We're gonna explain exactly what a loss leader is, how you can use it in your internet marketing business, and more importantly, we're gonna discuss what the profit margins are, what the commission structure is, and exactly how doing this sort of marketing can lead to a lot of profits down the road in the long term and help you build a really solid, forecastable predictable income stream from every product launch that you choose to do. 


So, let's dive in first and understand what a loss leader is. So, a loss leader is an offer that's sold with the sole intention of attracting and capturing leads for a funnel instead of for making a profit. So imagine if your main focus was to get the lead by launching a product to get a customer. That's all I want is a customer on my list.


I don't care if I get to keep the $20, the $50, whatever it is that they paid for the product. I'll make the product and I'll give away all the profit, because all I want is to have a customer on my list, a paying customer that knows me, that likes me, and that has trusted me enough to invest money in something that I made. 


So when you create a lost leader, the cost of producing the lost leader can actually make you go negative. It basically costs you more money to produce it and launch it than you make, and that's why you lose money. So it's the leader of the funnel, it's the main thing in the funnel, and it's losing you money. 


The purpose is to make the difference up, though in the back end, having something on your sales funnel that makes it all worthwhile. If you're just creating products and giving away the product, the profits on every product you create without having a strategy in place, well, that's not smart. 


If you do this tactfully, strategically, and smartly, you can make a lot of money. As a matter of fact, pretty much every single thing that we've launched in as far as I can remember, has always been a lost leader. We even reinject the funnel money into the affiliates to make it a 100% loss leader. 


We even go backwards. We go into the red in many cases. So let's talk about that. First of all, for it to really, really be an effective loss leader, the way that I see it is it's gotta be a no-brainer times three. Alright? And this is what I mean by a no-brainer. Times three. 


First, no-brainer is it's got to be good for the customer. The customer just has to look at this and be like, oh my God, I'd be stupid not to buy this. So the offer has to be a no-brainer because it's just an incredible amount of value for a super low price. So when you're creating a lost leader, the point is to move high volume. 


A lost leader only works if you move high volume because the purpose is not to make money, it's to get leads. So you wanna get a lot of leads. If you were just trying to sell for profit, then I would say the volume doesn't matter. The price of the product matters because I can make $10,000 by selling ten one thousand dollar items, or I can make $10,000 by selling $10 items or whatever that works out to them. 


The point is that if it was about money, I'd focus on price. But because it's a low loss leader, I'm focusing on volume. And the best way to move a lot of value is to have just an incredible offer for people where it makes them go, wait a second, can this possibly be true? Like, is this real? 


Can they possibly be giving me this much stuff or that amount of money? What's the catch? Like when your offer seems too good to be true. That's when you know it's a no-brainer for the customer. Now, a loss leader also has to be a no-brainer for the affiliate. 


You might think, well, isn't the customer more important? Look, there is nobody more important in your business than the affiliate. Yeah, customers are very important. You should treat them like gold. It is very, very important to make your customers happy, to make sure that you build trust, because that's what develops loyalty, and they'll keep buying from you. 


Yeah, all that is great. But remember, you wouldn't even have customers if it wasn't for affiliates. So on the hierarchy here, the affiliate ranks much higher because one affiliate could be worth a hundred customers or a thousand customers to you, right? So a loss leader has to be a no-brainer for the customer because you just have incredible value.


But it has to be a no-brainer for the affiliate because they get to keep all of the profit from the sale. If they get to keep all of the profit from your launch, that eliminates the need for them to create a launch of their own. They don't have to worry about product creation, they don't have to worry about support. 


They don't have to worry about any of the tedious stuff involved with creating and launching a product, building the funnel, testing everything. They just have to endorse it. And that is a no-brainer. They get to keep all the money, and all they gotta do is promote it to their list. Well, that's great. That's amazing. 


If they were creating the product, they would actually have to recruit affiliates. They would have to do customer support, they would have to build the funnel. They would have to spend money on copywriting and graphics and design the website and build the members that have so many things to do when creating and launching a product. 


For an affiliate to not have to do that and get to keep all the money, not a percentage of it, but all of it, giving them a hundred percent of the profit for every sale made. Well, now that's a no-brainer for them as well. So far you've got two out of three, no-brainers. 


It's a no-brainer for the customer. It's a no-brainer for the affiliate. And you know what? It's gotta be a no-brainer for the vendor. And this is a no-brainer for you. Only if you have a strategy, if you've got something on the back end. 


