Backlinks can affect your rankings in many different ways. In short, your rankings can increase or plummet depending on where you're placing links aimed at your website. In this discussion I will go over the many ways that backlinks can affect your rankings in a good or bad way.
Increased Rankings - When building backlinks your main objective is to gain increase rankings in the search engines. You are aimed at increased rankings because once you're ranked for all of your keywords you will be gaining loads of super targeted traffic. This takes time and you need a good gameplan in place before you attack. If you just start building random links aimed at your website you could be wasting time and well all know that time is money
More Traffic - When building backlinks you are hoping to get much more traffic to your website. The best thing about increasing your rankings in the search engines through backlink building is that you can get traffic that easily converts into a sale. The people searching for your product are ready to spend money, and if you can increase your rankings enough through backlink building, you can tap into those customers and make a good amount of money
Profits - building your own backlinks can increase your profits much more than you would think. You can even outsource your link building campaigns in order to free up your time to focus on other things, but you may have to pay a premium depending on your niche. You could pay $50 for a low competition niche and make $100 a day when ranked or you could be paying $5,000 a month for a difficult niche and make $1,000 a day when ranked. The profits can be staggering but if you do it right you will be blessed over time with a good amount of cash flow
Becoming an Authority - When you're building links to your website you could be seen as an authority over time and that means people will trust you more. Becoming an authority in the eyes of the search engines means that you will be able to rank for long tailed keywords much easier since the search engines already gave you their stamp of approval
Penalties - By building too many links at once you can gain a penalty pretty easily. If your website is fairly new, roughly 6 months old, you will want to build your links fairly slow to avoid setting off any red flags. Penalties can come in all shapes and sizes so try to avoid them at all costs because sometimes it's difficult to know if you're actually penalized or just in the Google dance for a while.
Rankings Drop - Usually when getting a penalty you will see a swift rankings decrease. This is due to Google seeing your website as spammy and not up to their standards to place in front of their users. If you build your links too quick or just get free auto approved blog comments (or something similar) you will get a kick in the @ss and it could be difficult to come back from this.
Deindexed or Blacklisted - If you constantly build horrible links aimed at your website and don't follow the rules that Google wants you to in order to be seen on the search engine, you will get deindexed or blacklisted. This is basically a killing blow to any website since it's nearly impossible to come back from. You will not be notified if you get deindexed or blacklisted, you will only have your analytics to show your traffic drop exponentially. Your website is pretty much dead if you get deindexed or blacklisted in the search engines, so play it safe
Be safe when you're building your backlinks. You can buy plenty link packages here on SEOclerks.com but if you buy 1,000,000 links and they are done within 24 hours, you'll definitely get a penalty. If you do this, I don't want you coming back here complaining that you just got deindexed and you don't know why lol