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Affiliate Marketing Alternative: Why I Quit & What I’m Doing Instead

December 1, 2021

Yo, what’s up.

Ok, so 2 things you should know about me. 

First up, I’ve got big, juicy, ambitious goals…

Secondly, I’m passionate about building online businesses. 

When you combine these together, it basically means I’m on the warpath to building profitable online businesses that make bank!

This means that over the last 7-10 years, I’m guilty of immersing myself in all things related to internet marketing. 

Allow me to reintroduce myself... My name is Ippei...

I’ve bought hundreds of internet marketing courses, and tried a number of different online business models.

All of this, in an attempt to find a model that will allow me to achieve the big juicy goals I’ve laid out for myself.

Some of them have worked, others have failed miserably. 

Here’s what I now know though...

While I did have some success figuring out and then running affiliate offers, there’s a better business model out there.

In-fact, it’s so much better that it’s now the ONLY online business model I focus on.

If you’ve been following my posts, you’ll of course know that this model is local lead generation.

You’ll probably also know I’m now making over $52K a month from my lead generation business…

This article is gonna do a deep dive into how local lead generation compares with affiliate marketing, and why I now prefer lead generation so much more.

Business Model Overview

What is Local Lead Generation?

So what is local lead generation, and how does it work?

In a nutshell, local lead generation is the process of sending local business owners leads for their business.

These business owners are usually providing local services such as carpet cleaning, tree services, plumbing, roofing etc.

There's a ton of different ways to generate leads for these business owners, but I think the way I do it is pretty tight.

First, I’ll build a small website about a local service for a local area. 

Next I’ll drop a call tracking number on the site and redirect the number to a local business owner that is looking for more customers. 

When my site ranks in Google, people will then start visiting the site when they are looking for that local service. 

When they call the number, they’ll be redirected to the business owner who then takes the calls.

If the business owner does a good job, they'll turn the caller into a customer.

Leads Funnel

In return for the leads I send them, the business owner pays me pretty well.

The best part is that they’re happy to do so, because I’m sending them more customers. At the end of the day, which business owner doesn’t want more leads, right?

What is Affiliate Marketing?

Affiliate marketing is the process of promoting other people’s products or services, and then taking a commission on any sale. 

The commission rate could be anything from 3% to 100% (yes some programs pay that).

Here’s an example of how it could work.

Let’s say you have a cooking blog.

You could then sign up as an Amazon affiliate, and start promoting related cooking products that are sold on Amazon on your blog.

When visitors come to your blog and click the link to the products, they are then redirected to Amazon. 

Amazon Affiliate
Amazon Affiliate

When they buy, you’d earn a commission on the sale.

This of course will depend on the product category, but with Amazon this is usually anywhere between 1% - 10% of the total price.

OK, so now that we know what local lead generation and affiliate marketing are all about, let’s see how they stack up against each other:

Lead Generation v Affiliate Marketing

COMPETITION: How Hard is it to Compete?

So when it comes to competition and saturation, how do local lead gen and affiliate marketing stack up against each other?

In my opinion, local lead generation wins every time. 

Here’s why…

With affiliate marketing you’re competing on a national, or global scale. You’re trying to drive traffic for offers that anyone around the world will be purchasing. 

This means that anyone around the world can promote them too, which makes the competition way more intense.

Affiliate Marketing Growth

With local lead generation, you’re only competing on a local level. 

This means that rather than competing against millions of other online marketers, you’re only going up against 20-30 other local companies in your niche and area. 

Think of it this way...if you’re trying to generate leads for a local tree service company in a town with a population of 100,000 people...how many other tree service companies do you think are in that town?

Maybe 30 maximum?

Google Map Rankings

But if you were trying to promote the latest “internet marketing course”, you’d more than likely be going up against thousands of other seasoned online marketing pros.

Talk about getting lost in the wash!

Then there’s saturation to consider. 

With affiliate marketing, while there are many products and services to promote, it all comes down to how much traffic you can drive to them. 

You’re gonna find that the popular traffic sources like SEO and paid traffic are pretty overrun with the internet marketing crowd, because there are only a certain number of niches that get enough high quality traffic to justify you actually promoting them.

