Is Passive Income Just a Pipe Dream?

Whenever you land on any make money online, internet marketing, or affiliate marketing site trying to sell you something, you’re usually going to get fed a bunch of hype about the “laptop lifestyle” and “passive income" dreams.

Unfortunately, a lot of unscrupulous copywriters and marketers have made millions of dollars by selling people a dream, but refusing to back up the claims that they made in their sales letters and advertisements.

As the years have passed, people have become leery of the “passive income lifestyle” because of all the hype and misleading claims.

A majority of those people have written it off as a dream, and refuse to entertain the thought of being able to legitimately make money from anywhere in the world, and truly control the amount of money that you make.

There’s nothing wrong with those people.

If you’re constantly fed hype and lies about products trying to sell you on the laptop lifestyle, you’re going to become jaded. That’s easy to understand.

What’s hard to understand, though, is how so many people have completely written off making money online or building an affiliate marketing business as a pipe dream. 

Even though some copywriters and marketers have tainted the industry with their sales messages and advertising, making huge claims that they can’t back up, affiliate marketing is still a viable business model.

When you take the time to understand how the industry works, and how you can actually build a business around affiliate marketing, you can start to work through some of the hype you’ve read and been conditioned to ignore.

By getting past the hype, and realizing that there is actually work involved (like building any type of business) and that you can get rich, but it’s not going to happen overnight, you’ll start to realize the power that affiliate marketing has.

Overnight success

It is one of the simplest, and most cost-effective business models you can pursue, but it doesn’t necessarily mean that becoming successful as an affiliate marketer is easy.

Before buying some program that is guaranteeing you to become an overnight millionaire, while only working 10 minutes a day, stop yourself.

Then spend some time learning about the affiliate marketing industry itself, and how so many people are building real businesses around the model.

When you do, you’ll start to realize your dreams are possible, as long as you’re willing to work to achieve them, and give yourself some time to learn the process.

The Principles Are Sound

Affiliate marketing isn’t really different than any other type of business, at the core of the model.

The main difference is that the business is built around a website, instead of a brick and mortar business. This aspect is what makes affiliate marketing so lucrative, because you’re not limited to your local market, and can reach new customers from all around the world.

Stop and think about how brick and mortar businesses actually work.

They buy products at a low price, and then resell them at a higher price in order to turn a profit and keep their doors open from month, to month and continue paying their employees.

They typically have a sales team or customer service representatives who help them sell those products to customers that walk through the door or call them on the phone. Most times, they’ll have a website to help them sell the products, too.

Their business model revolves around them selling products for a profit and usually paying their sales team a commission. The more products they sell, the more money they make.

Except, most times, those businesses are limited to selling only to the people in their local area.

Amazon changes that, and makes it possible to sell to people from all around the world.

They also make it easy for people to build a business around their model, without having to take the financial risk of sourcing the products they’re selling.

By becoming a part of Amazon’s sales team, you can collect commissions on products you’re selling, and never have to touch the inventory yourself.

Since it’s all based off the internet, you have access to a huge market (the entire world) and can control your income by getting your website in front of more people than you would if you were working for your local brick and mortar store.

When you think about it like that, Amazon is a digital brick and mortar store, and their affiliates are their sales team.

Brick and mortar business going online

As time progresses, and you begin seeing success from the effort you’re putting into promoting products through Amazon’s Associates (affiliate) program, you’ll end up collecting data that will allow you to eventually become your own digital brick and mortar business, and continue scaling your income even more than what you can achieve solely as an affiliate.

I hope that makes sense.

In essence, you’re becoming a part of Amazon’s sales teams, and using a website to make sales instead of having to buy or lease a brick and mortar building, purchase inventory, hire employees, and do everything else that comes along with running a business.

You get to sidestep all of that hard work by becoming an affiliate and building a website.

As an affiliate marketer in Amazon’s Associates program (or any other affiliate program), all you have to do is promote their products, and get paid

You don’t have to deal with customers, inventory management, accounting, or anything else that tends to bog down most traditional businesses.

The best part about being an affiliate marketer is that you can build a website from any laptop, which actually opens the door to you working on building your business wherever in the world you’re currently located.

There is work involved, though.

