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Just saw MJ DeMarcos article on affiliate marketing

Marketing, social media, advertising

nradam123

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Hello guys,

Its been a while. Perhaps 2 years since i posted here.
Last 3 years for me was life changing.

I tried everything i could. From Fiverr to Freelancing to building a tech startup to ecommerce.
I got sales here and there, but i could not have a financial breakthrough.

Then i found a mentor who thought me affiliate marketing. Things started moving after that.
I had my first 2 figures a day. And recently I have gone all the way upto managing 4 figures (of profits a day) but stable 3 figures a day is the norm.

This is paid media buying in display, native, social media and search traffic sources promoting offers from affiliate networks such as insurance, games and what not. I think I can finally call myself an expert, as I am getting really comfortable with my skillset. Of course, I am still scaling and trying to make it big.

Anyway, then i saw this video by MJ DeMarco

I know its true, there is a large lack of commandment of control in the affiliate marketing space.

But the catch is, i know people who are doing 6-8 figures of yearly income, with 100 person companies (We are just 6 now) and I havent met a single company who does not partner with other companies in some way. Joint ventures, key clients and partnerships are the norm in every company I know. We recently started working on creating a SaaS application to help marketers, and even that includes using services from APIs of several third party applications.

And there are always strategies you can use to minimize risks. In affiliate marketing we can stack offers so that when one goes down we have another one. We can also diversify niches so that there is always something going on. I think most businesses will need to build strategy to overcome the lack of commandment of control.

I am sorta thinking about my future and how to build my company from where it is now, and I wanted to hear your thoughts on commandment of control in your own businesses.

Thanks
 
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lludwig

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As someone who just sold my biz which was based on affiliate marketing only, MJ is 100% correct.

So I'm not following what's the issue here.
 
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TreyAllDay

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I'm glad to hear MJ talk about this a bit because I've been watching these very convincing videos online about people buying lambos via affiliate marketing, was curious about this.
 

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For me, affiliate marketing is a way I can monetize a blog following. It has worked and I’ve learned how and what it takes to rank a website by failing at it a lot.

You don’t have control, but if you produce high-quality content for targeted keywords you can do pretty well.

CPA marketing is what nradam is talking about and that is a whole different ballgame. I know of people blowing lots of money trying to figure it out and still failing. It seems to have incredible potential if you figure it out. Just like converting a Facebook or google ad to a sale, it’s the same premise it’s just not your product.
 

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I think MJ hasn't talked about the professional approach to affiliate marketing in his video. More of a SEO/content marketing for some big company affiliate program like Amazon/AliExpress/etc.

You're doing paid traffic. You have different traffic sources to work with.
You're carefully testing and picking offers from different networks.
You don't care that much if an offer stays there for a week or for a couple of months.
You're having some systems.

That's pretty advanced and it's more a marketing agency that uses affiliate marketing network as a lead source and has results-oriented pricing :smile:

P. S. I've learned/tried it for a few months. Got 3-figure total profit with few low-margin-profitable campaigns. Quit cause one of my campaigns suddenly started to produce very bad, almost the opposite results. Tried to figure out what happened, everything seemed fine. The I've tried to look at it from Brazilian IP (it was for Brazil)... They totally replaced their landing with some scam stuff that I was sending 4-figure traffic to...

I've decided that it's full of crap and immoral, but still believe it pretty much CENTS and profitable. With Time as the main issue, as for pretty much every other service-business.
 

MJ DeMarco

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That video is probably ten years old. Things might have changed, but the control issue still pervades, and as technological oligarchs grow stronger and more dominant, control will continue to be a bigger and bigger challenge for us smaller players. Affiliate marketing or not...
 

nradam123

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As someone who just sold my biz which was based on affiliate marketing only, MJ is 100% correct.

So I'm not following what's the issue here.

Interesting. Its hard to sell a CPA marketing company like mine, as we dont have a lot of assets except the team. Thats what i will be focusing on now, building assets like internal automation software. Making high traffic websites by creating content is not my thing at the moment.

I'm glad to hear MJ talk about this a bit because I've been watching these very convincing videos online about people buying lambos via affiliate marketing, was curious about this.

Its true. Like i said in the opening post, I know people who are making 6-8 figures in a year. I am sure there are people who makes 9 figures too. But its not easy, most of them have a decade of experience.
 