Remember, I mentioned, it makes no sense to create a loss leader and give away all your money if you're not monetizing, if you don't have an end game, if you're not monetizing those customers, because remember, once they go through the funnel and their purchase is complete, they're done, they're yours.


Now you can start monetizing them almost instantly, and you don't owe any commissions on the way that you monetize your customers. They're your customer. Now, they're on your list. You can mail them, you can monetize them, you can put them into webinars, you can do all kinds of stuff, and they're all yours. 


You get to keep all of the profit, right? So it's a no-brainer for you because this creates a tsunami of buyer leads that can be put into a webinar and you can make high ticket sales. So you can make a thousand dollars sales, $500 sales, and you can promote that. You can promote a high ticket webinar this week, another high ticket webinar next week, another high ticket webinar.


You are gonna keep the amount of money that you're gonna make from promoting backend high ticket sales to these customers are gonna far eclipse the amount of sales that the amount of money that you would've made by just keeping 50% of the funnel, because you would have had less affiliates and you wouldn't have made as much money.


So again, no-brainer three times. It's gotta be a no-brainer for the customer. It's gotta be a no-brainer for the affiliate. It's gotta be a no-brainer for the vendor. So that means there has to be a strategy. If you have a problem with getting traffic, well, look, all you've gotta do is provide a lucrative earning opportunity for affiliates. 


If you apply, if you give them all of the commissions, if you create a lucrative opportunity, you are gonna attract a large pool of affiliates that are gonna drive a significant sales volume for you, which ultimately benefits both of you. I've said this many, many times, I've said those that are focusing on making their affiliates rich, will never have to worry about traffic. 


If you design funnels and sales pages and offers that are focused on making the affiliate rich, you're gonna have tons of affiliates and their affiliates are gonna keep sending you their buyers. So you're never gonna have to worry about traffic. 


If you're out here trying to nickel and dime your affiliates and trying to all find a way that I don't have to give them even 50% or whatever, now you're gonna be having a harder time getting affiliates. 


They're gonna look at them and be like, I don't know if I'm gonna make enough money per lead on that. Nowadays, I don't get a lot of offers. So I gotta make sure when I send an email that I'm really profiting and your EPC would have to be huge in order for me to be able to even break even. 


So the affiliate is now having reservations about whether or not to promote for you. But if you tell that affiliate, “listen, I'm gonna give you a hundred percent of everything, everything they buy, and on top of that, not only am I gonna give you a hundred percent of the front end product, I'm gonna give you a hundred percent of the upsell. I'm gonna give you a hundred percent of the downsell on top of that. I'm gonna have a contest and I'm gonna give away $2,000 to the person that's in first place. There's no minimum requirements. So I don't care if you make 10 sales or a hundred sales, whoever's in first place is in first place, just like the Olympics. It doesn't matter how fast you run, the person who won is the person who won.” 


That's the way that contests should happen when you approach an affiliate that way. Now they're saying, oh, wow, okay, well maybe I should consider promoting this one because I get a hundred percent of everything, plus there's prize money up for grab and that other guy that wants me to promote on that same day, well, he's only giving away 50% affiliate, commission, and I don't even get a piece of his upsell.


It just makes it more lucrative for them. And when you do this, you are gonna eliminate your traffic woes. Because when a vendor offers a hundred percent commissions or higher to affiliates, you can offer higher than a hundred, you can offer 150% commission. You could say to them, Hey, look, whatever total amount of commissions you make, I'm gonna give you 50% more. I'm gonna cut you a check, or I'm gonna send you a payment on the day that the launch ends for 50% more. I'm literally gonna pay you extra at the end, or I'm gonna give you a commission bump. Or, you know, you give them all kinds of incentives and things like that. 


So you can pay a hundred percent or 110%, 120%. Usually the affiliate platform won't let you set your affiliate commissions higher than a hundred percent. But there's no reason you can't make a side deal with your affiliates and say, Hey, look, I'll give you a hundred percent plus if you make over 50 sales, I'll give you 110%. I'll give you 150%, which simply means after the set, you know, the launch is over, I'm gonna look at how many sales you met, and I'm just gonna PayPal you an extra, $200 or $300 or a thousand dollars or whatever it is based on the amount of sales that they generated. 


These kinds of things are incentives for affiliates, and it makes them say, Hmm, maybe I should be promoting for you. Right? So vendors that offer a hundred percent commissions are higher to affiliates on the front end products. They incentivize them to promote aggressively. It's gonna make me as the affiliate want to promote for you instead of promoting for the other guy that also had a launch that week.