Just like any other business, you have to put in the time and energy to become successful, but the sky is truly the limit. The more you’re willing to work, the more money you’re going to end up making.

That’s the beauty of affiliate marketing.

Your average Joe can become a millionaire using the internet, and they don’t have to reinvent the wheel because the principles have already been proven by brick and mortar businesses, and the Amazon Associates program is one of (if not the) largest affiliate networks still operating today.

I’ll repeat it again, though, you do still have to put in the work to succeed. There’s no free ride in business, and affiliate marketing is no different.

What To Expect In Your First 12 Months

Knowing what you’re getting yourself into before you start is half the battle.

When you know what to expect as the months pass, you’ll be prepared to tackle the obstacles facing you head on, and keep from getting frustrated because results aren’t coming quick enough.

Affiliate marketers typically depend on the major search engines (read: Google) to drive traffic to their websites, and for good reasons.

Imagine, for a second, that you’re selling dog collars on your website.

Which scenario is going to be easier?

  • Tracking down every place on the internet you think people who would be interested in purchasing a dog collar spend their time, and then getting your offers in front of them while they are actually in the mood to buy one? Or trying to convince them that they need the collar you’re selling?
  • Or sitting back and waiting on the search engines to send traffic to your website, from people who have specifically typed in “best dog collar for great danes” and are already in the mood to buy, just looking for a recommendation of which collar to purchase?

In the first scenario, you’re going to have to keep putting in the work to continue driving traffic to your website, while the second scenario sends traffic to your website 24 hours a day, 7 days per week.

I’m not a betting man, but if I had to guess, I’m going to assume you’re fairly smart and can see why search engine traffic is so popular among affiliate marketers.

Organic traffic from an affiliate site

Here're the traffic stats for one of my own affiliate sites

Relying on the search engines for traffic does have its downfalls, though, and one of the major downfalls is why so many marketers tend to bail out on the business model just before they start seeing success.

That downfall is what’s typically referred to as the “sandbox”.

If you’ve never heard the term, or are unfamiliar with what the sandbox is, here’s a link that explains the theory in great detail.

In short, it’s built to keep people from being able to manipulate the search results, but has a dual function of causing people to bail out and think that the business model (especially relying on search engine traffic) is hogwash and a scam.

If you’re able to push through the standard waiting period that major search engines will put your site through (usually 3-5 months), the end result is pretty astonishing (without trying to hype it up!) and consistently blows our mind for what we personally believe is possible.

Success of one of our clients

Here're the stats from one of our clients. He purchased our Custom Premium affiliate site with ongoing SEO in February '16

Months 1 to 3

If you’re not a very technical person, have never built a website, or haven’t attempted to go into business for yourself before, the first 3 months of your life as an affiliate marketer can be some of the most frustrating you’ll ever experience.

You’re going to need to learn new technical aspects, gain an understanding of how the business works, get your website built and put together while making sure it still functions properly, and then constantly fight to keep yourself motivated to see through the process you’ve started.

Most new affiliate marketers bail during the first 3 months because of how hard the mental aspects of getting into the industry are.

There is no real way to shorten this learning curve, except being a technical minded person, or having experience building websites, and then you still have to conquer the mental aspects of keeping yourself motivated when results are so few and far between.

During the first 3 months, you should work on embracing the fact that your website is coming together, and always remind yourself of the potential it has.

Do this instead of focusing on the income you’re not making, and your life will be a lot less frustrating during your first 90 days.

Months 4 to 6

This is where life starts to become interesting.

During months 4 to 6 as an affiliate marketer, you’re going to start seeing income, and traffic to your website will continue to increase.

You still need to continue focusing on learning how to properly promote the site and create content that your visitors are going to want to see.

For the most part, the mental aspect of pushing through the obstacles you faced in the beginning has become easier, because you’ve become more accustomed to the business model as a whole.

However, you will still have new obstacles to face.

The worst thing you can do at this point in the game is to look back at all the work you’ve already accomplished and realize how hard it really was, then think about how much work you still have left to do.

It’s best to work on your website a little bit every day, consistently promoting it on other websites so that you can get new links (and traffic) coming in and keep up the momentum that you’ve already built up.