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nradam123

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Interesting, may be a good strategy to build into my app.

If you have an app I recommend monetizing it using ads (Google Adx .etc because they pay in CPM basis and not CPC like Google Adsense. Its harder to get in, you will need atleast 100,000 visitors a month to get approval). I know a person who dominates app, has atleast a 50 person team who just builds app (This is India so hires are cheaper)

I think last year his in-app revenue was 18000 dollars, but his ad revenue on the same apps where 150 times. We had a mastermind and I saw this stats from his facebook app annie screenshot. His apps combined got downloaded 3 million times. You can use app annie to track all this info.

I am not the app guy, so I cant help much there.
 

nradam123

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P. S. I've learned/tried it for a few months. Got 3-figure total profit with few low-margin-profitable campaigns. Quit cause one of my campaigns suddenly started to produce very bad, almost the opposite results. Tried to figure out what happened, everything seemed fine. The I've tried to look at it from Brazilian IP (it was for Brazil)... They totally replaced their landing with some scam stuff that I was sending 4-figure traffic to...

I've decided that it's full of crap and immoral, but still believe it pretty much CENTS and profitable. With Time as the main issue, as for pretty much every other service-business.

100%. Affiliate networks scrape leads, traffic sources send bot traffic. Its the wild west in there. But you need to figure out how to tackle everything. Its a roller coaster ride for sure.

Usually service based businesses are linearly scalable. The thing about CPA affiliate marketing is that it is exponentially scalable. If something works out, you can scale to the moon. Its common to scale a campaign that runs at 100% ROI at $50 a day to 50% ROI at $1000 a day. Almost same effort.
 

nradam123

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That video is probably ten years old. Things might have changed, but the control issue still pervades, and as technological oligarchs grow stronger and more dominant, control will continue to be a bigger and bigger challenge for us smaller players. Affiliate marketing or not...

I agree. Its good to hear from you. Its true that all companies are starting to work in collaboration these days, its good in some way because you are able to plug and play without building infrastructure yourself (You can use Google Cloud ML and speech engine through Google Cloud instead of building your own machine learning models, stuff like that) but you also depend on several other companies.

PS: I am gonna buy your new book unscripted , just saw it yesterday :)
 
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aminmo

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Well, I'm not in affiliate marketing, but I do the next worst thing: Dropship from China. Here's my experience with the topic of "control":

I made around $1MM in revenue in 2 months alone during 2017, and I currently have a new store that's done around $600k in sales so far (probably quite a bit more) which I've only started in Jan of this year. I've also had days where I've made over $7k in pure profit.

But guess what? I had to shut my first store down after being in business for less than a year, and I'm now in the processing of scaling down my current store (and planning on eventually shutting this one down too).

Why is this? It's simple. It's because both stores violated the commandment of control.

I gave up control of the most important aspects of an ecom business to people over in China (who don't give a rat's butt about me): my inventory, the quality of my products, my shipping times, etc.

The only thing I really had was my advertising, my website, and my customer service.

But at the end of the day, these things don't mean much when I don't have control over the things that REALLY matter. The real money is in the repeat business, and without control over the quality of my products and control of my shipping times, people just wouldn't come back to buy more. And don't even get me started on supply issues that end up turning into tens of thousands in refunds and chargebacks.

Can you make a lot of money with a business that violates the commandment of control? Of course. But will this money last? Probably not.

Obviously, this doesn't necessarily mean that your affiliate marketing business will face the same fate as my ecom stores, but this is just an example that proves MJ's point.

So now I'm currently transitioning to importing products in bulk and having them stored at a fulfillment center (with the goal of eventually opening up my own warehouse so I can have total control), but once I have these things implemented, I'll be unstoppable. My advertising is top tier, my website design is sleek (and loads lightning quick), the products I sell are unique as hell, and my customer service is second to none. And once I have control over my shipping times and my product quality, well, lets just say money won't be an issue for me anymore.

That's just my experience though and doesn't mean it'll be the same for you.
 

nradam123

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Well, I'm not in affiliate marketing, but I do the next worst thing: Dropship from China. Here's my experience with the topic of "control":

I made around $1MM in revenue in 2 months alone during 2017, and I currently have a new store that's done around $600k in sales so far (probably quite a bit more) which I've only started in Jan of this year. I've also had days where I've made over $7k in pure profit.

