According to Cheq, The United States of America has an Affiliate Marketing industry worth $6.8 billion. Succeeding the US on the list is Japan with its Affiliate Marketing industry standing at $3.3 billion. The other lucrative markets are Germany ($1.34 billion), Australia ($930 million), and the United Kingdom ($634 million).
In another study by Viglink, Affiliate marketing is second on the list when it comes to generating revenue for publishers. The list is topped by Google AdSense. The list also contains display advertising, brand sponsorship, paid product reviews, and other forms of native advertising.
The above stats and facts endorse that Affiliate Marketing is a lucrative industry.
But, what is Affiliate Marketing?
In simple words, “Affiliate Marketing is the process of earning money (commission) by promoting products or services of some company or individual. In other words, if, as an Affiliate, you drive sales of a product (or service) created by someone else, you will get a commission for generating sales of that product (or service).”
You can read more about it here: A Simplified Guide to Affiliate Marketing
In a nutshell, Affiliate Marketing is about getting a share of each sale. For example, if the commission of a product is 25% and the product you are promoting costs $100, you will make $25 for each sale.
Like everything in life, Affiliate Marketing has its boons and banes and, in this post, I will walk you through the 9 of them.
Pros of Affiliate Marketing
(1) Low cost of entry
- What sets Affiliate Marketing apart from other businesses is that you can start for free! You could fetch your unique affiliate link and start promoting on YouTube. All you need is an affiliate link to roll.
- When you become an Affiliate Marketer, you are not required to pay for product creation, storage, maintenance, inventory, and so on. You are free from all the costs that a traditional business should pay.
- You can choose any product and if you do not believe in it, you can switch to another one.
- On the other hand, if you do decide to invest in your own website, you would need to pay for hosting, domain name, and website creation. If you are a developer, you can save the cost of creating a website.
(2) Affiliate Marketing is a billion-dollar industry
- The Affiliate Marketing industry is a $12-billion industry and it’s only projected to grow. According to studies, the industry expects a compound annual growth of 10% every year.
- Affiliate Marketing contributes greatly to e-Commerce. Around 1 out of every 6 e-Commerce sales is through an Affiliate.
- So, if you are looking to start Affiliate Marketing, I would recommend you start today itself! I would love you to have a slice of this big cake!
- With the market trend, user behavior, and the dreadful pandemic, the number of people looking to learn Affiliate Marketing is growing at the rate of knots!
- It is fair to say that the facts, stats, and market trends about Affiliate Marketing can only be summarized in the words of Bo Bennett – “Affiliate Marketing has made businesses millions and ordinary people millionaires.”
(3) No expertise needed
- If you want to take up Affiliate Marketing, you do not need any qualification, you do not need to have technical skills, you do not need to have a degree, you can be anyone, I mean it, anyone and you can become an Affiliate Marketer.
- If you want to make more money online, if you want to make a side income, if you are passionate to live a luxurious life, you can become an Affiliate Marketer. You need to make a decision about transforming your life and then take action to make it happen.
- I have observed more than 50 Super Affiliates in my Affiliate Marketing career spanning over 3 years, and each one of them was a normal person like us. They are neither founders of a tech company, nor they are rocket scientists, they are people with a passion for changing their lives taking action on a daily basis to live the life of their dreams.
- My mentor scored only 28% in his HSC (12th) Mathematics board exam. He is no expert but his passion to grow has taken him to where he is now.
(4) Passive income
- When you become an Affiliate Marketer, you become eligible to earn a passive income.
- “What is a passive income?” you ask. Passive income is making money while you are not working. Imagine sleeping tonight and waking up with $1,000 extra in your bank account. That’s possible with Affiliate Marketing.
- Disclaimer: It won’t happen instantly! It takes a lot of hard work, dedication, and perseverance to make a passive income. You would need to master traffic generation and automation to make a sustainable passive income.
- You can make passive income through your blogs, YouTube videos, online courses, and the services you provide. To learn more about how you can make passive income like Super Affiliates, sign up for this training.
- The most exciting advantage of becoming an Affiliate Marketer is flexibility.
- You can work from any part of the world. You are in India, you can work, you are in the Philippines, you can work, you are in Scotland, you can work! You only need two things – your laptop, and a stable Internet connection.
- With Affiliate Marketing, you are free to work whenever you want! You are your boss! You are not bound to deadlines, routine, etc.
- You want to go on a date on Monday, you can take time off. You do not want to work in the morning – no problem! You are not bound to time. You can work whenever and wherever you want.
(6) No glass ceiling on income
- When you are at a job, you earn whatever you are paid, but when you start your own Affiliate Marketing business, you can earn as much as you want. There is no glass ceiling on your income.
