Should I take a loss in the beginning to scale up?

15 replies
I like to buy traffic to scale up quickly, however as you know in the beginning your ROI is not right away. My affiliate business is a residual kind of business. Can the experts here tell me that this is the right strategy?

I spoke to one gentleman that said he spent $30,000 on a campaign (one that he tested 1st) and he realized that he may not get that money back for a while, but he didn't care because it was the quickest way to scale up so that eventually his downline would do the work and go viral if you will.

Your thoughts?
#beginning #loss #scale
  • Profile picture of the author Sitestomp
    Unless they had a good mentor or got insanely lucky, everyone takes a loss when they are just starting out.

    I don't even want to think about how much money I lost doing PPC until my campaigns started making money. It's all about tweaking and fine tuning your campaigns until it starts working out and you get out of the red and into the black. This takes a lot of time, patience, and of course - money.

    Think of it as the cost of an education.
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    • Profile picture of the author john mckee
      Yes, but once you tweaked your pay per click are you willing to scale up? and I mean scale up $$$$$thousand of dollars.....if you really believe.
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      • Profile picture of the author BenZhao
        I am kinda safety person so I personally trying to minimize the risk while giving my business a chance for growing.

        Business needs investments which come in the form of time and money. However, the faster you can earn money back, the better of the health of your bank account.

        Spending for learning purpose is understandable. The question is how much to do so. You may have the amount allocated and expect the returns within specific timing. It is good if you are cautious in spending not too much at the start. Until you are familiar with such method and getting some invested money back by promoting affiliated products to your lists, consider to increase amount of money would give you more confidence and the possibility of the loss would be limited.
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  • Profile picture of the author Alexa Smith
    Banned
    Originally Posted by john mckee View Post

    I like to buy traffic to scale up quickly, however as you know in the beginning your ROI is not right away. My affiliate business is a residual kind of business. Can the experts here tell me that this is the right strategy?
    It can be, certainly, if you have the confidence of knowing that you already have the right skill-set successfully to monetize over the longer-term.

    In the case of paid traffic, for example, it obviously makes sense to look at long-term income/profitability per customer/subscriber, rather than expecting your traffic-generation immediately to turn a profit. But this requires (a) working capital and (b) the certainty that the long-term monetization will be profitable, and that part is based on your own skills and experience.

    I imagine that few of us, when we started, would have been able to afford "the PPC traffic learning-curve" without some evidence that it was going to be profitable for us over the long-term.

    Originally Posted by john mckee View Post

    Yes, but once you tweaked your pay per click are you willing to scale up? and I mean scale up $$$$ of dollars.....if you really believe.
    As long as your "belief" is evidence-based, rather than just "hope-based", that can be a good approach.

    .
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  • Profile picture of the author skyro
    Once you tested and tweak your campaign and see that its winning you should scale it up. You are going to lose at first majority of the time in the beginning which is why tracking is so vital to your campaigns. If your tracking and watching the numbers you can tell from the data weather you need to scale up or pull back.
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  • Profile picture of the author JeffreyBenson
    Most campaigns lose at first. Never start a campaign with too much budget in the beginning. Learn to test small and if the campaign starts winning, scale up big until the campaign starts to drop. Then give it a rest for awhile and then run the campaign again and again and again. Spending $30k to find a winning campaign doesn't make any sense. You can test campaign successfully for under $500
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  • Profile picture of the author savidge4
    Originally Posted by john mckee View Post

    I like to buy traffic to scale up quickly, however as you know in the beginning your ROI is not right away. My affiliate business is a residual kind of business. Can the experts here tell me that this is the right strategy?

    I spoke to one gentleman that said he spent $30,000 on a campaign (one that he tested 1st) and he realized that he may not get that money back for a while, but he didn't care because it was the quickest way to scale up so that eventually his downline would do the work and go viral if you will.

    Your thoughts?
    There is a HUGE difference between "Scaling" and just throwing money at something.

    Scaling is taking an already working model and ramping it up. The VALUE should already be there. The ROI on something existing you SCALE should be INSTANT.

    IF you are making an INVESTMENT in traffic with the idea that there will be long term gain... that is something totally different.
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    • Profile picture of the author collison
      Your ads should be built using the concept of Fractals, meaning you must have tightly differentiated campaigns, understanding how they differ. Using the concept of the Fractal, they can be tiny and still give you valuable information about the marketplace.
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    • Profile picture of the author iAmNameLess
      Originally Posted by savidge4 View Post

      There is a HUGE difference between "Scaling" and just throwing money at something.

      Scaling is taking an already working model and ramping it up. The VALUE should already be there. The ROI on something existing you SCALE should be INSTANT.

      IF you are making an INVESTMENT in traffic with the idea that there will be long term gain... that is something totally different.
      I'm so glad we think alike. See, if you're really scaling something, then you already have a proven process that's already profitable and generating an exact % of ROI. If you can scale up by spending 25% more and getting an additional 150% return then there is no risk, or at least very limited risk.

      My recommendation is that in the very beginning you need to worry about finding something profitable, not just scaling up but finding and developing a profitable system. Once you have that, then worry about scaling.
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  • Better have a proven high converting sales funnel before dishing out 30k$ lol.

    I suggest split testing, tweaking, adjusting and finding other paid ad sources every single campaign you do with minimal investment first. If the test campaign finds success then you can feed it more money and scale. The rule is 70% of your profit should be reinvested.

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  • Profile picture of the author gcbmark20
    Hi,

    YES you have to be prepared to take a loos at the beginning of any
    paid advertising campaign.

    You need to remember that you're crafting a well oiled machine
    here that overtime will become just that.

    Most people never take the plunge so they end up trying to guess
    what the market wants and needs are.

    You can speculate all you want but eventually you have to get your
    feet wet and take the plunge.

    THE NUMBERS NEVER LIE!!!
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  • Profile picture of the author JakeStatler
    I would first like to commend you for even thinking about venturing out into the paid advertising realm.. Most marketers never move past "free traffic" (a completely separate topic by itself) and they struggle for a long time.

    Although free traffic is possible for long term results, paid traffic is where you go to scale your business, and if it's a residual business in the first place, it probably doesn't matter what advertising you're doing, the real results will come down the pipeline later.

    Everyone loses money when they start of investing in advertisements and paid traffic (unless you have an incredible mentor) so expect to lose a few dollars at first. The best advice I can give you is to track everything and tweak until you're getting the results you want.

    It's very unrealistic to think your first ads will be winners, but you can turn them into winners with patience, tracking and tweaking
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  • Profile picture of the author Malteaser
    Originally Posted by john mckee View Post

    I like to buy traffic to scale up quickly, however as you know in the beginning your ROI is not right away. My affiliate business is a residual kind of business. Can the experts here tell me that this is the right strategy?

    I spoke to one gentleman that said he spent $30,000 on a campaign (one that he tested 1st) and he realized that he may not get that money back for a while, but he didn't care because it was the quickest way to scale up so that eventually his downline would do the work and go viral if you will.

    Your thoughts?

    Before directing any traffic, make sure you have that sales funnel in place that converts well!

    You also want to have a product that converts and then invest all you want in paid traffic
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  • Profile picture of the author jgant
    I doubt I'd be prepared to lose $30k, but it is normal and expected to run campaigns at a loss until a winning formula is detected.

    I generally run multiple $5 per day campaigns to keep losses low. If a campaign is profitable at $5, it's profitable spending more.
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    • Profile picture of the author nitro37
      Only you know what you can afford, but with that being said if you can afford say $100 to test if that traffic stream is going to be ok for you. Then the answer is yes. I personally wouldn't spend $30k to test traffic unless you have money to burn.
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