But guess what? I had to shut my first store down after being in business for less than a year, and I'm now in the processing of scaling down my current store (and planning on eventually shutting this one down too).

Why is this? It's simple. It's because both stores violated the commandment of control.

I gave up control of the most important aspects of an ecom business to people over in China (who don't give a rat's butt about me): my inventory, the quality of my products, my shipping times, etc.

The only thing I really had was my advertising, my website, and my customer service.

But at the end of the day, these things don't mean much when I don't have control over the things that REALLY matter. The real money is in the repeat business, and without control over the quality of my products and control of my shipping times, people just wouldn't come back to buy more. And don't even get me started on supply issues that end up turning into tens of thousands in refunds and chargebacks.

Can you make a lot of money with a business that violates the commandment of control? Of course. But will this money last? Probably not.

Obviously, this doesn't necessarily mean that your affiliate marketing business will face the same fate as my ecom stores, but this is just an example that proves MJ's point.

So now I'm currently transitioning to importing products in bulk and having them stored at a fulfillment center (with the goal of eventually opening up my own warehouse so I can have total control), but once I have these things implemented, I'll be unstoppable. My advertising is top tier, my website design is sleek (and loads lightning quick), the products I sell are unique as hell, and my customer service is second to none. And once I have control over my shipping times and my product quality, well, lets just say money won't be an issue for me anymore.

That's just my experience though and doesn't mean it'll be the same for you.

I agree 100%. I think the move you are making now with fulfillment centers is the right way to go. Branding is huge as well. Using clickfunnels can increase the ROI too rather than using a general shopify store. But seeing your revenue, you dont need me to tell these things lol.

The roller coaster ride I have is very similar to yours. It scares me that things will get worse at some point.

I know the biggest affiliate marketers in the industry market there own products.
 

lludwig

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Interesting. Its hard to sell a CPA marketing company like mine, as we dont have a lot of assets except the team. Thats what i will be focusing on now, building assets like internal automation software. Making high traffic websites by creating content is not my thing at the moment.


That's because I didn't sell a site that was about landing pages and just conversions.

It was creating content and establishing a brand. That was where I added value.

No one is going to buy an affiliate marketing company who is performing purely an arbitrage game.
 
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MJ DeMarco

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I made around $1MM in revenue in 2 months alone during 2017, and I currently have a new store that's done around $600k in sales so far (probably quite a bit more) which I've only started in Jan of this year. I've also had days where I've made over $7k in pure profit.

Wow, safe to say if you can do well there, you're going to kill it elsewhere. You should be stoked about the future, hope you're proud of what you've accomplished. Impressive!

Can you make a lot of money with a business that violates the commandment of control? Of course. But will this money last? Probably not.

+1, the essence of the Control Commandment, very similar to Entry.
 

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IU is doing a lot of focus in affiliate marketing and growth this year. I've found that that, out of everything else, has probably led to our greatest increase in presence in the US market. We've been really successful globally, and I tend to view that Eastern countries care more about how much a product or company is being talked about, where in the US other companies can be the gate keeper and it is more about WHO is talking about you. I'm definitely going to pass MJ's vid onto my boss.
 

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I got started in affiliate marketing back in late 90's/2000.

There is no control for "most" of the industry.

As an affiliate ( in the most general sense that people think of ), you are the bottom of the totem pole and you always will be.

It's not until you "control the chain" that you can move up. Most affiliate do not do this though.

  • Until you control the payouts
  • Until you control the product(s)
  • Until you control the caps
  • Until you control the scrubs, shaves and lead carrots
  • Until you control the spy tools
  • Until you control the data the network collects
  • Until you can own the traffic
  • Until you control ( a lot of other areas )
You gonna be at the bottom.

I eventually got out of being just an affiliate near 2010.

Now I own my own offer. I own the payout process and the caps. I don't get shaved or scrubbed or deal with lead carrots and people ratting out my traffic sources and pages.

I'm still working on controlling the traffic sources, but Im doing better than ever... and I did very well just being an affiliate when I was one.

Yes you can make a lot of money, but you never know when the "gig is up" if you are "just an affiliate" in the sense everyone thinks of.

.
 
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shubham525

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Hello guys,

Its been a while. Perhaps 2 years since i posted here.
Last 3 years for me was life changing.

