Pros and cons of affiliate marketing: Is the business worth it?
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Abdul Wadood
In this digital era, affiliate marketing is one of the most utilized online marketing strategies. There are several reasons why marketers prefer affiliate marketing over other marketing strategies.
According to a study published in Statista, they expect affiliate marketing spending in the United States to hit 8.2 billion by 2022. This figure is mind-boggling!
If you’re planning to start an affiliate marketing business, you would probably be interested to know the pros and cons of affiliate marketing.
So, let’s dive right in to see the advantages and disadvantages of affiliate marketing.
Overview of affiliate marketing
Affiliate marketing is performance-based marketing where the affiliate sells a product or service for a commission.
Usually, there are three parties involved in affiliate marketing.
- The merchant: The merchant is the owner of the product. You, as an affiliate, have to partner up with the merchant to promote their product. Nowadays, it’s pretty simple to find affiliate programs as several top-level companies and even small ones have them.
- The affiliate: An affiliate is a person or company that markets the product. The money that an affiliate makes has so much variation. Depending on your business niche and efforts, you can make a few hundred to millions of dollars per month.
- The customer: Customer (or consumers) are self-explanatory. They are those who purchase the product you promote. If someone buys the product through your affiliate link, you’ll earn a commission from the merchant.
As you can see, in the affiliate marketing business model, all the three parties involved are in a win situation.
I am pretty sure that the affiliate marketing business model interested you.
But, before you go ahead and start affiliate marketing, it would be great if you go through the entire blog and get to know the pros and cons of the business. If you do so, you’ll get an in-depth idea of affiliate marketing.
Pros of affiliate marketing
First, let’s think positively and start with the advantages of affiliate marketing.
1. Time and location freedom
Affiliate marketing is the marketing that takes place online, which gives you the benefit of time and location freedom.
All you need to do affiliate marketing is a laptop, smartphone, and internet connection (it’s alright if you don’t have Wi-Fi as you can manage with a hotspot).
Since affiliate marketing is location-independent, you don’t need an office to do the business.
Moreover, affiliate marketing provides immense flexibility. This flexibility means that you can work on your own schedule.
Say that your kids are asking you to take them for a road trip. As an affiliate marketer, you can take three days off and spend time with your family. Of course, the same isn’t possible with other businesses or a 9-5 job.
Ok, great! Affiliate marketing offers tremendous time and location freedom!
But, you can experience the time and location freedom only after you set your affiliate marketing business up. Till then, you need to work day and night to achieve success.
2. Low investment
As mentioned previously, a laptop, smartphone, and internet connection are the primary requirements to start an affiliate marketing business. Almost every one of us owns these items, so there isn’t a need to invest money in them.
Next, you should invest about $80 on a website as it’s essential for an affiliate marketing business. Web-hosting service providers like HostGator offer a free domain name for a year along with their hosting package. So, you can use this opportunity to save a few dollars.
Note: The above link to HostGator is an affiliate link. If you purchase HostGator’s hosting through the above link, we will receive a commission at no extra cost to you. Thank you for your support!
According to statistics, 64.48% of affiliate marketers blog to generate traffic. This data shows that website plays an essential role in bringing traffic to your affiliate marketing business.
Summing up, an investment of less than $200 is sufficient to get started with affiliate marketing. Trust me; affiliate marketing is one of the very few businesses that can yield you so much money but requires less investment.
3. Free from dealing with customer service
This advantage is quite obvious. Since an affiliate marketer doesn’t directly deal with the product, he’s free from customer service.
As an affiliate marketer, your only job is to convince people to purchase a product through your affiliate link. Once people buy the product, it’s the merchant’s responsibility to solve the customer’s product-related queries.
Here’s another significant point that affiliate marketers need to note.
Since affiliate marketers aren’t involved in customer service, some affiliates might think they can promote any product to their customers. No, it’s wrong. Trust me – if you promote products that aren’t worth it, you’ll lose your audience in no time.
