The affiliate marketing business can be quite unpredictable. There are going to be months when everything goes according to the plan, and your business results exceed your expectations. Then there are months that nothing seems to go right. Many affiliates do get a bit nervous when their earnings start to drop. Making rash decisions in those situations won’t get you anywhere. If your earnings have dropped significantly, you want to stay calm and focus on things you can do to get back on the right track. Here are 5 ways to do just that:

• analyze your traffic: if your earnings are dropping because you are getting less traffic, you can do something about it. You should take advantage of new channels to bring more traffic to your website.
• analyze quality of your traffic: just because you are getting thousands of people to your website each and every month does not mean they are all ready to make purchases on your site. Quality traffic matters big time.
• try new affiliate products: not getting enough money from your current affiliate campaigns? It may be time for you to start trying new affiliate products.
• start more websites: it could be the case that your earnings are dropping because your websites are becoming stagnant. Adding new websites to your portfolio can always help with that.
• build your own product: relying only on affiliate products to make money can limit the potential of your business. Having your very own product would not be a bad idea.

If you are earning less money than ever before from your affiliate efforts, there is no need to panic. Trying to figure out the reason is the first step towards getting back on the horse.

Many affiliates see what is going on in other states and hope that Amazon tax won’t come to their state. It is nice to be optimistic but that is not the way to run a business. SC is the latest state to pass the affiliate tax law, forcing Amazon and a few other companies to leave the state. This anti-business measure will be making its way to almost every state in the U.S. in the near future. Let’s face it. States are struggling to make enough revenue to account for the liabilities. Affiliates are going to get the shaft as a part of these states’ efforts to raise their revenues.

It is encouraging to see other companies follow Amazon’s lead and leave the state. While we do not want to see affiliates lose their business, the best way to fight these anti-business measures is to take a strong stand. Going after the affiliate marketing business this way is going to lead to many small online businesses to struggle to stay afloat. By leaving these states, Amazon is reminding them that the current approach to the Internet tax issue is not the right one.

Affiliates are better off planning ahead of time just in case more states join this movement to implement Internet sales tax laws. Creating products and diversifying their revenue sources are must do for all affiliates at this point. We all want to make more money as affiliates. But you should not put all your eggs in one basket.

I predicted this a couple of years ago when we were just getting started with the whole “recession/depression” talks in the U.S. There is no question that many of our states are struggling to keep their budget deficits low. Taxing is the main way for local and state governments to raise revenue. Amazon for its part may not be against sales taxes but it does not support the current efforts, which will force the company to collect taxes across certain states.

Last week, Gov. Pat Quinn, Democrat of Illinois, signed a law that screwed Amazon affiliates in that area badly. Amazon had warned that it would not work with affiliates if the governor passed this law. Many small businesses lost a big chunk of their revenue overnight. Amazon kicked out big and small affiliates alike.

Amazon was as defiant as ever against this new piece of law:

We play by the same rules as other retailers, as the national chains collect online only for states where they have physical stores

Amazon is clearly on the right side here. The company is playing by the rules. Maybe rules need to be changed. It is shameful that Amazon competitors are using this episode to put pressure on the company. Competition is healthy but this new law will make a lot of affiliates go out of business. Unfortunately, that is something competitors to Amazon don’t care about.

As many have argued, these types of laws don’t lead to a significant increase in revenue for states. Amazon may end up collecting taxes in your state. But the affiliates in that state will go out of business or leave the state, taking with them their revenue. Unfortunately, many of these states use teachers, firefighters, and cops salaries to justify these tax hikes. There is no question these folks need to be paid. But small affiliate marketers and bloggers matter as well. Maybe states should just stop their wastes instead of going after small businesses.

It does seem this is a fight we can not win. Affiliates who are working with Amazon may want to try incorporating products from other companies in their business to hedge their bets. With states struggling to balance their budgets, affiliates will surely be thrown under the bus.

Affiliate marketing is not a new business model, but it is getting a lot of flak from people who are just getting familiar with it. For some reason, people have difficulty believing that affiliates can actually be honest with their reviews and claims. That could be partially due to the fact that some affiliates have overstepped the lines and done shady things in the past. Having some affiliates and marketers getting busted for misrepresenting products does not hurt either. But not all affiliates are out there to trick people into buying stuff. Being honest and promoting products worth promoting is a good start.

