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Monday, November 17, 2008

Bad Economy = More online earners?

There's no need to go on a long rant about the state of the current American economy. We all know the situation, and surely, we've all had our moments of anger, despair, rage, depression, ignorance/bliss and every other emotion possible. What does need to be discussed is where the current American economy leaves the average person who is trying to work from home, maybe using an affiliate marketing program or other internet marketing strategy to make money online.

Explaining Discretionary Income

The money a person makes can be broken down into categories. Everything you have left after you pay your taxes is called your disposable income. That's money you have left that you can actually buy things with and pay bills with. From that disposable income there's a smaller slice called discretionary income. That's the category that is getting written out of people's budgets and that's the category which can affect your affiliate marketing programs.

Discretionary income is money people have and put towards unnecessary items. The definition of unnecessary or extra can change from person to person and source to source, but it's basically anything that's not essential to living. So even if you think you "need" that new jacket for the winter, if your old one is still serviceable than you don't actually need the new one and the money you spend on it falls into the discretionary income range.

Discretionary Income is Vital for Affiliate Marketing!

Obviously when times are tough the first things to go are the things that people don't really need and fall into their discretionary spending. That's a huge problem for those who are making money online with affiliate marketing. More often than not, the products that online marketers are advertising and receiving commissions on are discretionary items. Whether it's shoes, cheap travel deals, sports memorabilia, collectibles of other kinds or anything else, those all fall into discretionary income for households around the country.

When people cut their discretionary income budget, whether out of necessity or out of a desire to save more, less of these products are sold. That means less visitors to your website, less buyers for the products you are advertising and less money going into your pocket from your affiliate marketing or working from home strategy as a result.

What can online marketers working from home do to continue to be successful?

1. Diversify your online marketing - Just as diversification is important when you invest (you prevent huge losses by spreading yourself around, so one stock can't destroy your entire savings if it falls), diversification is also important for affiliate marketing. Branch out into new products and try to find products that are essential for everyday life, as opposed to luxuries.

2. Research target markets better - Research is always important when it comes down to affiliate marketing. You may find you have the right product and the wrong target market and are wasting your efforts. Research into the demographics least affecting by the current American economy problems and find products that are tailored to their interests.

3. Find better deals - More expensive products offer higher commissions in affiliate marketing programs, obviously the more money spent, the more money you in turn make. But cheaper priced items will sell more, especially in tougher times with the American economy. Turn your attention to more bargain products and cheaper offerings to keep making money online.

There isn't one easy solution out there for those working from home, trying to make money online with affiliate marketing. The falling American economy is affecting everybody adversely. But you can always try to change your strategy around to be more successful. You have to stay ahead of the game, in every aspect of life, instead of permanently playing catch up.

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