Affiliate Marketing Success, With Ray Sinlao

You're listening to Business Lunch with Roland Fraser. This is your seat at the table. Hello and welcome to Business Lunch with Roland Fraser. This is Darren Clark, the producer of the show and we've had a lot of new people joining us and I just wanted to say thank you and we value your time. Now also, if you want to dig deeper with Roland, head over to businesslunchpodcast.com epicepic and you can learn all about how to take your business to the next level with Roland. So go to businesslaunchpodcast.com epic now, in 2019, we talked to the coder that went all in on affiliate marketing, Ray Sin Lau. In today's episode, we're sharing some highlights from that conversation in one bite sized chunk. You can hear Roland's full conversation with ray on episode 114 if you're interested in his story. But before this conversation, Ray wasn't doing podcasts or speaking engagements. He preferred to fly under the radar. But make no mistake, he has achieved huge success in a seriously short amount of time. So let's dive in.

Hey everybody, welcome to Business Lunch. I am here today with our guest, Ray Sinlau. Ray, welcome to the show.

Hey, what's up guys?

And Ray, will you tell us a little bit about your business? What is the business that you have right now?

So I do affiliate marketing.

Okay.

So companies will come to me like networks or even like the direct companies will reach out to me and like I've built a pretty decent name for myself in the industry.

Okay. A couple of things to start. One is, and I just want to share this since we talked about it, but you've built an eight figure business. Ray did not want me to say that because he agreed that I could, but he didn't want to because he didn't want to sound guru y or cringy. He said sometimes when you're listening to people it can sound weird to say that, but I want you guys to know that he's the real deal. He's got a significant business. He's built up a large amount of monthly recurring revenue which we talk about a lot on the show. And, and so that you're somebody that everybody should listen to just so people understand. Can you kind of say what is a network and you know, so that people understand that a little bit better.

So an affiliate network, I guess they just manage the connection between advertisers, the people who own the products and the actual affiliates. So they'll handle all the negotiating, like increasing the price and like pretty much like promising the advertiser volume, and then also helping out the affiliates.

So are you comfortable saying any of the products you have? And we can. We can make up a product if you're not, Because I know it's like, you know, I don't want more people in that.

Yeah, we do all kinds of products from.

Pick one, anyone will say one of.

Them is like, a translator.

Okay. Translate. Like software or a physical thing.

Like a physical thing. You just talk into it.

So I own a physical translator company. I've got my box, and I come to the affiliate network and say, hey, I'd like people to sell this.

Right.

And then the affiliate network says, what?

So they'll. They'll say, like, okay, cool. We'll reach out to our network of affiliates and then kind of pitch it to the affiliates. They'll usually build up, like, a document saying, like, hey, you could reach, like, men, women in the United States that are interested in, like, Oprah or some random thing, and then they'll pitch it to the affiliates. Then the affiliates will take the creatives that they find.

Creatives, meaning the ads and stuff?

Like, the ads and stuff like that. Like, launch it on Facebook, outbrain, or whatever traffic sources are.

So they're a broker, basically, right?

Yeah, they pretty much broker it.

Yeah. Okay, cool. And they come to you, though, you said, which is kind of interesting.

Yeah.

How does that work?

Well, I'm kind of, like, known in that space a little bit.

Okay.

So, like, I go to, like, affiliate world and stuff like that.

How did you get known friends?

I'm just, like, friends with them, I guess.

Yeah. How did you get friends with them? I'd like. I want to kind of go through the evolution of this. So maybe the best thing to do is to start back a little bit earlier. So let's go back to. How old are you now?

33.

33. Okay, let's go back. Your first entrepreneurial experience, when was that? The first time that you did something entrepreneurial to make some money?

I can't talk about that, but I.

Sold liquor out of the back of my car in high school, did all kinds of stuff like that. Yeah. So more risky entrepreneurial.

Yeah, but I always wanted to, like, get into, like, the more legit stuff.

So let's start with the first legit one, huh?

Okay, so this is what happened. It was 2012, and I got my girlfriend pregnant, and I was like, a security guard making, like, $10 an hour.

Okay.

And I was just like, how do I, like, support a kid off, like, $10 an hour? It's, like, pretty much impossible.

Yeah.

And I had, like, no skill set. I didn't go to college.

Right.

And then what I did was, like, I started running some, like, AdWords traffic to a background check offer.

Okay.

