How much sleep do you lose as an affiliate marketer? There are so many things that can go wrong with your campaign including but not limited to hosting issues, offer going down, conversion rate tanking, etc. Most affiliates are obsessed with checking their stats but forget to look at the big risks they are taking.

Here are some risks most affiliates over look and how you can proactively take steps to reduce them.

Lawsuits and Copyright Infringement

Nothing will halt your operations like well written Cease and Desist letter from the likes of Harpo or other big time law firms. Imagine making 1k profit a day and having to completely stop because your whole angle banked on using Dr Oz to sell.

If you want to avoid getting sued make sure that you are not using copyrighted material. This even goes for images in your ads. I know we all love Google Images, but those images are often times copyrighted.

Solution: Stop being cheap and buy the image of DreamsTime or iStock. Also, get creative and sell products without leeching off someone else’s brand.

FTC and The Government

We’ve all heard about the smack down on users of Flogs/Farticles to market but I’m sure most of you still think that it will never happen to you. I’m here to tell you YES it can happen to you, and it has happened to people I know personally. All that money your banking today won’t mean jack when you’re wasting it on a lawyer to keep you out of jail.

Don’t think because that a few astericks and some hard to read disclaimer in the footer of your site will keep you safe.

Solution: Be proactive – do your own research into what is and isn’t compliant. Make sure to look at your own states laws as well since there can be nuances at the state level you aren’t aware of.

Remember, a compliant page does NOT mean that it won’t convert, just means you have to do a little more work to optimize it.

Theft from Affiliates, Advertisers, and Even Your Network

As an affiliate, whenever you make some bank everyone is going to want a piece of the action.

1. Let me give you some examples:Other affiliates find your traffic sources and your ads and duplicate your campaign driving down your ROI.

2. Your affiliate network often times have their own internal teams who will just as readily copy your tactics

3. The advertiser sees your making money and can decide to scrub taking more and more of your hard earned share.

4. You think your traffic source is safe? If it’s a self serve you don’t know when a policy change will wipe your whole campaign out. If it’s a media buy the network can go direct to advertiser and cut your out of the deal.

By now most of you heard that you should diversify both your offers and your traffic sources. Some may have even thought about creating their own traffic source or offer, but here are some other ideas that will help you stay in business.

Solution: Build trust with your affiliate managers. Same goes with your traffic sources. Make sure you have a rep, and make sure you know your rep has your back. This is the only way you can avoid being “just another affiliate” who always gets the short end of the stick.

Here are some advantages you will reap if you build quality long lasting relationships with all your reps:

• Exclusive offers. There are many offers out there that are on big time private due to strict quality guidelines. If you AM trusts you, he/she will open them up to you and now you’ll only have to compete with a handful of affiliates instead of every n00b with a credit card.
• Heads up from traffic sources. They will tell you trends they see and ways to game their own systems to maximize your profits. Or like in my case they will make sure your account doesn’t get banned/slapped (Thanks Pete from Facebook).
• Test budgets and guaranteed EPCs. Once you build rapport with a network they will often times help you when testing new offers for them.

Cash Flow

This is an issue that a lot of guys don’t take seriously enough. Never take on more risk than you’re willing to lose even if a campaign is profitable. I know it sounds crazy but let me explain.

Lets say you find a loophole in some ad system and can drive a ton of leads/sales in a short period of time. You do 100,000 in sales with an ad spend of 50,000. To get that 50,000 you had to max out your credit cards, borrow from friends, and maybe leverage your mortgage. You think you’ve made 50,000 just to find out your wire/check didn’t come. You ask the network whats up and find out your quality was poor, the advertiser isn’t paying, you broke a restrictions without noticing, etc. Now you are completely wiped out and don’t even have enough money to pay a lawyer to try to get paid.

How can you avoid this catastrophe? Here are some tips:

Solution:

• Diversify across many networks. Even if the offer performs better at another network, by splitting it across 5 networks (easily done with prosper) you are managing risk and gaining favor with all 5 networks.
• Wires multiple times a week. Weekly wires are nice, but getting wires more than once a week can minimize cash flow risk even more.
• Prepay for leads. If you know you can do volume see if the network is willing to pay you ahead of time or even fund your campaign expenses.

Hope these tips will help you sleep better at night and not keeping your fingers crossed that your next wire is on time.

Lastly… GET EVERYTHING IN WRITING!!!!