 Hi, I'm George Kow and I am a recovering affiliate marketer. So I should let you know my history is that when I began my business 10 years ago, for the first three years particularly, I was intensely into affiliate marketing because it makes a lot of money. If you've never done affiliate marketing before, you should at least understand what it's all about. Basically, imagine that somebody else already has an audience that would love your product, that would love your service, that would love your program or event. Now wouldn't it be more efficient if that person who already has an audience promoted your product or service or event? And why would they do that? Well, the main reason why people do it is because it makes them money because you'll be paying them 50% of whatever you earn you earn from that product or that service. Now if it's a service, it's usually less than 50%, but if it's a product like an online course or something, then you typically pay 50% to the person who's promoting your online course for you. So much easier than trying to build your own audience, right? So that's what I did for my first three years. Back from 2009, 2009, 2010, 2011 and 2012, really the first four years I was very intensively doing this. Some people call it joint venture or JV, some people call it strategic partnership, strategic alliance, referral, promotional partnership, lots of different names. Nowadays, the more popular name is influencer marketing, but the idea still is you are leveraging other people's audience, other people's fame, other people's existing tribe and community for them to share your thing. So within my first year in business, 2009 to 2010, I reached $10,000 in sales for a month, for a single month. And then within three years, my third year's income, I should say top line revenue was $350,000 and this was almost entirely through affiliate marketing, meaning other people promoting my online courses. And then of course, now, here's the interesting thing, in 2014, I turned against affiliate marketing. So what happened? Well, I was doing so well, 2009 to 2012 particularly, and then 2013, I got disillusioned by it, and 2014 I turned against it. So what happened? What was the disillusionment? Because it was because in the affiliate marketing industry, in the industry where people are promoting each other, joint ventures, JVs, it is a shark-like world. It's so money-driven that people really just promote other people because they're hoping to be promoted back. And some of you know exactly what I'm talking about. And so it's like every week or every two weeks, I was emailing my whole list and it's like, let me introduce you to my friend Bob, and let me introduce you to my friend Mary. He's got a new friend who had a wonderful free webinar for you, and you attended their webinar and they basically is a carefully designed sales pitch to get you to buy the thing. And sometimes I would be on a webinar and helping them to pitch their product or service when I didn't even experience their product or service. And that's another dirty secret in the affiliate marketing world is a lot of the times the person promoting it hasn't even experienced or used that product. They're just promoting it because there's a good commission and they're hoping to be promoted back. So these are some of the reasons I got burned out and I got disillusioned by it. I have a whole article that I've written that you can read more about it. So I really shut down my affiliate marketing business in 2013, part of 2013, 2014. I shut it down. My income dropped from hundreds of thousands down to, you know, 20,000 a year or whatever it was really low back then. And then really starting in 2014, 2015, I basically started from zero income again to build from scratch this time without using any affiliate marketing. So starting 2015, I started building my own clients, my own online courses without any affiliate marketing started from zero income again. So I'm not making the 350,000 anymore. Now I'm making about 100,000 but without affiliate, well with some affiliate marketing I should say some. I have some very kind partners like TADHAR grade and the Healing Touch Professional Association and a couple other partners anyway. So I basically am coming to a kind of a moderate position on affiliate marketing. I am trying to figure out what the principles of authentic affiliate marketing are. I've written an article about this five principles but I'll kind of share it with you in this video, summarize it for you and I would love your thoughts. I would love your opinions about it, about affiliate marketing and what you think about my principles of authentic affiliate marketing. And if you have any of your own experiences to share, please feel free to add your thoughts in the comments too. So here are the five principles of affiliate marketing. Principle number one is that we only promote products or services that we can totally vouch for. So we can vouch for something when we either use it ourselves and find that it's really beneficial and we would love for other people to know about it honestly and it makes sense also I maybe this is another principle but it makes sense for us to sell it. So for example I might be really into a supplement, a vitamin or whatever that's really great but it doesn't make sense for me to sell it because that's not part of my business. I sell marketing and business training so I'm not going to sell your vitamin supplement. It has to make sense and we have to wholeheartedly say yeah it makes sense for my try building, my audience building for me to, I'm not going to start selling vitamins and start selling essential oils and stuff. That just doesn't make sense, I'm going to start looking, well that's actually another