7 Reasons Why Entrepreneurs Should Start as Affiliates (Before Making Products)

7 Reasons Why Entrepreneurs Should Become Affiliates

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If you’re here, it’s likely you’re stunned by the “theory” that entrepreneurs should do affiliate marketing. You might think I’ve been brainwashed into thinking affiliate marketing is for everyone, and I’ll admit, it is a funny concept. Here, I’ll explain exactly why entrepreneurs should become affiliates, and I think you’ll relate before the end of this article.

Whether you’re a doctor, lawyer, chiropractor, event planner, real estate investor, inventor, or you simply came up with a great idea, there comes a point in your business startup journey where we all ask, “What do I do next?”. You start in this concept phase where you have excitement about the potential of where your idea can take you, but the execution is a little fuzzy.

I’m sure you know what I mean. You’ve experienced this yourself, or you know someone whose spun up an entrepreneurial idea, and had this experience.

What Most People Do in the Concept PhaseA young man brainstorming his business idea

At this point in the entrepreneurial journey, I’ve seen many people who enter the concept phase and let the excitement direct them to begin building their client fulfillment process. If it’s a service-based business, they may begin by purchasing everything they’d need to perform the service. For example, a person who wants to start a construction company might begin by purchasing saws, hammers, drills, nails, and so on.

If it’s a product based business, they might begin by spending time on product development: the prototype, the trademark, copyright, or patent, they might be getting focus groups, and so on. They might get a 3d model, begin talking to manufacturers, or work with intellectual lawyers on protecting their idea.

The E-Myth Tragedy

The problem is they can literally spend hundreds of thousands of dollars on the client fulfullment process! Sometimes, they can spend years and years designing and tweaking to make the “best” product or service (especially if they’re perfectionists).

They won’t balance this time where they’re “doing the work” of the business with time they’re acquiring the work for the business (telling people about the business, getting more customers, and getting sales). This problem is what Michael Gerber calls the “E-Myth”. People assume that because they’d be good at creating the product or delivering the service, they’d be great entrepreneurs, and they dash off into being technicians. As a result, they can end with a well-made and expensive product or service, but no one to buy it.

This is a tragedy. This tragedy has caused many well made products and services in the world to never reach the end user it was designed for.

You’re here because I want to warn you and eliminate this tragedy from happening to you. I want to challenge you to consider affiliate marketing as the first step in your entrepreneurial journey rather than going into product development or service design, and I’ll be explaining why here.

What is Affiliate Marketing?

Affiliate Marketing is composed of three parts: the affiliate (you), the tracking software or affiliate network, and the merchant (the company delivering the product or service). As an affiliate, you build an audience of people with common interests, you help them solve problems they might have by recommending solutions sold by the merchant. In this way, you create a win-win scenario where the end user has a problem solved, you get paid a commission, and the merchant gets sales also.

Two Neat Affiliate Marketing Stories

These are two neat stories of startup entrepreneurs: their success and their failure. They show how affiliate marketing can benefit the entrepreneurial journey.

Alex Nerney and Lauren McManus

Alex and Lauren failed first. They did exactly as I described above. They came up with their idea to create a health and wellness website and create products in the niche. They’d invested lots of time into creating their first product, but when they “launched” it, they heard crickets.

They didn’t have a large enough audience of people that knew, liked, and trusted their advice, so they had no buyers. From then, they learned that affiliate marketing might be a good place to “test” product ideas, see if they could sell similar products by other people, then use the revenue from their affiliate commissions to create their own products and services.

It worked! After their first failure, they turned around and created their business Avacadu and made more than $100,000+ in their first year! Now, they teach others how to build online business and they recommend affiliate marketing as a way to “test” product ideas as they did. They currently make $100,000+ in monthly income, and generate majority of their income from their own products. You can learn more about them in my review here.

Michelle Schroeder Gardner

Michelle was a financial analyst with lots of debt from school loans. She had a “high-paying job”, but her debt was weighing her down. She decided to aggressively pay off the debt and share her debt payoff journey on a blog.

Over time, she learned how to monetize the blog with affiliate marketing, and her income grew. She made over $100,000/month in affiliate income and sponsorships when she decided to create products based on the demand she’s observed from her audience. Now, she’s launched two of her own products and still recommends the affiliate products as well. Even after creating her own products, she still has more than 60% of her monthly earnings comes from affiliate marketing. You can learn more about her in my review here.

Affiliate Marketing as a Phase vs. Permanent Income Stream

Alex and Lauren still recommend products and services as affiliates, but they’ve decided to focus majority of their effort on selling their own products and providing backend support. In contrast, Michelle still makes significantly more from affiliate products than she does from other income streams.

This shows that it’s possible to skew either way. You could decide to stay largely focused on affiliate marketing, or you can decide to refocus on your own products and services after affiliate marketing proves the concept is viable for you.

How Would it Fit into the Concept Phase of the Entrepreneurial Journey?A group of entrepreneurs brainstorming their business ideas

Instead of diving into service design or product development which could take lots of money and time, you’d first start by finding a product or service that’s complimentary to what you plan to make and begin selling that.

1. It Starts a Flow of Revenue Faster

As a result of starting with affiliate marketing, you’d be able to start getting revenue into your business faster. The product is already created, and the service is already designed, so all you’d need to do is introduce that service to people who would need it.

The revenue from your commissions can be reinvested into creating your own product or service–this would make your business self-sustained much earlier.

2. It Helps with Validating the Idea

Selling the product or service will help you feel more confident that you can sell your own product and service once you decide to, it’ll also give you the chance to see how often refunds or customer service might be needed, and it can finalize your idea validation process by identifying the idea is something you can do and something you’d enjoy.