As an affiliate marketer, your primary goal shouldn’t be to make a commission. Instead, it should be to earn people’s trust and provide value. If you do so, you’ll automatically see an increase in your revenue.
4. Passive income – Make money while you sleep!
Affiliate marketing is a passive income business model, which means you can make money while you sleep.
Now, you shouldn’t expect to make passive income from the first day of starting the business. Of course, it’s impossible!
However, if you put in your best efforts with dedication, you’ll eventually start making passive income.
From my experience as an affiliate marketer, I could say that it takes around three years to start making $1,000/day from affiliate marketing passively.
I specified the figure $1,000/day because that’s when people will consider you to be living a life of financial freedom.
5. Free from product manufacturing and managing inventory
As an affiliate marketer, your task is to promote the products. If you successfully market the product and make a sale, your merchant will provide you compensation.
You don’t have to deal with product manufacturing and managing inventory as it will be taken care of by your merchant.
As you know, product manufacturing and managing inventory aren’t easy tasks, especially if the business is a start-up. They are expensive, and if something goes wrong, it will negatively impact your reputation and business.
6. No expertise needed to start affiliate marketing
If you know the basics of how affiliate marketing works, you’re qualified to get started with your affiliate marketing journey. You don’t need to have a marketing certificate or prior experience as a marketer.
You can build your expertise in affiliate marketing over time. However, the sooner you develop your expertise, the better.
As you move on with your affiliate marketing journey, you’ll get to know various product niches, affiliate programs, promotional methods and channels, promotional strategies, and many more. Figure out the tactics that work the best for your business and leverage them.
Rinse and repeat the process to keep expanding your affiliate marketing business.
7. Extensive options of products to promote
Nowadays, many companies have realized the effectiveness of affiliate marketing, and they started to offer affiliate programs.
As a new affiliate marketer, you may wonder how will this benefit me? Great question!
As a new affiliate marketer, you won’t have much knowledge regarding affiliate marketing. So, initially, if you promote products you already know, it will be easier for you to learn the business.
Once you start gaining experience, you can gradually identify the best niches for your business and start promoting products in that niches.
This level of flexibility is made possible to affiliate marketers thanks to the extensive options of products available for affiliates to promote.
8. Ability to work with multiple merchants or networks
As an affiliate marketer, you can work with multiple merchants or networks.
For example, say that you want to promote different category product’s like software, gadgets, books, etc. In this case, you don’t have to quit promoting one product to market the other. In other words, you can simultaneously work with merchants operating in different niches.
Many businesses don’t offer the level of flexibility and convenience similar to affiliate marketing, let alone 9-5 jobs.
Nice!
Though joining an affiliate program is a simple process, it’s one of the crucial decisions that affiliate marketers make.
If you plan to partner with a merchant, you should perform thorough research about the company and its products. If possible, go through the reviews and ratings that customers gave for the product. By following this method, you get to know the quality of the product.
I am stressing this point because if people notice that you’re promoting unworthy products, it can negatively impact your entire affiliate marketing business.
Thus, even if you work with limited merchants or networks, make sure they are the best in the business.
Cons of affiliate marketing
Having seen the pros of affiliate marketing, now it’s time for us to see the disadvantages of affiliate marketing.
1. Tough competition – My solution to stand out from the competition
Affiliate marketing is an easy-to-start business. It requires significantly lesser requirements and investments than other businesses.
However, this advantage has a downside. Since affiliate marketing is accessible to everyone, the competition is tough.
But the good news is that it’s not as difficult as you imagine. Here’s why.
We divide affiliate marketers into three categories:
- Beginner ($0-$350 per day)
- Intermediate ($350-$1000 per day)
- Expert ($1000+ per day)
If you’re starting the business, you’ll, of course, fall in the beginner category. As for beginner affiliate marketers, many don’t know how affiliate marketing exactly works. They tend to follow the wrong strategies and make no sales. Now, here’s your advantage.
If you learn affiliate marketing correctly and use the correct strategies (provide value to people), you’ve crossed a significant portion of your competitors.
