If you’re looking to start an online business, either as a side gig to your current day job or to replace it altogether, Affiliate Marketing is an enticing option.
Just like any other online business opportunity, Affiliate Marketing comes with a range of Pros and Cons.
If you’re running short of time, here’s the quick overview of this guide. Like the majority of the other Online Business Models, Affiliate Marketing can be incredibly lucrative. It attractive due to its low cost and low barriers to entry. As such, it is incredibly quick and easy to get started and there are thousands of Products to promote in a range of Niches that you can align yourself to. But here’s the truth – being successful with Affiliate Marketing will require effort, skill and time if you truly want this to be a long-term and profitable enterprise. It will require strategy, determination and dedication but if you commit and develop your knowledge, you’re on your way to a full-time income online. If you want to fast track your learning, I would suggest you read this.
So, before you decide that Affiliate Marketing is, or is not, for you its always a great idea to understand exactly what it is, and then take a look at the reasons why you should or shouldn’t become an Affiliate Marketer. In this way, I will firstly explain the model and then move onto the Affiliate Marketing Pros and Cons.
- 1 What Is Affiliate Marketing?
- 2 Pros of Affiliate Marketing
- 2.1 Low Startup/Ongoing Costs
- 2.2 No Expertise & Knowledge Required
- 2.3 On The Side Project
- 2.4 Flexible & Adaptable
- 2.5 No Need for Customer Service
- 2.6 Work When & Where You Like (At Your Convenience)
- 2.7 Marketing Material is Provided
- 2.8 Passive Income – Earn Money As You Sleep
- 2.9 Scalability & Potential
- 2.10 Sole Proprietorship
- 2.11 Leverage Your Skills
- 3 Cons of Affiliate Marketing
- 4 Final Words
What Is Affiliate Marketing?
With Affiliate Marketing (as an Affiliate Marketer) you independently promote products or services from a particular niche, on behalf of the Vendor (Product Seller, Creator and/or Owner).
In this way, you receive a % cut of each and every sale that you refer. This is known as pay-per-sale, but there are even affiliate offers and bonuses that pay-per-lead (where you get paid for referring just an email registration).
Say, for example, that you refer a customer to a product that has a 50% commission offer. If the product retails at $100 – you will earn $50 – just for sending the referral.
By clicking on your link yo become credited with the referral to the sale and you get paid. That’s it.
There’s no work required by you beyond this; like there is for the product vendor (After Sale Support etc).
Being independent, you are in full control of where, when and how you promote; as long as you conform to the requirements as set out by the Vendor. This means you choose the platform you want to promote on (Your Blog, YouTube, Instagram, Facebook etc), the type of content you wish to create, and how you reach your customers.
Affiliate marketing is considered the easiest online business model to begin with some of the lowest barriers to entry. Costs can be kept very low, so your profit margins are high. There is no product creation process, customer service, shipping/fulfillment issues and a whole range of other costs to consider.
All in all, with Affiliate Marketing, your priority is in a obtaining a cut of sales.
Does this sound good? You bet!
But unfortunately, Affiliate Marketing with its many advantages isnt without its own unique disadvantages.
If you’re looking to become an Affiliate Marketer, and benefit tremendously from the lifestyle it can provide, its best to understand the Pros and Cons of what you are getting yourself into.
So without further ado, onto the list…
Pros of Affiliate Marketing
Affiliate Marketing is at the forefront of online sales. A recent report by Rakuten established that consumers are heavily reliant on Affiliate Marketing Content to find and purchase products. It is this type of content that connects searching customers with ideal products and solutions.
The report even goes on to state that around 81% of advertisers, and 84% of publishers have adopted an affiliate marketing campaign to generate leads and drive revenue for their products and services.
Affiliate Marketing referral payouts are expected to reach seven billion by 2020:
Affiliate Marketing is clearly a growing market, here’s some other reasons why its a great industry to get into (if you haven’t already).