It's also gonna make me want to promote for you aggressively, because the more I promote, the harder I promote. Maybe in a normal situation, I wouldn't make a bonus page, I wouldn't make a video. I just don't have the time. I'm not gonna be bothered because I'm not gonna make a ton of money. 


I stand to make a few hundred bucks promoting this product, and that's just not enough of an incentive for me to take time off, set up my green screen, set up my camera, shoot a video, create bonuses, make a bonus page, do the graphics. It's just too time consuming. 


I have to spend a couple of days preparing for something that might only make me a few hundred dollars, right? But if you say, Hey, look, I'm giving you a hundred percent commission across the whole funnel, or I'm giving you this, plus I'm gonna give you a 150 if you hit this, this goal.


I also got a contest where there's $5,000 up for grabs. First place is 2000 or whatever. Now, I'm thinking to myself like, wow, okay. There's a big earning potential here. He's got contests. He's giving away a MacBook. He's got, he's got all these things happening for his launch, or she's got all these things happening for their launch, and the other guy literally has nothing going on. 


He's giving me 50% commission, right? So the high commission motivates the affiliate to prioritize the vendor's product over competitors. I would rather promote somebody that's got a hundred percent commission than for somebody that's got 50% commission and at the very least, it's gonna give them priority. So like, I might still promote for that other person, but I'll maybe promote for them after their launch.


If two people are launching and they're launching the same week, and the product is about equal caliber, and the sales page looks about equal caliber, I'm gonna promote for the one that I'm gonna make the most money, clearly, right? Because I'm in business to make money, not to make friends. 


It's awesome if we become friends in the process of making money together. But ultimately, I didn't start an online business because I was lacking friends. I started an online business because I was lacking money, right? And it's important to keep that in mind. That's the way that affiliates are looking at it. 


When they're considering whether or not to promote for you, the bottom line is money. How much money are they gonna make? So it doesn't serve you to be like, oh, come on dude, I'm just starting out. Come on, help me out. Like, try to get the sympathy ploy. It's about money you want them to promote, you want them to consider, well make it lucrative for them. 


Now, why should you even do this? Why should you even consider doing this? Because a lot of people will look at this training and be like, well, that's risky. What if I don't make enough sales? What if I don't make enough money? Well, become a better marketer.


This should incentivize you as the vendor to become better at learning your numbers, you know, get understanding what the visitor value is, what the long-term value of each customer is. Loss of products, prioritize lead generation over immediate profits. 


Now, you might not make as much money right now during your launch week because it's a lost leader, but you stand to make a lot more money after the launch because it's a lost leader than otherwise. The main goal for a vendor is to attract as many customers as possible and then put them into an optimized sales funnel. 


This is a separate sales funnel. You have this sales funnel for the product that you're launching for the loss leader, and then you have the funnel that you're putting them into once they become your customer. These are two different funnels. Now, despite the potential initial loss, the focus is to cultivate the leads into a long-term profitable customer. 


Starting with a high ticket webinar, the amount of money that you will make from just a portion of the customers that bought the front end loss leader, just a portion of those people coming and showing up to your backend webinar is going to far, far surpass the amount of money that you would've made if you just said, Hey, I'm gonna do a 50% launch and not have any backend webinar at all.


Again, you're not gonna attract the amount of affiliates that you need to really have a stellar launch. You're gonna make a lower number of units, and you're gonna make only 50% of the commission. You have to split that with the affiliate. You won't be able to afford doing a product launch, a contest and all that. 


It's just not gonna get your launch in that scenario and is not gonna get enough interest. It's not gonna get enough buzz, it's not gonna make enough noise. You're not gonna attract enough affiliates doing the loss leader is gonna get more eyeballs on your offer, on your JV page. 


It's gonna get more people involved. And now that's gonna in turn, generate more customers for you. Even if those customers only bought a $20 product, even if those customers invested on the low ticket, the fact that they invested tells you a lot about them.
Number one, they're eager to buy and solve a problem right now. Number two, whatever they did buy is exactly the niche that you need a high ticket product to sell to them. And that high ticket product could be a thousand dollars product. It could be a $2,000 product. It doesn't matter. 


You know that they have a need, you know that they have a problem. You know that they have an itch and it's up to you to scratch it with a high ticket webinar. Now, you don't need every single one of those customers from the lost leader to attend that webinar. Just a small percentage. 


As a matter of fact, what we've come to learn after doing this hundreds of times is that about 20 to 25% of the people that buy are gonna attend the webinar. But it doesn't matter because if you sold, like for example, if you sold a $20 product and you made a hundred sales, that's $2,000.


