A career in retail and borrowing a book about affiliate marketing turned into a work at home lifestyle for internet marketer Kevin Middleton.
Kevin, who lives in London, began his career in retail as a shop assistant and worked up through the ranks before starting his price comparison website, ProperPrice.co.uk in 2007.
In the past year he generated £530,000 (around $842,000 USD), all from affiliate commissions.
ProperPrice compares the prices of kitchen appliances and household products such as fridges, dishwashers, ovens, washing machines and TVs.
Kevin generates most of his traffic by advertising on AdWords and Bing.
I interviewed him to learn more. One thing Kevin explained is how he has an extra edge over other affiliates – he does things that his competitors don't do.
Hi Kevin (pictured RIGHT), thanks for agreeing to speak with me today. First, can you please tell me about yourself and what you do.
I'm in my early 40s, live in London and have been a full-time affiliate for four years and was a part-time affiliate for two years prior to this whilst working full time. I work from a spare room at home and I run a UK price comparison website in the kitchen appliances and TV sector called www.properprice.co.uk.
I understand the income you make from ProperPrice is all as an affiliate. What inspired you to get into affiliate marketing, and what were you doing before?
I have always been working in or around the shops. In my early days as a sales assistant then as a manager and more recently I was working as a project manager for retailers in airport environments.
Like many people, I always wanted to run my own business but was never sure what to do. I also had a real interest in the technologies behind the Internet and how it worked. I started to teach myself basic skills with HTML, CSS, JavaScript, PHP, etc. and slowly the idea of being able to make money online started.
How did you get started?
A friend bought an ebook about making money as an Amazon affiliate using pay per click. At that time Amazon allowed affiliates to use their brand name in AdWords ads and send traffic direct to Amazon.
I had no idea what affiliate marketing was at this point, and no experience of Google AdWords but this seemed a good way to learn which was why I agreed to do it. I really had no expectations that I could actually make a profit from this.
We created a bit of a competition between us to see who could sell the most and make the most money. I remember it being very exciting. Each morning I would look at my Amazon sales for the previous day and my AdWords spend and figure out what made a profit and what didn't.
I was only spending very small amounts, perhaps only £20 a day on my pay click advertising. I quickly learned that not everything can be promoted successfully and it was all about cutting your losing lines quickly and keeping the profitable lines running.
It was all very manual. I had to find new lines on Amazon and manually create the ads in AdWords. This wasn't very scalable. I discovered that both Amazon and AdWords had an API and I had this idea that if I could just join the two together I could automate large parts of the process. My PHP skills were largely non-existent then but it forced me to learn.
I spent many hours after work working through the nights to figure out how to do this. In the end I was able to create a control panel that would import products from Amazon and create pay per click ads and send them direct to AdWords and then pulling reports from both Amazon and AdWords and figure out what was working and what wasn't very quickly.
I started to earn meaningful amounts of money very quickly. However, I wasn't convinced this was a long-term business as one change in policy from Amazon would kill it off in an instant, so I was never tempted to give up my full-time job at that point. This did eventually happen but by then I was diversified and had a sensible amount of savings.
One-legged stools are dangerous
Amazon was really my first attempt at affiliate marketing. Even though I had some success with this I was looking at other ways of making money online. I believe a successful affiliate marketing business is like a three-legged stool. If all your income just comes from one method then you only have a one-legged stool, which is dangerous. If you have a three-legged stool it's a lot easier to sit on!
I looked around at other affiliate marketing opportunities such as information marketing but it never really appealed to me. In the end I went with physical product marketing again. Payouts on individual products are quite low but are consistent and you are on the right side of the trend as more people transfer their purchases online from the high street.
I chose to promote kitchen appliances as it was a hedge against Amazon since they do not sell large kitchen appliances in the UK. Whilst there was other affiliate competition in this niche with the odd exception I thought the quality of the competition was very low and I could do something better. Also, critically there were a large number of merchants that offered affiliate programs in this sector.
What were you doing before you started affiliate marketing? What was your life like?
I was fortunate in that I worked for a good company, but it was very process driven and meeting orientated and many days were back-to-back meetings. Also I live in London which means commuting anywhere is a problem so I was spending a couple of hours a day just getting to and from work.
When I quit my “proper job” I was determined not to do the things that I disliked about my old job. I nearly always refuse all meeting requests. In the past five years you could count the amount of meetings that I have had on a badly mutilated hand. I even discourage phone calls and most people now know to contact me by email for the best response.
Do you operate on your own or do you have business partners or employees?
On my own without business partners, but I don't rule out having business partners in the future.
From time to time I might hire somebody on Elance to help out but generally I do everything myself. I am quite good at writing automation tools to help me.