Low Startup/Ongoing Costs
Perhaps the biggest advantage of Affiliate Marketing is that there are no significant blockers or barriers to entry. Its a very easy Business Model to get set up and started with, and the costs for doing so are incredibly low.
One of the most effective ways to begin Affiliate Marketing is to promote products and services through articles on your website. Creating and setting up a website is very easy and all you need is a domain and hosting. You can pick these up for under $25 and these will be your only costs – for an entire year!
A website is not always necessary, and you can choose to promote products through other platforms, like YouTube.
From here, all you need to do is locate a niche of interest, and then find Affiliate Products and Services that operate within that niche. Then, you sign up to the required Affiliate Marketing Programs (Free), and you’re ready to start.
When you compare an upfront cost of $25 to other Business Opportunities, both online and offline, its quite incredible!
No Expertise & Knowledge Required
Secondly, you do not require any specific skills or knowledge to become an Affiliate Marketer. Having an understanding of how to build a website helps, but using a platform like WordPress makes it incredibly easy (Even for a complete beginner) and there are hundreds of free YouTube Videos that you can follow step by step if you wanted some extra support.
Beyond just the beginning, Affiliate Marketing is one of those things that you learn as you go. You soon start to learn what works and what doesn’t, and you can easily scale what is working and drop what isn’t.
Besides, there are plenty of brilliant beginner Affiliate Marketing courses (like this) which cut the learning time in half. You can also learn profitable strategies so you implement successful tactics from the very outset .
On The Side Project
If you have a current day job, the best way to start Affiliate Marketing is on the side. With Affiliate Marketing, you do not need to leave your current 9-5 job. You can work around your jobs hours (in the evening and weekends) and start earning on top of your current salary.
Flexible & Adaptable
With Affiliate Marketing, you are never limited in your scope and in your marketing initiatives.
You can continuously add to your content, join new affiliate programs, find new products, change how you promote your content etc. This way, you can find what is most profitable for you and focus solely on that.
Also, you do not need to stick to a specific niche if you start out pretty general. To begin with, you will need to choose a small number of products in your niche, but you can always test new niches if you find good products or think that it could be more profitable.
If you notice that certain products are too difficult to sell, you can always steer away from them. Likewise, if you find a winning product you can navigate towards this kind of product or type of content that you used to promote it. In time, you will learn to identify the trends and create more profitable content as a result.
You can also find products that compliment one another, and recommend them together to fuel your affiliate commissions. A lot of tools integrate with one another and the majority offer Affiliate Commissions for referrals.
This is all great because you can reduce your chances of failure, and maximize your chances of success.
No Need for Customer Service
If you sell your own product or service, chances are that your customers are going to have questions and customer service related requests. This can be incredibly time and labor intensive, especially if the product is technical or if not much is known about it to begin with.
Thankfully, as an Affiliate Marketer, this is not your responsibility. This always falls on the product or service vendor – for it is their product. Thus, if you receive a post-sale question you can quite simply forward this on to the dedicated customer service team who will take care of the issue.
Work When & Where You Like (At Your Convenience)
All you need is a device and access to the internet. As such, you can literally work where and when you want – on the go, or in your home. Even on the beach if they have WI-FI availability!
You therefore have a lot of flexibility in your working environment and can adjust it just to how you like.
As you are a freelancer, and work for yourself, you also do not need to follow any company policies or rules as such. There’s no need to undertake laborious tasks like you would at work, and you only have to complete work you want or that furthers your online business.
You can work at much or as little as you want, on a schedule that suits you; plus, you can wear whatever you like!
So if something crops up which means you need to take time away from the computer – you can.
Marketing Material is Provided
A lot of Businesses understand the importance of Online Marketing and provide a lot of Marketing Materials for their Affiliate Marketing Program. These are all readily available for you to use that you can instantly upload to your site. Promotional materials like Banners, Ad Copy etc are usually provided and this takes away any need to create them yourself.