With lead generation this is not the case.

There are hundreds of service niches you can go into, and thousands of locations to go into them in.

Remember, each location is a different market. 

Zip Codes

There are over 40,000 zip codes in the United States alone, and you can do local lead generation for any town or city on the planet!

Simply put, when you consider how low the competition is in each of these towns and cities, the possibilities are unlimited with local lead gen.

Winner - Local lead generation.

ONGOING WORK: Is it Passive Income?

It’s one thing to build an online business, but how much work do you need to put into it on a day to day basis?

My experience with affiliate marketing is that the amount of work you need to put into your business on a day to day basis will vary, but overall there will always be a certain amount of work that is required to keep your business going.

If you’re running paid traffic to your offers, you’ll need to keep a close eye on your campaigns to make sure they’re still converting and not hemorrhaging money.

PPC Tracking

You’ll need to keep close tabs on the offers you’re promoting to make sure they’re still in stock or still being sold. 

On more than one occasion, I’ve invested time and money into promoting a product, only to find the owner stopped selling it shortly after I started sending traffic to it...talk about a bummer!

On the other hand, with local lead generation, you’ll find the business model is about as passive as it gets.

Local Lead Gen Can be as Passive as You Want:

  • You build a site.
  • Rank it in Google.
  • Start sending calls to a business owner.
  • Collect your payment each month.

Once your sites are ranking and generating leads for business owners, there’s not much else to do other than collect your income each month.

You can either move on to building more sites...or stop and live off the income your existing sites are generating for you.

What I love about this model is that it can be whatever you want it to be.

You can build sites day in day out until you’re making $100K a month, or you can just build a few sites and make a few extra grand a month, and then kick back and live off the income passively...the choice is entirely yours!

Winner - Local lead generation.

COST: How Much Initial Investment is Needed?

One of the biggest factors you’re gonna want to consider when comparing affiliate marketing and local lead generation, is how much capital you’ll need to get started.

Capital Investment

It goes without saying that the less money you have to invest at the start, the less risk you’ll be incurring.

While affiliate marketing programs are usually free to join, you’ll need to find a way to drive traffic to your offers if you’re going to earn any affiliate commission from your efforts.

In most cases you’ll either drive this traffic through SEO or paid traffic.

On the surface, SEO may seem like “free traffic”, but because of the competitive nature of affiliate marketing, you’re soon gonna find that you’ll be competing against some of the big boys. 

This means you’ll need to invest a significant amount of money into your SEO campaigns to ensure that you’re able to get the right eyeballs on the offer you’re promoting.

If you’re running paid advertising, you’ll quickly learn that this can be a dark art to get right. 

Paid Traffic Sources

When it comes to effective paid traffic, you’ll need to closely track how much it’s costing you to generate sales.

When I was first starting out, I was amazed how quickly I’d spend money, and before I knew it, it was costing me more than I was making back in commission payments.

You'll need to track the Average Cost of Sale (ACOS) extremely closely to make sure you're staying on the right side of the tracks!

ACOS

The good news is that getting started with local lead generation costs almost nothing.

You can throw a website or two up for less than $10 a month, and you can drop a call tracking number on a site for around $10 a month as well.

Web Hosting

So you're looking at needing no more than $20 for each site.

Although it may take a little time, driving traffic to your site through good old SEO, won't cost you much, because you’re playing in a different league to the average business owner that you’re competing against.

So at the end of the day, local lead generation will cost you very little to get started, and very little to drive traffic to your offer (the phone number on your site essentially).

Affiliate marketing on the other hand will more than likely start eating away at your wallet from day 1.

Winner - Local lead generation.

SCALE: How Easy is it to Scale Your Business?

If you’re serious about building an online business that is going to allow you to quit your 9-5 and build a life on your own terms, then there’s one really important element you’re gonna need to figure out…

...that is, how to scale and grow your business so that it generates the income level you want it to.

Scale your business

It doesn’t matter if you’re doing Affiliate marketing, local lead generation, Amazon FBA, Facebook Marketing...or any other type of online business.

None of those business models will ever allow you to build a stable, full time business on only one campaign, product, or customer.

...and guess what, any business that does is not stable, because it would depend entirely on that one product, service or client.

