How to lose money and look like an idiot. Or “being broke and dumb sucks”

December 29, 2007 · Filed Under Affiliate Noob 

how not to make money online

So, before I started setting up my first site for my installment of “affiliate marketing: 101” I figured it would be a good idea to make sure I knew how to set up the site, build my adwords campaign and actually buy some traffic. Mostly just so I knew what steps I needed to document for the series when I wanted to post about it.

I also wanted to see if I could grab a small piece of the Christmas rush even though it was a bit late.

Well, even though I completely screwed up the adwords campaign (like having 3 thousand keywords all in the same ad channel) and not knowing how to track anything important I did end up getting some traffic out of it and actually even had some conversions. I’ve learned a lot about setting up keywords and such since so hopefully I will be able to show that in my next post about this.

Beyond not really knowing what I was doing, I was also on a pretty tight budget. With Christmas, being paid only once a month and still trying to adjust to that and just being broke in general I didn’t have a lot to work with. And that is where the comedy begins…or at which point you can point and laugh at me for being a dumbass.

I won’t be real specific with stats but here is the general info for the “campaign”:

I figured I’d try to get some of the traffic that was looking for Nintendo Wiis for Christmas and since there was a short supply in general there seemed to be a decent amount of traffic for finding Wiis. I set up a site similar to the one I posted earlier using the ebay/amazon affilaite plugin for WordPress. I was hoping that there would be a lot of hungry buyers ready to jump on ebay to grab up what was available.

Surprisingly, even with my noob errors and getting by with my blindfold on I was filtering traffic and making sales. Of course not knowing how to setup adwords correctly, not knowing how to optimize my keywords (or even organize them) and not knowing how to know if I was making money or losing money the whole time I wasn’t sure if it was working or not. CJ not having updated stats and ebay not reporting being the best made it worse.

Over the course of the campaign I earned:

$563.57 through CJ for the ebay commissions
$171.74 through amazon for the sales commissions

For a gross of:
$735.31

Not so bad for a noob. Now lets figure out the net…

My adwords charges for the month came out to:

$652.36

Wow, an actual “profit”! If my math is correct I ended up with a positive difference of $82.95! And that is with an obvious non optimized campaign, probably overpaying on keywords and pretty much not knowing what I was doing beyond paying to filter traffic through my site.

So, did I actually profit? Well that is where bing a broke dumbass comes into play and reminds me of what a noob I really am. Being a noob and not planning well, I didn’t know when Google actually charges for adwords fees. I remembered from small promotions in the past when I was just trying to get traffic to various sites that I had been billed (automatic debit/bank draft) after the first of the month for those charges. So I assumed that even though I had a limited budget that I wouldn’t be billed until after the first of the month which, by then, I would have gotten more funds in. Well I was wrong and was billed in the middle of the month a few days before my funds came in! Because I use my debit card for EVERYTHING I had a ton of small pending charges waiting to go though. Things like $5 snacks at the gas station, $8 domain registration and a few small stocking stuff purchases I had made. Well since I didn’t know Google was going to charge me, I didn’t have enough to cover those purchases and the adwords bill at the same time…after all, I was expecting the adwords bill to come after the end of the month.

So I ended up being overdrafted and since my bank chrages per item overdraft, I ended up with 5 overdraft fees at $30 each! They dropped it down to only charging me for 3 of them as a “courtesy” so in the end, my bad planning and lack of funds cost me $90 in band fees.

So let’s do the math and find out my net results…

$82.95 profits from the campaign
$90.00 bank overdraft fees for being a moron
= -$7.05

Yes, I lost money but even so I am pretty happy that in reality my campaign was profitable. Even without fine tuning and optimizing I was able to make it profitable. Was it worth spending $652.36 to bring in $735.31 and only end up with $82.95 (pre dumbass surcharges)
? I don’t know. Profit is profit I guess but it’s not the most efficient method. And of course overspending my budget (even if unintentional) isn’t the smartest thing to do obviously.

So there you have it. My first “real” campaign and the results of being an idiot. Hopefully in my “learn along with me” affiliate marketing: 101 series I’ll be a bit more prepared and be able to show what I have learned. I’m excited to see how much of a difference optimizing and fine tuning will have.

Anyone have any obvious tips on how to avoid being this dumb?

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