Passive Income – Earn Money As You Sleep
This is my personal favorite, the ability to earn while you sleep, are on holiday, playing sports etc.
With Affiliate Marketing, you are mostly likely creating an asset (Website, Blog Posts, YouTube Video etc) that is being accessed and views at all hours of the day.
This means that you are expanding your opportunity to earn well beyond just your 9-5 hours. You’re not paid for your time, but instead through your content (which once created, is there forever).
Just imagine waking up, turning on your laptop and being notified of an affiliate sale. Or checking your phone to see a PayPal notification. Its great.
Scalability & Potential
There are a number of effective ways to market affiliate products in 2019 – and this is expanding all the time as new platforms are created and being used.
One of the most recommended and effective ways is to build an affiliate blog and write content on a particular topic. But a lot of Affiliate Marketers are turning to YouTube and other apps like Snapchat. Beyond this, you can set up paid marketing campaigns through CPC networks like Google Adwords, utilize social media like Facebook, and leverage the communities over at sites like Quora.
You do not need to necessarily just focus on one or the other, and you can always double up across platforms to scale once you get the time to do so.
Being an Affiliate means you are likely a freelancer. When it comes to the legal side of things, you can use laptop and mobile phone purchases as tax write-offs.
Leverage Your Skills
This is a truly scaling enterprise; and the more you can align your skills with your marketing strategies the more successful you will be.
If you an avid writer and like writing articles then you can do so. Alternatively if you prefer or have skills in recording videos for YouTube you can also do this.
Cons of Affiliate Marketing
It does take time before your Affiliate Marketing start to flourish. Those who succeed are those who have a delayed gratification and who understand that your are unlikely to be successful overnight. This is not a ‘get-rich-quick scheme’ but a real, sustainable business model.
The more persist you are the better. You will need time to create content, time for your content to rank in the Search Engines, and time to build a loyal fan-base and audience who routinely and regularly buy products that you recommend.
Once you begin Affiliate Marketing, expect to wait between 6-12 months until you start to receive a recurring or ongoing regular commissions. You will get some success early on and the odd sale here and there, but after this introductory period you will start to see your effort multiply.
Here are some of the other downsides to this business model:
Like anything in life, it is highly unlikely that you will master something straight away. It takes time to learn the craft and develop a knowledge and understanding of what works and what doesn’t.
There are a lot of products and services that you can promote, but this doesn’t always mean you can or should promote them. Ultimately as an Affiliate Marketer, you have a reputation and responsibility to only suggest products you have or would personally use and or buy.
It will take time to identify what products sell best, and what ones you want to avoid. The same goes with Affiliate Marketing Programs; and the platforms that are best and the worst for conversions.
There’s a lot of strategies and tactics that will learn along the way, but there’s also a wealth of material available online to help you during this process.
Beyond just Affiliate Marketing, you also need to understand a number of other important if not crucial things to be truly successful. Search Engine Optimization (On-Page and Off-Page) and Keyword Competitiveness are two clear examples. If you do not understand how these things work its difficult if not impossible to succeed.
No Control of Affiliate Marketing Platforms and Programs
You are completely reliant on all existing Affiliate Programs. Whilst the majority of them are great, not all of them are. Some are slow to respond to emails, some fail to pay out on time, and some are just downright painful to work with. Therefore, it is always recommended to work with the most reputable and recommended Affiliate Programs.
Beyond this, you are completely reliant on Merchants rules and conditions. A lot of programs come with a set of conditions that need to be met in order for you to be eligible for a commission. You therefore need to make sure you are aware of these from the outset to ensure you do not feel unjust if you are not paid.
Also be aware that merchants rules and conditions can be changed or updated at any time, without notice. You have no option but to accept, or discontinue promoting.
No Control of the Competition
Just like any market, Competition varies and changes all the time.
As the barriers to entry are low, such as low set-up costs, low expertise, high-profit opportunities and a lack of knowledge required, it comes as no surprise that many people attempt to become Affiliate Marketers.