It goes without saying that your affiliate business can go out of business in a flash if you are busted for doing fake reviews. If your affiliate business is large, the PR disaster would be even worse. Yes. We all want to sell more products but affiliates can make money by doing things the right way. Here are 5 ways you can write legitimate reviews to make money as an affiliate:

• Actually review products: too many affiliates cut corners when reviewing products. It’s so easy to grab product description from Amazon and present that as your real review. But that’s what gets affiliate in trouble. If you are trying to sell a product to your audience, you may as well test it to see if it works as advertised.
• Be honest: if a product is terrible, don’t promote it. Nobody is forcing you to promote something that is not up to your standards (or your audience’s). Lying about a product may get you some sales in the short-term but people are not stupid. They will return those products and may come after you too.
• Think of negatives too: just because you are trying to promote a product does not mean that you should forget about the short-comings of that product. No product is perfect. Your review will look more credible if you address some of the faults of the products you are reviewing.
• Avoid copying others: there are so many affiliates who just copy everything others say about a product. It happens to my own sites all the time. What if I am wrong in my assessment of a product? Copying my work wouldn’t help anyone. Besides, shoppers are always looking for unique perspectives about products they are trying to buy. Coming up with unique content may be difficult but it is worth it in the end.
• Be transparent: affiliates are always scared to disclose their relationship with their merchants. It’s true that some people won’t buy using your links if you do that. But at least, you get to put all your cards on the table.

Being dishonest with your affiliate reviews is not going to help your affiliate business one bit. You may make a few sales, but complaints (and returns) will come back to haunt you in the future.

Dedicated affiliates work very hard to bring more leads to their merchants. It’s true that they don’t do it because they are in love with the merchant. We are all in this business to make some cash. It’s true that the most successful affiliate marketers act as a marketing arm extension for their merchants, but for all the effort that they put in, they don’t get any guarantees or specific benefits (except the commission checks).

I don’t know about you, but I have worked with many merchants who use their affiliates and discard them when times are tough. That attitude would make me feel undervalued. Being undervalued can lead to affiliates putting less than 100% effort forward or just abandoning merchants.

There are really two ways for us affiliates to deal with this issue. One way is to return the favor to merchants. A lot of successful affiliates use merchants to make money and discard their offers once the EPC goes below a certain level. The better approach in my opinion is working with merchants towards building a mutually successful relationship. I personally believe merchants should offer their best affiliates some unique benefit to keep them from focusing on other offers. I know a few companies offer jobs to their top affiliates, but another way to go is providing them with health benefits.

Now many argue that providing health benefits to folks who are not really employees is complicated. But I am sure there is a way around that (e.g. creating a new class of employees). For many affiliates, benefit costs cut into their profits and having merchants step up to take care of them is a big deal. I know I would give 110% to a merchant that is willing to work with me and not just use me as a tool for its own success. Will we see merchants step up to take care of their top affiliates more than before? We might! But with the economy crumbling, I wouldn’t hold my breath.

You decide: should merchants provide affiliates with some employee-like benefits?

I have been a fan of the Ultimate Fighting Championship for a while now. I have followed their PPV events, and have paid for them in the past 6 months. If you are not familiar with the UFC, it is the top mixed martial arts organization in the U.S. Basically, folks get into a cage and beat each other up until there is a winner. The sport is very hot these days, and fighters are getting paid more for their efforts than in the past. But recently, I read an article about how some fighters did not feel valued by the organization. These folks were claiming that they shed their blood for the UFC, but UFC uses them and discards them as they wish.

This whole thing made me think about my own experience with merchants. There have been numerous times that I have felt as If I was being abused by merchants. For instance, you put your time and effort to create an affiliate portal only to have your commissions slashed in half by the greedy merchants. Some merchants have lousy tracking practices and don’t offer you commission on indirect leads. A few merchants ask leads to call up and by on the phone to avoid paying commission to their affiliates.

My most recent experience was with a financial company that asked me to remove all their business-related solutions from my site. They argued that after careful consideration they had decided to not work with us affiliates. Now, I get the merchant side of the story, but their answer or lack thereof to my complaints was a slap in the face, having worked for months to develop a portal for their business solution.

It’s one thing to kick out affiliates who are under-performing. It’s another to kick out those who are bringing you leads on an everyday basis. Unfortunately, a lot of merchants don’t care about you and I as affiliates. We are just tools to help them reach their goals, and they will discard us as soon as they don’t have any need for us. But there are a few merchants that actually want to build a long-term relationship with you, and those are the ones that you should really give your 100% effort to. Why would you give your 100% to a company that doesn’t value your efforts?

Your take: do you feel undervalued by your merchant? What do you think merchants should do to feel affiliates more valued?