- My mentor always tells us your business will grow to the extent you grow. Although it takes time to earn something noticeable, once you start to see the number in your bank account rise, there is no stopping.
- Just 1 blog or 1 video could result in an extra income. Pat Flynn, a renowned Internet Sensation earned $315,000 off just 1 product. Through ConvertKit, he was able to make $315,000.
(7) Earn through various methods
- With Affiliate Marketing, you can earn through various methods. The most popular method of getting paid is making commissions for each sale driven through your affiliate link. So, if you make a commission per sale, it is called the Pay Per Sale method.
- Many companies will pay you for each click that drives traffic to their websites or apps. That mode of making money is called Pay Per Click.
- A number of companies pay you once visitors submit a form on their website through your link. This method is called Pay Per Lead.
- Diversity is one of the most exciting advantages of becoming an Affiliate Marketer. As an Affiliate Marketer, you can choose multiple products and/or services. At the time of this writing, I was an official Affiliate of 56 companies. So, if you are a beginner, I want to reassure you that this is possible through the power of Affiliate Marketing.
- Alternatively, you can choose to promote similar products of the same category. For example, if you decide to promote web hosting, you can promote HostGator, WPX Hosting, BlueHost, and so on.
- Another example I could give is page builders. If you are an Affiliate of page builders, you can promote Elementor, SeedProd, Divi, and the like.
- If you promote similar products of the same niche, your chances are of making more money.
(9) You can do what you love the most
- Imagine you are working at a job. Usually, you have to work with colleagues you don’t like. No matter how much you despise them, you can do nothing about it. You have to work with them for the entire duration of the project. Doesn’t that qualify as suffering? 😀
- Thanks to Affiliate Marketing, you get away with that “suffering” and are free to choose any product that you love. You can select a product based on your passion and what you are truly interested in.
- The advantage of choosing products you love is that you will give more effort. Let me give you an example. What do you love to do? What is that 1 thing that you can do for hours? Let’s consider, dancing – for example. If you love to dance, you will find time, in fact, you will make time! The amount of effort you will give will be unparalleled! A shallow example, but I hope you got my point. Similarly, if you choose products you love, you will make efforts to create in-depth content – blog or video. You will get creative to explain the benefits it will have to people. As a result, your content will be in detail and better than those who merely scratch the surface. The result? More value! More eyes on your content! More sales!
Cons of Affiliate Marketing
(1) Takes time to make something noticeable
- When I started Affiliate Marketing, I came across many “gurus” and “experts” who promised that anyone can make big money in 7 days. As it turns out, it takes more time – a lot of it – to make a noticeable income from Affiliate Marketing.
- So, if you are a beginner and want to make instant money, I’d request you to not choose Affiliate Marketing. Affiliate Marketing is a long-term game. It is a serious business.
- According to my experience and research, it takes anywhere from 18 to 36 months to make real money – if you work every day.
- Building authority and trust take time. If you start today, I would suggest you create your website, post content regularly that helps people and solves their problems. The more content you have, the more people will trust you and they tend to buy from those whom they trust.
- Making money from Affiliate Marketing is not a fairy tale where you will see instant results. There are exceptions, however and exceptions are not examples.
- Affiliate Marketing is not a “get rich quick” scheme. If you want to stand out, you should take different steps, follow different strategies, and techniques.
(2) Requires self-discipline
- Affiliate Marketing is a lonely journey, takes a lot of hard work, and you are responsible for everything – website creation, content creation, marketing, and so on. There is no routine or agenda as in the case of jobs. You have to figure out everything yourself! You have no support and there is no one to help you!
- It is difficult to set goals and stay on track if you are alone. You are accountable to yourself, you are your unpaid employee, hence, establishing a strong work ethic is crucial.
- When I took up Affiliate Marketing full time, I thought it was going to be a cakewalk, but, gradually, I began to realize that it’s going to be challenging. I was responsible for everything – researching, creating blogs, and marketing. There were distractions at home, on some days, I wouldn’t have an idea in my mind, many times I started writing an article only to find myself searching words after one paragraph.
- So, planning your day, aligning tasks, and achieving every daily goal will require a great deal of self-discipline which will help you in the long run.
(3) You may run into bad partnerships or programs
- Let’s face the harsh reality about Affiliate Marketing – not every partner is going to be a good partner. If you are a beginner, this is a heads up!
- Some partners may change their terms and policies without informing you, they could change the commission structure, they may not pay you, they may terminate your account for reasons undisclosed, and so on.
- Many companies that you sign up as an Affiliate of may go out of business completely shutting your income.
- Many companies, even the best ones, could close their Affiliate program and you could lose those hard-earned dollars.
- So, no matter how experienced you are, please research before you sign up for any program.