Rinse and repeat the process, and you’ll notice yourself climbing up the ladder to reach the level of intermediate affiliate marketers. Let’s see how to stand out among the intermediates.
By this time, you’ll have made some decent money which you can utilize to run PPC campaigns (advertisements). If you run ads, you can stand out from a good portion of intermediate affiliate marketers who only concentrate on organic traffic.
Use this to your advantage. Learn to run PPC campaigns, and figure out a strategy to yield you the highest affiliate sales.
Again, rinse and repeat the process. Finally, you’ll reach the level of an expert affiliate marketer.
On average, it takes about three years of hard work, dedication, patience, and persistence to reach the expertise level in affiliate marketing. By this time, you would have built a unique strategy for your brand to compete with the top players.
Ok! As an experienced affiliate marketer, this is my advice to progress with affiliate marketing.
Bonus tip: If you aren’t familiar with the affiliate marketing business and its strategies, I suggest you take an expert course to get a head start.
2. No guaranteed revenue
Affiliate marketing, unlike a 9-5 job, doesn’t guarantee revenue. If you’re working in a job and have commitments to fulfill, you should make a note of this point.
When you start affiliate marketing or any business for that matter, you’re taking a risk as the revenue isn’t guaranteed.
But, if you’re ready to work hard with dedication, the risk is worth taking.
If you succeed in affiliate marketing, you can enjoy the time, location, and financial freedom that no job can offer.
3. No control over some factors
As an affiliate marketer, you only promote the products. Though this lets you be free from product manufacturing and managing inventory, it has a disadvantage that you should consider.
An affiliate marketer is a third-party to the merchant, and they don’t grant you control over factors like product quality check, fixing the price, etc. Moreover, you don’t have control over your commission and even your customers.
But, don’t worry. There’s an easy solution to this issue.
If you become an affiliate marketer for a reputed company, you can be confident that their products will be good. Also, you’ll receive your commission at the right time without delays.
Now, you may have a question that why affiliate marketers have no control over their customers. Here’s the answer.
When you refer a customer to your merchant, you’ll make a commission for that sale. But, if the customer wants to purchase a product again, he can directly buy it from the merchant instead of buying it through you.
However, if you build up an audience through your blogs, YouTube videos, or other sources, they will consult you before making a buying decision. In fact, as an affiliate marketer, you should try to establish yourself so that you can earn money passively.
4. Affiliate marketing takes time to succeed
Affiliate marketing is a real business, and building it is a process that takes time.
Moreover, nowadays, since the competition is higher, it takes even longer (around three years) to become an affiliate marketing expert.
Ok, well and fine! Here’s another point that you need to note.
Since affiliate marketing is an online business, some people mistake it for a get-rich-quick scheme. Affiliate marketing is nowhere close to that.
In fact, no legit businesses can make you earn quick money.
If you start affiliate marketing with the intent to make quick money, you may give up pretty soon as you won’t have the patience to see the results.
5. Slight possibility of getting cheated
As you all know, the internet is open-source, and it contains both legit and spammy information. Speaking of online businesses like affiliate marketing, they are no different.
If you’re new to the internet world and want to start an affiliate marketing business, you should be careful of those who promote spammy products. You shouldn’t join in their affiliate program as they can cheat you in paying commissions.
However, if you become an affiliate marketer for reputed companies in your niche, you can be safe from these issues.
In my opinion, regardless of any business (both physical and online), there will be fraudsters trying to steal the hard work of others. As business owners, we should be aware of them.
Conclusion: Is affiliate marketing worth it?
YES, affiliate marketing is worth it!
Affiliate marketing is a passive income business that offers time, location, and financial freedom.
Sure, the competition in affiliate marketing has risen significantly over the years. But, as mentioned in the blog, if you follow the correct strategies with dedication and patience, you can undoubtedly succeed and make serious money.
I hope you found this blog about the pros and cons of affiliate marketing to be beneficial.
If you have any doubts related to affiliate marketing, let me know in the comment section below.
