Pros and Cons of Affiliate Marketing (For Affiliates & Businesses)

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Pros And Cons Of Affiliate Marketing: Introduction

When it comes to the pros and cons of affiliate marketing for affiliates and businesses, they can be a little different from each other

It would be hard to write a general “pros and cons of affiliate marketing” that applies to both businesses and affiliates.

So, here’s an article that covers both separately. 

Should You Jump On The Affiliate Marketing Bandwagon? 

Affiliate marketing is becoming increasingly popular.

This is totally normal for a huge industry like affiliate marketing that is worth over $12 Billion per year with an annual increase of 10% per year ever since 2015. 

Not only has it not stopped, but it also does not show any sign of stopping. 

Should you jump on this bandwagon as an affiliate or as a business?

Well let’s take a look at how it would benefit you in this article. 

Feel free to skip to the pros and cons of affiliate marketing for businesses.

(Source of statistics mentioned: hostingtribunal)

Pros And Cons Of Affiliate Marketing (For Affiliates)

Pros and cons of affiliate marketing for affiliates

Overall, affiliate marketing is a great business opportunity for affiliates. 

See the full pros and cons of affiliate marketing below.

Pros For AffiliatesCons For Affiliates
Easy To Start✔

Low-cost business model ✔

Real Business Opportunity✔

Works in almost any niche✔

Low-risk and flexible✔

Some affiliate programs are shady 

You don’t control conversions

It has a bad name (to some people)

No payment guarantee

 

Pros Of Affiliate Marketing For Affiliates Explained

Pros of affiliate marketing for affiliates

Affiliate Marketing is an easy-to-start business model that really does not require a lot of investment.

You can technically get started for free, although I always recommend a budget of at least $20-$30 per month, depending on how you want to start.

It also is a real business opportunity, despite some clueless people out there calling the whole business a scam.

Due to the ease compared to other businesses, as well as the low investment needed, it also does not carry a lot of risk. 

And, other than that, it’s flexible too. If you go into content creation, you do want to be aware of how to succeed in competitive niches if you are looking to get into one of those. 

But, there are so many different ways you can do affiliate marketing and you can work on it whenever you want. 

Getting a Piece Of The Cake

One big pro of affiliate marketing for affiliates is, that they can essentially get a piece of this $12 Billion per year cake. 

And, I don’t want to call it easy, because it is still a business but considering the potential that there is in this industry, it really is somewhat “easy”. 

What’s also nice about this cake is, is that it keeps growing.

Some people may talk about competition, but all affiliates can drive more sales.

That means if the so-called competition goes up, it doesn’t really go up, as there is usually just more money being spent.

Want to get started? Blogging is arguably the most effective affiliate strategy & my free e-book will show you how to start a profitable blog in just 7 days.  

Cons Of Affiliate Marketing For Affiliates Explained

Pros and cons of affiliate marketing for affiliates

There are some really shady affiliate programs out there, sometimes even from bigger “trusted” companies.

Here are some examples of scenarios that I have experienced myself & seen with others:

Conversion tracking being completely off – Trial to conversion rate being ridiculously low (2-3%, this is not normal nor anywhere near average)

Affiliate programs locking out affiliates while they already have trials signed up. This is especially a problem if the affiliate paid for traffic. 

Affiliate programs shutting down without paying. 

For me, that’s really the main con of affiliate marketing, but it doesn’t happen very often. 

Other cons:

  • You don’t control conversions (although, you can a little, by preselling well & following up)
  • It has a bad name (to some people who call everything a scam)
  • No payment guarantee (Duh?! I have never seen any business with a payment guarantee)
Related: How to get approved into affiliate programs

How To Mitigate The Cons

As I mentioned earlier, the main con is the shady affiliate programs. 

The main way you can avoid these is just by researching the affiliate program well and actually reading reviews on places like Trustpilot.

To mitigate the con that you don’t control conversions, just try to have a system in place that allows you to follow-up with the leads.

This is also something that I like about Kartra’s affiliate program, as it allows you to see the email addresses of your leads. 

Other than that, for me, I don’t see the other “cons” mentioned as cons. 

I would love to see any business that has a payment guarantee, this just simply doesn’t exist. 

And, affiliate marketing having a bad name to some people who don’t know about it, is not exactly our problem either. 

What To Expect

Although affiliate marketing itself can’t get saturated, you should be competitive.

Nobody goes into a real business not being competitive.

There will be affiliates out there investing more time & money than you, so at least be competitive in the space.

If you’re not, you will probably fail or not do very well at least. 

It’s definitely not easy at the start, but it gets easier as you go along.

And, once you start making some money, you will start to learn about putting your effort into long-term strategies that will prove to be the most profitable. 

Pros & Cons Of Affiliate Marketing (For Businesses)

Pros And Cons Of Affiliate Marketing For Businesses

For businesses, there are also some similar benefits in using affiliates as part of the businesses marketing strategy. 

