If done right, affiliate marketing can make you a lot of money. One problem I see all the time is that affiliate marketers chase the money, and when they do not make any, they give up.
And this is why I want to talk about the affiliate marketing pros and cons. I want to help set your expectations before you get into it—this is the only way you can make an informed decision.
Pro 1: Profitable industry
Affiliate marketing is profitable, provided that you make a lot of commissions. There are those who earn tens of thousands of dollars a month from it.
The first thing you have to do is to choose a niche where there is a consistent demand. The most common examples of these are health and fitness or the make money online niches. Many affiliate marketing companies pay top dollar to their affiliates for each sale.
If you can, choose products that have recurring commissions. For as long as your referred customer is paying, you will also get a commission.
Pro 2: Passive source of income
Affiliate marketing is a publish-and-go business model. You do not have to talk to customers about their complaints since you do not own the product.
The beauty of this is that you only refer customers to products, and then they have to decide if they want to buy it. As a content creator, it is also completely up to you if you want to answer “customer” inquiries.
Once you have published your content, it is there to stay for people to read and people to watch. If you created content that ranks high on either Google or YouTube, then you can expect more traffic and more passive revenue.
Pro 3: Several ways to set up
There are many ways to do affiliate marketing. Here are some:
- Blogging – put up a blog and provide valuable content to your audience. In your blog post, publish your affiliate links.
- YouTube – create a channel and publish videos like reviews; put your affiliate links in your video description.
- Email marketing – you can do this in two ways. The first one is through gathering email addresses from your blog, and then send your subscriber’s product lists and marketing materials that have your affiliate links. The second one is to use services like Udimi, where you can ask people who have email lists to send your marketing materials to their subscribers (otherwise known as solo ads).
- Sales funnel – build a sales funnel that has a landing page, opt-in page, and check out page. Advertise this funnel to get traffic and make sales from this traffic.
Do not limit yourself with only one method. Many affiliate marketers today have a blog and a YouTube channel.
Pro 4: Lots of marketing options
Affiliate marketing does not rely on one marketing channel. You can advertise on social media, Google, and other platforms.
Just be careful when advertising, as many sites do not allow affiliate links in their ads. Instead, what you have to do is to create a squeeze page where you can get the email address of your traffic to your affiliate product. A bridge page could also be used to separate your affiliate link from the advertising platform.
You can also put your links in forums. But again, you have to be careful. Many people do not like marketers. What you can do instead is to provide value first. Only post affiliate links in a subtle way and after you are a respected member of the community.
Pro 5: Low-cost business to start
You do not need a lot of money to get started. If you prefer to blog, there are many free blogging platforms where you can set up a free blog like Wix and WordPress.
If what you want is a YouTube channel, you do need an expensive rig. All you need is your phone to get started. There are many free video editing apps you can use to edit your videos.
If you are prepared to spend on your blog, the most that you have to spend is about $8 per month for a hosting web service. The content management system is free. You can write your blog or hire an affordable freelance content writer to do it for you.
Con 1: Can take years to be profitable
Many affiliate marketing gurus make it seem like you will earn money right after you set it up. This couldn’t be farther from the truth.
Affiliate marketing websites may be a passive income source, but it does not work like selling pancakes. In a physical business, people will buy from you the day you open your store. This almost does not happen in an online business.
It can take months or years to make a sale. And this is especially so for affiliate marketing. Most of your readers are not ready to buy. Your followers are in the phase of still checking out your recommendation.
As such, you will be spending money on your blog maintenance, plus you will be spending money on your writer. You do not have to spend if you do not want to, but be prepared to do a lot of hard work for a long while.
Con 2: Lots of competition
You are not the only affiliate marketer. There are thousands of you online.
You see, affiliate marketing does not need a lot of money to get started. As such, the barrier to entry is so low that almost anyone who wants to start an online business considers affiliate marketing.
Also, many companies advertise affiliate marketing as an easy way to make money, and this is what attracts thousands of people to try it.
This is okay—all businesses have competition. What you should strive to do is to create content that is unique and valuable—do not be a “me too” affiliate marketer.
Con 3: No control over commissions
As an affiliate marketer, you will never know when a company would stop paying out commissions, or if they decide to lower down the commission rate.
This happened to many Amazon affiliate marketing experts in 2020, during the height of the Covid-19 pandemic. What happened was that Amazon changed the payout to as low as 1%. This hurt many people who were earning a living through affiliate marketing.
The worst thing that can happen is when a company decides to shut down its affiliate program, like what Oberlo did. In this case, you just have to change all your affiliate links to something new.
I have seen people set up whole websites based around a particular product, only for this product to be discontinued. This is particularly the case with ClickBank offers!
Con 4: No customer base
As an affiliate marketer, you do not have a customer base. You cannot expect people to do repeat business with you. Once a customer clicks on your affiliate link and makes a purchase, you cannot expect this person to buy more.
You see, you are not a store. This is why I strongly recommend that you choose affiliate programs where you get paid a recurring commission. There are many that offer this, but in most cases, you get paid for only 12 months.
The other way around this is to find a way to capture emails of the people you are marketing to, then you are able to keep selling to them with good email marketing campaigns.
Con 5: Earnings are uncertain
There is no certainty with what you earn in this business model. Your capacity to earn depends on several factors, such as the ones below:
- Traffic – without traffic, no one will find your affiliate links; you need to consistently find ways to send traffic to your website, YouTube channel, or landing page.
- Relevance – if your product is no longer relevant, you will no longer earn money. One good example is a health and fitness product. Time and time again, new technology introduces new equipment. If your product is outdated, no one is going to buy that anymore. Maybe you promoted a diet that was just a fad and is no longer popular!
- Ranking – you need to rank high in search engines. This is the only way you can get lots of traffic. If you do not rank, your affiliate marketing efforts via SEO will not yield results. Failing this, you need to have a consistent way to promote your offers with paid traffic in a profitable way. With costs changing all the time with this type of advertising, it is not always easy.
While affiliate marketing is a passive business, you need to be active from the backend to ensure that you get traffic—which you can only do if you are actively managing your content and sales performance.
Con 6: Limited potential growth
Once you have put up an affiliate marketing niche site, it is not likely that you can scale it up. It is not like high-ticket dropshipping where you can add products to your store anytime you want.
With affiliate marketing, your website is going to stay as it is—a niche website catering to a specific type of market. If you want to sell new products, you have to build a new website and start all over again.
Is Affiliate Marketing for You?
Affiliate marketing is a great business model for people who do not like active participation in a business. At best, affiliate marketing is great for influencers—those who want to produce online content, but do not really like the hassle of dealing with customer complaints.
Affiliate marketing is not for everybody. It takes some serious grit and persistence to make it work. On average, it takes two years before you make your first sale. And it will take several more years to earn a decent amount of income from it.
My advice is simple: do not do affiliate marketing if you are after a quick buck. Do affiliate marketing because you are passionate about a niche—and then monetize it later.