And it just, like, started picking up, like.

So an offer where one of those things you see, you know, find out about Joe. Yeah. Or something like that.

Search about your next door neighbor. Like, find out if your girlfriend's cheating or something like that.

Okay.

So I started that and, like, I mean, it ran for like, three years, like, profitably.

So now that's an interesting thing too, is so there were tons of people doing that. Right? Like, that's an offer that was.

I don't know if a ton of people are doing it, but, like. Cause that offer has been around for a long time. The way that, like, the affiliate thing works is like, everyone just hops onto the next thing every time.

Right.

So, like, people had already hopped off of that.

Okay. So. Well, actually, that's a. Kind of a cool insight, though, for people. Right. So would you recommend if CBD is hot or crypto or something like that? Don't go there. Because there's so much competition and traffic and look at what was hot maybe six months or a year ago.

No, I don't. I don't do that. I just like, for my thing, whenever I talk to people, I'm just like, just stick to what you're good at. Okay, so.

But you weren't good at background offers before, right?

No.

Yeah.

Yeah. Like in our industry, you notice, like, something pops up. It'll be like Snapchat ads. People will literally, like, let their old campaigns die and just like, jump onto Snapchat.

Really? Okay.

Yeah. And it's just like, I failed. And I'm like, damn, you didn't have to let everything else die.

Right. Because otherwise you're starting a new business basically every time the next offer comes along. Right?

Yeah. And everyone's just like, something will pop up in the forum and then everyone will be like, everyone does that now. And it just gets so competitive.

What kind of forums?

So there's like, STM forum to stack that money. Have you heard of that?

Yeah.

So there's that one. And there's like, do you know what telegram is? Yeah, yeah. So there's like, one with, like, a thousand people in it.

Really?

Yeah.

So how would people find those things?

You'd have to, like, know somebody who's.

In it for that one and they'll.

Add you to it.

Okay. But STM is relatively open Isn't it?

Yeah.

Yeah.

I think it's like $99 a month.

Yeah. Okay.

If you want to get into affiliate marketing, that's probably the best way to start.

Yeah. And like the telegram one, is that just people sharing or is that a paid profit thing?

It's like people sharing.

Okay.

I don't know anyone in the group either. Yeah, it's weird, but, like, you see kind of some really cool stuff. Like, I've picked out some things.

Yeah.

Yeah.

So if somebody was looking for an offer to run, because it's kind of overwhelming when you first start doing that too, how would you suggest that they pick what to do?

You have to find affiliate network and get paired up with, like, a affiliate manager.

Okay.

And then they will typically tell you, like, what's hot and what to run.

Okay. Are there any affiliate networks that you think are particularly friendly for that kind of stuff?

Yeah, like, some of my friends own Direct Focus Online. Okay, that's a good one.

Direct Focus Online dot com. Is that.

Yeah.

Okay.

Verve.

Okay.

You could probably hit up my friend, my Willens.

Okay. She'll let me do this at Verve. Yeah. Okay.

Maya Williams.

Maya Williams. Okay, great.

And then there's also Giddy Up.

Okay.

Have you heard of that?

I have, yeah.

Yeah. So reach out to those guys.

Okay, great. And do you like those more than, like, the commission junction and those kinds of older, more established, Been around forever?

I mean, those are. Those. Those other ones I've never got to work.

Yeah.

Just because they don't really have, like, as dedicated affiliate managers. I feel like. I don't know.

Yeah, no, I agree with you. You can like, never hear from anybody.

Yeah. Because it could. It's literally like thousands of offers. That's. Most of them are untested.

Okay.

And they're just like, all right, just try whatever you want. And that never works, Especially if you're just coming in and you see like a thousand offers and you're like, all right, I want to try out this credit thing. I want to try out this selling mugs or selling T shirts. As, like, an inexperienced person, you don't really understand what people actually want. You're going to end up launching it, wasting time, and then also losing a ton of money.

Okay. That's actually really good advice because I think that people go like, those are giant. They've been around forever. But the affiliate manager sounds like you're saying that's like a key thing. You gotta find a good affiliate.

The affiliate manager thing is, like, probably the most important thing other than Being friends with people. Cause a lot of the stuff that I did was, like, I knew somebody and they're like, dude, try this out. And then I tried that. But the next level to that is the affiliate manager.

Okay. Okay, cool. Okay. So you found an offer that you want to do. What's next?

