For about 6 weeks in November and December of 2023, my primary project was a website called MySolarBudget.com.
The idea was simple: when I wanted to get my head around solar battery sizing and power budgeting for an off grid solar installation, most of the Google results were shitty content marketing operations. But for something like this, you really want a tool, not wall of text. There were a few decent ones embedded in the shitty content, but I thought I could do better, so I built one. It landed somewhere on page two of the Google results after performing the type of non-nefarious, user-centric SEO optimization that Google recommends, and I realized that there were actually a few other decent calculators ranked similarly poorly, because Google Search apparently only likes verbose, wordy pages and doesn’t like simple tools, or things that aren’t covered in banner ad space that they happen to sell.
Not to be deterred, I decided it would be worth running some search ads to see if I could drive traffic to the calculator and pay for the ads with affiliate commissions. The margins might be tight, but affiliate commissions, typically 5-6% of the sale value, went as high as $600 for some of the larger home-scale off grid kits, so I thought it’d be worth a try. Plus I’d get to learn how to run ads which I naively thought would be a useful skill and I’d already invested a week or two in building the tool.
When I started signing up for affiliate programs, things started to smell funny. Most affiliate marketing goes through marketplaces that do the tracking, and these marketplaces try to pull you into the platform to market whatever other random stuff they have, as well as their own platforms. The big ones I saw were Impact, ShareASale and Clickbank.
Clickbank seemed especially sketchy, because it did this weird thing where they actually charged you for having an inactive account - like they were charging you for failing to make money on their platform. If they were actually making any money on affiliate marketing commissions, why would they want to do this? I didn’t wind up using their platform at all for this reason, but I got far enough into poking that they got my email address and I started to get some amazing emails from them with subject lines like “College Drop Out Buys New Audi Thanks to ‘Perfect Storm’ Method”, “Mom of 4 Makes $5M+ as an Affiliate???” and “[GROUNDBREAKING] For New Affiliates…” which, if you click through to the email, refers to “Something that you could use as soon as tomorrow to start earning up to $684/day…”.
Impact and ShareASale had their problems but they at least don’t seem like they are MLMs. I found a few solar kit merchant programs and signed up.
Then I spent around $550 on Google Ads, had 205 clicks through to the affiliates, and based on the published conversion rates of around 2% for most of the affiliates I was working with, this should have translated to about 4 purchases. But I got zero. I kept it up for just long enough to believe that this wasn’t just a statistical anomaly and then promptly pulled the plug on the whole operation. If the conversion rate for the clicks I sent through to the merchants was actually 2%, the odds of zero purchases on 205 visits is about 1.5%. If the true conversion rate were anything close to 2%, I might have had a profitable operation, but alas, it wasn’t.
So does this mean the merchants and marketplaces are lying about their conversion rates? Not necessarily… it probably means that the clicks I was sending through were significantly less likely to buy than other clicks. It seems most affiliate marketing is geared towards content marketers or influencers who might be making some kind of product endorsement.
I still felt a bit played by the whole experience of spending the time to build this thing out and spending the money on Ads. Get-rich-quick content that seems like a big part of the affiliate marketing ecosystem, not just in the Clickbank emails, but also in almost anything that came up while I was Googling practical things about how to accomplish certain tasks in Google Ads or ShareASale, and I feel like I fell for that.
What’s a little strange to me is that, unlike most get-rich-quick content that exists around day trading, crypto and MLMs, affiliate marketing is not zero sum (except maybe Clickbank, which seems to function like an MLM), so there should be a way to make the business model work. Like it does seem like there’s a role to be played for marketers who don’t want to operate their own stores but are good at getting the word out about products. But that said, it seems there’s significant friction to making this work. For one, the tracking isn’t perfect, and maybe some of those 205 people went on to make untracked purchases on other devices that I didn’t collect a commission on. Also, the commissions aren’t high enough to justify much ad spend - margins would have been tight and it seems most people in the affiliate marketing space are trying to monetize an existing audience, not create a new one. So I’m not saying these businesses can’t be built, I’m just saying that you’ve probably heard a lot more from people who’ve built them and want to collect more affiliate commissions from recommending you to their affiliate marketing platform than those who tried and failed to build one of these businesses.
If I wanted to pursue this further, I’d probably try to open up an online storefront and find a drop shipper to capture higher commissions (functionally what drop shipping is) and not have to worry about imperfect tracking, but I decided I didn’t want to keep chasing a mirage and moved on to a new business that I’ll discuss in my next post.