What Vertical Should You Be In? - Next Level Stuff (are you sitting down?)

I get people asking me a lot where they should start in affiliate marketing.

Typically I give the same answer. Pick a vertical with low paying, high converting offers. Then you can get statistical relevance quicker and at a much smaller cost. This speeds up the learning process 100% + makes you feel like you’re making progress.

This article is for people LONG past that stage.

They’re also past the stage of I just want to run whatever will make me the most money.

This article is for people that are ready to think future forward and are ready to build a real business with a long term vision! Now I know some of you like your very simple life with just yourself running traffic and not having any responsibilities. Again This is not for you.

This is for the person that wants to build something BIG!

Well if you’re ready…

I recently optimized for efficiency and service a lot of the internal systems and structure for A4D. Any time I change anything for any of my companies I build financial models, which I did again this time as well. Once I was done I started to ask myself question. How does this model stack up with other industries and is there any examples out there and is our department overhead costs where they should be?

Then I jumped over to Google and started hunting around for “average net margin by industry” to see if I could find some standards. Obviously as a company A4D is still in growth mode so we’re investing heavily in R&D as well as front loading staff for growth. But, I was curious of 2 things

1. How we were doing compared to others in the space.

2. Where we could end up at full scale.

After poking around for a while I came across some good sites with industry data averages. Then pasted them in a Skype chat I’m in and some others found some more. Now obviously, these are for very large corporations and averages across an industry. And thats’ where I want to go, multi-hundreds of millions in revenue.

When I show you these, at first glance you may think…. cool whatever.

But, stop and imagine you can build a large company in any of these verticals, it all just starts with the first step. Why not head down a road with the brightest of lights at the end of the tunnel?

As you now begin to look at these charts think to yourself a couple of things

1. Could I start promoting in one of these verticals today? Could this be my entry way into the next step. Typically the important part of most businesses is understanding the customer. The customers motivations, needs and wants.
2. Is there a logical road map to becoming a larger player in one of these industries in the long term? Whether you say you can or you can't, you're right.

Here's a few charts:

• http://www.businessinsider.com/sector-profit-margins-sp-500-2012-8
• http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/margin.html
• http://research.financial-projections.com/IndustryStats-NetProfit (based on older data I think)

There’s a handful of charts by industry and how they stack up as far as profit margins.

Do you see any industries you could start generating leads for.

By generating leads would you get to know the consumer on the front end?

Do you see an industry you could start learning about, then open a small call center?

I didn’t say these things are easy to build. But when you’re ready I’d take a look at these charts and find out where it makes the most sense to think about learning.

Start with the end in mind. Not sure where I heard that but it couldn’t be more true. So many people in our space and in life just listlessly wander through things without definiteness of purpose. Without a big goal and destination they’re heading to. “I just want to make money” is neither a goal nor a destination. It’s the recipe for a hamster wheel. Nothing more powerful then picking your destination and making it huge. Bigger then you can comprehend. Then breaking it down into achievable smaller goals along the way so you feel a sense of accomplishment.

In looking at this list I like Insurance. Good margins, usage of other peoples money, can start as an affiliate and generate leads to understand the consumer. Could easily transition to starting a small brokerage with someone else fulfilling the insurance on the backend. Then once you have enough customers you could transition to fulfilling the insurance yourself. Sounds like an amazing business.

There’s lots industries on the lists that fit this model. As an amazing media buyer and affiliate you can buy media in any vertical and typically make it work. It’s just all about focus and time. Why not learn about one that has an amazing pot of gold at the end of the rainbow?

What vertical looks interesting to you and what’s you plan?