We work, like, 16 hours a day, like, seven days a week.

And what are you doing? Like, what is happening during those 16 hours?

That's another big thing that I feel like most marketers, like, leave out. Yeah, it's just like writing copy.

Yeah.

Because a lot of people think, like, I'm, like, make this ad. I'm going to, like, make it tricky. I'm going to throw it up there, and then, like, the algorithm is going to take care of it. Like, I mean, I've seen people lose tons of money that way. And, like, it works sometimes if someone else already, like, prepared all that stuff for you. But a lot of marketers, like, completely leave out that whole, like, copywriting stuff.

Okay. Do you have a resource that you like for that? Like, you like, ad skills for the other stuff?

Great leads. And then also just following, like, Justin's Facebook to. Do you know Justin, right?

I do, yeah. He spoke at orum.

Yeah.

Cool.

Nice. Yeah, he's like one of my buddies. He lets me go to his events for free and stuff.

Yeah, he's awesome.

Yeah.

Okay, cool.

So.

And great leads just for people who want to follow up on that. That is a book. That's a program book.

So the way I would explain great leads, it's like Jiu Jitsu for sales copy. So, like, it helps you understand.

That's Mark Ford, right? Michael Masterson.

Yeah, yeah, yeah.

Mark Ford's his real name.

Yeah.

Okay, cool.

Okay.

It's like Jiu Jitsu for sales copy.

Okay.

So you understand, like, where someone's level's at and then attack them at that level.

Okay.

Versus, like, the way that. I'm not gonna say like, most marketers, but a lot of people will just attack every single problem, like, with the same thing. Like, okay, open it up with this.

Right.

Say this in the middle.

It's not as formulated as that.

Say this. It's like.

Right.

You can't just, like, step into everything the exact same way.

Right. Okay, so now you're putting that together. You've got the offer. How do you make your first sale? You go to Facebook. A Google Ad. What do you do?

Right now, we're only doing. Actually, no, we're not only doing Facebook right now, but we started out with Only Facebook.

Okay, so you start on Facebook, you put up the ad and build a landing page, and it's an affiliate offer. So no inventory, no fulfillment, anything like that. What kind of commissions do you look for when you're looking for something like this?

For me, I usually try to work around, like, the $35 to, like, $90 payout.

So a CPA, just a cost per acquisition, where you get a bounty. If you get a customer, they pay you X dollars. Yeah. Okay. Do you negotiate anything higher or do you just take what they get?

Yeah, you can negotiate. Yeah, yeah, you can negotiate all kinds of stuff.

So say somebody's offering 35 bucks on something. Do you have any kind of thought, like, what do you start thinking? Or how do you determine what you need to get to make this worth your while?

You can always say, like, hey, I'm trying to scale. Like, because what some people do is they scale it up unprofitably, or not even unprofitably, but, like, break even and then ask for, like, a pay bump.

Right?

And then, like, once that pay bump happens, then, like, the profits come in. But every time you start an offer, too, like, obviously the affiliate network's not going to just volunteer to give you more money, especially if you didn't do anything. Like, if you have, like, zero sales or, like, even 10 sales a day or something, and then you ask for more money, they're just going to be like, why?

Okay, so do you follow that and that you don't go in in advance? You kind of wait, build it up a little bit, and then go, Yeah.

I usually want to have like a couple hundred sales going.

A couple hundred a day?

I mean, at least a couple hundred.

Just a couple hundred.

So, like, usually around, like, for me, like, at 500 or something, I'll just be like, all right, what about, like, five more dollars or something?

Okay, and is that kind of where. Where you're after? Or are you saying. I've determined that my cost per acquisition for me to get a buyer is X and I need to make this much to break even on it or to make money? Or do you have any formulas that you use? Or is it just, you know, hey, how about another five? Come on.

I mean, yeah, sometimes it's that. Okay, it's like, both. Because if you notice, like, a rise or whatever, and then like, if you also notice that there's not that much competition, like, if you kind of find out, like, you might be the only one running it.

Right?

Because there's spy tools on the Internet. That you could use to see what other people are doing. So if you don't see that many people and you're like, oh, I'm like, the only one.

Nice.

You're like, I wonder what the average order value is. And then you're like, all right, I wonder how much more I could get out of this. So then you just ask for more. But then there's also like the situations where if it hits Q4, and then like all of a sudden, ad costs go up and you're like, I can't maintain this scale without it. Then you just have to be like, hey, you either give me like 10 more dollars or I cut everything off right now.

