Table Of Contents
- 1. Who We Are
- 2. Intro
- 3. Kyle’s Revenue Streams
- 4. What Is Amazon’s Affiliate Marketing Program?
- 4A. How Stable Is Amazon Associates?
- 4B. The Numbers
- 4C. Analysis
- 4D. What To Focus On
- 4E. Diversification
- 5. Youtube Adsense
- 6. Company Sponsored Videos
- 7. Conclusion
- 8. Fun Little Bonus
1. Who We Are
Hello, my name is Max, I run a company called EverOrg.
We analyze & teach the finances of businesses & professionals to help our customers model their success.
We believe that understanding the economics of businesses will help entrepreneurs & professionals make robust, long-term business decisions.
If you’re reading this, I’m sure you have come across online businesses that recommend products and services via affiliate or referral links.
You have probably wondered how much money they make doing this, and this analysis will give you some idea.
Please note we are not certified advisors, at the end of the day, you have to make financial decisions based on your own judgement and your own judgement alone!
We will also break some misunderstandings and hidden issues in the affiliate marketing space by collaborating with Kyle Taggart, a professional YouTuber with over 26,000 subscribers.
Kyle works full-time as an IT Analyst and earns an income of about $1,500/month with his Youtube Channel.
I mention that he has a full-time job because there is no way he can sustain himself on the money he currently makes.
We think it’s very important to emphasize how difficult and long it can take to acquire financial freedom with affiliate marketing.
We’re sure there are internet entrepreneurs who made a ton of money passively doing affiliate marketing in a short period of time, but most probably will not achieve this.
It also shows you can run an online business while still having a full-time job!
In addition, being an IT analyst has increased Kyle’s problem solving and communication skills, which has no doubt made him a better youtuber.
His youtube channel primarily focuses on reviewing photography related products and talking about photography in general.
You can find it as HiKyleTaggart on youtube.
It took him about 1.5 years to get to this point in his online business and he spends about 10-20 hours a week on it.
We’re going to break down exactly how he makes this money.
Keep in mind, this research is not a how-to lesson, but rather a soft template that you can model to build your own online business as fast as possible.
There are countless pieces of content out there on the internet that will teach you how to start an affiliate marketing business, our focus is giving a hard look on the economics of the business.
3. Kyle’s Revenue Streams
Kyle has 3 revenue streams that has recently made him $1500/month, the biggest one being Amazon’s Affiliate marketing program.
The other 2 are “company sponsors” and “Youtube Adsense”.
Company sponsors pay Kyle to promote them in his videos and Youtube Adsense is what Youtube pays Kyle for running ads on his videos.
4. What Is Amazon’s Affiliate Marketing Program?
Amazon’s affiliate marketing program is called Amazon Associates.
Amazon Associates is an affiliate program that lets you get paid for referring purchases to Amazon.com
If someone clicks on your respective affiliate link and buys something on Amazon within 24 hours, you get a small percentage of the sale.
It does not matter what the product or service it is. As long as they buy it via your link, you’ll get commission for it.
There are a few things you can buy on Amazon that you do not get credit for, but this is a very small percentage of Amazon’s marketplace.
It is very important to know that different products have different commissions.
Kyle focuses on technology products like cameras and lenses, which is around 4% per sale.
So if someone buys a $500 camera, you will get $20.
Here is Amazon’s affiliate chart of commissions.
Here is the official list of commissions: https://affiliate-program.amazon.com/help/node/topic/GRXPHT8U84RAYDXZ
Notice that there are big differences between product lines.
It would be very ideal if you were passionate about a high commission product line.
4A. How Stable Is Amazon Associates?
Important: Amazon Associates rules are constantly changing and are very intricate.
Affiliate marketing is extremely volatile and breaking the program’s rules can cause immediate termination.
You need to read up on Amazon’s rules before marketing right away.
You can’t just spam your affiliate links everywhere.
It is very important to know that this is not a stable, robust source of revenue!
With a quick Google search, you will find countless stories of people losing their accounts.
DO NOT start promoting your affiliate links before you study their rules.
A quick Google search will go a long way.
Just to stress the importance of this, you cannot do simple things like using email marketing.
One of the most popular and important methods of advertising your online business is with email marketing, so it’s pretty shocking you cannot use it.
You also have to be transparent that you are an Affiliate Marketer for Amazon.
Amazon does not like it if you hide or simply don’t mention that you are using their referral links.
So focus on creating authentic, valuable content that Amazon will have no trouble with.
Kyle does a great job at this, so let’s model him.
4B. The Numbers
Here are some examples of his Affiliate Links.
