How Much Money Do I Need To Start Affiliate Marketing?

Today I’m gonna answer one of the most common questions I get about affiliate marketing.

Hey Malan! I want to get into the affiliate marketing game. How much money do I need to get started?

I used to answer by just saying: “The more the better”.

While this answer is 100% true, it doesn’t provide any real guidance for someone who is brand new and lost about how to get started.

So today, I’m going to share a better answer and then break it down the reasons why, based on my personal experience.

Ready? Here we go.

Short Version: You need at least $3000.
*There are a few caveats, read below.

My Experience

I only give answers based on my personal experience. So to begin, I’m going to tell you the true story that I am getting the $3000 number from.

When I started affiliate marketing I had a life savings of $15,000.

This was money I’d saved from my full time job and almost two years of SEO work that I’d been doing on the side.

I had initially saved the money because I was moving to California and the rent prices were through the roof. With the $15k I could survive for about six months while I figured things out.

My first week in LA, I got a strange email from an affiliate manager and ultimately decided to give paid traffic a shot.

I had the nest egg sitting there, and I decided to take a gamble and risk my life savings.

The First Month’s Profit/Loss

I spent the first month learning the ropes. I screwed up everything and lost money almost every day.

This is very common for new affiliates.

Most newbies come into the game with $150 and think they’re going to turn it into $1,000,000.00. This almost never happens.

Most of the time, the first month (or four) are a total loss.

Not because affiliate marketing “doesn’t work”, it’s because the new affiliate sucks at playing the game.

Think about it:

If you could really turn $150 into $1MM, wouldn’t everyone on Earth be rich by now?

You Will Lose Money In The Beginning

Just knowing that you’re supposed to lose in the beginning should help the new marketer tremendously.

Because most people have been brain-washed by Gurus who talk about their “secret system” or “silver bullet” so “anyone can make millions” using a “push button system”.

This is bullshit my friend.

Real affiliates laugh at these guys.

The truth is: You will lose your ass until you learn to play the game.

Expect it.

For example, here is my first month:

  • I spent $5,000.
  • I made $2,000.
  • I lost $3,000.

This is the brutal truth of what the beginning will look like. And this is with an amazing affiliate manager helping me along the way.

If you’re all alone, you can expect your results to be much worse for a much longer period of time.

*I have a group with 100s of affiliates who are willing to help you if you’re new. It’s a private/paid forum, you can find it here: http://madsociety.net.

So after my first month I was $3,000 in the hole. This freaked me out so bad that I almost gave up and quit.

But a little voice in my head told me to keep going.

So I did.

The Payoff

In your first month or two (or ten) you may lose a lot of money. In my case I lost $3,000, or 20% of my life savings.

Any smart person would have stopped. But smart people fail at affiliate marketing all the time… because they don’t get it.

Sure, the math looked horrible. But what I didn’t understand at the time was that I had just paid my way through affiliate college. After losing $3,000 – I had a “college degree in what not to do”.

If I quit then, I would have wasted that education!

During that first month I made every mistake in the book! And I learned from each one.

So when I dangerously decided to continue into month two, I took those lessons with me.

Here’s what happened:

  • I made less mistakes.
  • I wasted less time.
  • And by the end of the second month I’d profited $8,000.
  • The next month I made way more.
  • On and on it went… more and more every month.

If I’d stopped after that $3,000 loss, I wouldn’t have ever seen the gold on the other side. I was so close and had no idea!

The Breakdown

Okay, so that’s the story. Let’s break down the numbers and give you a real takeaway that you can work with.

You need at least $3000.
Why?

If you’re going to make it in online marketing you need to spend a minimum of $100 a day. Spending less than that means you’re hardly getting clicks and you’re never going to get any real data.

$10/day budget with .30 clicks = 33 clicks
$100/day budget with .30 clicks = 333 clicks a day

See what I mean?

You can’t get any information from 33 clicks. Even if you make sales the numbers are so low that they won’t mean much.

I started my campaign with $50/day budget and slowly raised it to about $150/day over the course of that first month.

I spent $5000. But I think you could steadily spend $100/day (or $3000) and achieve the same results.

The key is to start VERY slow.