Okay. That's a cool thing that you just mentioned the seasonality of expenses in ads around Christmas. Everybody's spending money around elections. Everybody's spending money. So ad costs can go up. How do you balance that out or deal with that?

I guess like a really good. I mean, this is like, not a secret either. Like, a really good thing to do during the holidays is like, like 20 best Christmas gifts.

Okay.

Stuff like that.

Yep.

Yeah. The listicles.

Anything for ad costs. Any strategies that you were like, this actually is going to make a difference that you can share. Because it's something we found, like at our E. Comm businesses too. Is. Is when an election happened or when the. It was the Christmas holidays or the December holidays, depending on what you follow, that you just kind of stop. We just would roll it back during that time. Cause it just wasn't profitable.

I've actually done that where I just stopped.

Yeah.

Yeah.

So at the retreat. I'm trying to get out that retreat. Is there anything great there?

I mean, but like last year we kind of just cruised straight through it.

Yeah. You're just like, okay.

I don't know if it was like, just different that year, but the previous two years we. I remember just killing it, like entirely in December and just restarting in January.

Okay. Yeah. That's what we ended up. We tried so many things and we ended up doing that. So I didn't know if you had had broken through that. So you mentioned the spy tools, which is one of my favorite things. What spy tools do you like and what do they do?

There's adbeat. It's mostly for, like, native and display stuff. So you'll find that stuff there. Find the websites. You could kind of see like the websites that other people are running it on. And then like, if you're only running Facebook, like target that website interest or whatever. And then there's also another one called Ad Spy. It's a Facebook.

Is that your favorite one for. Because Facebook ones come and go. They get shut down a whole lot because of Facebook saying, you know, yeah, we don't like that. Yeah, I mean, that's just like.

That's one that works.

Yeah. Yeah.

I don't really have, like, favorites ones because I know those go away so quickly.

They do, yeah.

Yeah.

What else do you use? What else do you like on the tools side of things for that?

A lot of this stuff, too, is just like. So here's like, something that my team does that I know a lot of people. People don't do is, like, we create, like, a private group, and all the employees are, like, using Facebook.

So you create a private group for.

Just a private group that all the team's in.

Okay. For your team.

Yeah.

Okay.

And then as, like, everyone just scrolling through, like, using Facebook as usual, if they see an ad that they like, they just share it to that group.

Oh, okay.

So it's like your own, like, database of, like, ads that you all, like, got. And then, like, every week, usually we'll just go over, like, hey, I really like this ad. And then so I actually have, like, a creative director now. He'll just go and, like, make it.

That's cool. So, so how do you get shown those ads? Is there, like, do you go and click and, like, the offer or the publisher or the. Whoever the product maker is, how do you get.

I think after enough time, like, especially if you're clicking on similar offers and you just get pixel, you just start showing them showing up, and then when you, like, like them and share them, like, they just start showing you more stuff like that.

And is that so.

Pretty much my entire feed is just, like, all my competitors, all your competitors, and me.

Okay, nice. Great. All right, so now you have two people working for you. How are you dealing with finding new people to work to build a team of 15 people? And how do you pay them and keep them motivated?

Okay, so it's a percentage of the profit.

Okay. Is there any draw at all?

Draw?

Any payment, any base salary or anything like that? It's all for the developers.

There is, but, like, for the media buyers. No.

Okay, and how does that work? How do you comp them?

So just percentage of the profit margin.

Okay, so let's say you have an offer, you get paid. I'm gonna use round numbers because it's easy for math. You get paid 100 bucks on the offer, and it costs you 60 bucks to generate the buyer. So you got a 40 margin on that. How would you recommend paying something so.

They just have, like, a. Whatever the profit is, I just give them, like. I mean, it just depends on their level, too.

What would the range be?

Between, like, 15 to, like, 30%, which is, like, really.

30 is really good. Yeah. Okay, so 30% of your profit margin, you're making $40.

People who work for me make, like, what doctors make.

Nice.

Yeah.

That's awesome. And how long. And. And these are people you trained up from kind of nothing.

Yeah. And they've only been doing it for, like, four months. Like, literally, I cut one guy, like, a $30,000 check.

Yes.

Last month.

That's all right.

Yeah.