3. It Helps to Build the Sales Skills

Affiliate marketing is the evolution of the salesforce. In previous decades, you’d need to learn door-to-door, cold calling, or live sales to sell your product or service, but the industry is really changing. Now, buyers make more of their buying decisions online, so if you decide to start a business, it’s important for you to learn how to engage potential buyers using the internet.

While you’re studying affiliate marketing, you’ll be learning things like:

  • How to attract potential customers
  • Buyer psychology
  • Copywriting
  • Internet marketing (social media marketing, search engine optimization, paid ads, etc.)
  • How to persuade
  • and other things

The skills you learn from affiliate marketing can be taken and applied to selling your own products and services!

4. It Saves Money from Creating Products and Services that Won’t Work

Many entrepreneurs fail several times before succeeding. You might find the original idea:

  • Wouldn’t solve the problems in the market
  • Wouldn’t be enjoyable for you
  • You can’t sell it (for whatever reason)
  • It wouldn’t make the money to cover your lifestyle
  • Or maybe, it just needs extra thinking thru

Customers of the existing product are likely to disclose their problems with what’s available in the market, and as an affiliate, you can use this insight to make yours the best it can be. It’s best learning these lessons without spending lots of time and money. If you can try selling a comparable product and identify the problems there, it can save you from wasting time and money of your own.

5. It Builds Relationships within your Niche

When you decide to become an affiliate, you’ll have to meet people, buyers and merchants, in the industry. When you start making good sales for a merchant, they take notice of you, and many have incentives for affiliates who really help them to get more sales.

On the other side, you’ll build trust and credibility within your niche where people will come to you for solutions within your industry. The clout that you build as an affiliate can transfer well into your own product and service launches.

6. It can help to build a Relevant Audience before Product Launches

If people are already aware that you’re knowledgeable within a certain area, they’ll be attracted to you for advice there. This momentum that you build as an affiliate with an audience can hugely propel you when you create your own products and services.

7. It Helps You to Better understand the Market Demands

As an affiliate, you’ll need to be empathetic towards your audience, identify their pain points, and learn to present relevant solutions. Over time, you get better and better at relating and solving problems. This awareness of what’s causing obstacles and pain can help you to add features and benefits into your products and services you might not have thought of.

Conclusion

While many people go head first into product development and service design, I think this article can help you see why affiliate marketing could be the perfect first step. Where product development and service design might take you lots of time and money, affiliate marketing can expedite your access to revenue, build your audience, and help build your skills for product and service launches.

Some of the most successful companies in the world have learned to test their ideas with partnerships before launching products and services of their own, and I hope you decide to apply this principle as well. To begin your journey with affiliate marketing and get my Business Growth Framework e-course, get started here.

You’ll get my free e-course, 10 lessons on affiliate marketing, access to a community of 1.4 million+ entrepreneurs (who are learning affiliate marketing), and 7 days of 1-on-1 coaching for free. Get started here.

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8 thoughts on “7 Reasons Why Entrepreneurs Should Start as Affiliates (Before Making Products)”

  1. Oh! This has come so much in handy and just at the right ment. Definitely, it is advisable to go for affiliate marketing before becoming a fulltime entrepreneur that create products to sell. Going by what I read in this post, it makes a lot of sense trying to gain an audience and selling other peoples products first so as to know what the people in such niche needs as this would give a better idea as to how to restructure or tweak the product one would create to suit all the needs of the people. My sister is about to start creating organic products for skin but I will suggest this post to her maybe she would have a rethink before going head first at it. Thanks

    1. It sounds like you understand exactly what I was writing about Ramos! I hope the article helps your sister out.

  2. This is a very smart Idea. I am doing affiliate marketing now and I can see how it is preparing me to be able to promote my own products when I make those. If I did not do affiliate marketing first, then I might not know how to actually promote my products, get found on search engines, and everything like that.

    I think both of your stories in the middle there are great because both of the people end up making $100,000. That would definitely be one of my goals. I can relate to the person who wants to pay off their student loans.

    everything you said here is really great. I’m glad that I’m doing wealthy affiliate because it’s helping me get started with affiliate marketing.

    1. Hahaha. I didn’t realize both of the stories had people who reached $100,000+–that wasn’t intentional. Thanks for sharing your story with affiliate marketing! I agree it’s great preparation for launching your own products and services.

  3. This is a very interesting take on affiliate marketing as step one for entrepreneurship. It’s definitely a good idea to test and validate business ideas for feasability, and often times even when there is a good product behind a business, it will still need to be marketed to the right audience to be profitable. Good to get practice in a low cost environment before scaling it up to the masses.

    1. I agree Aly! It’s vital to validate the idea would work for you AND you are effective at reaching the market for it. Otherwise, even good products can be unprofitable.

  4. A very informative article. I agree with the concept of starting out as an affiliate before creating a product to start your business. I think this looks way easier to start with, where you can follow someone who has already paved the way for you to follow to make an income. I can see that this will take less time to make an income.

    Starting out with your own product will be more time consuming and you will really have to know what you are doing to get the business up and running smoothly. Not to speak about getting people to buy your product. This will be a hard task especially if they don’t like the product.

    I think being an Affiliate is the easiest way to begin. You can sell other people’s products, it saves you time and money from making your own products, and you start making money faster. I would go for being an affiliate at any time.

    1. I completely agree Delores! When you start as an affiliate, you cut your time to enter the market by more than half. You can start producing income faster and reinvest into your own products. It’s a great funding option.

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