PartnerPerform Blog

A recent BusinessWeek article suggests that entrepreneurs can launch a new business online starting at $3,000.

“Startup costs can be as low as $3,000, and the business can be set up in a home office and attended to at nights and on weekends, allowing new entrepreneurs to keep their day jobs.”

While $3,000 is a modest estimate, affiliate marketers can, and often do, much better. Let’s examine the costs, blow-by-blow. What does an affiliate need to spend to have all the tools to become successful?

1. Computer. I assume that most every serious entrepreneur owns a home computer. In the case that our new affiliate marketer does not own a computer, let’s take a cost-effective option that will work for all of an affiliates needs. Here’s a lovely, budget-aggressive Dell PC for $500. Total Cost: $500.
2. HTML Editor. Sure, one could toss another $400 on DreamWeaver or another WYSIWYG editor. If your bootstraps are really tight, there is a great selection of free HTML editors available online, including the highly recommended Arachnophilia. Total Cost: $Free.
3. Graphics Editor. Sure, a BusinessWeek entrepreneur could plunk down $649 for a current copy of Photoshop, but affiliates can get the same functionality at a much, much better price point: free. Enter The GIMP, an open source graphic editor application with all the tools a web designer would need to build a great affiliate site. Total Cost: $Free.
4. A Domain. A domain isn’t necessarily a requirement, but it makes success a lot easier to achieve. If you wanted to go the free route, an affiliate could sign up for a free blog at Blogger.com or another free blogging service that includes hosting. If you wanted a domain of your own, $8 will get you one at GoDaddy.com. Total Cost: $8, or…
5. Hosting. There are a sea of hosting options available for webmasters. My webmaster of choice? Bluehost. Bluehost service starts at $6.95 per month, and even includes a domain. If you decide to use Bluehost, scratch that $8 from your list above. Total yearly fee for Bluehost, plus one domain: $83.40.
6. Business Registration. To run any legal business, the entrepreneur will need to register their business with the county or state. If we’re a single entrepreneur with no business partners, we can register a DBA (”Doing Business As”) with the county or state. With this registration, we can run our business and use our social security number as our Tax ID. The total cost here depends on your location, but we’ll take Cook County, Illinois as an example. Total Cost: Around $100.

There you have it: the most bare bones, bootstrapped tools an affiliate would need to make a success in this business. The total cost of these tools? $683.40. If our affiliate entrepreneur already owns a relatively up-to-date computer, the cost is much less: just $183.40, the total cost of business registration and yearly hosting with BlueHost (including domain registration). $183.40 for an affiliate to start a web business vs $3,000 for a BusinessWeek entrepreneur. WINNER: The Affiliate Marketer!!!!

Of course, any successful affiliate marketer will tell you that it takes a lot more than just the tools listed above. Affiliate marketing takes time, patience, savvy, hard work, and a strong instinct about the consumer experience online. $183.40 is not the cost of success in affiliate marketing, its the “sign-up fee” for a shot at one heck of an exciting career…