right? And I think it's honest and it's right to do. It's right to do that. And it's. You're following the law too. And then number five, fifth principle is to be sparse about what products you promote. And you know what I'm talking about. You know, some friends, every time you meet them, they're always selling something to you. Okay? I mean, not some friends. Maybe, maybe not many friends like that. But I have had friends like that every time we get together or every time they contact me, they're trying to sell me something. Or maybe you go to someone's website, right? And every other link they mention someone's product, it's an affiliate link. So then you really start to question, like, they are financially incentivized by every endorsement they make, then how can I trust any of. I mean, all their endorsements are colored, Are corrupted by money. And it's. I'm not saying corrupted, but it's colored at least by it's, It's. It's incentivized by money. And it makes you look like a salesman. It looks, makes you look like. Look like you're just out for selling everything. It just doesn't look good. It's not a good look. Okay? So that's why I'm like, for example, if you go to my website, go to the tools section of my website. I have an entire page of tools that I use, software I use in my business. And I say on the top, like, I could be an affiliate for all of these, but I'm none. I'm not an affiliate for any of these. By using the tool section of my website, you might be buying all kinds of stuff. I get nothing in return. Now you might say, george, you're stupid. You could have gotten made tens of thousands of dollars a year selling all these different tools. No, because I would rather come across 95% of the time as praising things, not because I'm making money from it, but because I honestly believe in someone else's product or service. Because then you trust me when I make a. So I'm not the boy who cried wolf, right? When I do make a sale, I tell you, hey, I'm making money from this, but I really believe in it also. And thank you for supporting my business. So be really sparse. Don't be selling all these different things. It just doesn't look good. And I used to be like that. I used to be like, oh, affiliate marketing makes so much money. I don't want to leave money on the table. Right? Yes, I want to leave money on the table because by leaving money on the table, I also retain an audience that trusts me. People don't get that. Yes, you want to leave money on the table. You want to be plenty of money on the table because you want to make money in other ways that are really authentic and honest. And you can make enough money doing that. You don't have to make all the money in the world. No, just make enough money. Right. And you can keep growing that, obviously, but you don't have to make more money like using affiliate stuff. So. So basically, I. Yeah, I make. I make. And I should also let you know, if you. If you follow my videos, I am promoting somebody every week. And I sh. And actually, I should get better about doing this. All of them are my clients. Everybody you see, I promote someone on Saturday or Sundays through my video. I interview someone and they promote something I really should be more clear about. I realize I have stopped recently being clear about this. So I'm learning, too. I should mention that these are my. All my. All of them are my clients. Now, they didn't pay me specifically to promote them, and I'm not earning anything. When you buy from my clients, I'm not earning anything. It's just one of the bonus benefits I give to my clients is that I try to fit them into my schedule of interviewing them on video. And sometimes when I interview colleagues, like recently I interviewed Mark Silver. He's a niche mate of mine, a colleague of mine, he does something similar to me. I'm not making any money by promoting him, but what I am getting is that he's promoting me in return. Again, he's not making any money by promoting me either. So again, I should probably be more transparent about that, that there's some kind of indirect financial compensation. Not direct, but indirect financial business benefit from me interviewing these people. But maybe going forward you can trust that whenever I'm interviewing someone, there's probably some kind of benefit. Eventually they'll interview me or something like. But it all comes around it all comes around. So hopefully, hopefully this is helpful to you. I'd love to know what your thoughts are. You have probably encountered affiliate marketing. As a consumer, all of us have probably bought things that have been sold by promoters and other businesses that we follow. So what are your thoughts about affiliate marketing? Do you have any suggestions, any thoughts about these, these principles? And thanks for those who are joining me live here, Maria, Sabine, Ida, Pram and Prem. Also Aunt Jen, Amparo and Tara Captain, thanks all so much for joining me live. And until the next video, I wish you well.