That's not really a huge, huge amount of money on the front end, and you would have to split that 50% with the affiliate. But if those 100, if only 25% of those people showed up on a webinar, you had 25 people on a webinar and now you sold a thousand dollars product or a $2,000 product, or a $1,500 product, and only three or four of those attendees buy what you've already made. 


Now, remember, you get to keep a hundred percent of that. You've already made three, four, $5,000 on the backend webinar, which far surpasses your share of what you would've made on the front end with that same exact amount of buyers. So again, having that high ticket angle on the back is the reason that you wanna run the lost leader.


You run a lost leader because it's gonna get more people, more buyers onto your list and more buyers into a high ticket webinar. Now you gotta understand the backend. A lot of people misunderstand the backend. It's like, I don't wanna say they misunderstand, it's just that a lot of marketers, when they call something a backend, they don't clarify what they're talking about. 


Now, the key to a successful loss leader is to have a solid backend in place. And the backend for me is what happens after the customer completes the initial sales funnel. To some marketers, when they're talking to you about a backend, they're thinking, or they're trying to say that, it's the upsell. 


So the person buys the front end product, and then the upsell that they see after that, and the second upsell, and then the downsell. That's the backend. And that to me is not a backend. That's just the funnel. That's the middle of the funnel. That's kind of just the beginning of everything, to be honest. That's just the customer in the process of becoming a customer. 


It's just the customer customizing the price of their order. That's all that is. But for me, the back end is what happens after the customer has gone through that upsell, that second upsell, that downsell. I usually don't do more than four offers inside of a funnel. It'll have like the front end, then it'll have an upsell, a downsell to that upsell, and then it'll have a second upsell and a downsell to that second offer. 


That is, for me, it's the max amount in a funnel that I think works well with my list that keeps people happy, that keeps affiliates happy, because there's enough products in the funnel for it to be profitable for them. And it's also not so many products in the funnel to upset a customer. So it's the sweet spot, right?


Whenever something starts happening, having more than four products in the funnel, I'm thinking, okay, that's a lot of offers to make in one session. Anyway, the point is that your backend is what happens after that entire funnel. Now, affiliates only get paid on the funnel sales, okay? So they get paid on the front end, the upsell, the downsell to that upsell, they get paid on the second upsell and the downsell to that second upsell. 


So a total of five products, that's where the affiliate gets paid. And I'm perfectly happy with giving them a hundred percent to all of that. Now, what some vendors will do is they'll give a hundred percent commission to the front end, but then they'll give 50% commission to the upsell and the down-sell because they want to use the balance of that. 


The other 50% that they're profiting on the upsells and downsells in the funnel, they want to apply that to contest prizes. So even though they stand to earn a commission as a vendor on the upsell in the downsell, they're planning on re-injecting that money. We'll talk about this later. 




They're planning on re-injecting that money to the affiliates anyway, in the form of contest prizes, right? So affiliates only get paid on the sales funnel but any future sales after the funnel, that's a hundred percent for you. That's a hundred percent for the vendor. 


The higher margins on backend products enable vendors to generate significant profits and offset any losses incurred on the front end because remember, if they buy a $1,500 product, you don't have to split that with somebody and only get 7,500, so that whole 1500, especially if it's your product. 


Now, you might be the affiliate in that backend scenario. If you're the affiliate on the backend scenario, then yeah, you would only keep your share of that. But still, you can make 10 sales, just 10 sales. If 10 people out of your 100 front end sales, maybe you made 100 front end sales, and those were $20 sales, that's $2,000.


Now, if you do that and you split that with the affiliate at 50%, you only made a grand. But in the other scenario, if you give affiliates all of that front end, you give them all of that money, and now you know on the back end, get just 10 people to buy a thousand dollars product. You just made 10 grand. 


You made 10 grand because you made it a loss leader as opposed to only making $1,000 if you were giving 50% commission. So not only does doing a loss leader make more money for the affiliate, it makes more money for you as long as you have a plan, as long as you have that high ticket backend and it's not just the backend webinar. 


What are you gonna promote after that backend webinar? What's the second thing you're gonna promote the week after? You gotta have a plan for how you're gonna monetize these new customers. That's another rookie mistake is they don't just have a backend in place. 


They don't have a plan for what products we're gonna be promoting for the next three months. The first three months that you have a buyer on your list are the most profitable three months that you're gonna have with that buyer, right?


And so you should offer them recurring offers. You should do as much as you possibly can with those people in the first three months because you get to keep all of that there for your buyer now. But you have to know your numbers. 