I have considered opening a small office and employing some people as this would help me expand faster as I'm very positive about the potential of the sector that I work in. However, if I was to do that it would negate many of the benefits and lifestyle advantages of being a work at home affiliate. Because I readily take days off on a whim or go away on holiday at short notice this doesn't sit well with having the responsibility of managing a team.
Do you mind me asking what kind of income you're earning and if you're happy to answer this, is there any chance you could break down your income for us?
In the past year I've earned £530,000. That's revenue generated – not profit. All of that is affiliate commissions. Each year I've been able to improve on the year before.
What is your profit margin?
I wouldn't even tell my priest that! I'm very happy with the margin that I make. It's not “private jet” money, but it is significantly more than what I and my wife were earning in our “proper jobs”.
My biggest cost is my PPC bills. My hosting costs are pretty small in relation to my earnings. As I work from home my overheads are pretty small.
Did you make any mistakes when you were first starting out? What did you learn from them and how did it change the way you took your business forward?
My first business idea online was to create a directory and charge people a fee for listing their website. I chose the gardening niche (looking back I have no idea why) and it took me over a year to build it as I was completely new to everything.
When I finally launched it I had one person sign up in the first three months. For some reason I thought that you only had to build something and people would find it. I hadn't bought into the idea that you had to actively market something even if it is the best thing ever.
It was at this time I remember reading about an analogy with a party. You could host the world's best party with the greatest DJ, the finest food, fantastic wine and a stunning venue but if you don't send out the invites nobody is going to turn up.
Ever since I have spent a lot of time thinking about and working on sending out those invites.
Can you give me a rundown of what was involved in getting ProperPrice up and running?
There wasn't much to it I'm afraid. The site is built on a WordPress front-end and a custom-built backend that controls all the comparison data.
How has your life changed since moving to an online business model?
A lot. First off, both my wife and I were able to give up our full-time jobs. This has given us a very flexible lifestyle. I prefer to think of it as a blended lifestyle, where work and home life are not rigidly separated. Whilst this means we are able to go away on holiday fairly frequently, it also means that I have to spend half an hour a day just checking things are running smoothly.
We live very close to a cinema and it's great to be able to go at day times during the week when we pretty much have the cinema to ourselves. Similarly, we go to lots of concerts and theater shows and it's nice not to have to worry about getting up the next morning. I'm a big sports fan and watch a lot of cricket which can be very time consuming, but I just work around these events. This year London hosted the Olympics and we were able to attend events most days and I could shuffle work around it.
Everything is a compromise. My business is not a set and forget business. Ultimately I still have to put the hours in or sales start to drop but the point is it does not matter which hours I work. Some of my friends might describe me as lazy, but this is because they only see and hear about the things I get up to or holidays I have taken, but I still have to graft to achieve this, it's just in a different way.
Can you talk me through a typical day?
Well, I wake up when I wake up. I know that might sound a bit trivial but for years having woken up to an alarm clock at some unearthly hour it is a big luxury to me now not to have to use an alarm clock.
The first thing I want to do is have a look at the sales and costs for yesterday. From the night before I will already know how the day has panned out but this is the first chance I get to see it in detail. It is often where I pick up on customer trends or new ideas or new product areas.
The bit of the job that I enjoy the most is coding. I'm always working on new features or new systems to support the backend of the website and I have about six or seven mini projects on the go at any one time. That way when I get fed up of one I just switch to another one.
I should say that I am no programmer. I'm self-taught in PHP and I'm good enough to be able to code what I need but I doubt I would be good enough to actually get a job as a PHP programmer. You don't need to be an absolute expert – you just need to know enough.
Afternoons are mainly spent on maintenance tasks, for example making sure new product lines are listed and answering emails with merchants or networks. Depending on what else is happening I might well work into the evening or even the into the night if particularly enthusiastic about something.
Let's talk a bit about your website. How did you get the idea to develop a price comparison website? Do you remember where you were and what you were doing when inspiration struck?
The concept of comparison seems to be a natural place an affiliate can add value for a merchant. A customer has decided what they wish to purchase, for example they have a make and model number but the very fact that they are using a comparison site means they are open to who they purchase an item from. This makes comparison sites highly attractive to merchants as they can be certain that all sales are incremental.
From an affiliate's perspective the fact that customers are searching for a make and model means that they are quite a way down the sales funnel and are zeroing in on their product choice, so this traffic is very valuable for an affiliate.
There was no one moment that I realized that this is what I wanted to do and that this was the way forward but it happened over a period of time as I was researching what I wanted to do next.
How many unique visitors a day does your website get?
I get around 4,000 per day. There is some seasonality between what people buy but the overall numbers are similar. For example I get more traffic for people looking for televisions in the lead up to Christmas but in January there is huge traffic for washing machines.
Do you have websites other than ProperPrice?
I have a bank of domain names that I might develop in the future but I have no other sites operational. I've been looking around at other sectors and I can see the amount of fashion that is now being bought online and I think my existing comparison engine would work well in areas such as footwear.