I tried everything i could. From Fiverr to Freelancing to building a tech startup to ecommerce.
I got sales here and there, but i could not have a financial breakthrough.

Then i found a mentor who thought me affiliate marketing. Things started moving after that.
I had my first 2 figures a day. And recently I have gone all the way upto managing 4 figures (of profits a day) but stable 3 figures a day is the norm.

This is paid media buying in display, native, social media and search traffic sources promoting offers from affiliate networks such as insurance, games and what not. I think I can finally call myself an expert, as I am getting really comfortable with my skillset. Of course, I am still scaling and trying to make it big.

Anyway, then i saw this video by MJ DeMarco

I know its true, there is a large lack of commandment of control in the affiliate marketing space.

But the catch is, i know people who are doing 6-8 figures of yearly income, with 100 person companies (We are just 6 now) and I havent met a single company who does not partner with other companies in some way. Joint ventures, key clients and partnerships are the norm in every company I know. We recently started working on creating a SaaS application to help marketers, and even that includes using services from APIs of several third party applications.

And there are always strategies you can use to minimize risks. In affiliate marketing we can stack offers so that when one goes down we have another one. We can also diversify niches so that there is always something going on. I think most businesses will need to build strategy to overcome the lack of commandment of control.

I am sorta thinking about my future and how to build my company from where it is now, and I wanted to hear your thoughts on commandment of control in your own businesses.

Thanks

Affiliate is good , but it hurts when the campaign you have been working for years gets pulled down in an instant.

Like the case of Flipkart in India.
 

Marty Foley

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MJ's advice is wise.

And it reminds me of what marketing expert Dan Kennedy says, "The worst number in business is one!"

In other words, reliance on just one customer/client, marketing or advertising method, prospect, employee, product/service, skill, etc.

If any problem comes along that wipes out your one whatever, you’re toast, or in deep trouble.

Simple but valuable lesson.
 

nradam123

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Affiliate is good , but it hurts when the campaign you have been working for years gets pulled down in an instant.

Like the case of Flipkart in India.

Hey man, you know me lol. I made your website years ago, how is it going now? I see you have got good traffic in the website going on, very cool. PM me and we can talk in skype.
 
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nradam123

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I got started in affiliate marketing back in late 90's/2000.

There is no control for "most" of the industry.

As an affiliate ( in the most general sense that people think of ), you are the bottom of the totem pole and you always will be.

It's not until you "control the chain" that you can move up. Most affiliate do not do this though.

  • Until you control the payouts
  • Until you control the product(s)
  • Until you control the caps
  • Until you control the scrubs, shaves and lead carrots
  • Until you control the spy tools
  • Until you control the data the network collects
  • Until you can own the traffic
  • Until you control ( a lot of other areas )
You gonna be at the bottom.

I eventually got out of being just an affiliate near 2010.

Now I own my own offer. I own the payout process and the caps. I don't get shaved or scrubbed or deal with lead carrots and people ratting out my traffic sources and pages.

I'm still working on controlling the traffic sources, but Im doing better than ever... and I did very well just being an affiliate when I was one.

Yes you can make a lot of money, but you never know when the "gig is up" if you are "just an affiliate" in the sense everyone thinks of.

.

Hello,

Good to hear from you again. I have checked your threads long time ago.

Anyway, I am also building a SaaS product right now. Its going to help us initially as an internal tool, but I am planning to launch it by end of year to public. We have 3 developers and 1 consultant working on the product apart from me and cofounder. I am super excited about it. Reading through your gold thread on building a successful SaaS company right now.
 
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So now I'm currently transitioning to importing products in bulk and having them stored at a fulfillment center (with the goal of eventually opening up my own warehouse so I can have total control), but once I have these things implemented, I'll be unstoppable. My advertising is top tier, my website design is sleek (and loads lightning quick), the products I sell are unique as hell, and my customer service is second to none. And once I have control over my shipping times and my product quality, well, lets just say money won't be an issue for me anymore.


Hey Aminmo, (asking for advice here..) at what point in dropshipping do you decide when to go into actually buying your own stock and move away from dropshipping?

Since it sounds like you have been doing well for yourself in dropshipping for a few years now...
1) how much reserves have you built up for this transition to happen and
2) how much internal needs (your own dreams and needs like a house or car for example) have been realised before you decided going long-term with your ecomm stores?