What has worked the best for you in this business? That you were kind of, like, surprised? Like, oh, wow, that's amazing. That's. I didn't expect that to go that way.

I don't know. I've just been in for, like, a.

Long time, so you can say nothing surprised you.

That's.

That's totally cool.

The thing about us is we're constantly testing every single time.

Okay. Has anything surprised you that didn't work out that you thought was going to be good? And then you're like, ah.

Oh, yeah. I mean, like, so when we hired the filmmaker, he made this, like, amazing video. And I mean, it was, like, beautiful. Like something you could see on tv.

Right.

And everyone was, like, so stoked. We're like, yes, this is going to, like, crush it for us. And then when you launched it, people were just like. And, like, it died.

So did you find and that you wouldn't have known if you hadn't tested. And I know what you're talking about, because it just seems like over and over, highly produced videos, they come across as inauthentic. Maybe it's the rawness. So do you use video in your ads and your stuff like that?

Yeah.

How do you shoot it? How you produce it? What works the best?

I mean, this part's, like, pretty cool.

Yeah.

Because, like, the guy I hired, he's, like, a legit filmmaker, and he auditioned everyone. And, like, previously, when I would shoot it, I would just, like, hire two actors or models or.

I don't even know, go to an agency or whatever.

Yeah. All right. Like, bring me to, like, usually, like, pretty hot chicks or whatever. And then they show up, and we would have no script. We would just be like, all right, stand right here. And then, like, hold it like this and say, I really like this. You know, just something weird like that. And Then we're just like standing there, I'm like, all right, like change your shirt and then like do this. And you know, just weird, right? I mean I heard one or we hired like one actress not recently, but like two years ago where she like couldn't even like read. So I was like, damn, like it's on the teleprompter.

Oh, you don't read?

I'm like, oh, damn. I mean it's not that she couldn't read. She couldn't read on camera, right?

Yeah. Oh, so it was like stage frightish kind of thing?

I don't know. Yeah, probably.

Okay. Yeah.

But I mean like so the current video creative director actually brought in like 20 people, auditioned them, had them send in like audition tapes, did like exercises like, hey, pick up this notebook here and pretend that it's like £200. So then they'll be on stage like pulling it and they're like, okay, cool. Like you could do your body thing. It's like, alright, so act surprised. And then, you know, he like, we'll read it. And so I'm just sitting there.

Really cool.

Yeah.

And then so we have this database now of like really good actors.

Okay.

And anytime we need something, we're just like, hey, this is like the perfect person for this.

That's so cool. And where are you located? Are you in LA where there's a billion actors or are you.

Oh no, we're in San Diego.

You're in San Diego? So kind of normal people just. It's not like a huge acting town. So you're getting. Yeah, yeah. And do you use agencies or do you just run like Craigslist?

Oh, we actually use one agency. Yeah, I don't remember their name.

Okay.

But usually we just get like people from Craigslist.

Okay, that's awesome.

Sweet. We just audition ourselves and stuff.

That's pretty cool. And what percentage of would you say, like, what's working best? Video stills. What kind of.

I mean right now we do video and image, but so far our videos have been going like really, really well.

Yeah. Yeah. Okay, cool. So just if people wanted. I know you're shy and don't like to speak and stuff like that, but if people wanted to apply to make $30,000 a month with you, like your brother in law.

Oh, it's my actual brother.

Your actual brother?

Yeah.

Or work on the team or just find out more to stay in touch with you or see what you're doing. Is there any place that they could do that?

Yeah, just Facebook.

Facebook.

So just reach Out. It's like Race and Lau.

Okay. You want to spell it for them so they're listening. They can.

R A Y S I N la. Oh, yes.

And the company. You don't even have a company webpage, which is awesome.

I don't have that. The thing about not having a company website is like when you're trying to hire people, they start getting sketched out. Especially developers are like, search everywhere. Haven't found one thing about you guys, what's going on? And I'm like, it's because, like. And then I have to explain like the whole business. And they're like, okay, I get it.

That's pretty funny.

Yeah.

Then they're cool. Awesome, man. Thank you so much for coming in and taking the time to do this. I think it's a lot of, lot of great stuff to share and really appreciate you doing it.

Cool. Thanks, Roland.

Thanks.

You've been listening to Business Lunch with Roland Fraser. If you're enjoying the show, let us know by subscribing and leaving a review. And for more information, go to businesslunchpodcast.com thank you for listening.

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