16. Tell me a bit about where your affiliate income comes from and how it is generated through ProperPrice.
As it is all UK-based, the main networks are Affiliate Window, Tradedoubler and Webgains as well as Amazon.
All the income is earned on a CPA basis so I only get paid when a sale is completed and delivered. I sometimes accept homepage promotions or agree to put a banner ad for a particular merchant but I prefer to do this on an increased CPA basis rather than for a fixed amount as I'm confident that I can generate increased sales.
It's all done on a “last cookie wins” basis, so if the user visits another site after mine, then I lose the commission.
Looking at ProperPrice, the first thing I noticed is that there's no hard sell – just products. Can you explain your approach and why you choose to work this way?
On the site you will find next to no information in respect of what a product can do or cannot do. All the information I supply is in respect to price, availability and delivery. I felt that if I did this bit very well then the sales would take care of themselves.
For example, I could have written many articles on particular features like the steam function on a washing machine or how much an energy-saving feature could save you money. All of this would be useful to a customer. However, they would still be in the research phase of their purchase and are likely to visit many more sites before homing in on a particular product and as a result this wouldn't be very commercial.
By focusing on when a customer is searching for a particular make and model number you can be fairly certain that the research phase is finishing and they are now looking at what deals are available and who to purchase from. If you can fulfil that last piece of the puzzle then you can make a sale.
I can see you have focused on home related products – cooking, cleaning, appliances, home technology etc. Why did you choose this area?
I think it's a natural area where people will purchase online. The products are large enough that you're likely to have them delivered anyway even if you were to go to your local store and it's not like clothing where you really need to feel a product or have tried it on, you just want to be sure that it does what you need to do. Quite often these are replacement items so regardless of the economic climate if your washing machine breaks down you want a new one in the next 48 hours.
On your about page it says, “ProperPrice is concentrating on quality over quantity. We have put a lot of effort to make sure that the information on the products we display is up to date and accurate. This sounds simple, but in practice it takes a lot of time and effort to get it right.” How do you go about getting this element of your business right?
The thing that I do differently is to put as much information as I can get in respect to the pricing of an item on one page so the customer feels that they have all the information they need to make a purchasing decision.
My competitors were simply using the data feeds supplied by the merchants which can be notoriously inaccurate. I decided to use a scraper to crawl every merchant site so I can get near live prices. This means my site is more accurate. While I'm crawling the page I can also pick up any information I feel would be useful to the potential customer such as earliest delivery dates, quantity in stock, the cost of recycling the old appliance, extended warranty prices etc and show it all together on the comparison page.
By using a crawler I can update prices as they happen whereas a merchant's feed at best will only be updated once a day. I can react to these changes quickly by updating my PPC adverts with the new price faster than my competitors because I use automation and AdWords and Bing's API.
I also add any publicly available voucher codes or discount coupons into the listing price. Additionally I will also list any rebates that are available from the manufacturer, and include the claim form.
Most of this process is automated but the initial mapping of the product requires a human check for accuracy. The problem is that if you have an error on the page people will assume your whole site is rubbish and click away in a heartbeat.
What process do you go through when choosing products to promote?
When I chose the domain name ProperPrice I deliberately kept it generic even though I was going to major in kitchen appliances. It means I can promote any product or category that I like.
There are some categories that I've really struggled with and have stopped doing such as digital cameras. Although it was easy to generate sales by buying traffic, the conversion rates were too low to make a profit. It seems that people like to click around more before making their purchasing decision in some categories.
The hottest product I promoted this year was a window cleaning gadget that sold for around £50 which was like a squeegee attached to a mini vacuum cleaner. At the time I listed it I just thought it a curious product but had noticed an advert for it in a national newspaper so I quickly created a comparison and put up an ad and was suddenly selling hundreds of these per week.
What are your tips for finding a good affiliate program to join?
When I first started I was just happy to be accepted on to any program. I joined every merchant in my sector and gave it a go. I made mistakes doing this, but it's also the fastest way to learn what works and what doesn't work. When a new merchant approaches me I will probably run them on a trial basis and I watch very closely their conversion rate and their cancellation rate.
Some retailers may claim that the product is in stock and when a customer places an order they then scrabble around to get the stock from the manufacturer and the customer may choose to wait or cancel. It is from this cancellation rate that indicates to me what their customer service is like.
What kind of marketing do you do and how much time do you spend on marketing? What do you do in terms of traffic generation? How do most people find you?
It's search engine marketing, both pay per click and organic traffic.
On the pay per click side I make heavy use of the APIs for both Google and Bing. They both have the facility to use ad parameters which means that you can change the price in the ad without having to create a new ad. I always put the price in the ad as this helps click-through rate and it means I can update the price multiple times per day without having to upload a complete new ad which from a Quality Score perspective is not a good idea. This is a feature that is only available to API users so you need to brush up on your programming skills.
