Even if you are new to affiliate programs, sooner or later you are bound to come across those programs that call for very heavy investment on your part. More often than not these are the programs that will have a very highly price affiliate product which will naturally require the generation of a very high number of leads before a single sale is made. A high number of leads means expensive sustained advertising.
The big temptation to get involved in these kind of programs is that because the affiliate product is so highly priced, the commission earnings from a single sale will tend to be very high. The problem with this is that one does not realize just how big an investment they have made to generate that single high ticket sale. If one were to take the trouble to do a few calculations, you would quickly realize that the margin is not as large as it may seem at face value. Then you also need to factor in the time taken to make that single sale. In most cases you will be much better off making many small sales over the same period of time.
But much more important is the fact that these high investment affiliate programs make it very difficult for you to refer others successfully to the opportunity. The problem here is that income from referrals which is usually residual income takes up an increasingly large part of affiliate earnings. And by joining affiliate programs that require a very high investment from the affiliate you make much more difficult for you to get referrals who will be able to duplicate what you are doping to make sales.
These are some of the compelling reasons why it is advisable to avoid programs that require too high an investment.
How To Recognize High Investment Affiliate Programs
The truth of the matter is that it is not always easy to recognize these high investment affiliate programs before it is too late. This is yet another reason why it is so important to test and do trial runs with affiliate programs before you fully commit yourself to join them. Even if you are forced to pay the joining fees, you will still save yourself a lot of money and grief over the long time.
It is actually quite easy to test a lot of things online and there is no reason why any online entrepreneur should not take advantage of this to establish exactly what kind of investment in cash and time is required to make an affiliate program work that they want to commit to.