Advantages and disadvantages of affiliate marketing
This article offers a detailed assessment of the advantages and disadvantages of affiliate marketing. There is no doubt that one of the most effective ways to make money online is by becoming an affiliate marketer. Affiliate marketers can offer products or services from a particular brand and receive a commission when a consumer makes a purchase by clicking on the link provided in their websites, blogs etc. It can be very easy to pursue this type of business model; however, it does require some hard work for the affiliate marketers to promote their selected brands continuously.
What is affiliate marketing?
According to Patel (2022) the term ‘affiliate marketing’ refers to the process of earning money (commissions) every time a person/organisation promotes another individual or company’s products/services and drives a sale. They only get paid every time they drive a sale.
Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each customer or visitor brought by the affiliate’s own marketing efforts. Affiliate marketers are typically website owners or bloggers who promote products or services of another business. When a customer makes a purchase or completes a desired action, the affiliate is rewarded with a commission, which is typically a percentage of the sale.
Affiliate marketing has become increasingly popular in recent years as more businesses are realizing the potential it holds for reaching new customers and expanding their customer base. It is a great way to leverage existing relationships, build brand awareness, and increase sales. Around £627 million were invested in affiliate marketing in the United Kingdom (Statista, 2022). This is shows that it is a good market and can benefit both the merchants and the affiliate marketers.
Advantages of affiliate marketing
The key advantages of affiliate marketing are listed below:
Easy to set up
Affiliate programs are very easy to setup. Merchants need a link from their selected companies and add the link in their websites, blogs, or other platforms. The set-up process is usually very smooth and quick.
Affiliate marketing is a low-cost way to make money online. Affiliate marketers get paid when a consumer clicks on the corresponding link to buy or sign up for a product or service. Likewise, they need a website or blog which does not cost much to set up either. This is very cost effective for merchants as well as they do not have to have employees on their payroll.
Some of the affiliate marketers make a great amount money every month. Some of them in fact make six or seven figures a month. According to Ong (2022) some marketers make around £50 thousands per year. The author has identified Matt Giovanisci as a good example of a high-earning affiliate who earned $149,991 affiliate commissions in 2021. This is surely a dream number for many people.
Middle-class affiliates make anywhere between $1 thousand to $10 thousand a month. However, how much can be earned depends on the niche, popularity, volume of traffic to the sites, and the amount of work marketers put in.
Own products/services not required
Marketers do not need their own products or services to promote. They simply need to find a product or service that customers will like and enjoy, and then promote it for a commission. They can focus on what consumers desire and enjoy and not worry about creating their own products or services.
Affiliate marketing is also very targeted. This means that the perfect customer base can be targeted specifically. For example, if a marketer promotes children’s toys, then it would be a sound business practice to market directly to parents or to other businesses selling children’s toys.
Last but not the least, affiliate marketing can be very flexible. This form of marketing does not require a large investment of time or capital from marketers. It is easy to set a website up and run the business with little risk involved. Marketers have the flexibility to choose their time, and the brands they would like to promote.
Disadvantages of affiliate marketing
The key disadvantages of affiliate marketing are listed below:
Limited rapport with customers
There is a little room for affiliate marketers to build up a customer base based on rapport or quality of service. They simply provide the links to the products and encourage consumers to make purchases. No further help is usually provided, other than to sending traffic to the website of the merchants.
Another disadvantage is that there are so many people who want to be affiliate marketers, which can make it difficult for one particular marketer to stand out from the rest of the crowd.
If affiliate marketers decide to promote multiple products/services, it may sometimes very time consuming. It may require a lot of work and discipline having to spend time researching the products.
As affiliate marketing is a performance-based model, marketers have no certainty as to what amount of money they can make in a month. This is not very helpful for them as they may struggle to plan for their regular family and personal spending. Particularly, new marketers literally do not make that much causing them regular livelihood challenge.
Lack of website/blog traffic
If a website/blog does not have enough traffic, then prospect of making money with affiliate marketing is very slim. It means that marketers need to constantly spend time on attracting new traffic to their sites which is certainly not an easy task. Likewise, some complications can arise from maintaining a blog or website which also means that this type of business is not for everyone.
Affiliate marketing strategies
Affiliate marketing is a great way to reach new customers and increase sales, but it is important to have a clear strategy in place. Here are some tips for developing an effective affiliate marketing strategy:
Identifying the right affiliates
It is very important for companies to choose affiliates that have an audience who are likely to be interested in their products and services. Likewise, affiliate marketers need to select companies they would like to promote and select affiliate marketing platforms accordingly.
Setting clear goals
It is important for both affiliate marketers and companies to set clear goals for their affiliate marketing campaign so that they can measure success.
Establishing a commission structure
Companies need to establish a commission structure that incentivise affiliates to promote their products and services. Likewise, affiliates need to identify the platforms that pay them very well.
Both affiliates and companies need to track the results. Tracking results is key to understanding what works and what does not when it comes to affiliate marketing.
The best affiliate marketing platforms
There are many different platforms available for affiliate marketing. Here are some of the best ones:
ShareASale is an affiliate network that offers access to thousands of merchants, as well as tools to track performance. Regardless of the niche, affiliate marketers will surely find a product category to work with.
Amazon Associates is one of the most popular affiliate programs, offering commissions on a wide range of products. It allows website owners and bloggers to create Amazon.co.uk links with their unique associates ID (Amazon, 2022).
ClickBank is an affiliate network that offers access to thousands of products and services. It has paid out billions of US dollars since its inception (Shopify, 2022).
CJ Affiliate is one of the largest affiliate networks, offering access to thousands of merchants. Though it is a great platform for beginners, it is best for the advanced affiliates (Shopify, 2022).
Rakuten is an affiliate network that offers access to over 1,000 merchants and a variety of tools to track performance. This company focuses on quality rather than quantity. Therefore, a small number of affiliates are accepted into the programme.
Impact is one of the newest networks. However, its popularity has hiked quite well within a very short time. It is very popular for marketers with mobile apps.
Summary of the advantages and disadvantages of affiliate marketing
Affiliate marketing is a great way for businesses to reach new customers and increase sales. It is cost-effective, requires minimal effort, and can help them leverage existing relationships and build brand awareness. There are several services and courses available to help a would be affiliate marketer develop their skills. With the right strategy and effort, they should be able to unlock the benefits of affiliate marketing.
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Last update: 20 December 2022
Amazon (2022) Amazon Associates, available at: https://amazon-affiliate.eu/en/about-the-programme/ (accessed 18 December 2022)
Ong, S. (2022) Affiliate Marketing for Beginners: What It Is + How to Succeed, available at:
https://ahrefs.com/blog/affiliate-marketing/#how-much-money-can-i-make-with-affiliate-marketing (accessed 18 December 2022)
Patel, N. (2022) What is affiliate marketing, available at: https://neilpatel.com/what-is-affiliate-marketing/ (accessed 20 December 2022)
Shopify (2022) 10 Best affiliate networks to earn sales, available at: https://www.shopify.com/uk/blog/affiliate-networks (accessed 18 December 2022)
Statista (2022) Affiliate marketing spending in the United Kingdom (UK), available at: https://www.statista.com/statistics/1252554/affiliate-marketing-spending-uk/ (accessed 18 December 2022)
Author: M Rahman
M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.