Don't Believe The Hype - All That Glitters May Not Be Gold

One thing I love about the Affiliate industry is that basically earnings aren't limited. What I love about my SEO business is that you work with fantastic people. But as the economy slows I was thinking about just checking the risk factor involved with taking on certain clients. Thankfully out of the blue Debbie from RiskDisk.com called me to talk about their product which allows you to see limited and non registered company financials.

After checking the risk and financial status of some potential clients I wondered "what sort of profits do you need to be classes as a Super Affiliate"? I knew that most networks would only see one side of the equation. They'd see your income from the network and not what it cost you to deliver the sales (although they could have an educated guess).

What I found was interesting.

Now I don't want to name names as that'd be just a bit crap. Thankfully I'm educated in financial matters so I can look and their balance sheets, financial summaries, P&L accounts and Cashflow data and ascertain what if they representative and see if significant amounts of cash have been moved from the business account to their personal accounts. However ....

One affiliate paints themselves as a super affiliate, a guardian of the industry and one to be respected, well ... Looking at their financials from their accounts which ended in the last quarter of 2007 the net worth of their company was NEGATIVE between £100k and £200k (not giving out exact figures) and their cash levels had plummeted by a factor of 4 over the previous year.

And their credit score well its bad. RiskDisk says "this company appears financially valueless". Now you may have thought that this was just a non-trading company. But I've checked the companies that the person is also a director of and they're actually classed as non-trading to Companies House.

Now thankfully not all my earnings are from the affiliate industry - they're pretty sporadic after effectively taking a couple years off work. But those that found a profitable method and improved on it are still doing very well (perhaps I should have kept working instead of downing tools?)

(I'm sure these successful affiliates won't mind me talking numbers - its publicly available information anyway.)

If you take UK Web Media Risk Disk says that its safe to give them credit of £218k and have a score of 1 (you can't get any better). [Financials removed by request]

If you look at eConversions,[Also removed by request - but healthy]

Net Media Planet on 31st July 2007 had a net worth of £1,973,000 and £1,701,000 as cash in the bank. They were owed £1,030,000 and owed £765,000. These guys know what they're doing.

CK Net has a suggested credit limit of £28,000 and a credit score of 1. They had a net worth of £270,000 and cash in the bank of £446,000 on 31st August 2007.

You may say these are brand bidders so "what did you expect"? Well they do paid search very well!

But there are other affiliates out there that don't say how well they're doing and they're doing very well. Most of these affiliates concentrate on niches and really are jolly nice people.

So what can you learn from this? Well, my advice is that you've really got to be careful about reputation as they're often self-perpetuated and a little myopic. I'd say that its far better to find out who runs the sites you can see as being successful and monitor what they do to find out how you can improve your business.

I've made the mistake of being a bit to honest in what I've had success with in the past and have seen loads of sites copy me over the past couple of years (since I got back into working) so I'll been keeping schtum out that and prefer highlight how I feel the industry can be improved. I still give my private thoughts to friends and the odd tid-bit publicly. But why should you trust me? Well that's up to you to work out.

p.s. "look at me, I'm a super-affiliate" LMAO!

p.p.s If any company wants their financials removed either PM on the forum, MSN me (details up top) or email me on lee@[myAFhandle].co.uk.

p.p.p.s. If anyone wants Risk Disk call Debbie on 0844 871 1868 (no kick back for me :-( )