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2008-01-26

How To Build Your Product Portfolio

Whether you’re a “newbie” or an experienced affiliate marketer, I’d like to start by asking
you a simple question:
How many affiliate products are you marketing right now?
If your answer is that you’re trying one or two affiliate products, waiting to see if they’re
lucrative, and dumping them to move on to the next few if they’re not, then that’s the
wrong answer. Small portfolios with high turnover won’t generate income unless you’re
very lucky.
This method of product promotion is one of the biggest mistakes most newbies – and
even some of the experienced affiliate marketers – make. They’re managing their
portfolios like zombies, doing the same things over and over.

Unless you’re creating and promoting your own, original product, the best strategy is
usually finding and following the affiliate guru who is promoting a particular product and
earning more than $300/per day, and using their methods. Unfortunately, the super
affiliates won’t part with their secrets and share their success.

let me first clear up some
of the misconceptions about portfolio management. I’d like to also offer some advice
regarding the selection of affiliate products.

You should always have at least five to ten affiliate products in your portfolio. Your
portfolio should be in a dynamic phase. It should change constantly. Whenever you find
a good product, add it to your portfolio. Similarly, whenever you find that a particular
product has sold well but the demand for it is decreasing steadily, remove that product
from your portfolio. If you love your portfolio as it is, then you’re destined to never make
any significant money with it. Constantly watch the performance of all of the products in
your portfolio and don’t hesitate to add or remove products as necessary.

Selecting Your Products
Most affiliates start hunting for products in Clickbank. It’s a good place to start, because
Clickbank presents product data very systematically. There are 5 variables attached to
every single product: $/sale, Total $/sale, %/sale, %refd, and gravity. Many affiliates
think that the products with high gravity are always the best product to start with. That
couldn’t be further from the truth.
Let’s say you want to promote a “forex” product. Browse the marketplace using “forex”
as a keyword, and you’ll get the following results, with different variables attached to
every product:




Here’s what the product variables mean, according to Clickbank:
Dollars Per Sale ($/sale). The average net amount earned per affiliate per
actual referred sale (affected by refunds, charge backs, and sales taxes, but not
unfunded sales like returned checks).
Total Dollars Per Sale (Total $/sale). The sum of all initial sales and re-bills
divided by the number of initial sales.
Commission Per Sale (%/sale). The average percentage commission earned
per affiliate per referred sale; this number will not vary unless the publisher
changes the payout percentage over time.
Referred Percentage (%refd). The percentage of the publisher’s total sales that
are referred by affiliates.
Gravity (grav). The number of distinct affiliates who earned a commission by
referring a paying customer to the publisher’s products (weighted, not actual).
All of the factors are combined and adjusted so that more recent sales activity is given
greater weight.
To improve their marketplace ranking, products must show a history of reliably
converting referred traffic to paying customers over the previous eight weeks. Products
that maintain a higher ranking naturally attract more affiliates, and thus make more
sales overall.
If you select a product considering only one of these factors, then you won’t get the true
picture of that particular product in the marketplace. Let’s use our previous example,
where we typed “forex” in the keyword box and sorted the database to show the
products with the highest gravity.
The product that came up at the top of the list is Forex Trading Machine. Looks pretty
good, doesn’t it? But if you select this product for your portfolio, then you’re making a
big mistake. I’ll show you why, and explain how you can find out about these products
that may look good on the surface, but which won’t hold up your portfolio in the end.

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