If you’ve made it through the first 3 months, and have started seeing money come in, you’ve already made it past a majority of affiliate marketers that have thrown in the towel and gave up.

Keep pushing forward, reminding yourself of what to come, and keep repeating the process -- creating content, and promoting that content.

Months 7 to 9

The 3rd quarter during your first year of business is typically uneventful.

You will need to keep working on promoting your website and creating content, but traffic is going to continue climbing so you will start accumulating data to base your decisions off of instead of relying solely on your intuition (which you may still be lacking confidence in).

During the previous 6 months, you will have spent more time working on your own motivation and conquering the mental roadblocks standing in your way, where months 7 to 9 are going to test your creativity.

Using the data that you’ve collected over the previous 6 months, you’ll be able to figure out which pages on your site are earning the most money, and start looking into ways to improve the income of those pages.

Your major goal for the 3rd quarter should be increasing your conversion rates, and figuring out how to earn more from the traffic that you’re already getting.

The work you do during this period will dramatically pay off once you pass the 12-month mark, and the major search engines start truly rewarding you for all of your hard work up to this point.

Months 10 to 12

If you’ve made it to month 10, you need to congratulate yourself.

90% of affiliate marketers that attempt to build a business around Amazon’s Associates program bail out long before they get to this point, which is pretty sad.

By month 10, income should be coming in, you should have a decent amount of traffic coming into the site from all of the promotion you’ve done so far, and you should have a solid foundation of content that’s been tweaked to increase your conversion rates.

You will still need to focus on creating new content, targeting new keywords, and finding new ways to interact with your visitors and continue promoting your website, but you’re preparing yourself for a huge break once you get past the 12 month mark.

Keep pushing forward, because at 12 months, something truly dramatic happens.

It’s almost as if the search engines release you from their icy clutches, and allow you to start ranking for all of those keywords that you’ve been targeting for the last year, and open the flood gates of traffic (and income) to your site.

Here is a great post that shows you the results of sticking with your website and what happens after it passes the 1 year old mark, and you’ve finally gained the trust of the major search engines.

Year 1 organic traffic boost

The “Sandbox” Is Real

Knowing what to expect is only half the battle, unfortunately.

We can teach you about the sandbox until we’re blue in the face, but until you experience it, continue pushing through and building your website when results are so few and far between, and then realize what happens after 12 months, you’ll never have a true understanding of the possibilities.

Google Sandbox effect

There are ways that you can avoid the sandbox and still drive traffic to your website during the first 2 to 6 months, though, along with common errors that people make that practically guarantee they’re going to sit in the sandbox until the first year is through.

Here is a post from the Ahrefs blog that breaks down the sandbox into even more detail, and outlines a few different strategies you can use to help ensure your site spends the least amount of time as possible in Google’s “purgatory”.

If you’ve followed what I’ve laid out for you here, you shouldn’t have many issues with the sandbox, but knowing it exists will help keep you from getting as frustrated if results don’t happen as quickly as you think they should.

Google uses a two-part process to determine how trustworthy your site is, and it’s primarily based off of signals coming into your site from other sites that they already trust and have an established history with.

First, you need to gain links from authoritative and niche relevant websites.

By promoting your website using the strategies we’ve given you in the previous post (blog commenting, forum participation, and guest blogging), these links will come in at a natural pace.

Next, you need to grab some social shares to validate the links you’ve created.

In our previous post, we also showed you a bunch of different “social” websites that you can use to create profiles and start gathering the social signals your site needs to be trusted in the eyes of the search engines.

There’s a reason you need both, if you want to avoid the sandbox.

Google knows that spammers use links to manipulate their search results. Google has also figured out that most spammers cannot generate the “social proof” (ie: likes and shares) required to back up those links.

When your website has a bunch of links pointing to it, but people aren’t talking about it on social media, they can safely assume that you’re trying to manipulate the search results.

However, if you have both in place, their algorithms start to place trust in the fact that your site has new links coming in, because people are also talking about it, sharing it, and liking it on social media platforms.

If you get both aspects in place, you will have a much shorter stay in Google’s “purgatory”, and start to enjoy the fruits of your labor sooner.

Scaling Into The Future

As your site evolves, though, and you break through the 12 month mark to start seeing real income, you may want to scale it even further.