Loss leaders are intentional because the vendors understand the math and they understand the value of each customer. They know how much that backend webinar converts at. So if I'm promoting a backend webinar, and I know that it converts at 10%, and I know that I'm gonna make a thousand dollars per sale on that webinar where it's a thousand dollars webinar for me, or it's my own product, or it's a $2,000 product that I'm promoting for somebody else, but I get to keep 50% of that, which is a thousand dollars for me, regardless, I know that my numbers, I know that that converts at 10%.


So if I know that I'm putting a hundred people, a hundred registrants, a hundred customers into that, and I'm gonna get a 10% commission conversion, I'm likely, again, this is all math, but I can't guarantee you that it's gonna happen that way. 


It often happens where you make more, but again, at a 10% conversion, if I get a hundred people registered, a hundred people show up a hundred people, there's a difference between how many register and how many will show up. Now, if I get a hundred people on that webinar or to watch a replay and I make a 10% conversion, that's 10 sales. 


If my commission on that is a thousand dollars per sale, I just made $10,000 on the backend webinar, and the first thing I promoted after my launch and basically just blew away the profits that I would've made on the front end, right? So you literally made like five times, or six or seven times more money on the back end than the entire front end funnel possibly made. 


This happens all the time. And you still have those a hundred buyers, because remember, only 10 of them bought that, right? You can promote another high ticket webinar and another 10 people will buy that one next week, and you can promote another one the third week after that if you have it all lined up. 


If you plan this, they don't all have to be your high ticket products, but if you have a plan in advance, as a matter of fact, I usually make that plan before I even create my front end product. I create a front end product based on what I'm trying to sell on the back end. I usually create a product that lends well to a backend webinar that I wanna promote.


So I literally launch a product for the purpose of putting people into a backend webinar. I could care less how much money the front end makes me. I wanna give all of that money to affiliates because literally the affiliates are handing me their customers, they're handing me their buyers, and I'm gonna monetize those buyers by putting them into a backend webinar and then another backend webinar, and then another backend webinar. 


And then I'm gonna promote a continuity program, and I'm gonna start making monthly money from each of them. And I'm gonna make the money that I'm gonna make on the backend from this batch of 100 buyers is gonna make the profits of the initial funnel pale by comparison. 


Even the 50% of profits that affiliates make that a vendor might make on the upsells of a funnel. I recommend you inject that into contest prizes. But in order to do this, you gotta know your math, right? I recommend that you don't have minimum requirements. I recommend that you tell the affiliate, listen, I value your time. I would not use you as a Guinea pig. 


I've created this product and I've tested it. I know that it converts. I know that it works. Well, I know that the emails work because I've tested them with my own list. I know my numbers, and because I know my numbers, I am gonna offer $2,000 in contest prizes, and I am going to get $2,000 for first place. 


I'm gonna let you get a thousand dollars for second place, whatever, you know, whatever it is. I'm gonna inject my winning, my earnings of the upsells. I'm gonna inject that back into the affiliate pool in the form of prizes, right? And that's really telling of a vendor. 


When I see someone that, as an affiliate approaches me and says, Hey, I'm doing a launch. It's a hundred percent commission. I'm doing a hundred percent commission on the entire funnel. And on top of that, I'm also doing prizes. And I know that this person knows their math. I know that they've tested it. They wouldn't be doing that if they hadn't tested it, if they don't know their math. 


So the fact that they're doing that gives me a lot of confidence that their funnel's gonna work because it's been tested, that this person knows their math, they know their stuff, they know what they're talking about. 
But when I see a vendor that is giving 50% commission, and then I'm having a contest, but you have to sell a minimum of a thousand sales in order to earn this $50 gift or this $20 key chain or whatever it is, I'm thinking to myself, wait, you got minimum requirements on a contest based on skill, on a performance based contest, you are gonna put a minimum requirement.


So I could literally be the best in the world at selling your product and not hit your arbitrary requirement and therefore not earn the first place prize. That's insane to me. Like, why would you do that? And still, there's marketers out there that do this, and then there's other marketers that'll defend this practice. I think it's the stupidest thing ever. That's just my personal opinion. 


When I see a vendor that says, no, I've got no minimums. I don't need minimums. I don't need minimums because this is about, this is a lost leader. This is about me rewarding my affiliates for the traffic they're sending me. This is about me knowing my numbers, And this is about me monetizing the customers that I get after this because I have a plan. That's the guy that I wanna work with, or that's the girl that I wanna work with because they know their stuff, they know their numbers. 