I recommend $50/day or $100/day MAX until you know what you’re doing. Because if you don’t know what you’re doing bad things WILL happen.

Day 1: Your link won’t work and you’ll lose everything. So you fix the link.
Day 2: Your website will go down and you’ll lose everything. So you get new hosting.
Day 3: The offer will cap and redirect to a pin submit and you’ll lose everything. So you’ll get some cap allocated to you.

Over and over.
It’s a trail of tears.

If you jump in and start blowing through $2000/day you’ll be broke before you figure out what you’re doing. It happens all the time.

The Big Losers

I regularly hear from people who are $40,000+ in the hole and want help making it all back. They’ll say stuff like “I’m going for broke!

And my answer is: “Yes. You are going to go broke unless you slow down and spend $100/day.

They never listen, saying things like “No way! I’m tryin’ to make a million man!

A few weeks later, they’re $100k in the hole.
Finally, they quit the game and go find a job to pay their bills.

This is real.

Newbie Daily Spend Examples

Let’s look at my first month. I hope that by sharing these numbers you’ll be able to see why it makes sense to start slow and then slowly grow.

  • Day 1 you have no clue what you’re doing.
  • Day 30 you’re going to be 1000x better.
  • If you go for broke your first week, you’ll never get to Day 30.

Here’s my breakdown.

The offer payout was $35. So on day one, I was spending about 1.25x offer payout per day.

These are not the real numbers. That was 8–9 years ago. These are just to show what the situation looked like. There were days of profits and days of total losses.

  • Day 1: $50/day (total loss, link didn’t work)
  • Day 2: $50/day (total loss, LP didn’t work)
  • Day 3: $50/day (total loss)
  • Day 4: $50/day (total loss)
  • Day 5: $50/day (one sale for $35!)
  • Day 6: $50/day (one sale for $35!)
  • Day 7: $50/day (one sale for $35!)
  • Day 8: $75/day (only losing $15/day now, so raised a bit)
  • Day 9: $75/day (total loss)
  • Day 10: $75/day (one sale!)
  • Day 11: $75/day (one sale!)
  • Day 12: $75/day (one sale!)
  • Day 13: $75/day (three sales!)
  • Day 14: $75/day (two sales!)
  • Day 15: $75/day (two sales!)
  • Day 16: $75/day (three sales! raised a little again)
  • Day 17: $100/day (two sales!)
  • Day 18: $100/day (total loss)
  • Day 19: $100/day (total loss)
  • Day 20: $100/day (four sales! PROFIT!)
  • Day 21: $100/day (four sales! PROFIT! raised again)
  • Day 22: $150/day (five sales! PROFIT!)
  • Day 23: $150/day (total loss)
  • Day 24: $150/day (one sale)
  • Day 25: $150/day (eleven sales!!! PROFIT!!)
  • Day 26: $150/day (total loss)
  • Day 27: $150/day (five sales!)
  • Day 28: $150/day (five sales! raised budget again)
  • Day 29: $200/day (three sales)
  • Day 30: $200/day (seven sales)

Don’t do the math on the list above. It will most likely not work out to $5000 spent and $2000 made back. Just imagine that it does.

The point of that list is to show how badly you may do in the beginning. In this example I didn’t get a single sale until the fifth day. And that was still at a loss.

Most new affiliates would have quit on day four.

They’ll scream “I’m losing money!!!” and either look for another offer or quit completely.

What they don’t know is that they are SUPPOSED to be losing money at first. It’s part of the game.

And that is the major point I wanted to make with this post.

  • If you’re new you will lose money.
  • It will be a blood bath.
  • It will be your fault.
  • It will teach you what not to do.
  • This is the game.
  • So keep your budget low until you don’t suck.

You need $3000.
You’ll spend $50-$100/day.
You’ll lose money for 30–90 days.

Lower Payout Offers

There are some cases where you can play the game with less than $3,000.

For example, I was contacted by a guy who lives in a small country where he earns about $4,000 a year. It would take him 20 years to save $3000.

So what can he do?

If you have a smaller amount of cash to play with, you can play the game with lower payout offers.

Instead of trying to run an offer that pays $40, you’ll want to test an offer that pays $4.

Why?

Because you can get more data for less money.