He uses Genius Links to track link clicks: https://www.geni.us/
Lens: Sigma 16mm f1.4 – http://geni.us/Sigma16mm
B-Roll Lens: Sony 35mm f1.8 – http://geni.us/35mmEmount
Canon M50 – Vlog Camera – https://geni.us/CanonM50wLens
All Around Lens: 18-105mmF4 G – https://geni.us/Sony18to105mm
Hard Drive: Samsung T5 1TB – https://geni.us/SamsungT5SSD2TB
Mic: H1 Zoom – http://geni.us/ZoomH1mic
Lighting: Ring Light – https://geni.us/RingLightYouTube
Memory Card: https://geni.us/128GBSD
Here are some of link click volumes for the year:
And let’s take a look at his earnings to hype ourselves up a bit:
Kyle makes wonderfully informative and entertaining product reviews for photography related products, such as the popular Sony a6000 Camera.
He makes about $400+/month doing this.
Kindly pause the course and head to the following URL to see a video review: https://www.youtube.com/watch?v=7Wg9qIS30cs
It is about 9 minutes long & he uses his expertise in photography to explain if this popular camera is worth buying.
Notice how expertly done the angles are, the lighting is, the editing….
Kyle is a professional!
So if you’re new to this, modeling his standard of quality will be really tough!
I mean the quality of the video speaks for itself.
In addition, Kyle is SUPER passionate about his work, has been involved in photography for about 10 years and spends 10-20 hours a week on his channel!
So in order to model his standards, it will be really tough.
You have to really mentally invest yourself into what you are doing.
This isn’t a side hustle you can just do without much effort.
Yes, you can do it on the side but not without great effort (or by hiring someone who can put in a lot of effort).
Now, let’s do a little bit of math to understand the affiliate marketing finances of Kyle’s business.
In December 2019, Kyle made about $500 with about 160,000 views for the month.
Of course, not all of the videos are product reviews or recommendations.
Kyle tends to produce about 3-5 videos a month, and some specifically focus on products he recommends through Amazon Affiliate links.
Now, for the 160,000 views earned, he made about $500 in affiliate marketing sales, that’s about .003 cents per view.
In order to get those 160,000, Kyle worked really hard for 1.5 years and, as said before, puts in a lot of effort to make high quality videos.
So again, not easy. Affiliate marketing is no get rich quick scheme.
Of course, these ratios are not applicable to all Youtubers!
But this provides an idea of what a high quality youtube channel can pull in with said metrics.
For many, this is awesome and invigorating!
$500 is a good amount of cash that can go a long way.
If you are disappointed with these metrics, then maybe you will want to focus on higher ticket products, put in even more effort than Kyle or something else entirely.
We just want to provide you an idea of how tough it is to build an affiliate business but at the same time know how rewarding it can be.
Money isn’t everything, but it’s important.
4D. What To Focus On
One of the reasons Kyle succeeds is because he chose a niche that he is relentlessly passionate about.
But passion isn’t everything, you still have to work smart to maximize financial performance.
Which is why Kyle recommends you pick products that include these 3 traits when you’re just starting:
- Evergreen – A product that won’t be outdated anytime soon so your videos will get income for a long time. Will cameras go out of style anytime soon? Unlikely.
- Popular – A product that is already well known so you know there’s a big market for it.
- Specialize – A product or product segment you see the potential in becoming a go-to resource for. Is there a demand for a channel focused on X?
The Sony a6000 has these traits, the video we directed you to earlier.
But, wait a minute, what about the expenses? Don’t you need to BUY the camera before reviewing it? And what if the camera is expensive?
The Sony a6000 is over $600, which is more than what Kyle made in his most recent month with Affiliate Marketing.
So, before you get hyped up by the earnings, make sure to ALWAYS keep the expenses in mind.
If you estimate you will make X amount, always subtract the actual cost of the product.
Don’t be surprised if it takes you months (or more) to get your money back.
Here are some other minor expenses Kyle has:
Expenses: $39.39 / month
– FREE / month – Epidemic Sound $12 per month – now FREE with Ambassadorship
– $10 / month – Geniuslink $2 per 1,000 clicks on links a month (around 5,000 clicks per month)
– $10.39 / month – Adobe Suite – Lightroom / photoshop 1TB storage
– $13 – Squarespace – website
– $6 – Smugmug – used for online photo albums for clients
One of the best ways to diversify Kyle’s affiliate marketing earnings is with diversification.
He plans to strongly push one of his affiliate partners and favorite tools, Epidemic Sounds.
Epidemic Sounds provides non copyright music to content creators.
This lets people like youtubers use music in their videos without breaking any copyright laws.
Epidemic Sounds pay their affiliate marketers $30 per sale, which is very enticing to Kyle, who already loves this service.
– Affiliate Marketing is very volatile, but you can make good money if you create high quality content in an authentic way. Make sure to diversify, it’s too volatile otherwise.
– Try to focus on a niche that you will be passionate about, affiliate marketing can be tough so you need something you won’t give up on.
– Always keep your expenses in mind. Don’t focus only on your earnings.
5. Youtube Adsense
Kyle’s Earnings in 2019:
Youtube Adsense pays Youtubers a percentage of the ad revenue that is generated by the ads on your videos.
