Is Affiliate Marketing Worth It? Here’s the Reality…

by | Jul 28, 2021

Is Affiliate Marketing Worth It?

Everyone likes the idea of waking up to passive income. When your website can generate over $30,000 in sales while sleeping, it feels like you can have a better work-life balance.

It’s a simple formula based on commissions that you see in sales across multiple industries. When a rep closes a deal, they take a small portion of it for their salary.

When you’re an affiliate marketer, you can achieve a similar goal by developing numerous websites in multiple product categories. With commissions ranging from 4% and upward on sites like Amazon, it is possible to earn an income.  Bloggers have been doing this since the inception of the internet.

The problem is that you must create the websites and content before any sales get started. You’re taking all the risk in this scenario. If nothing happens with the site, you’re out the time and money it took to set up everything.  Starting a blog is not easy, but certainly a requirement for succeeding when it comes to sustainable affiliate marketing businesses.

Is affiliate marketing worth it? The answer to that question depends on the time you have to research products, write content, and design websites.

What Is Affiliate Marketing?

One of the best definitions of affiliate marketing comes from Pat Flynn. [1]

“Affiliate marketing is the process of earning a commission by promoting other people’s products. You find one you like, promote it to others, and earn a piece of the profit.”

When you enter this space to earn money, you’re becoming part of a four-tier relationship. Your role in affiliate marketing is to create awareness and communicate value about specific items or services.

Your website visitors rely on your expertise to help them see the value of the items in question. When you offer reviews, insights, or opinions that address consumer pain points, you’re contributing to the sales funnel by helping customers finish their research.

What makes affiliate marketing unique is that you can be the marketer and the creator while still earning a profit.

Here are the four roles you can expect to find in the typical sales process.

The Four Roles Found in the Typical Sales Process

The Merchant: This role is the brand, retailer, seller, or creator. It is the business or individual that creates the product or offers the service getting sold. Affiliate marketing opportunities are available through Fortune 500 companies to individual entrepreneurs.
The Affiliate: Affiliate marketers are in this role in this four-tier chain of events. They are the publisher who promotes the products or services. It is often an individual entrepreneur, but it can be an entire company. When there is enough influence in the conversion process, it is possible to make several thousand to several million dollars each month.
The Consumer: Companies need customers to earn a profit. Consumers need to research information about the goods and services they want to purchase. Authenticity is a significant component of today’s interactions in this space, which is why it is a good idea to let people know if they’re viewing an affiliate marketing website or network.
The Network: You need a network to be successful as an affiliate marketer, just as any other professional must have relationships to extend their reach or influence. It’s helpful to have a platform managing your payments or product deliveries, which is why so many people are attracted to the idea of using Amazon. [2]

How to Make Money as a Merchant Through Affiliate Marketing

You can enter the affiliate marketing world as a merchant if you have a product or service to sell.

In this role, you’d seek affiliates who can reach out to potential customers who would discuss the benefits of what you offer or communicate your unique sales position.

This process starts when you have a product idea. After validating the concept, you’ll need to create it. Since this step involves a lot of risks, most individual entrepreneurs prefer to become the affiliate instead of the marketer.

After releasing the product or service, you must find the marketers who promote your item. You could take over this role, but it would make your business closer to the traditional model of creating and promoting.

If people like what you have, you’ll start to make money. If not, you won’t.

Is affiliate marketing worth it if you have a great idea to pursue? That depends on your cost profile, time commitment, and other variables. It can be quite lucrative to be a merchant, but this role can also put you at a significant financial disadvantage.

How to Make Money as a Marketer Through Affiliate Marketing

Affiliate marketing is popular because it requires fewer risks at the start of the sales process. You don’t assume the risk of creating the product or service to offer to customers.

Your role is to show people how those products and services solve problems. When you connect with the correct value proposition, you can earn a sale for the merchant.

A successful conversion translates into a commission for you.

Although you can take whatever approach you feel is appropriate to create an informative process for consumers to follow, the merchant might have specific rules to follow. You’ll want to review those in their entirety before designing a site.

Once you get your domain and web hosting provider secured, you can take these steps to begin producing content and interacting with people.

Start Reviewing Products in Your Niche.

Most affiliate marketers review products by creating blog posts or pages. WordPress is a popular platform for this work because it allows you to assign creative roles to different people so that you don’t need to do all the work yourself.

You will notice that most written reviews take a fact-based approach. That’s because most affiliates don’t have access to the actual item. They’re writing from their unique view or experience without having a complete perspective to offer.

That’s why webinars and live streaming events generate lots of sales during an event. Your customers feel like they’re connecting with you, building a relationship through each interaction. If that outcome occurs, the trust you’ve created can translate into sales commissions for you.

