What Is Affiliate Marketing? The 3 Profit Activators

What Is Affiliate Marketing? And How Does It Work?

What is affiliate marketing and how does it work is one of the most common questions people ask.  Affiliate marketing is where you promote someone else’s product/software and you are paid whenever a sale is made. This does not increase the price to the customer. The product creator usually has excellent copy and sales material for you to use. The more sales you make the more money they make. It is in their best interest to help you be successful. In a nutshell, you are connecting the product owner with your network of customers.

There is low ticket affiliate marketing meaning the price of the product is typically under $100. There is high ticket affiliate marketing which has products starting at $1000 and up. With high ticket affiliate marketing, the high ticket item is usually on the back end. The sales process starts with a lower priced item.

Before you get into affiliate marketing or any business for that matter you want to make sure that you will be profitable and that it will be worth your time and energy. One of my mentors, Dave Sharpe wrote an article on how to become an affiliate marketer.

Jay Abraham said that in order to increase your profit (know if the business you are looking at will make you money) the following three things should be met. He called these profit activators.

The three profit activators are:

1: Get more customers. It goes without saying that if you have more customers buying your product you will make more money.

2: Do repeat business with the same customers. You already have someone who likes your product if you can sell them more then you will make more money.

3: Sell high ticket products. If you have a high ticket product that you sell then your profit margin will be higher.

So when you are looking at a business there should be a checkmark by all three of these before you decide to proceed.

Let’s look at some of the other business models out there and see if they meet the three profit activator requirements.

Real Estate Flipping:

You can sell more houses to more customers — YES to #1.

Once you sell a house typically you are not selling another house to the same customer — NO to #2

You can definitely sell higher-priced houses (high ticket) — YES to #3.

Brick And Mortar Business:

Can you get more customers in the door — YES to #1

You can definitely sell more product to the same customer — YES to #2

Can you sell a high ticket product? Typically the answer to #3 is NO. The reason for that is that it is too difficult to compete with the big box stores. They purchase in such large quantities that they are able to keep the price down.

Low Ticket Affiliate Marketing:

Are you able to sell to more customers — YES to #1

Can you sell more product to the same customer, do repeat business — YES to #2

Sell higher priced products. — NO to #3. Since it is a low ticket affiliate offer there is no high ticket item to sell from that product owner.

High Ticket Affiliate Marketing:

Are you able to sell to more customers — YES to #1

Is it possible to sell more product to the same customer — YES to #2

Can you sell high ticket items — YES to #3. Because this is a high ticket affiliate product you can scale and sell the high ticket item. With high ticket affiliate marketing, there is a lower-priced item at the front. This gets people in the door. They can check out the product and the company and make sure that it aligns with them. As they get value and training they can decide if they want to move up the value ladder (I wrote another article about value ladders which you can read here) and purchase more products.

So high ticket affiliate marketing meets all three of the profit activators. Click here if you would like to find out more about the program that I am using that meets all three of the profit activators.

I also created a YouTube video that explains what affiliate marketing is and how it works.

You can watch that here:

Make sure you subscribe to my channel and hit that notification bell to get updated on whenever I release a new video.  You can subscribe to my channel here:  https://dldonaldson.com/YTChannel

* If you purchase anything through a link in this article, you should assume that I have an affiliate relationship with the company providing the product or service that you purchase, and that I’ll be compensated in some small way at no extra cost to you.