Businesses and companies are realizing the significance of affiliate marketing in the strategy. It allows them to promote their product in a short time, with low effort, and a limited budget. It would guarantee high business growth, brand awareness, and a high return on your investment. Today, we’ll discuss the advantages and disadvantages of affiliate marketing.
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What is Affiliate Marketing
Affiliate marketing is when you hire people to promote your products/services and offer them rewards in the form of commission for their work and efforts. It’s comparatively an effective strategy to improve the sale of your business.
Affiliate marketing usually comprises developing a partnership between the affiliate marketer and the retail company in order to improve the sale of its products. The retail business agrees to pay a certain commission to the affiliate marketer per sale.
In online businesses, affiliate marketers use a unique link on their website to monitor the traffic directed towards the clients’ site. If a directed customer buys something using the affiliate link, then the affiliate marketer would receive its commission.
Affiliate Marketing Statistics
- Revenue and profit have been increasing roundabout 10% annually for the past five years
- 84% of the publishers and 80% of the brands employ affiliate marketing
- Roundabout 15% of the revenue of the digital media industry is from the affiliate marketing
- Sale by affiliate marketing would reach over 8.2 billion dollars by the end of 2022, and it was 4.8 billion dollars in 2016, according to Statista
- 16% of the e-commerce sale is through affiliate marketing and its markets are Canada and the US
Advantages of Affiliate Marketing
Some of the main advantages of affiliate marketing are as follows;
Billion-Dollar Business
As many of you are familiar with the fact that the affiliate marketing industry is worth billions of dollars, it has been prospering tremendously for the past few years. Primarily, it’s one of the main benefits of attaching yourself to the growing business, and it amplifies your chances of growth and success.
Low-Cost Business
It’s very simple and easy to start an affiliate marketing business without any barrier, and it all depends on your decision. You should have your own affiliate website to market the products of your clients. In fact, you can be an affiliate marketer without having your website. You just have to focus on one product niche that you would promote, and join any of the affiliate programs.
No Special Expertise
It doesn’t require professional marketing expertise to join the affiliate programs. The good thing about AM is that you can learn it gradually while working, testing, and practicing various techniques. However, there are various methods and strategies to run affiliate marketing programs, and you can use any one of them relevant to your marketing needs and requirements.
Limited Investment
Compared to other businesses, the operational cost of affiliate marketing business is almost none. All you require is stable internet connectivity and electricity, and others cost of the domain, hosting, subscription, theme, design, layout, and others in order to launch your affiliate website.
If you want to work in an office environment, then you should rent out an office co-working space. You can also work as a freelancer without paying any cost, you don’t have to worry about inventory costs or customer service.
Additional Source of Income
You don’t have to leave your job and start working for the affiliate, you can do both works at once. It would be a bit difficult to manage the time, but it’s possible. It would take a few months to become fully established, when it does, then you can withdraw money from it.
Flexibility & Convenience
You can run various campaigns on different websites to promote the affiliate link, it would help you to focus on the well-performing links and leave the rest. You don’t have to stick to one affiliate product, you can run various affiliate programs in different product categories.
If it’s difficult to sell one product, then you should move to the next one that is a bit easier to sell and offer more profit. In other words, if one program doesn’t work, then you should move to the next one. It allows you to lower the risk factor, and amplify the probability of growth and profitability.
Not Focused on Customer Service
Building, managing, and retaining customer relationships is a difficult process and requires a lot of work. You don’t have to worry about that in the affiliate business. However, your focus is on the sale and commission, and you can end the relationship anytime. If visitors ask any questions under your post, then you should answer their questions.
Independence
It offers you high payment and flexibility over the working environment however you want to work. You can work anywhere you want as long as you have electricity and an internet connection. It seems like ideal work, and freelancers don’t have to follow the chain of command and rules and regulations of any organization or delivery any type of reports. These small things offer you great independence over your life.
Marketing Kit
The client Retail Company or vendor would offer you different types of marketing and promotion material. You don’t need to prepare banners, logos, or graphical images to promote their product, they’ll do it for you.
Passive Income
Passive income means that your website would keep you earning money even you’re having fun on the trip or sleeping. Wouldn’t it be wonderful to know that you wake up in the morning and realize that you’ve earned a lot of profit last night?
Sky’s the Limit
You can promote your affiliate program in various ways like PPC, email marketing, or your blog post. In fact, you can promote your affiliate products on social media platforms like Quora and others. You can both use various techniques in combination with whatever suits your business.
Sole Proprietorship
You’re working on your laptop or mobile phone as a freelancer in the affiliate program. Here you don’t have to share the profit; you’re working as a sole proprietor.
Flexible Timing
You’re working in your home by creating your own timing schedule depending on your mood. If something comes up, then you can rearrange your timing schedule however it suits you best. You can go on vacation whenever you want.
Performance-Based Salary
If you’re good at running marketing campaigns and promoting products/services, then it offers you a great benefit of earning well based on your performance. As they say, success is for those who do the hard work. However, persistence and practice are the keys, you just have to keep on working unstoppable.
Disadvantages of Affiliate Marketing
Some of the main disadvantages of affiliate marketing are as follows;
No Control
You don’t have the ownership of an affiliate marketing program; you’re just a part of it. In other words, you have to follow the regulations of a Retail Company, and you’re dependent on them. It seems charming in the beginning, but it becomes less competitive later. You have to wait for the client to adjust the new rate and implement the changes. Other than communication, you can’t do much.
Uncontrolled Competition
Easy to start the affiliate business, limited cost, and high profitability are the benefits of an affiliate program. It also means that anyone can start and win the market share with its new marketing campaign, and you won’t have control over the competition. Professionally established affiliate marketers would offer you tough competition in the market, and they would impact the growth of your business.
No Customer Base
It’s a referral program, once visitors go to the client website using your affiliate link. They would visit the store directly next time without your link. You can’t establish a database of loyal customers or make them repetitive customers. Your job is to attract new customers and keep them referring to the client, and that’s it.
However, some SaaS affiliate marketing programs provide you with recurring licenses where you’ll keep on getting the commission if the customer stays with the company. Such programs are limited.
Unguaranteed Income
Income-based on your performance is a double-edged sword, it can offer you benefits along with no income at all if your performance goes down. It’s challenging to work with affiliate programs, you have to keep on working consistently to maximize growth and profitability. You have no idea how much income you’re going to earn every month.
Freelancing Unsuitable for Everyone
Working in solitude for unlimited hours and you don’t have to talk with anyone or move anywhere; it’s such a lifestyle that’s not easy. Not everyone has a stomach for it, and it results in the form of mental health issues with some people. If this is the case with you, then you should rent out a co-working space and work in the company of other freelancers.
Quantity Approach
Affiliate marketing usually falls under the category of spam marketing, and it’s true to some extent because some marketers do that. It’s important to mention it here if you follow any of the shadow techniques, then it would limit your growth chances and jeopardize your reputation. Furthermore, the affiliate program would finish the deal with you.
Bottom Line
After a careful analysis of the advantages and disadvantages of affiliate marketing programs, we’ve realized that it’s generally a good program. Therefore, you should avoid following spam marketing techniques and be truthful with your campaign.