Begin to Collect Email Addresses.

When you know how to build an email list from scratch, you’ll have ways to communicate with interested parties without going through the customer acquisition process. Affiliate marketers use their site to collect addresses that they can use to follow up with additional information.

You can build a massive subscriber list by offering something valuable. There’s this perspective in the affiliate marketing world that taking this step means you’re giving away something for free.

You’re not. When a potential customer gives you their email address, that action has value because you can communicate with them as part of your audience whenever you want.

By offering an eBook, member access, or other benefits, you can begin the networking process.

Use webinars to your advantage.

This option brings the affiliate marketer back to a place of authenticity. Anyone can write a review about something without really having accurate information. When you promote an item through an extensive process that shows each value point, your expertise becomes an asset to the customer.

That’s why webinars and live streaming events generate lots of sales during an event.  Your customers feel like they’re connecting with you, building a relationship through each interaction. If that outcome occurs, the trust you’ve created can be translated into sales commissions for you.

Scale growth using PPC advertising.

How do you get your content seen before someone looks at another affiliate site? Once your site starts generating traffic and sales, you can advertise your information the same way a merchant would promote their products. The only difference is that what you’re selling is the expertise you bring to the equation.

What Are the Benefits of Affiliate Marketing?

The value of affiliate marketing in the United States could top $8 billion in 2022.

When you’re ready to see if affiliate marketing is worth it, a closer look at its benefits can help you see if this effort makes sense.

1. It doesn’t cost much to get started.

You can purchase a domain name for around $10 on most platforms today. When you get a web hosting agreement, you might pay between $5 to $10 monthly to have a great site with enough bandwidth to grow.

Once you have those assets, you can hire someone to produce content or do the work yourself. If you decide to build a text-based affiliate marketing site that uses reviews and general information, it might need 50,000 words to create enough search attention. At 1,000 words per hour, you could have it up and running in a week or two.

If you decide to hire a writer, you must verify their talent. Poorly structured content will not generate the sales commissions you want.

2. Your ongoing costs are relatively low.

When you start thinking about ongoing costs, you’ll have the utility charges, web hosting requirements, and potential advertising expenses to manage.

Those costs are relatively low compared to other methods of income generation.

You can maximize your profile by working with a platform that distributes payments through direct deposit or using a provider like PayPal. If you want a paper check issued, the cost could be up to 3% of your earnings.

3. You receive targeted traffic.

Since you’re creating a website within a specific niche that communicates expertise and value, each visitor is automatically a warm lead. That means they had a particular reason for clicking on a link to come to your site.

Whether you’re the merchant or the affiliate in this transaction, the benefit of having targeted traffic is massive. Organic visitors convert at rates as high as 16%, while the people who stumble onto the page typically convert around 2%.

That means your potential income rises by eight times when you have targeted, organic traffic reaching your affiliate website.

4. Affiliate marketers have more flexibility.

When you are an affiliate, you get to set your own hours. You can work (or not work) whenever you want. If the kids need to visit the doctor, you want a more extended vacation, or you like to work out in the morning, those options are all possible. Although it takes discipline to get the work finished, there is much more control.

From the merchant’s perspective, you can decide to make your affiliate program bigger or smaller with relatively little cost. You’re still getting the profits from each sale and paying the same commission from those transactions, whether you get 50 or 50,000 during the month.

5. It offers a high ROI.

Affiliate marketing has one of the best return on investment figures in the business world today. It is superior to almost any other strategy.

Before you get involved with this potential moneymaking opportunity, it helps to calculate what your ROI could be with this investment.

Advanced calculations include all the costs needed to run the campaign, including software, computers, and your salary.

If your ROI figures aren’t where they should be, in your opinion, you can review product quality, item placement, or your target audience metrics to see where improvements are possible.

Is Affiliate Marketing Worth It with All These Necessary Investments?

Some affiliate marketers produce consistent results across multiple industries. Others barely make it out of the gate, struggling to earn their first paycheck.

What is the difference between success and failure in the affiliate marketing world? It is how value gets presented to the visitor.

If the sales process is self-serving, it won’t communicate value to the consumer. When the website is all about you or your company, that’s a red flag telling customers to stay away. [7]

When the goal is to offer something valuable to a targeted audience without expecting a transaction in return, you’ll give the consumer something to think about during their stay on your site.

You can trust customers to make the right choices. When your expertise shines through to communicate how products or services solve problems, you’ll find that affiliate marketing can be a worthwhile venture.

As the global economy continues its recovery trend from the 2020 COVID-19 slowdown, the benefits of affiliate marketing will become more apparent to companies of all sizes. That’s why now is the perfect time to consider it for your needs, whether you’re the merchant, affiliate, or filling another role.

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