Let's talk about profit margin. The percentage of commission that you're offering your affiliates has absolutely nothing to do with the defining characteristics of a loss leader. Remember, the defining characteristics of a loss leader for me is three brainer. No-brainer times three, no-brainer times three, no-brainer for the affiliate, no-brainer for the customer, and no-brainer for the vendor, right? So you gotta have a strategy. 


You gotta have a backend as a vendor. You gotta be a hundred percent profit. It's gotta be lucrative for the affiliate, and it's gotta be just value packed, no brainer for the customer. All three of those things are nowhere in there. Did the commission percentage determine whether or not, so if I do 110% commission, that is not the defining characteristic of a loss leader. 


A defining characteristic of a loss leader is whether or not I go backwards, right? If the total revenue or the total income that I make does not cover the total expenses, that is a profit margin, by the way, right? So a margin is the difference between the total income and the cost in a business. 


Now to calculate it, you just subtract the total cost from the total of revenue and you just divide it by the revenue, right? So this ratio is what's gonna reveal to you the percentage of revenue that becomes profit after covering expenses. Here's an example. If it costs me $1,000 to produce a product and launch it, it costs me $1,000.


That's what it costs to make the sales copy. That's what it costs. And I'm not even factoring in the man hours that it took me to do it. So it cost me $1,000 to bring this to the market, right? And then I made $2,000 as a profit after affiliates got paid, after everything got paid, I made, and $2,000 is left over. 


Well, guess what? That means that I profited 1000 because I had a thousand dollars expense. It took a thousand dollars to create this and get it to market. $2,000 was generated as profit, but I have to factor in that I'm only recouping 1000 of that. So I recouped my 1000 investment and I made a thousand. That's called a margin. 


Now, a negative margin would be what? A defining characteristic of a lost leader, meaning that I only made $800 in sales, but I had a thousand dollars in expenses. So the amount of money that came in from the sales, the total revenue was less than the amount of money that it took to get the product to market. That is by definition what a lost leader is. 


I lost money bringing this product to market now I'm willing to lose money. I'll lose money every single day if I keep the customer lead, because now I'm gonna turn that customer lead into a for-profit situation, right? By maximizing the lifetime value of each customer through backend webinars, through cross-selling, through subscriptions, and even just repeat purchases. 


A vendor covers the losses from the loss leader products and generates substantial profits over time, over and over and over and over again. This is literally the way that you should be thinking if you're gonna have a long-term profitable, life changing income stream from the internet. 


If you see people that are constantly rushing to launch some products, a mediocre product every single month, they don't have a good backend in place. They don't understand the math, they are in that feast or famine cycle. 


It's very tough for me to want to get behind a product that that sort of person is launching, that I can count in one hand the amount of people that launch really, really frequently, frequently that I'm willing to support because that type of person tells me they don't truly understand the marketing where the true money is being made. 


The people that do understand where the real money is being made, they don't need to launch very often because they have big backend systems in place to monetize their loss leaders. You gotta maximize your lead capture. It's all about the lead. It's not about the profit. 


When you're creating a loss leader, the profit is gonna come from the back end. So when you're creating your loss leader product and funnel, it's all about the leads, right? That's why it's called the loss leader. Loss leader. It's about the leads. That's how you remember it. 


You're exchanging profits for leads, so you're compromising on not making money in order to make leads, in order to make buyer leads. And you've gotta have a reliable lead capture process in place to do this, right? 


You've gotta have API buyer integration directly into your autoresponder. No questions about this period. If you don't understand how to do that, you're not ready to be a loss leader. This means that when somebody buys your product, the affiliate network is automatically adding that buyer's name and email address to your AWeber list or to your Get Response, whatever company you're using, you have connected the two. 


There is a process to create an integration with your JVZoo or your Warrior, or your ClickBank or whatever network you're using to sell your product. You can connect that network with your autoresponder. And now that network will automatically add the names and email addresses of every buyer directly onto your list without them having to fill out a form without them having to go to a squeeze page. 


It is not effective to send your buyers to a squeeze page and ask them to give you their name and email after they've already purchased. Only a fraction of your buyers will opt in, thereby not making a lost leader profitable. That is a road to destruction. Do not do that. You must have API buyer integration directly into your autoresponder. 


I'll take it to another level. I'm gonna say that you must have API buyer integration directly into the webinar platform. Most affiliate networks have just like they have the feature built in where you can connect your product, your account to an autoresponder, well, they usually will support an API integration also with a webinar platform. 


The most common ones are usually supported like GoToWebinar. There's ever webinar, there's a few other ones, but if it doesn't exist, you've gotta figure out a way to make it happen. You've gotta either get a technical person involved, hire a program. You need to create that integration because automatically adding them to the webinar is gonna eliminate the webinar registration process.


