Hey cool... a topic right up my alley and then someone goes and mentions my name. =]
In the long run an affiliate program is a great investment because it makes your dollars work for you instead of the other way around. But you can indeed build a decent sized program without affiliates... in fact in the early stages you will most likely have to do it that way since affiliates that are worth a darn are hard to come by unless you have deeper pockets. Sites like
http://www.ultrawriedsex.com built quite nicely with no prgram.
So what do ya' need? Friends and angles. Friends to trade exits with, or get traffic from cuz they like you or maybe you do something in return like design. Also know how to play the TGP/MGP game. Email marketing (there I said it! - never do it but it works for many), newsgroups (if done right), build your own free sites to support, etc... You will have to be dilligent but it can be done.
Let's do a fantasy scenario that would be close to what would happen for most people:
Let's say you are on a tight budget and have to really cut deals and scrimp for content. Without heavy content you will have to consider going niche or you'll not have enough to keep people in the site. Even so it's a smaller start up and you're going to do lower numbers but not too bad as the nich saves you some. You spend maybe $5k on content, design it yourself and then budget only $1k per month for more content and feeds.
You might see conversions okay at like 1:600 (figuring dilution of quality from TGP traffic). Trial conversion will be rough at this level so 28% and retention at 70%. These numbers will come up DRASTICALLY if you immmedietaly invest in more content.
Pricing: $4.95 trial / $24.95 Mon / $59.95 Three Mon.
The next variable, traffic all depends on how good you are at playing the game. If all you can do is get 1000 people per day with those numbers than in the first year you will gross about $16,000 and be at about $2200 per month in that 12th month. The curve moves up slow hence only $16k that first year.
Say instead you are quite good and get 7500 people per day to the site. Then at year one end you gross about $130,000 (making $18k per month at month 12).
HUGE difference! And let me tell you if you did the reinvesting in content and got your retention up it would be much bigger. Do remember the nubers I gave you are GROSS income.
So what holds most people up?
1) They don't know how to build them well enough to get any decent numbers.
2) They don't have any idea just how much money they need to do #1 properly and so don't or do it too small and never get there/go broke trying.
3) Getting 1000 people per day isn't too hard. Getting 7500 takes a little bit of talent and ALOT of hard work. Most people think we're in a get rich quick biz, but we're not. Plan on working.