I'm currently in the stage of focussing on cash flow for my dropship businesses, but wonder should I save the reserves fully for Long-term transition like buying inventory, or use the first-in cash flow to fulfil my own needs first, then once I have the freedom of time (with a mortgage fully paid off), to start looking into building long-term ecomm stores. Afterall, @MJ DeMarco did also pay off a house fully after he sold his business, and now he has a lot of free time (which to me, is true wealth) to work on more interesting ideas without worrying about rent every month.

Thoughts?
 
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aminmo

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Hey Aminmo, (asking for advice here..) at what point in dropshipping do you decide when to go into actually buying your own stock and move away from dropshipping?

Since it sounds like you have been doing well for yourself in dropshipping for a few years now...
1) how much reserves have you built up for this transition to happen and
2) how much internal needs (your own dreams and needs like a house or car for example) have been realised before you decided going long-term with your ecomm stores?

I'm currently in the stage of focussing on cash flow for my dropship businesses, but wonder should I save the reserves fully for Long-term transition like buying inventory, or use the first-in cash flow to fulfil my own needs first, then once I have the freedom of time (with a mortgage fully paid off), to start looking into building long-term ecomm stores. Afterall, @MJ DeMarco did also pay off a house fully after he sold his business, and now he has a lot of free time (which to me, is true wealth) to work on more interesting ideas without worrying about rent every month.

Thoughts?

Well, the idea of transitioning to buying in bulk and using US-based fulfillment came out of necessity. I think it was around the end of Feb and beginning of March when I started running into supply issues and was getting bombarded with refund requests / complaints via email (I started this business in the beginning of Feb). But since this is the first time I've ever bought products in bulk, it took me quite some time to get everything in motion. I just got my first shipment in today, and I'll be getting another shipment in tomorrow (for a different SKU).

As for your questions:

1) I had a bit of money to play around with, but you honestly don't need much in your reserves for the transition. A lot of suppliers on Alibaba have low MOQs, and many of the top fulfillment centers accomodate new stores that have very little orders (for some of them, you'll have to pay the difference of whatever minimum picking & packing monthly fee they have). For instance, you could start off with importing 50 units, and then reinvest the sales or profits generated from those back into buying more inventory (obviously you'll need to look at your numbers first to see if this is viable). If you're planning on fulfilling from the US, PM me and I can hit you up with recommendations for the fulfillment centers that I've researched.

2) Very little. Like I mentioned, this transition was out of "necessity". Since this current store is my only source of income at the moment (I shut down my other store and put a buncha other stores on hold), I had to either transition or start from scratch again. That said, I've been blessed by being born into a privileged position where I never had to struggle a single day in my life, so I'm in a bit of a unique situation where I don't actually need any of my needs or wants realized (but I am an ambitious person by nature and that's what keeps me going).

Regarding your situation, though, I would recommend you transition to building a long-term brand ASAP. I don't know what type of numbers you're pulling in, but sooner or later, you're gonna get hit with a lot of things that can end up screwing up your entire business in the short-term (if you haven't been hit already). Paypal or Shopify holds / rolling reserves, Facebook ad accounts getting suspended (from low page feedback scores), bad reputations across review sites, etc.

Plus, every sale you get right now (I'm assuming you're dropshipping from China) is a potential long-term customer that losing out on. You're going to get very little repeat business with the long Chinese lead times, and every customer you get now is potentially someone who you could've become a lifelong customer if you were shipping from the US (or domestically where they're located). So the longer you wait to transition, the more money you're leaving on the table.

But once again, everyone has different circumstances in life, so it's best to make your own judgment regarding this. I personally recommend you transition over as soon as you can since not only will it be more beneficial to your business in the short and long term, but it'll also feel incredibly more fulfilling, which means you'll work harder at building a meaningful brand. But if you're in a situation where you can't transition right away, then pay off what you need to pay off first. Just make sure to keep an eye out on all the potential issues you might run into since you may end up having to close down your store before you can even make that transition.
 

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A lot of suppliers on Alibaba have low MOQs
You are almost certainly not buying direct from manufacturers, in which case you would be paying too much.
Plus, every sale you get right now (I'm assuming you're dropshipping from China) is a potential long-term customer that losing out on. You're going to get very little repeat business with the long Chinese lead times, and every customer you get now is potentially someone who you could've become a lifelong customer if you were shipping from the US (or domestically where they're located). So the longer you wait to transition, the more money you're leaving on the table.
This is exactly right. It's not all just about the margins, it is also about building a sustainable business, with continuity of supply and a happy customer base.

