Affiliate marketing is excellent for making money online. It is easy to get started on, and you can make a significant income with a good strategy.
Recent research findings show that 81% of brands and 84% of publishers in the US rely on affiliate marketing to increase their sales. In 2020 there was a 10.1% increase in affiliate marketing spending to a value of 6.8 billion dollars. Affiliate marketing is beneficial for both marketers and brands.
This article explores what affiliate marketing is, its pros and cons, and tips and ideas for making money with affiliate marketing.
What Is Affiliate Marketing?
Affiliate marketing is an online business model whereby you refer customers to merchants and earn a commission if they buy through your referral link. Some affiliate programs pay per lead or per click on the affiliate link.
Usually, affiliate marketers set up a niche website to review some of the best products in a given category. The review provides links to the product on the merchant’s website, which a customer can click on to make a purchase.
Advantages of Affiliate Marketing
Below is a look at some of the reasons you might want to become an affiliate marketer:
A source of Passive Income
Unlike a regular job where you have to constantly put in work to get paid, you can set up your affiliate website and have it bring you income even as you sleep. You can establish an affiliate marketing business as your primary source of income or as a side hustle.
At the onset, you will need to put in substantial work towards finding high-quality products that are eligible for affiliate marketing, creating content, and setting up marketing strategies that continuously drive traffic to your website.
If done correctly, you may review a product, provide its affiliate link today, and continue to make money from it 5 to 10 years from now. Occasionally, it may be necessary to update your articles and links with newer products.
There’s No Stock or Inventory Involved
This is one of the top benefits of affiliate marketing. Since you’re only serving as a referral, you do not have to worry about product inventory, shipping, or storage. This significantly cuts down your initial start-up costs as well as daily operational costs.
There Is No Customer Support
As mentioned earlier, your primary role as an affiliate marketer is to promote the merchant’s products. Customer support and satisfaction are not your responsibility.
You Can Work from Anywhere
Most people looking to get into online business are keen on the freedom that online business models give you in terms of work schedule and the ability to work from anywhere.
With affiliate marketing, you don’t have to work from a given location within a specific timeline. You could work from the beach, your bed in your pajamas, your favorite coffee shop, or wherever else you like.
Low Initial Setup Costs and Operational Costs
For most businesses, the initial setup costs are usually because they need cash flow to stock up on products and oversee daily operational costs. With affiliate marketing, your main start-up expenditures include the cost of setting up a website, creating content for the website and driving traffic to the website.
Depending on your skills, you may bootstrap website design, content creation, and marketing efforts such as SEO. In which case, your main costs will be advertising and website hosting which are pretty affordable. Furthermore, there are no membership fees or subscription fees associated with signing up for an affiliate program.
You Do Not Require a Sophisticated Level of Skills to Get Started
The most crucial skills for becoming an affiliate marketer include content creation, website design, domain registration and hosting, SEO, online advertising, lead generation, and analytics. Most of these skills can be acquired easily with free or paid online resources. Alternatively, you can outsource some aspects of the business, such as web design, content creation, and marketing.
Disadvantages of Affiliate Marketing
When going into affiliate marketing, it is paramount that you understand and plan to maneuver the cons associated with this online business model. They include:
You Have No Control Over Products
Sometimes, one of your best-selling products may suddenly be taken out of the market by the merchant. The merchant may also make changes in the product design that may affect the product’s demand, negatively affecting your revenue.
You Have No Control Over Affiliate Program
Similarly, the affiliate program may change its terms and conditions, such as commission rate, at any time without your input. There have been cases where the affiliate program takes down your affiliate links without prior notice or explanation. This leaves your business at their mercy.
There Are No Guarantees of Revenue
Affiliate marketing is a pay-per-performance business model, and the more leads you regenerate, the more you’ll be paid; otherwise, you do not make any money. It is also difficult to predict how much money you will make within a given period.
It Can Take a While for Your Affiliate Business To Get Established
On average, it takes 18 to 36 months before you can start making a consistent income with affiliate marketing. This is because the process of building an audience, finding reliable affiliate programs, and getting ranked on search engines takes some time.
How to Make Money with Affiliate Marketing
Below are tips for getting started and making money with affiliate marketing:
Choose an Affiliate Program that Offers a Decent Commission
Commission rates vary significantly from one affiliate program to another. While some offer 5%, others offer up to 50% on each sale. Do your due diligence on the various programs to identify those that offer the best commission rates. Some programs offer a flat rate commission per sale instead of a percentage, while others pay per click or lead.
Some of the most popular affiliate programs include:
- Shopify Affiliate Program
- Amazon Associates
- Affiliate Network
You could also reach out directly to merchants to see if they have an affiliate marketing program. You may work with one affiliate program or different ones.
Understand the Affiliate Program’s Terms of Service.
Read the fine print to determine the specified time frame for cookies, whether the program pays per sale, click, or lead, how often the program pays and payment method, whether you can use the company’s name or products in pay per click ads, among others.
Carefully Choose Your Niche
Determine who your target audience is, their demographic, interests, the product they use, and buying habits. Research the niche in detail to be able to determine products to review. Ensure the products you choose to have a reasonable demand but low competition. This way, you are sure to become profitable.
Develop a Marketing Strategy
Once you’ve identified your niche, an affiliate program, and products, you need to create relevant content and come up with ways of driving traffic to your website. When creating content, introduce links as early on as possible while ensuring that they fit organically in the context of the content.
Review Your Affiliate Marketing Strategy on an Ongoing Basis
Check your analytics on the regular identifying affiliate links and content that perform the best and find ways to leverage them. Also, identify the best performing marketing strategies and maximize them.
Affiliate marketing offers you an opportunity to start an online business with easy-to-acquire skills and at a relatively low initial cost. With patience and the right strategy, you can establish a consistent passive income.
This is a multibillion-dollar industry that you can tap into to establish a consistent primary or secondary income. With time, you will be able to determine what works and what doesn’t work for your affiliate marketing business and adjust accordingly.
Think through the cons associated with this model of business and determine how you will go about them. You get to work from anywhere, anytime, and you can outsource most aspects of the business if need be.