principle I'll mention later but we can wholeheartedly vouch for it. That's principle number one, have you used the product and can you honestly say that it's tremendous or alternatively have your clients, a lot of your clients have used the product and keep telling you my god this is really helpful, really good, you should tell more people about it okay then even if I haven't used it also many of my clients have used it and okay so that's principle number one. Principle number two is that the product's price is not inflated. This is one of the issues I have with multi-level marketing MLM because there's so many levels to pay and the product tends to be inflated in price. We all have to agree, okay I'm going to get a lot of flap for this, there are marketers like no no the price is really really reasonable, yeah the wholesale price is reasonable but the retail price is, so the problem with affiliate marketing if it's done, so let me tell you why the product price gets inflated okay. Back then I'll use my own example, from 2009 to 2012 I was selling $2,000 online courses, $2,000 each course was $2,000, my course is now maximum price is $100 to $150. Back then it was $2,000 why because 50% of it was going to be paid out to affiliates and I wanted to make it exciting, every sale you make $1,000 right and then I made a lot of money too, but the problem is because I paid out $1,000 I only had 50% left of whatever my product price is, that means I could really only deliver $1,000 of value. I had a lot of Q&A and kind of like group masterminding that kind of stuff but I could only, do you see what I mean? I could only deliver 50% of the value because the other 50% was taken by my affiliates and usually marketing and advertising costs are not 50%, I looked it up usually it's about 8%, not 50% so affiliate marketing makes your advertising costs way, way higher than the typical advertising costs even with Facebook ads it's not 50% okay so if you are selling your product entirely through affiliate marketing or mostly through affiliate marketing you're paying out so much money that you can only deliver the value that you receive for yourself you see what I mean so that's why the product price gets inflated so much and so now when I do affiliate marketing I make sure it's only a small percentage of my total sales. Most of my money these days comes from selling courses myself with my own audience not with affiliate selling for me I have a few courses that affiliate sell for me like my Facebook ads course a lot of affiliates or some of the affiliates who work with me like to sell that course but even then most of my sales is still through myself so therefore and so because if I sell $100 Facebook ad course right and Tad Hargrave he's very transparent with his audience hey I'm getting paid for this 50% I pay $50 a tad I only get to keep $50 whereas if I sell it myself I get your $100 completely for myself so just see what I mean so it's like so basically if yeah so so why do I still do it I still do it because I like Tad I actually want to support I like sending him money because I believe in him I believe in his work if you haven't checked out his website marketingforhippies.com great amazing writer and teacher so I like sending him money so I'm like Tad it'd be nice to please feel free to promote this I'll be happy to send you 50% and you know you know it and what was I was going to say and it's I like as a minority of my sales even for that course okay so that's the second one is it's price make sure the price is not inflated the third principle is only promote affiliates whose marketing you can vouch for so what I mean is if you promote somebody else right and your audience goes into their sales funnel and starts getting emails and all these things have you experienced your affiliate partner sales funnel for yourself before you promote them most of us haven't and so we put our audience into this sales funnel that is oftentimes affiliate marketing is very manipulative very hyped up a lot of false scarcity and a lot of like fear of missing out that kind all that's all that stuff that is creating negativity in the world which is not necessary for marketing to be to be effective if you follow me hopefully you realize that by now so you need to join somebody's email this for a while before you decide whether you want to promote their stuff because if the way that they're emailing or the way that they're putting their stuff on Facebook whatever the way that they're marketing themselves it's not something you would vouch for why are you promoting them because your audience is going to just have a bad taste to say well why is George promoting somebody that you know so okay so that's that and then the fourth principle is to be transparent about receiving commissions for a product that you're promoting now this is not just a principle it's also United States law it's legally required that you tell people hey I'm receiving commissions for this thing in my article I linked to an FTC website web webpage about that and it's just a good it's just good honest marketing it's like basically why is it important to be transparent is because they listen we're all human beings if you are promoting and praising a product because you're you know because you're secretly getting some money for it okay your audience deserves to know because no matter how pure okay this is important no matter how pure you think your promotion of that thing is it is 100% going to have some coloration based on the fact that you're getting money for it because why because you're not an angel you're a human being with normal human excitements and fears about oh I hope I make some money doing this oh I'm so excited I'll make some money doing this people should