What Is Affiliate Marketing And What This Means For You

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What is Affiliate Marketing and What Might This Mean for You?

Written by Nelson Lam on Nov. 23rd 2020

Let’s be honest, affiliate marketing is nothing new yet still the cause of confusion for people with little to no experience with digital marketing. It’s true, affiliate marketing seems to be on the radar for most entrepreneurs but at the same time, it seems as though most people are somewhat intimidated by this fast-moving industry.

But what does this mean for you and what is affiliate marketing exactly?

Well, whether you’re fresh out of college, tired of your regular job or simply in search of a side hustle, affiliate marketing is a straightforward solution for starting your own online business. But more on that later.

What is Affiliate Marketing and What Might this Mean for You?

Affiliate marketing is a revenue-sharing based system in which you can promote and sell third party products and services in return for commission. In other words, if you direct people to any of these businesses, you will receive a certain percentage of each purchase made by the customer.

Needless to say, the process of generating this traffic is referred to as marketing and it’s also possible to utilize affiliate marketing the other way around. For example, if you created a digital course or product, you might offer certain websites or blogs the opportunity to sell this course in return for a specific commission.

Anyway, this is obviously a basic outline of affiliate marketing, and the actual advantages and disadvantages of the process are a lot more complex. With this in mind, let’s take a look at the pros and cons of affiliate marketing and why this might just be the solution for your next online venture:

9 Pros and Cons of Making Money Online via Affiliate Marketing

1. You Can Choose Products or Services in Absolutely Any Niche (Pro)

Affiliates can be found in every market and product category that exists today. Whether you’re looking to break into the retail industry or for something more niche like handcrafted vintage toys, there will always be relevant websites to align with.

The great news is that many of these affiliates will already have an established visitor base. These partnerships grant the opportunity to expand out into new markets that you might not otherwise have had the bandwidth to explore or to further saturate your existing target markets, giving your brand a much stronger online presence.

Think of these partners as an extension of your current marketing or sales team.

2. Affiliate Marketing is Performance Based and You Need to be Self Motivated (Con)

As you can imagine, the success of affiliate marketing is completely based on performance. After all, you only receive commission when this traffic converts to sales, and without putting in the work to acquire this traffic, none of the above is possible.

For this reason, you need to be self-motivated to succeed in affiliate marketing and also persistent through times when numbers are low or non-existent.

3. Competition is Often High with Affiliate Marketing (Con)

Finding a niche market is increasingly difficult due to the amount of competition online. While you need to “follow the hype” or target especially profitable markets, you can be sure that many more people have precisely the same idea.

In fact, when faced with talented or experienced niche affiliate marketers, it’s sometimes best to target an alternative niche in which success is more realistic.

4. You are not Responsible for Customer Service (Pro)

Customer service is a hugely time-consuming process that affiliates do not have to think about. What’s more, even when you receive an after-sales query, you can most likely direct them back to the merchant and not have to worry about taking responsibility for product or service performance.

5. Affiliate Marketing is Incredibly Easy to Start-Up (Pro)

Affiliate marketing is most likely the easiest way to start an online business. Whether you have any experience or not, the extent of online resources makes it easy to get started and success is often a case of trial and error.

Either way, it takes little more than ambition and determination to set up an affiliate marketing business and this can even be done in a matter of days.

6. Life as a Freelancer is Not Always Easy (Con)

Affiliate marketing inevitably means that you will take to the life of a freelancer. Now, there are many benefits to freelancing but you must also understand the potential downsides of this kind of lifestyle. That is to say, freelancing is often a lonely industry and there is rarely any support for when things may not go to plan.

Of course, you can work from co-working spaces or coffee shops but at the same time, these are not always as social as you might think and it can take time to adapt to this nomadic lifestyle.

7. Affiliate Marketing Can Provide Absolute Freedom (Pro)

If you’re like me, you think that freedom is the absolute best thing about affiliate marketing. You see, the independence of running your own online business is priceless and you have full control over every last decision-making process.

As if that’s not enough, you get to choose your working hours and you also have the opportunity to work from absolutely anywhere in the world. Trust me, once you work in this industry, the mere thought of returning to conventional life will make you work even harder to succeed!

8. Affiliate Marketing Can Translate to Passive Income (Pro)

Affiliate marketing is usually the best way to create passive income online. It’s true, building up some steam will take time but in the long run, most affiliate marketers start to outsource the actual work and automate everything else. For this reason, the websites will often make money overnight and the affiliate marketer's role is more a case of maintenance rather than marketing.

9. You Need Very Little Money to Get Started with Affiliate Marketing (Pro)

For many people, “money” is the reason or excuse they have for not starting a business. However, there are very few startup costs with affiliate marketing and no expertise or consultation is needed for the process.

In fact, there are no sign-up fees or qualifications needed for affiliate programs while website design is rather straightforward in the current era of website builders. As for the process, after choosing a market niche and deciding on the products or services you wish to promote, it’s simply a matter of creating a website, signing up for affiliate programs, and generating traffic.

‘Practice Makes Perfect’

Why You Should Start Your Own Online Business

As you can see, there are certain downsides to affiliate marketing but the advantages most certainly make the process worthwhile. Whether you want a “side hustle” or an alternative career, this is also a viable solution for just about anyone who is willing to work hard and persevere.

At the same time, this can be a very profitable business opportunity and an industry that will most certainly grow.

And that’s just part of the story….

You see, the statistic back this up.

In fact, recent studies show that the affiliate marketing industry is valued at more than $12 billion and expected to grow by 12% over the next few years.

What’s more, affiliates are responsible for 15% of revenue online and at least 80% of businesses rely on these marketers to contribute to their yearly profits.

Let’s be honest, there might be a learning curve to this “confusing” process but when it comes to affiliate marketing, it would certainly seem as though practice makes profit.

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