Long Fables

When most beginners start an affiliate marketing business, they don’t realize how important cash flow is. And they don’t always realize how the cash flows in and out of their business on a day to day basis.

This is an important concept to grasp if you want to be successful in business though, so let’s look at the issue in detail.

Cash flow is simply the amount of cash you have going in or out of your business at any given time. The term “cash” in this instance is actually available money - whether it’s in your bank account, PayPal account, or actual cash in hand doesn’t matter. What matters is what you actually have available to spend.

Now many new affiliate marketers will spend money to get their affiliate marketing activities off the ground. They’ll spend money on advertisements, setting up new websites, or hiring other professionals to do various tasks.

The problem though, is they don’t realize how long it might be before cash starts flowing IN from their affiliate marketing efforts.

A common scenario is this: The new affiliate signs up for a program which pays every two weeks. So they start marketing - and spending money - based on the assumption they’ll have more money in hand in two weeks. That’s not exactly how it works though…

You see, there’s a built in lag period between money earned and money in hand. If you’ve joined an affiliate program that pays every two weeks, it could be up to 4 weeks before you see the actual earnings in your hand.

Let’s say for instance, you join an affiliate network like Clickbank which sends your earnings every two weeks. And let’s further say you $100 in commission on the 1st day of the month. Now since Clickbank pays out every two weeks, anything you earn between the 1st and the 15th of the month will be paid all together on one check. But that check will not actually be mailed to you until the 1st of the following month. So the $100 you earned on the first won’t actually be in your hands for 4 weeks.

Now the good part of this of course, is any sales you make on the 15th of the month. Since that’s when the pay period cut off time is, any commissions earned on the 15th will be mailed to you on the check sent the 1st of the next month. In other words: In two weeks.

As you’ve probably realized already, this problem becomes much more severe with affiliate programs and networks that pay out once each month. Several of the biggest pay on the 20th of each month for instance… but they’re paying you for commissions earned in the previous month.

So anything earned in the month of December for instance - regardless of how early or late in the month you earned those commissions - won’t actually show up in your hands until almost the end of January.

Cash flow is important in all businesses, but it can make or break a new affiliate marketing business. So be sure to realistically take this into account when growing your business, so you’ll be able to continue growing for the long term instead of having to quit early due to lack of spendable cash.

© 2006, Kathy Burns-Millyard. Kathy is a professionally published freelance writer and stock photographer living in Southeast New Mexico. You’ll find some of her best articles and reports on small business, motivation, and marketing in the Brain Dump section of the ElectronicPerceptions.com website. Please visit and enjoy!

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