To make an offer work, you need to spend a minimum of 1–3x offer payout. So if the offer pays $35, you need to spend at least $35/day to get anywhere.

If you can’t afford that, go with a lower payout offer.

If you only have $500 to play with, find an offer that pays $4 per sale. With this offer you can spend 1–3x offer payout and only be out $10-$12/day range.

$500 divided by $100/day spend = 5 days of data.
$500 divided by $10/day spend = 50 days of data.

Which would you prefer?

Blowing your wad in less than week or slowly spending and learning over the next 50 days?

And for those who think “I’d rather go hard in five days!!!” I have bad news for you.

You will fail.

How Much Money Do You Need For Affiliate Marketing?

In closing, let’s wrap up with a simple breakdown.

You need: $3,000

  • Your daily budget: $50-$100/day (or 1–3x offer payout)
  • You will lose money for a few months before you figure things out.
  • Your $3,000 is not guaranteed to make a profit.
  • You may (will most likely) lose it all.

Too often, newbies come into the game thinking they’ll turn $100 into $1,000,000.

This never happens.

  • Save up $3000.
  • Educate yourself on the fundamental skills like making banner ads and landing pages.
  • Find someone to answer your questions if possible.
  • Take your shot.
  • Expect to lose.
  • Learn from your mistakes.

This is what I did.

This is what everyone did.

And this is what you will do.

If you want to win.

 

P.S. I’m creating an affiliate marketing training course based on my personal experiences. The goal is to save you all of the time and money that I lost as a newbie. If you’re interested, you can sign up for more info here

  • Jose Burgos

    Thank you Malan! Just can’t find people in this industry that are so straightforward as you, and willing to share…. im so looking forward to your course!!!!

    • http://malandarras.com/ Malan Darras

      thank you brother Jose

  • ace wilson

    Hey Malan, My name is Ace Wilson.
    John Crestani recommended you saying “he’s the number one affiliate blogger”
    So I had to give you a shot.

    I am a 19 year old college student and this article,
    Man, this article answered a question I’ve had on my mind for so long.
    NOW I have an idea of where to go to money wise.

    500 dollars with low ticket offers is definitely a doable thing for me.

    I grew up with a family of 4 which only earned about 4k a year, so the story about the man who started with 4k a year was really inspiring. It gave me something I can relate to! Tangible, practical information.

    This is incredibly valuable and powerful information, especially for those who find it relevant, like myself.

    ALSO it’s awesome that you make music.

    my passion in life is to do affiliate marketing as my career so I can spend more time traveling and making music. It’s great to find affiliates that also make music. Beautiful.

    Keep up the great work. I’ve subscribed to your channel and I am definitely going to keep you in my book of mentors for when I earn more money so I can pay for more trainings. One at a time for now. Thankyou so much!

    • http://malandarras.com/ Malan Darras

      hey ace – really cool to hear your story. and yeah, if your budget is low, stick with low payout offers and go slow. It’s a marathon, not a sprint.

  • Bob

    So I assume this 3k is for ad spend only, not including any tools or hosting, right?

    • http://malandarras.com/ Malan Darras

      there were no tools back then. tracking202 was the only tracker, and it was free. hosting was negligible (maybe $30) so nah, didn’t count that.

  • Troy Stamps

    We written article and thanks for cutting the BS that so many other so-called affiliate marketing gurus promote. I will definitely be joining your course despite the cost because it’s my passion to learn affiliate marketing and have multiple streams of income. It’s just not cutting it to have one income source when single, married, etc. Jobs are slim, no loyal and everyone needs a backup plan or just another income source period since relying on the system (govt., SS, pension, 401k, etc) can get us behind in this game of coming out ahead.

  • http://www.lexgabrees.net Lex Gabrees

    These types of reality checks are great. So many people don’t understand how online marketing works and what amount work and preparation goes into making any type of campaign work (if it’s branding, affiliate or anything). Personally, I’d say people could need even more than $3000, depending on their background / skills and experience. Losing money in order gain insights is a very scary thing for most people and when it happens, many loose the ability to think clearly … so, having that buffer can be a little bit of a calming factor …

  • http://affiliduo.com Tom Shavit

    Nice article, while you only write about numbers, it’s still has a good info!

    Thanks