(4) No control over commissions
- When you sign up for any affiliate program, you cannot negotiate the commission with the owner. You will make whatever commission that company is going to pay.
- Many companies are so unyielding, they will not change the commission rate even if you are the best-performing affiliate. These companies do not think about increments, do they? 😛
- According to my experience, some of the renowned companies pay a small commission. Amazon, as a matter of fact, pays up to 12% commissions. Let’s do some calculations here. Suppose, you are an Amazon Associate and you promote a product that pays a 10% commission. Suppose the cost of that product is $20. So, for every sale, you will make $2! That’s it! $2 for every sale! If your goal is to make $1,000 per month, you’d have to generate 500 sales of that product – every month!
- One of the threats to an Affiliate Marketer is getting their links hijacked! There are linkjackers sitting on the Internet to steal your links, make them their own and steal your commission.
- Hence, it is crucial for you to inspect your links every now and then to ensure they are working fine. You can utilize the link tracking capability of the Affiliate platforms.
(6) High competition
- Affiliate Marketing is trying to swim in the ocean and make money. As there are many of the same fish, there are many of the affiliates who promote the same product.
- You could be in a situation where many affiliates are promoting the same product and the well-known ones are getting all the sales. You would end up wasting your time and effort due to fierce competition.
- It is all the more difficult when you are a beginner. You must be exceptional to catch the eyes of people and make some money.
- Like any business, there is no guarantee of a fixed income from Affiliate Marketing. You could make $1,000 in one month, and nothing in the next. That’s the nature of Affiliate Marketing. Your income graph is not going to be stable. Your income graph will look more like a stock market graph – there will be fluctuations regularly.
- The next point is programs shutting down anytime! You could be a lucrative affiliate of a certain platform, but if that company does not perform as per its expectations, they could shut the business altogether. Due to the pandemic, many well-known companies were forced to go out of business. So, there is no control over affiliate programs.
- Out of the blue, the companies can change their commission structure. This has happened a few times with me and I have no control over it. I mentioned increments in one of the above points, which these companies do not believe in, but they do believe in decrements.:D
- Another pertinent point I would like to put forward is your account being canceled. When I started Affiliate Marketing in 2018, I signed up for the ClickBank affiliate program. I created my account and only copied the hoplink. The next day when I tried to sign in, I was informed that ClickBank has terminated my account for undisclosed reasons. No matter what you do, this action cannot be undone. Companies can terminate your accounts just like that and you cannot do anything about it.
(8) You can be labeled as a ‘scammer’
- Affiliate Marketing is a business where you promote products created by someone else.
- Not everyone that purchases the product(s), sees value in them and if you happen to sell it to someone who did not get the desired results, they will label you a ‘scammer’.
- Hence, when you promote products, tell everything about them – the pros, cons, features, etc. People are only interested in the benefits, but it is your responsibility to tell them everything. Convince them of the benefits but also mention the downsides.
- Online business is such that if you fail to build trust, you could enter the ‘scam’ category.
(9) 70% of the Affiliate Marketers earn nothing
- Although Affiliate Marketing is a lucrative business, 70% of the affiliates make nothing. According to my research, 7 out of 10 Affiliate Marketers fail to make money.
- So, if you are planning to become a full-time Affiliate Marketer, be aware of the fact that not everyone makes money, maybe due to lack of persistence, wanting instant results, not following a system, not providing value, etc.
- Not everyone makes $315,000 in 24 months like Pat Flynn. But you can learn the lessons and principles followed by him and make a reasonable income.
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- According to Cheq, The United States of America has an Affiliate Marketing industry worth $6.8 billion. Succeeding the US on the list is Japan with its Affiliate Marketing industry standing at $3.3 billion. The other lucrative markets are Germany ($1.34 billion), Australia ($930 million), and the United Kingdom ($634 million).
- In another study by Viglink, Affiliate marketing is second on the list when it comes to generating revenue for publishers. The list is topped by Google AdSense. The list also contains display advertising, brand sponsorship, paid product reviews, and other forms of native advertising.
- Although Affiliate Marketing is projected to grow at 10% annually, things are not always on the bright side.
- Just like with every aspect of life, there are pros and cons to Affiliate Marketing.
- In this article, I went over 9 miseries and ecstasies of Affiliate Marketing. In brief, they are as follows:
- Low cost of entry
- Affiliate Marketing is a billion-dollar industry
- No expertise needed
- Passive income
- No glass ceiling on income
- Earn through various methods
- You can do what you love the most
- Takes time to make something noticeable
- Requires self-discipline
- You may run into bad partnerships or programs
- No control over commissions
- High competition
- You can be labeled as a ‘scammer’
- 70% of the Affiliate Marketers earn nothing