The webinar registration process will always end up in a shortfall. So you're never gonna have a 100% success rate in a signup rate if you leave it up to them because they've got other things to do. They're busy. They just bought a product, they want to dive into the training. 


A small percentage of people will manually register for your webinar. So automatically register them for the new member training and tell them that you've done that. Tell them right on the first page of your website when they buy the product, when they buy the lost leader and they're logging into access it, let them know in effort to save them time, you have pre-registered them for the new member webinar. 


On that new member webinar, you're gonna be talking about a brand new tactic that's gonna help them do X, Y, Z. You're gonna have a guest speaker there, and they're absolutely gonna lose love because it's gonna change their life and it's taking place at this time.


There may or may not be a replay, and now you are going to have a good turnout rate. That's how you can pretty much guarantee yourself a 20 to 25% show up rate. But don't worry that a hundred percent of people didn't show up, that's why you have a replay. 


You're gonna do a replay video and you're gonna email the other people over the next three days in order to get the 75% that didn't show up to come and watch that. So not only are you gonna have a 10% conversion from those that show up live to watch that webinar, you're also gonna have a 10% conversion from the people that you're emailing, the 75% of emails. 


As a matter of fact, you'll find when you do this, most of us have found that you'll make way more money from the replay than you did from the live webinar or from the initial webinar, even if it's an evergreen webinar, right?


I'm gonna even suggest that you do additional tactics like retargeting pixels, and even a pop-up offer to capture exit traffic because remember, it's all about the leads. You wanna try to do everything you can to capture that lead. You're paying the affiliates a hundred percent commission for them to send you the buyers. 


You better do everything you can to capture as many leads as possible. One of the things that you can do is run ads on Facebook or Instagram or on social media networks, or maybe even on Google, and you could target or retarget as it's called, the people that have visited your site but didn't buy. So you can add a pixel from those platforms. 


Again, I'm not gonna go into a big tutorial about how to do that, but doing it makes sense because now you can maximize the sales that you're gonna make based on the leads that you were sent. And you can even have a popup to offer maybe a free chapter of your product or some sort of a free gift in efforts to capture that exit traffic. 


One of the things that's guaranteed every single person's gonna do when they get to your site is they're gonna end up leaving the site. You can't guarantee that everybody's gonna buy something, but you can guarantee that eventually every single person's gonna click that X and close the window.


When you trigger a popup in that particular situation, you can offer them something for free and you'll see that that's gonna convert at 20 to 30%. So now you have a non-buyers list, that general, so you're gonna generate a buyer's list. You're gonna generate a custom audience inside your social media that you can target because of the pixel, and you're gonna generate a non-buyers list that you can market to and turn into buyers by putting them onto a autoresponder sequence.


They're automatically getting emails every single day. That first set of emails might be to build trust and get them to come back to the sales page and get them to buy. But again, you are trying everything you possibly can to maximize your lead capture. Let's talk about those commission structures. 


A loss leader can have a hundred percent commission structure on just the front end or throughout the entire funnel. What that means is that you can give away 100% commissions on the front end product and also give a hundred percent commission on the upsell and also give a hundred percent commission on the downsell and give a hundred percent commission on the second upsell. And you're literally making $0. 


Not only are you making $0, but in some of these situations, remember the payment platform keeps their percent, like if PayPal is gonna keep 3%, the affiliate network might keep three or 5% or whatever it is. So again, that comes off the top, and then a hundred percent of what's left is what's paid to your affiliate, but you are gonna make zero money. 


Now, if you decide on top of the fact that you're giving a hundred percent commission on the front end and on the entire funnel to you, and then you decide I'm gonna do a contest, you are definitely going negative. So not only are you giving away all your profits, but on top of the fact that I'm giving away all my profits, I had a thousand dollars expense to produce this product, getting the sales copy, the graphics, everything. 


Now I'm also investing two or $3,000 of my own money. I haven't even launched yet, and I've already gone backwards $4,000 because I'm putting up prize money and all that. Now, I'm gonna say this, be confident about your prize money if you're doing this, if you're offering a contest, don't ever offer a prize that you cannot afford to pay.


Even if you made zero sales, don't do it. Don't hope that you make enough sales to cover your prize money. Don't do it. Don't do it. Don't do it. Now you might say, well, yeah, that's why we gotta offer minimums. No. Become a better marketer. Become a better marketer. Test your product. 


