Why I do Affiliate Arbitriage.

by El Plumber (admin) on November 28, 2008

So I’ve been dabbling in Affiliate Arbitriage for about 4 months now with some success.  It takes a LOT of time and a LOT of looking after to make sure you don’t end up emptying your pockets into ads that don’t deliver.  It’s really not a big money maker by itself, but I do it to drive tiered based systems such as my Amazon payout percentage over the high water marks for big affiliate payouts.

Here is how it works.  Say you have a website that you have Amazon affiliate ads on.  Amazon pays out on a sliding scale, where if you sell like 0-5 items you get 4%, 5-30 items you get 6%, 30-60 you get 6.5% and so on up to the sweet spot of 8% for 600ish items sold each month.  These aren’t the exact numbers, and I’m too lazy to go look them up, but you get the idea.

If you have a site promoting high priced items and you only sell 30 each month, you get 6%.  If the items you are promoting cost $500 each, you get:

$500x30x0.06=$900 per month

Not a bad month pay for letting a machine move a bunch of electrons around wires on the internet while you sit on your ass and drink beer, right?   Well, if you can get your account to the 8% level, that turns into:

$500x30x0.08=$1200 per month

So the key is to put ads up on Google/Yahoo/MSN and get enough people to buy so you at least break even.  If you’re not breaking even, you’re eating into that extra $300 each month.  Sometimes you even get lucky and add to the total, but that’s a story for another day.

So far, except for the month of October 2008 (which sucked royally) I’ve not only broken even, but actually made money through the ads alone, and achieved either the 7.5% or 8% payout level each month since August.

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{ 2 comments… read them below or add one }

Lucas November 16, 2009 at 2:22 pm

El Plumber, what types of ads do you reccomend to start off with, and what types of ads do you put up?

El Plumber (admin) November 16, 2009 at 5:23 pm

Lucas, I stopped paying for search advertising a couple of months before the Amazon Affiliate program stopped allowing it. I would not suggest paying for any advertising to start with. It’s far too easy to lose more than you earn. Focus on trying to get search engines to notice a site you create. No money lost and it keeps paying without having to pay for advertising.

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