Internet Entrepreneurs: To Private Label or Be an Affiliate?

If you are reading this, you probably are already an internet professional. You have a website selling one product or another either directly or on an affiliate basis. You may even do both. No matter which, you need to decide the path to greater profits: Label your own brand, or affiliate with an existing company. The purpose of this article is to shed money-saving light on a crucial decision that you must make when selling a product online. For the ease of illustrating my points, I’m going to use Wrinkle Creams as an example.

OK. So you have a blog or traditional website where the visitors are concerned with the look of their skin. You know that your site could be powerfully monetized by selling the best wrinkle cream possible. Your natural instinct is to take the easy way out and become an affiliate of several wrinkle creams and see which one sells best. However, depending on the factors below, you might stand to benefit from creating your own brand of cream and building a name for it. The following points will make your decision clear.

Profit to Effort ratio:
Put a gauge on the amount of true effort you are willing to put into the project. Is your true and honest effort level that of making a blog and optimizing it, along with figuring out ways to drive traffic to it? If so, stick to becoming an affiliate. However, if you want big rewards and you’re willing to sacrifice big efforts, then read a little more. Clearly, you will make far more money as the owner of a brand of wrinkle creams than you will as an affiliate. You can have a flock of people marketing your own product, as well as reap profits of well over $100 per sale on traffic that you, yourself, drove to your site. The downside is that you have to take on a lot of responsibility and have to have the resources to get things ready to roll.

Added Responsibility Level:
In order for you to have your own brand of cream you need to be willing to get some major tasks accomplished. First and foremost, you have to go and find the best wrinkle cream manufacturer. You should spend a lot of time on researching the ingredients you want in your line of creams, and find the manufacturer who can make it, bottle it, and ship it to you, at your target price.

If that alone seems like an insurmountable task, stop reading. Become an affiliate. If it seems doable to you, then read on. The manufacturer who will make the product for you will require you to make a minimum purchase of probably at least $10,000. Besides this barrier to entry, you will have to start a company, get a bank account, qualify for credit card processing, and find a place to warehouse and ship your product. Naturally, you will need a graphic designer to create your logo and brand image, as well has have them copyrighted. Lastly, the minor task of setting up your own website with a shopping cart, and getting your product added to it is required as well.

Ability to create a brand:
If you are still reading, you must be willing to make quite a commitment to the project. The next thing you need to consider requires a bit of self reflection. Is your ability to brand the product strong enough? You are going to need the ability and experience to come up with a name for your product and a logo that you can market to the public. You will have to create a "product image" for your line of wrinkle cream and forge that image in the mind of consumers, in order to be successful. If your experience level consists of running some PPC campaigns, and doing some SEO work, and you don’t have a way to answer a flood of customer service or sales calls, then just become an affiliate.

Liquidity Level:
If you haven’t decided yet to take the easy road and become an affiliate, then congratulations, keep reading. The next topic to consider is your level of liquidity. We know that it’s going to cost at the very minimum $15,000 to get the product inventory you need. However, even if you have that kind of bankroll to invest, you’re going to need an equal amount, at least, to spend on marketing. I’m using extremely low estimates here… you could fairly double or triple these amounts. Additionally, you need to take a close look at the next related topic of consideration.

Patience Level:
You are going to have to be able to absorb the aforementioned investments, as well as make a secondary order of inventory, prior to having the cash flow from the business to begin paying yourself back, let alone take a profit. Therefore, if your ability to wait on taking money out of the business is less than several months, stop reading. Go become an affiliate. There is nothing worse in business than getting started with enthusiasm, and not having the financial backing or "staying power" to hold your ground until profits are available for you to enjoy. A new business of creating your own brand of wrinkle cream will take a long time and a decent investment. If you are not able to absorb either one of those, you risk running out of money, and causing the project to fail.

Commitment Level:
The final qualifying requirement of starting your own brand of wrinkle cream vs. becoming an affiliate is your level of commitment to the project. Be honest with yourself. Are you the type to be highly motivated for a few months and then lose interest slowly when things don’t get exciting? If so, you already know what to do. If you have the attention span, and more importantly, the dedication and passion to stay with your brand through the long and tedious building months, then give it a shot. The most important thing here is to do some honest self reflection and decide if you have the ability to ride out the difficult months and scary bills to pay, on your way to a successful project.

The points mentioned in this article are a fantastic guideline to help you decide how to match your own situation and skill set with a proper decision in business. By now you already know if you should consider building your own brand, or if are better off becoming an affiliate. Neither is better than the other. There are plenty of millionaire affiliates, and plenty of broke company owners. The bottom line is that if you follow these guidelines and make an honest assessment of your qualifications, you will make the profitable, correct decision.

The author is an expert on wrinkle creams, and contributes to a wrinkle creams review site, helping consumers find the Best Wrinkle Cream.