14 Pros and Cons of Affiliate Marketing

One of the easiest ways to begin earning a passive income is through the use of affiliate marketing. It can also be one of the most difficult ways to earn an income as well. Affiliate marketing requires an individual to create an online presence that markets specific goods or services on behalf of an organization. In essence, you’re becoming an independent sales consultant. If your website creates a sale, then you get a commission or some other reward. If not, you get nothing.

What Are the Pros of Affiliate Marketing?

Billions of dollars trade hands through affiliate marketing, so it makes sense to want a piece of this action. That’s where the primary benefit of this income generator happens to be. It is incredibly easy to begin this type of online business. All you need to do is sign up for a program, follow its rules, and promote its products. With the right tracking codes in place, you can start earning money in just a couple of hours. Here are the additional benefits.

1. It takes no marketing skills to get started.
You don’t need to have a marketing background to be an affiliate marketer. You can focus on your primary talents and incorporate your affiliate marketing into it in a way that makes sense. If you know SEO, then you can make your site rank high. If you know social media, then you can make your site go viral. Creative people can post stunning content, images, or other forms of art that encourage a click or a sale. What you know how to do fits into affiliate marketing.

2. Many programs can be implemented for zero down.
The best affiliate marketing sites tend to be on their own domain with their own unique sales pitch. Thanks to free blogging websites, however, you can begin an affiliate program for the cost of your electricity and monthly ISP subscription. The only investment is in the time you take to design the site or the costs you pay to have someone else do that for you.

3. You can create multiple areas of income quickly.
Different markets have different affiliate programs that can be included in your portfolio. If you think you can sell something and there’s an affiliate program for it, then you’ve got the chance to make some money. As you continue to build a portfolio of sites, you’re also continuing to build the chance to have daily passive revenues coming in on your previous work.

4. Eventually you have to put in very little work to bring in a lot of potential cash.
Once your website is up and running, it needs light refreshing every once and awhile for it to remain relevant. That means most sites can be managed on just 1-2 hours per week. Some don’t even need to updated at all. This means your toughest job is finding out what to do with all your free time as your bank balances slowly begin to grow with referral sales.

5. You don’t have to handle any of the customer service issues.
As an affiliate marketer, you might not be getting a customer base that can be locked in, but the trade-off is that you don’t have to handle the customer service issues either. Everything like that runs through the home company, so if you receive complaints about a product or service, you can simply refer someone to the home company customer service line and move on with your day.

6. There is the possibility to create private deals.
Because there can be so much competition in the public affiliate marketing programs, once someone gets their feet wet and understands what it takes to be successful, they may begin to look for alternatives. One of the best is a private affiliate marketing contract. Instead of a generic program or standardized commission scale, a contract is formed between you and the company for you to represent them online through an affiliate site. It still operates as any other program, but because the deal is private instead of public, there is a lot less competition for the traffic interested in the product or service.

7. There is a lot of fluidity.
You’re not locked into one specific program when you’re affiliate marketing. If something isn’t working, you can change it. You can go to different programs. You’re not forced to stay on a sinking ship. This fluidity gives you a tremendous opportunity to find success if you can read the signs of how the items you represent are doing in the marketplace.

What Are the Cons of Affiliate Marketing?

The primary disadvantage to becoming an affiliate marketer is that there is no guarantee of success. You can spend 20 hours designing a website, spend thousands to secure good domain names, and wind up with zero sales. Even experienced affiliate marketers who make tens of thousands of dollars per year on some sites will strike out on other sites. The income might be passive, but it takes a lot of work to make it that way… if it every will. Then there are these additional disadvantages.

1. You have no control over the programs.
Merchants set the rules for their affiliates and what seems like a great program today could be a lousy program tomorrow. Once you join up, there’s not much you can do but sit and wait out a bad program until it becomes a good program. Because many businesses are using this online model to expand their brand, certain industries could have thousands of competitors, which gives you even less control on how you’ll be able to make yourself stand out.

2. Anyone can join and become a success.
Sure – this is a big positive part of the affiliate marketing experience. It’s also a big part of the negatives as well. Because anyone from anywhere in the world can sign up for most affiliate marketing programs, there is massive competition within the ranks. If someone is naturally better at marketing than you, then you’re at a big disadvantage. You might even have competition from family and friends and not even realize it.

3. You are forced to take on all the risk.
Merchants typically only pay their affiliates when a sale is made from a customer your site referred to them. This means all marketing costs and risks are placed squarely on the shoulders of the affiliates. You can send massive levels of traffic to a program site, but if no one buys anything, you don’t get paid anything. If the product is bad or the sale prices aren’t tempting, it’s the affiliate that pays the ultimate price.

4. Not every affiliate marketing opportunity is a direct partnerships.
Many affiliate marketing programs are a lot like the MLM products you’ll find people representing to their family and friends. Many opportunities are based off of an affiliate network, which means you’ve got to pay upstream costs whenever a sale is made. You might be able to pick up some downstream commissions later on down the road, but a lot of programs have limited opportunities and limited payouts that can make it difficult to find profitability.

5. False advertising is common.
Affiliates will say and do virtually anything to make a quick buck if they’re allowed to do so. Strict rules that govern content creation are often necessary so that products or services aren’t falsely represented. When a value proposition is offered by an affiliate that goes unfulfilled when the product or service is received, it isn’t the affiliate that gets the heat. It’s the company that began the affiliate program.

6. It is easy to steal codes and links.
Although the average affiliate marketer isn’t going to do this, there are certain people with questionable ethics who know how to hijack a link so they can get the commission from a sale instead of the domain owner. The anonymous nature of many affiliate programs makes it possible for a scam to create a huge payday without anyone ever really finding out about it. If that target becomes you, it can be difficult to get the commissions that you’re earning.

7. The growth potential is naturally limited.
As an affiliate marketer, you’re stuck trying to find new customers all of the time. The client gets to benefit from inside sales. You’re stuck forever in the world of outside sales. This means your growth is naturally limited because you’re forced to rely on one demographic alone.

The pros and cons of affiliate marketing show that a direct partnership is the best way to go. If you can directly affiliate yourself with an organization that will put you into their program without a network or middleman, then you can control many of the disadvantages of this form of passive income. Evaluate each point carefully, proceed with caution, and represent only the products or services you’re passionate about. When you can make that happen, you can become successful at affiliate marketing.