The revenue cut is 55% for the creator, and 45% for YouTube.
For you to be eligible to monetize your videos, you must have at least 1000 subscribers & have your videos consumed for at least 4000 hours within the past 365 days.
From there, Google Adsense pays you after you hit a threshold of $100.
Different niches have different CPM rates (click per milli), which is how much you make per 1,000 ad impressions (impressions are how many times the ad is shown).
That being said, he has a CPM of $8.76.
CPMs fluctuate all the time and there is no concrete way to determine what your CPM will be.
So like affiliate marketing, CPM is very volatile.
Before I give my analysis of Youtube Adsense, I asked Kyle to provide us with a more technical understanding of adsense:
“Tech and Gear related content (product reviews) typically have higher CPM rates than non product related content. However, if you were to focus on Photography educational content – maybe towards a specific software (Adobe, Capture One, Quickbooks for finances, ect), the CPM rates could be very high. Educational content oriented for LONG watch times, typically have very high CPM rates.
In my experience my CPM has grown over time overall, and as you make more videos and try different topics you can see which ones you’d want to focus on if you want to key in on higher CPM rated videos.
Imagine your CPM was $10 for a video. So $10 per thousand views. If you got 10,000 views on that video, you’d be at $100 for that video. Now, CPM, watch time, how many ads are shown, and other factors, come into play. Based on the math above, imagine if you had 30 videos for the year (I made 32 in 2019), and let’s say they garnered 10,000 views each at the CPM of $10. That’s $3,000 for making less than 1 video a week. You could also get way less than 10,000 views per video and still make money off YouTube adsense by having content with a higher CPM.
Videos remain on your channel until you see fit. So the benefit of the Adsense model is that as you build your video library, your adsense revenue will grow and stack.
If you make evergreen content, which is valuable to any search engine like YouTube, you can increase your chances to make money on videos that you created months ago. Thus the ever so popular term of “making money while you sleep”.”
– I believe adsense is even less reliable than Amazon since you literally have no control over it.
– It’s still a sizable segment of his revenue.
Here was Kyle’s verdict about whether or not Adsense is reliable:
“Yes and no. CPM varies, watchtime and audience interest vary, Google’s own policies may vary over time as well. Despite the variances, once your channel has become established and has a following, you can begin to determine what you’d expect in a given month if you’re consistent with the content you create.”
6. Company Sponsored Videos
This is where I see the most potential for Kyle.
This is a simple revenue stream where you form a paid partnership with a company to promote their respective product or service.
For Kyle, this was in the form of a 45 second promotion for the sponsor during a video.
He averages about one, $100 sponsorship, per month.
Before anything, we should understand how Kyle secures a sponsorship.
There are two ways to secure a sponsor. Proactive or Passive.
“A proactive approach to sponsorships is having a media kit. Something that represents you as a brand, that shows metrics that would bring value to a company. Now if that sounds tough to do at zero subscribers, it’s because it is!
I recommend the passive approach.
I focused on my videos first, how my brand looked from the outside (video thumbnails, channel banner, social media, website, ect), and my community engagement. If you focus on bettering those things, the brands and companies will come. It’s cliche I know, but it is the advice you will see in all videos and blogs on this topic, and that’s because it works.
Much like Nike doesn’t want to sponsor a no name player on the bench, a brand or company will not want to work with someone who isn’t at least established in some way.
In the photo and gear world, once you develop an audience, even at a size of 1,000 subscribers, you may start to see a trickle of emails from manufacturers about products they’d like you to review.
Depending on the contract or deal you’ve made, you can set yourself up to gain an instant flat fee per video. Sponsorship / brand deals are a perfect way for you to leverage what you’ve built, and to free yourself from only relying on YouTube adsense.
YouTube sponsorships work in a variety of different ways. You could be paid a flat fee per video, or a fee per sign up of a product or service you’re asked to promote, a combination of both, or other avenues such as an exchange of a free product for promotion on your channel.
The best sponsorship deal – is one that you’re comfortable with. For me, I just started between $75-$100 per video. I also did videos on products that were sent to me for free. However if you want to see your value when the time comes for that first sponsorship or brand deal, you can use something like socialbluebook.com to see an estimation of what you should charge for different types of sponsored content.?
Social Blue Book is website that connects sponsors with influencers and will help you gauge how typical sponsors can value you: http://www.SocialBlueBook.com
– I hope this will be Kyle’s biggest revenue stream since it’s so robust.
– The best part of Kyle’s business is his strong relationship with his fans.
We hope this research has helped your judgement about starting a business like this.
8. Fun Little Bonus
Before we go, Kyle gave us a list of digital product ideas he would like to sell one day. There is no certainty of these happening, but we figured it would be insightful.
– Lightroom Presets
– Instagram Story Frames/Styles
– Photography Courses
– YouTube Thumbnail Presets
– YouTube “How To” Courses – Step by Step Guides
– Entrepreneur courses