So instead, with affiliate marketing, you’re gonna need to start small, and scale upwards if you want to achieve long term success.

We’ve already talked about the cost of running successful affiliate marketing campaigns. To scale these campaigns, you’ll need to build out more of them, which means one thing...

...more money!

PPC Costs

There’s only one problem...

Because driving high quality traffic to your affiliate offer is not cheap, your profit margins are going to be pretty slim. 

Remember, when you make an affiliate sale, you only get a percentage of the sale as an affiliate, not the full price.

Slim profit margins will mean that the amount of capital you have to reinvest into your business will be limited, which in turn will limit the speed and ease at which you’ll be able to scale your business.

Throw in the competitive nature of the business model that we’ve also talked about, and suddenly scaling your business to a level that will allow you to meet your financial goals will start to seem like a pipe dream.

With local lead generation though, it’s a different story.

The nuts and bolts of this business is building little websites, and then ranking them in Google so that they generate leads.

As you now know, the good news is that these sites cost very little each month to build.

This means that you can pretty much build as many as you like.

Considering each site could earn you anywhere between $500 - $1,500 a month, you can see how quickly and easily you can scale this business, by reinvesting the profits back into building more sites. 

With such low running costs, you’ll find that the profit margins are usually around 90% - 95%. This means that if just one of your sites makes you $500 a month, you can easily pull back $450 from that and build another 20 websites with the money.

With local lead generation, it’s basically just a numbers game. The more websites you have, the more leads you will generate and the more money you will make.

Winner - Local lead generation.

CONTROL: Are you the Captain of Your Own Business?

One of the biggest issues I found with affiliate marketing was just how little control you have over your own business.

I lost count how many times I invested money into creating advertising campaigns to promote a particular product, only to find that the product owner decided to stop promoting it soon after.

Out of Stock

The biggest problem was that often I wasn't aware that the product was no longer for sale, so in some occasions I was running paid traffic to offers that didn't exist without realizing it.

I also soon realized that I had no control over how much I made off each sale I promoted.

On a number of occasions I'd start promoting an offer for a certain percentage, and at some point the product owner would change the commission rate without any warning.

Overnight my earnings would halve in some cases.

Case and point... the mighty Amazon cut their associates program commission rates by more than 80% in some categories.

Amazon Associate Rate Changes

Without any warnings, millions of affiliate marketers lost more than half their income, and there was absolutely nothing they could do about it.

On top of all that, you also have zero control over the price of the product or service that you're promoting.

Sure, an increase in the product price might mean higher commission earnings for you per sale, but it could also mean lower conversion rates, which means less sales overall.

With local lead generation, you're always in total control of your business. 

Lead Gen Control

The biggest factor is that you own the website and the phone number that is generating the leads.

That means that if at any stage the business owner doesn't meet your expectations, you're free to send your leads somewhere else (like to their competitor).

This is incredibly powerful, because it gives you the upper hand when it comes to negotiating price and terms.

At the end of the day you're bringing a ton of value to their business by sending them more customers.

This means that you're able to capitalize on this value, and make sure you're getting paid accordingly.

In terms of control, lead generation is like no other business model out there. 

Winner - Local lead generation.

EARNING POTENTIAL: How Much Can You Earn?

If you’re really serious about starting an online business, you should know what long term earning potential it has before you dive in.

Earning Potential

I mentioned earlier that I had run an Amazon FBA business in the past.

What I didn’t realize before I started that business, was that due to the difficulty of being able to scale with any ease, my long term earning potential was always going to be limited.

With Affiliate marketing, the same applies. 

Due to the fact that scaling an affiliate marketing business is not a simple task, the earning potential can be limited. 

Sure, you can make some good money, but it will take you a long time to really get your business cranking at a level that will truly allow you to live life on your own terms.

Your goal might not be to make $100K a month, but whatever your goal is, I’m pretty sure that creating a life of freedom and lack of financial worry is right up there on the list, right?

With affiliate marketing this is possible, but it’s not easy to achieve. 

With local lead generation on the other hand, the potential earnings are almost unlimited.

With the power to build new websites that could potentially each make you $500+ a month, but only cost you $20 each to keep up and running...the sky truly is the limit.