Walter
 

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You are almost certainly not buying direct from manufacturers, in which case you would be paying too much.

This is exactly right. It's not all just about the margins, it is also about building a sustainable business, with continuity of supply and a happy customer base.

Walter

Hey, Walter!

First off, I just want to say that your book on importing is INCREDIBLY valuable (worth at least 10x the price I paid), and it was instrumental in getting my new store/brand started.

Regarding the whole supplier and manufacturer thing, that's why I made sure to say "supplier" and not "manufacturer" in my original post. Since suppliers have lower MOQs, they allow people like me (direct-response marketers) to test the waters quickly and see if it's even viable to make a move towards importing and shipping from the US.

Also, in my case, it makes more sense for me to work with a supplier rather than a manufacturer. The reason being, my product is extremely hard to mass produce (it's very unique), so a supplier who has connections with multiple manufacturers (in which case my supplier does) is way more valuable to me than a single manufacturer.

Of course, it would make more sense for me to go and reach out to multiple manufacturers myself, but I'm not too big on the whole communication thing especially with another party who may misunderstand what I'm saying or asking. I'm more of a marketer and my strong suit is generating a crap ton of sales in a very short period of time. So, basically, my long term goal is to work with this supplier to generate enough sales so I can start hiring people who are fluent in both English and Mandarin to do all the sourcing for me (directly from manufacturers) while cutting out the supplier I'm working with. But since I have limited time and resources at the moment, and since I want to put all of my focus on building up my new brand (with another on the way), I think the tradeoff for slightly higher costs is worth it for me. Plus, since my product is so unique, I'm able to charge a very hefty markup, so it's not like I'll be working with slim margins or anything!

But yeah, the sooner I can start sourcing from manufacturers, the better.
 
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The-J

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That video is probably ten years old. Things might have changed, but the control issue still pervades, and as technological oligarchs grow stronger and more dominant, control will continue to be a bigger and bigger challenge for us smaller players. Affiliate marketing or not...

The control issue is a HUGE one, with Amazon, Google, and Facebook being the biggest 'drivers'.

There are people here who run 8 figure companies that would be completely decimated if ONE of these channels were to no longer go their way. You know who you are.

Those three own the Internet's shopping, their questions, and their free time. It makes absolute sense to utilize them. But it's so easy to rely on them solely because they make it so easy. With these companies you get the people you want seeing your offerings. You no longer have to create traffic out of thin air by 'getting the word out'. You can just pay for it. You can optimize your content so that the platforms prioritize it. It's a beautiful thing, as one of the biggest problems of starting a business has largely been solved for you. Best of all, you can measure nearly everything.

Don't forget that you're still at their mercy. Facebook decided that it no longer wanted people posting ads about crypto, and just like that thousands of ICOs turned into absolute nothing (even if they weren't actually scams). Amazon decided that it would release a brand of personal care items that is a near copy of the private label stuff many people sell, and they're selling it cheaper at the same quality. Just like that, market share was taken away from small businesses.

Start your Shopify stores that sell products via Facebook ads. Build a business that distributes products through FBA. Use Google Ads to promote your service. But don't forget the game you're playing.
 

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Thanks for you kind comments about the value of my book.

A number of people who are using it are in a similar position to you. They have a market for a product and they buy through a reseller in China who has given them great service, with a price that still leaves them a very good margin.

So, I was generalizing, but there are exceptions, and I have no problem with helping people who in effect have an immediate market and find it easier to work through a reseller.

When you are ready to look for manufacturers, there can be benefits in using a sourcing agent, although that is something I rarely recommend. The exception in that situation is when you know that the sourcing agent is genuine, doesn't get secret commissions, and really knows what they are doing.

In my 2019 revision I did mention one that I can recommend, having thoroughly researched them over a very long period. You can find them here: https://jingsourcing.com/a/new It is a relatively small Chinese operated business with 50 employees, and they handle assignments for orders of a minimum value of $1,000. They provide exceptional service, assigning one specific sourcing specialist who will handle your project from beginning to end. Sign in without obligation, but it will introduce you to their interesting system.
 

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