What is Affiliate Marketing? With Pros & Cons

affiliate marketing

What is Affiliate Marketing?

Affiliate Marketing is a way of online marketing that provides opportunities for independent affiliates to earn commissions by selling a company’s products.

Affiliates can be publishers, bloggers, youtubers and social media influencers who join companies and promote their products and services to earn profit.

Affiliate links or sponsored posts are used by Affiliates to generate sales.

Affiliate marketing mainly includes three entities: Affiliate Marketing Company, Affiliate and Customer. Let us understand the role of all three.

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1. Affiliate Marketing Company

The Affiliate Marketing Company can be a large enterprise or an individual entrepreneur, a seller or a retailer. Such companies provide products that need to be sold further.

Affiliate Marketing companies may own tangible items or intangible services as products.

The products can be cosmetics, household accessories, personal care, skincare, and containers whereas the services can be online courses, hosting and domain-related services.

The profit earned by the company through product sales is shared with the affiliates as a part of the commission.

2. Affiliates

Affiliates are also known as Affiliate Marketers, they promote some products to their audience and get predefined commissions on each purchase made by the customers.

Affiliates bring leads and traffic to the company and visitors who make purchases turn out to be actual customers.

Affiliates must have a decent number of social media followers, youtube subscribers, website traffic, or other audiences to promote affiliate products and earn profit.

It is necessary for every affiliate to disclose to customers that he/she might be earning some commission when customers purchase products through links.

3. Customers

Customers are vital for every business. Be it an Affiliate or any Affiliate Marketing company, both earn profits when the customer makes a purchase.

The customers come across different products through blog reviews, websites, YouTube videos or social media post. When they purchase products from the provided links, the affiliate earns commissions.

Some affiliates provide promo codes and discount coupons to attract customers to their sites. While Affiliates with high credibility can easily convince visitors to make purchases through their recommendations.

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How to Become an Affiliate Marketer?

There are mainly two options to start working as an Affiliate Marketer: Join an Affiliate Marketing Company or Affiliate Network.

Joining Affiliate Marketing Company

Any company which operates an affiliate program for their product promotion is called as Affiliate Marketing Company, hence people can directly join the company as an Affiliate.

Affiliate Marketing Companies pay commissions on the sale of every product. The commission can be withdrawn when the minimum payout level is reached.

Most Affiliate Marketing Companies are free to join, but Affiliates are required to have an audience base to convert them to customers. A few such companies are Amazon, GoDaddy, and eBay.

Joining Affiliate Networks

Affiliate Network is a middle entity between companies (product/service owners) and affiliates. The companies register their products with the Affiliate Network and on the other side, the affiliates contact the network to join different affiliate offers.

After signing up, the affiliates can select any product of their choice. The payouts and commissions are managed by the Affiliate Network.

ClickBank, ShareASale and Commission Junction are a few well-known Affiliate Networks having products and services for all niches and brands.

Remember, there can be some criteria and policies to join an affiliate marketing company, network or offers. For example, an affiliate company may seek affiliates having audiences in European countries or particular categories such as wellness.

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Pros of Affiliate Marketing

Every profession has advantages as well as disadvantages. Affiliate Marketing seems to be an easy earning opportunity but it also has some other sides.

Let us have a look over the pros and cons of Affiliate Marketing.

Passive Earning

9 to 5 jobs require hard work to earn a fixed amount every month. However, Affiliate Marketing enables you to invest an initial amount and earn all the time whenever viewers click on the links.

If you have good digital marketing skills, you can earn well with a few active affiliate programs.

People who have a decent audience and an online presence can earn commission by sharing relevant affiliate links.

Work from Anywhere

A traditional office and its environment might irritate you but affiliate marketing gives you freedom. All you need is a device with an internet connection and you are good to go.

Earning revenue from the comfortable own place has been a dream of many and you can simply live one with Affiliate Marketing.

Less Expensive & Flexible

Business startups require a lot of cash flow but Affiliate Marketing doesn’t. You can become an Affiliate at the least cost and start earning without any hassle.

Being a freelancer, there never is a headache from a boss. You work as an independent employee, at your own working hours and as per your own convenience.

Performance-based Earning

Hard work and skills are required at the initial stage but once you are done with setting up, you are good to go.

How you engage people, drive them towards products, and share the reviews of products are all included in the performance. Your earnings depend on audience size, type and trust.

Cons of Affiliate Marketing

High Competition

The Internet is full of products and services referred by bloggers, influencers and website operators. Numerous affiliates are available in every niche, so there is high competition. You need to be extraordinarily and better than others to generate sales.

This requires various skills and hard work which is not possible for every individual.

Time Consuming

Like other online businesses, Affiliate Marketing is a time-consuming opportunity. It may take a few years to build audiences that sustain longer.

Affiliate Marketing is better than Network Marketing, but now scams are also got common in the affiliate marketing industry as network marketing.

Risk of Failure

Not all affiliate earns well. In high competition, one needs to be highly skillful to bring visitors and send them towards the company’s products or services.

Even after long-term, and hard work you cannot predict the behavior of the visitors which in turn might result in failure.

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