At this point, I’ve now got over 50 of these sites collectively generating leads and making me over $50K a month, with very little input needed to keep them doing so.

Of course the cool thing though is that I’m really just getting started with lead generation. 

While I’m still doing lead generation for local business, I’m also working on other bigger lead generation projects. 

Once you learn this skill, you can generate leads for almost any business, be it local, national or even global!

Tree Site

Of course those niches are more competitive, and I wouldn’t recommend you go into those niches until you master local lead generation, but just know that there is no limit to this game.

It really just comes down to how big you can think!

Winner - Local lead generation.

GOOD FEELINGS: Are You Adding Value?

Running a successful online business isn't all about profits and Key Performance Indicators. 

In my experience over the last 10 years, I can tell you firsthand that no matter how much money you are making from your business, you will grow to hate it if you don't feel that you're actually adding value to the customers you're serving.

Humans are wired to "feel". It's how we operate.

If you don't "feel" good about what you're doing and how you'e making your money, that will eventually catch up with you, and you'll start to lose your drive.

Looking back now, I realize that when I did affiliate marketing I wasn't focusing on the value I was adding to the people who were buying my products.

All I was focusing on was where my next dollar was coming from. 

Chasing Money

Let me tell you now, this is a terrible way to run any business.

Here's why...

I've now realized that in life, you are financially rewarded for the value that you add to the marketplace. 

The more value you add (be it in business or as an employee), the more you will be paid in the long run.

Getting back to affiliate marketing, because I was only chasing my next dollar, I was adding very little value to the marketplace, which meant that not only did my business struggle to make money, but I also didn't like the way it made me feel. 

I was only focused on promoting offers I thought would make me money, without little thought as to whether or not they would service the customer with what they were actually looking for.

With my local lead generation business, the exact opposite is the case. 
I'm now obsessively focused on the value that I am adding to my customers (the business owners).

I not only work hard to drive targeted high quality leads to their phones, but I make sure I do it at a price that they get a ton of value from.

Happy Customer

In other words, I offer these business owners so much value, that they literally find it irresistible not to do business with me. 

As a result, I now never have a problem making money, as people are literally begging for my services.

Winner - Local lead generation.

Conclusion

Lead Generation Wins Every Time!

So now that I've given you the run down on how local lead generation and affiliate marketing stack up against each other, it's pretty clear that lead generation is my #1 business model pick.

Since discovering this, I've gone all in on the business model and am now making over $50K month after month, sending high quality leads to business owners who need them more than ever!

When you compare it against pretty much any other business model, be it Affiliate Marketing, Amazon FBA, Dropshipping, YouTube advertising, Facebook Ads...local lead gen wins every single time. 

I'm all in on local lead generation, and have big plans for the next 3-5 years.

If you'd like to learn more about how I do it, check it out here.

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Ippei Kanehara
Founder/CEO

$52K per month providing lead generation services to small businesses

Ippei.com is for digital hustlers, industry leaders and online business owners.

His #1 online business recommendation in 2022, is to build your own lead generation business.

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  1. Simply great and thanks so much for sharing such a wonderful article. After reading it, now I realize how lucrative the local lead generation business is. I'll definitely start this online business very soon.

    1. No greater time to start than now! Glad you found value in this article. It’s important for people to see the big picture when it comes to affiliate marketing and local lead generation.

  2. I am interested in the Lead generation business . But my
    question is this , who is going to pay me after i get lead or buyers to business owners through graphic designing advertising on my website ? .

    1. Hey-thanks for reading! If you have questions about our program or the lead generation business model why not jump on a quick call with one of our coaches? Happy to answer all of your questions. You can schedule something that works for you with this link: https://www.ippei.com/best. Look forward to connecting.

  3. Hey thanks, great article. Question…do you cold call biz owners upfront and try to sell them on your service? I get that now maybe they’re calling you but when you got started with local lead gen how’d you get that first deal?

    1. Tim, we teach a number of different strategies to help students land their first few clients. It depends on what works best for them. Cold calling is certainly one option but we generally don’t recommend it, especially if you don’t have plenty of experience with it. Our leads in advance process is a favorite and no-brainer.

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