I have also written my own bid management tool, so each day my system downloads the sales reports from the networks as well as the spend from the pay per click campaigns and I see which products are making or losing money. I've built in a system of rules which means that the bid prices can get adjusted according to the profitability at that moment in time.
As far as organic traffic is concerned I don't get huge amounts of it, but then I don't put any work into it either. I treat this traffic as a bonus. I did spend an afternoon link building once but it was so boring I would rather stick pins in my eyes! In general I'm up against other retailers for the top rankings and it is difficult to rank for a very large number of low volume keywords across thousands of pages.
In general, I prefer the immediacy of PPC marketing.
Would you mind sharing your favorite marketing strategies?
One of the things I like to do is look for product inspiration on television and in the press. For example, if a shopping channel is promoting an electronics product I know that there will be people searching for that product online right now. Within minutes I can create a quality comparison and have an advert up and running.
TV programs about gadgets is another good area to get inspiration. Often they do a review of a particular category and declare one product the winner. Again a lot of people will be searching for this product online. Once you have built an initial platform you can react very quickly to an opportunity.
I should say that this is not the bulk of my business as most kitchen appliances are not interesting enough for the press or TV to cover but it is more fun and exciting especially when you see sales generated from something you only set up a few minutes ago.
What challenges do you think people in price comparison face?
I think it has a low barrier to entry and there are more affiliate tools today to get you started quicker. On the flipside there are millions of products to promote and hundreds of different sectors. I know people who can make a living by promoting narrow areas such as just satnavs or golf equipment or perfumes.
In the UK, cash back sites are growing at a phenomenal rate. These cause an issue for comparison sites since a customer will use your service and then go to the cash back site and you will lose credit for the sale.
Another aspect is that all the major UK affiliate networks work on paid-when-paid contracts. This adds another link in the chain to getting paid so payment times can be quite lengthy. Also the affiliate carries all the risk and typically when a merchant goes into administration or bankruptcy you lose most or all of the outstanding monies since the networks will not pay out.
Why do you think you have found success when others struggle to?
I'm not claiming to have done anything special or sufficiently unique. I do not feel that I have achieved success but I just hope I am on the right path so I'm not really qualified to answer this question.
What advice would you give to people just starting out in affiliate marketing? Can you give us five tips for things you wish you knew before you started in affiliate marketing?
I think an affiliate today needs an edge. It doesn't have to be a big thing but it does need to be something. For example, I think my programming skills give me an advantage over other affiliates in my sector. They allow me to do things other affiliates can't or do not want to spend money doing. It doesn't mean my site is leaps and bounds ahead of anyone else's. It only has to be a little bit better for it to get some success.
For some affiliates their edge might be that they have in-depth knowledge of a particular market and they are able to communicate that to their users. For others it might mean they have good skills in marketing and are able to drive traffic without having particular knowledge of their market, or it might be that you're just prepared to work harder than other affiliates – anyone can do that!
You are unlikely to make much money from your first websites so don't stress too much about them and treat it as part of your apprenticeship.
I know people who have made money from affiliate marketing and then something has changed, for example a Google update, and they have lost all their income, become disenchanted with affiliate marketing and quit. Methods will always change. The biggest strength of an affiliate is that he is agile and flexible. Nothing goes in a straight line, my business included. It has been said many times that this is a get rich slowly business, and I couldn't agree more, although much of the hype around this industry suggests otherwise.
Is there anything else you'd like to add?
I love watching those gold mining shows on the Discovery Channel where people will spend six months working hard in Alaska digging for gold with no guarantee of getting anything back at the end of it. In that sense it has some similarities with affiliate marketing, only we can do it in our own homes.
It might seem an act of madness to work for 3, 6 or perhaps 12 months and not make money but that is the life of an affiliate. It is key for an affiliate to be agile and if you start earning money think of that three-legged stool I mentioned earlier.
I hope I haven't rambled on too much and it doesn't come across as too preachy as I don't claim to have the answers, I can only talk about what's worked for me and that hopefully somebody's found this useful.
KEY POINTS
- To add motivation, compete with a friend.
- If you don't have skills, you can learn them.
- In PPC marketing, drop losers quickly.
- You must have more than one revenue source.
- Study competitors before you start.
- You don't need to be an expert – you just need to know enough.
- People who are searching for a product make and model are ideal, ready-to-buy visitors.
- You want the customer to believe you have given them all the information they need.
- Get new products online fast.
- For ideas on products to promote, look on TV and in newspapers.
- Treat your first websites as part of your apprenticeship.
- Things change. Be agile and flexible.
- Build a business around your strengths. (Kevin enjoys coding.)
- Look for an edge over other affiliates.
