Affiliate Prescription: How to Prevent
'Sudden Earnings Collapse'
What would you do if your affiliate earnings suddenly
dropped from $50,000 per month to $2,000 per month; or from
$2,000 per month to absolutely no income at all?
How would you pay your super-sized mortgage and auto loans?
Never mind trivial items like shelter and transportation –
who's going to pay the groceries? Your mother-in-law?
Forget it. She always knew you should get a 'real job' and
now she's going to lord it all over you.
Don't think that such catastrophes can't or don't happen.
They can and they do.
Merchants go belly-up and the commission checks stop
arriving.
Products become obsolete or illegal, and entire markets
disappear. (Remember BETA video cassette players? They
didn't even make good boat anchors.)
For example, let's consider the implications of the
following news release from the DEA (Drug Enforcement
Administration) in the United States, "DEA Unveils
International Toll-Free Hotline to Report Illegal
Prescription Drug Sales and Rogue Pharmacies Operating on
the Internet".
Read the full press release.
At issue here are doctors who prescribe drugs without seeing
patients in person. It's a downright dangerous practice, and
the medical questionnaires on pharmaceutical web sites don't
begin to solve the problem.
As a result, doctors and online pharmacies in several states
had fines levied against them, and some pharmacies have had
their licenses lost or revoked.
OK, but how does that affect you as an affiliate?
Well, here's a post I found on the RXAffiliateForum with the
subject line "My Conversation with the FBI".
"I spoke with the Special agent in charge for the
southeastern region for INTERNET pharmacies. I was told in
no uncertain terms it is illegal to dispense medications
without a doctor/patient relationship. The FBI, DEA and
other regulatory and enforcement agencies are investigating
all websites that operate in this fashion."
"In addition there is no distinction between websites (read
'affiliate websites'), Ops (Online pharmacies) and
pharmacies. Just a heads up."
Just a 'heads up', indeed!
Here's another post that I found at the same forum.
"I've taken HUGE losses in the OP (Online Pharmacy)
industry. ABC Merchant Site (name changed) owes me over
$15,000! And XYZ Merchant Site (name changed) owes me over
$5000! …There are people who have lost 2, 3, 4... even 5
times the amount that I have! And I've lost over $20,000! If
you read through old posts on this forum, you will find TONS
of people in the same boat. Some people have even taken
legal action... but very few have got any money."
After those online pharmacies pay their fines, there
probably isn't much left to cover their affiliates'
commission checks.
According to Richard A. Chapo, Esq. of AdultInternetLaw.com,
"it is clear that affiliates of online pharmacies can be
prosecuted in states such as Nevada".
Mr. Chapo encourages webmasters of online pharmacies to
"review the programs they are promoting to make sure that
they are not in conflict with the Controlled Substance Acts
of various states, such as Nevada. There is little doubt
that the industry will see many more prosecutions in this
area of the online industry."
Scarey, huh? Yes, but the point is not to scare you away
from affiliate marketing.
The point is that there are potential 'problems' with any
business arena you may want to enter. You simply need to be
both cautious and aware.
So, what's the prescription for protecting yourself from
sudden earnings collapse?
Well, just like you can't expect to stay healthy or thrive
on a steady diet of cake, neither should you hope to
maintain or grow an affiliate business with a single type of
product.
There are thousands of merchants with affiliate programs,
and tens of thousands of products in different markets from
which to choose, so start choosing. Expand and diversify
your product range and build a solid and healthy affiliate
business!
In other words, hedge your bets - and no, that doesn't
necessarily mean that you should promote online casinos. :-)
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