know that you're financially connected to this thing that you're praising okay and and people don't mind knowing that is it you know if you could say it in a in an authentic way to say that's kind of what Tad does Tad says hey I really like George I believe in his work lots of my clients have benefited from his work and I'm selling I'm helping him to sell his course so when you buy his course through my link I'll get 50% of it thank you for you know I don't know if he says this but I would also add and thank you for helping to support my business too by doing this so it's a very charming and authentic way of saying I'm getting some money for this and just FYI so if I'm praising this product too hard you know why because I'm getting paid to do this right and I think it's honest and it's it's right to do it's right to do that and um and it's you're following the law too and then number five fifth principle is to be sparse about what products you promote and you know what I'm talking about you know some friends every time you meet them they're always selling something to you okay I mean not some friends maybe maybe not many friends like that but I have had friends like that every time you get together or every time they contact me they're trying to sell me something or or or maybe you go to someone's website right and every every other link they mentioned someone's product it's an affiliate link so then you really start to question like they are financially incentivized by every endorsement they make then how can I trust any of I mean all their endorsements are colored are are corrupted by money and it's I'm not saying corrupted but it's colored at least by it's it's it's incentivized by money and it makes you look like a salesman it looks makes you look like look like you're just out for selling everything it just doesn't look good it's not a good look okay um so that's why I'm like for example if you go to my website go to the tools section of my website I have an entire page of tools that I use software I use in my business and I say on the top but I could be an affiliate for all these but I'm I'm none I'm not an affiliate for any of these by using the tool section of my website you might be buying all kinds of stuff I get nothing in return like that's George you're stupid you could have gotten me tens of thousands of dollars a year selling all these different tools no because I would rather come across 95 percent of the time as praising things not because I'm making money from it but because I honestly believe in someone else's product or service because then you then you trust me when I make a so I'm not the um the boy who cried wolf right when I when I do make a sale I'm I tell you hey I'm making money from this but I really believe in it also and thank you for supporting my business so be really sparse don't be selling all these different things it just doesn't look good and I used to be like that I used to be like oh I feel like marketing makes so much money I don't want to leave money on the table right yes I want to leave money on the table because by leaving money on a table I also retain an audience that trusts me people don't get that yes you want to leave money on the table you want to be plenty of money on the table because you want to make money in other ways that are really authentic and honest and make you can make enough money doing that you don't have to make all the money in the world now just make enough money right and you can keep growing that obviously but you don't have to make more money like using affiliate stuff so so basically I um uh yeah I make I make and and I should also let you know if you if you follow my videos I am promoting somebody every week and I and and actually I should get better about doing this all of them are my clients everybody you see I promote someone on saturday or sunday through my video I interview someone and they promote something I really should be more clear about I'd realize I I have stopped recently being clear about this so I'm learning too I should mention that these are my all my all of my clients now they didn't pay me particularly specifically to promote them and I'm not earning anything when you buy from my clients I'm not earning anything it's just one of the bonus benefits I give to my clients is that I I try to fit them into my schedule of interviewing them on on on on video um and sometimes when I interview colleagues like recently I interviewed Mark Silver he's a he's a niche mate of mine a colleague of mine he does something similar to me I'm not making any money by promoting him but what I am getting is that he's promoting me in return again he's not making any money by promoting me either so you know we again I should probably be more transparent about that um that there's some kind of indirect financial compensation not not direct but indirect financial expenses business benefit from me interviewing these people um but maybe going forward you can trust that whenever I'm interviewing someone it's there's probably some kind of benefit eventually they'll interview me or something like that but it all comes around it all comes around so um hopefully uh hopefully this is helpful to you I'd love to know what your thoughts are uh you have probably encountered affiliate marketing as a consumer all of us have probably bought things that have been sold by promoters and other businesses that we follow so what are your thoughts about affiliate marketing do you have any suggestions any thoughts about these these um these principles and thanks for those who are joining me live here uh Maria Sabine Aida Pram and Prem also and Jen Amparo and Tara um captain thanks all so much for joining me live and um until the next video I wish you well