Its pretty much impossible to find a niche without competition; and if there is none, chances are its not a profitable niche.
However, whilst you will need to compete with others and overcome them to get your commission – do not let them put you off. If you can work harder and smarter, and provide great content and value, there is plenty of commission to be made.
Difficult to Establish a Loyal Customer Base
This is not impossible, just difficult.
With Affiliate Marketing, you are sending traffic and customers to your Merchant. Therefore, once you get your referral commission, it is unlikely that the customer will return to your site and purchase from you again.
But remember, this is the nature of the beast. You are committing to driving new business and new leads with this model.
That is of course, unless you sign up to Affiliate Offers and Programs that offer recurring commissions (recommended but not always possible). This is where you will receive a fee every month or year, for as long as the customer stays using and paying for the product or service.
So say a software retails at $50 per month and you receive a 50% recurring commission each month for the length of the membership. Say the customer uses the product for 3 years (which is expected with a software product), this is how much you would earn:
$25 x 36 = $900 for one referral.
Can you see how lucrative this can be?
No Guaranteed Income
Your only earn on your referral sales. Period.
This can be a real challenge, especially in the early days when you are new and learning the ropes. Being an Affiliate Marketer is therefore a slow process in the beginning and there is no guarantee of success.
If you truly want to be successful then you need to commit and dedicate yourself to the project for at least a year. You also need to work hard. But if you do this, the rewards can be fruitful.
Is Freelancing For You?
Most of us like the idea of working for ourselves. In reality, not all of us can do it.
You need to be a particular, self-driven individual to work as an Affiliate Marketer. You need to be comfortable working when you do not feel like you want to, and if you work a current day job, be comfortable to work in the evenings and at weekends. To some, the thought of this can be overwhelming and put them off, so it is important to develop strategies to not overwork and save some time to unwind.
You need to be self-motivated but you also need to understand that you get what you put in; nobody is going to pay you unless you are providing value.
Affiliate Marketing is sometimes linked with spammy content and poor advice and recommendations. There is definitely some truth to these statements. Like any industry, there are always the Charlatans and those who give the business model a bad name. It is usually a small number of individuals who are looking to get fast results by producing misleading content.
But it doesn’t have to be this way, and you would be surprised how much more you will earn remaining sincere and honest. Besides, people know when they are being lied to or manipulated and it doesn’t go down well.
Besides, if you decide to undertake false advertising, or other illegitimate methods you will not last. Platforms like Google and YouTube are always on the lookout for and banning these kind of sites and accounts. Whats more, you will lose any credibility that you have built and may even be thrown off of Affiliate Marketing Programs if they identify these kind of practices.
It’s always best to think of the long-term picture. You are building a business that you want to succeed not just now but in 10 years time. You are building an asset, that you could even sell in the future.
Here’s the best advice I can give you: Be authentic and act responsibly; this is the only way you can succeed in Affiliate Marketing.
Affiliate Marketing is a growing and lucrative industry – expected to reach $7 billion by 2020. It is an industry that is filled with opportunities and unique, exciting ways of working.
Just like any other Business Model, there are always Pros and Cons. Hopefully by now you will have a further understanding as to whether you want to take this further and if this is the type of online business you want to start.
As you will notice, there are a lot more advantages than disadvantages. I would say that it is one of the best, risk-free ways to get started or to increase your income online.
If you are serious about Affiliate Marketing, then I would strongly encourage you to check out the comprehensive training: Savage Affiliates.
If you just want to get started, and want to learn as you go and by yourself, then this is the cheapest and most recommended service to buy a domain/hosting for your website.
Best of luck!
Hey, I’m Jeremy; a seasoned entrepreneur that has been earning his full time income online since 2005. My online business portfolio includes eCommerce stores and affiliate marketing niche sites. I also make money through Blockchain and Crypto. I created Unrivaled Review to share my knowledge, experience and recommendations for anyone looking to pursue such ventures.