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?
Affiliate marketing refers to a type of marketing where the partners or affiliates advertise products of their selected merchant/s. This type of marketing is based on performance, as the reward is usually calculated through the number of clicks/purchases by customers (Prussakov, 2007).
According to Brown (2009) businesses compensate their affiliates for each visitor, customer, or sale which results from the affiliates’ marketing efforts. Usually, these rewards are given in monetary form such as commission.
According to Statista (2021) £627 million were invested in affiliate marketing in the United Kingdom in 2020. 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 Ahrefs (2021) Pat Flynn from Smart Passive Income made over $100,000 in affiliate commissions in December 2017. 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.
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Last update: 11 February 2022
Ahrefs (2021) 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 30 January 2022)
Brown, B. (2009) The complete guide to Affiliate Marketing on the Web. Atlantic Publishing Group.
Prussakov, E. (2007) A Practical Guide to Affiliate Marketing. AM Navigator LL.
Statista (2021) Affiliate marketing spending in the United Kingdom (UK) from 2018 to 2020, available at: https://www.statista.com/statistics/1252554/affiliate-marketing-spending-uk/ (accessed 30 January 2022)
Author: Joe David
Joe David has years of teaching experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality, and tourism management. He holds a Postgraduate Diploma in Management Studies and a Post Graduate Diploma in Marketing Management.