There’s 2 different ways you can scale your income as an affiliate marketer.

You can either start a brand new website, or you can use the data you’ve collected to start sourcing your own products to sell.

Starting a new website (or 2, or 3) is a great way to repeat the process and ensure you know what you’re doing so you can strengthen the skills you’ve already developed.

Too many side projects

Make sure that you don't abandon your project just so you can start another one.

However, building a completely new website yourself can be tedious and frustrating, because you’ve already spent the last year working through that process.

One of the best ways to scale an affiliate marketing website that’s been built around Amazon’s Associates program is to start sourcing products and begin selling it yourself.

Since you have at least 12 months of data to back up your decisions, you already know which products are selling well, so a majority of the work has already been done for you.

When you convert from Associates to the Fulfillment by Amazon program, you can effectively increase your profit margins from 8% (for affiliate commissions) to more than 30% (for buying low and selling high).

If you prefer to stay on the affiliate marketing side of the industry, you can also begin using the earnings from your first site to start putting a team together that can either help you scale your existing site, or put in the work required to build out new websites for you.

Whichever route you choose is entirely up to you.

Once you hit the 12 month mark, though, doors begin to open, and you’ll have a much easier time moving forward than you did getting to this point.

You Don’t Have To Go At It Alone

We can help.

In fact, we help both affiliate marketers and FBA business owners every day. It’s what we do best.

Whether you’re looking to build your first Associates based website, looking to scale into Fulfillment by Amazon, or looking to build out your portfolio of websites without having to spend time putting a team together, we can help you every step of the way.

If you want to shorten your learning curve and keep from having to learn every technical aspect of building the site out yourself, and rely on the years of experience we’ve gathered by making mistakes ourselves and learning from them, we have options available for you.

The newest addition to our business are pre-made turnkey websites that are ready for you to take over and start growing into a thriving and successful affiliate marketing or FBA business.

We can’t guarantee your success, because that’s determined by how well you can keep yourself motivated, but we can tell you that we have a 96% success rate over the past 8 years, and have helped countless entrepreneurs begin living their dream.

Turnkey and Custom websites are the best way to dramatically shorten your learning curve and help you get straight down to business without having to go through all of the heartache and frustrations that making mistakes on your own (and learning from those experiences) brings you.

5 thoughts on “Is Passive Income Just a Pipe Dream?”

  1. Hi Andrew. Thank you for this very motivational article. I am just getting into affiliate marketing, so your advice will be very beneficial as I move forward.

    I have set up my website (no content yet except for a “coming soon” post) and am in process of registering an LLC, which I’ll transfer the site to. I’m also drafting several articles, terms of use, and a privacy policy. I have a question, though, that’s not directly related to your post topic:

    Do you recommend new affiliate marketers purchase cyber risk or blogging policies to protect against liability should the website get hacked and readers’ emails are stolen or malware infects readers’ computers? If so, could you share what amount of expense such policies would cost?

    Thanks again for the helpful information!

  2. Hi Charles,

    thanks for stopping by. I never really did any of that during my affiliate marketing career (8+ years), so I can’t give you any concrete advice on the topic. I’m pretty sure that you can simply add those policies (or just parts of them) to your standard Privacy Policy and you should be set.

  3. Hi Andrew. Great post. Having spent a few months performing due diligence on various done-for-you providers and internet marketing educators, its so refreshing to be dealing with you/ and getting a realistic view of the ecom / affiliate mktg world.
    While so many are pitching for quick and unsustainable wins, you will continue to appeal to people like me who want to partner with you over many years to help each other grow our respective businesses.
    I look forward to being the growth example that you use in the post you write in 12 months time from now.

  4. Hey Bernard,

    thanks for your kind words. I’m not a big fan of hyping things up just to make a quick sale. Managing expectations is probably the most important segment of any successful (affiliate) business, and that’s something I’m emphasizing on a daily basis.

    That said, I’m pretty sure you’ll be featured in one of our case studies 12(ish) months from now 🙂

  5. Really Encouraging post, because its really easy to give up.A post like this will keep me motivated abd now I realize you need full 12 months to start seeing your efforts pay off hopefully.Great Artice!

Leave a Comment