Send cold traffic to it. Find out how it's gonna convert. Do your math, work your numbers, find out how much you can offer on a prize, and don't offer something that you can't afford to pay even if you didn't have tons of sales. Okay? Very, very important thing that I wanna point out. 


A vendor is gonna likely go backwards when it, when, you know, when you consider the concept prizes, right? Then there's development costs, right? I don't know how much of this you're gonna do yourself, but there's a lot of things involving launching a product from product creation to the graphics, to building the website, doing the sales copy, making the sales video.


There's a lot of different jobs. If you're planning on wearing all those hats, okay, fine, but then you still got man hours. How long did it take you to do it? A month, two months? You know, you wanna recruit some money for your labor. But again, with a lost leader, the whole idea is to go backwards. 


Like I go into every loss leader knowing this is gonna cost me money to put together, but that is the cost of doing business, and I'm gonna make a lot more money on the backend. So I have no problem doing that. Absolutely no problem doing that. 


Flat rate commissions are a different type of commission. This is not a percentage. There's different types of commissions, flat rate commissions. When I say to an affiliate, Hey, listen, I'm gonna give you $10 for every sale regardless, it doesn't matter whether they bought this or they bought that, or they bought the upsell or they didn't buy, I'm gonna give you $10.


A lot of times it's just for the opt-in just for the lead. So if they bought it or they didn't buy it, I don't care. I'm gonna give you $10. This is called cost per action. When they take action on the site, you're gonna pay them the affiliate for the referral regardless, right? So this is not as common in internet marketing as a percentage based commission, but it's a loss leader either way.


So a percentage based commission had a hundred percent or a cost per action where you're just paying them regardless of whether it took action. You're obviously gonna be paying some people that don't buy, they took an option, they took action. They might have entered their lead, their name and, and email information but didn't actually buy. So you're gonna take a loss on those, but then you're going to make money on the ones that do pay and become customers.


Percentage based commissions is generally what we see as far as commission structures in the affiliate marketing world. And this is where affiliates get a percentage of the sale amount as a commission or, again, remember, that percentage is calculated after the affiliate platform takes their share. 


And after the payment processor takes their share, you've gotta make sure that your incentives are aligned. Aligning incentives between the vendor and the affiliate fosters a mutually beneficial relationship. When you've got an affiliate that feels like, wow, I am making so much money promoting this, I am so excited about this, now you've got an affiliate that's gonna wanna promote for you hard and they're gonna wanna promote for you over and over and over again. 


You wanna be transparent. Let them know, Hey, look, I am creating a lost leader. I am giving you all of this profit because I plan on monetizing these leads. And trust me, you don't even have to, they know what you're doing. They're okay with it. You don't even have to go into detail explaining this, but just, it's perfectly fine to be transparent. 


You don't gotta feel shady. You don't gotta feel like you're doing anything wrong. You don't have to try to avoid the topic. No, it's a loss leader. I'm giving you a hundred percent. Trust me, when you come to me and ask me to promote your product and you say, I'm giving you a hundred percent on everything I know, it’s because you're gonna make your money somewhere else. 


I know that I'm basically trading my lead for that money. Now, that doesn't mean that I lose the lead, the lead remains on my list as well, but now I have to be willing to inject that lead into your funnel. And if the price is right, if I know I'm gonna make money, yeah, I'm perfectly okay with it.


Always, always, always strive to make your affiliate rich. When you strive to make your affiliate rich, you are never gonna have to worry about traffic. I treat my affiliates like gold. I give them absolutely everything that they need to promote. I give them bonus products, I give them email swipes. 


I gotta tell you, I get very discouraged when I see affiliates and when I see vendors ask me to promote, and I say, well, how long do you want me to promote? Promote? Well, the launch is in a week. It's a week long. Okay. How many emails would you like me to send? Well, I would love it if you send two emails per day. Oh, okay. Officer, that's 14 emails, right? Okay, excellent. Where are they? Oh, the email swipes are on my JV page. I go to the JV page, there are three emails. I'm like, okay, so wait, you want me to mail for you for 14 days, but you're not supplying the tools for me to be able to mail for you? Do you want me to do a video, a bonus for you? Yeah. Okay. 


Are you providing bonus products? Are you providing anything? Like the more tools that you give your affiliate, the more incentives you're giving them to promote. So strive to make your affiliates rich. Give them a hundred percent commission, and then give them everything they possibly need to make money and make sales. 


The more that you do this, the more likely they are to promote, and the less you are gonna have to worry about traffic. Strive to make your affiliates rich, and you're never gonna have to worry about traffic.