The main issue for businesses comes with “spammy” affiliates that can damage the businesses brand.

Pros For BusinessesCons For Businesses
Low-risk marketing strategy

Passive marketing strategy 

Improves scalability 

No-cost marketing strategy 

Potential brand damage

Potential legal issues

Risk of abuse

Pros Of Affiliate Marketing For Businesses Explained

As you only pay when the affiliate makes a sale, or in some cases refers somebody to take a specific action (email opt-in, etc.), affiliate marketing is very low-risk.

It’s a marketing strategy that is:

  • Low risk
  • Passive 
  • Scalable
  • No-cost (apart from maybe getting setup)

This kind of marketing strategy can have tremendous value to smaller businesses with lower budgets, as well as bigger companies. 

The business itself is not investing more time and/or employees into marketing but is making more sales. 

If you are not investing more resources into marketing, but still are making more sales, you are in a very good position.

As you grow the affiliates for your business, the sales will increase too without having to put more resources into marketing.

Cons Of Affiliate Marketing For Businesses Explained

The main con that affiliate marketing can bring to your business is spammy affiliates.

Not only can they damage your brand and reputation, but they can also actually throw off your sales tracking & retargeting pixels.

This can be a huge problem, as it can stop potential buyers from making a purchase, as well as throw off your advertising campaigns. 

If you have affiliates who just spam their links all over the internet, message random people (in an unpolite way) and reply to random people’s social media posts with an affiliate link to your product or service, it can damage your brand.

And, also if they use spammy traffic methods such as:

  • Buying from Fiverr
  • Traffic exchanges
  • Some Solo ads (There are good solo ad providers too)

This will throw off your pixels, sales tracking, and just about anything you track on sales pages.

You will also spend money advertising to people with no interest in your product. 

You may also like: The beginners guide to building an affiliate lead magnet

The other risks include:

  • Abuse (i.e people buying through their own affiliate link and stuff like that)
  • Legal issues

In terms of legal issues, you will want to have clear T&C’s (I assume) and stuff like that.

This is not legal advice, I am not a legal adviser, laywer or anything else related. 

However, most affiliate programs have this, and I of course always see them, so I would assume you need something similar. 

In these T&C’s you can also create rules on how your product should be promoted, that the affiliate has to stick to. 

How To Mitigate The Cons

Mitigating the cons for businesses is pretty simple, but it depends on your size.

Something that you should consider is having a closed affiliate program if it’s available to an audience where there are a lot of beginners. 

For example, if you have an affiliate program on ClickBank or similar marketplaces, you should probably make it a closed affiliate program.

It kind of depends on what sort of skill level the affiliates that will look for your affiliate program.

Keep in mind, you may not even have to do this sort of stuff mentioned below, but it’s worth looking into depending on your industry and the skill level of your affiliates. 

Closing The Affiliate Program

Usually, a lot of people from a “make money online audience” are beginners and do spammy stuff. 

If a lot of people finding your affiliate program are from like a spammy “make money online” sort of audience, then you should definitely consider having a closed affiliate program that asks for stuff like:

  • Social media platforms
  • Websites
  • YouTube channels
  • etc. (i.e web presence)

This will mitigate the risks of spammy affiliates, as you will be able to see who is joining your affiliate program. 

T&C’s/Legal Stuff

You will also want to research this sort of stuff which I can’t really help you with.

It’s maybe even best to go see a lawyer relating to this sort of stuff.

Another thing that you could do is look at other affiliate programs in your industry and see what sort of rules they have, just to get an idea for your own business. 

What To Expect

Just make sure that you are aware of how your affiliates are going to be promoting your product/service.

Make them agree to an affiliate agreement that forbids them to advertise in ways you don’t want to.

By doing this, you should be able to expect nothing negative from having affiliates.

If you get a spike of not converting traffic, look into where it’s coming from and find out why.

Pros and Cons Of Affiliate Marketing (Overall)

Overall, I think affiliate marketing only has pros.

If you take away the specific stuff such as potential spammy affiliates, or on the other hand shady affiliate programs, you are really only left with pros.

Every business in the world wants more customers and the affiliates? They will always want to make money. 

It’s a match made in heaven. 

Anybody saying things like affiliate marketing will go soon, or that it’s not a real business model straight up has no idea of what they’re talking about. 

It’s common sense really. 

Affiliate Marketing Pros and Cons: Conclusion

As you have seen throughout this article, affiliate marketing can have huge benefits for both affiliates and businesses. It can help businesses make more sales and it can even help affiliates become rich. 

I hope that this article has been helpful in your decision on how you want to use affiliate marketing, or whether you want to start/use it. 

If you did find this article interesting, helpful, or useful make sure to share it and/or leave a comment!

 

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