Affiliate marketing is about you recommending someone product to another person and getting paid when that person buys the product. Like any other marketing model, it has its advantages and disadvantages both for the product owner and the affiliate. Product in this context includes services.
Advantages
Product Owner
- Reach Extension – Affiliate marketing enables product the owner reach by far more people than he would have been able to sell to all by him/herself. It is for this reason that manufacturers also appoint distributors, wholesalers and retailers to move their product towards consumers.
- High Return on Investment – The return on investment would be high because of savings on selling and, at times, distribution costs. Imagine the cost if the product owner were to take over the task of selling their product every possible user of the product. The cost would be so high that the venture would fail.
- Free Time – The time that would have been spent selling the product could be used for enjoyment or creating other products. If the new products are successful, then they can only grow richer and richer.
Affiliate Marketer
- Start-up Ease – It is easy as easy as identifying the right product for yourself and signing up to be an affiliate if the owner has set up an affiliate scheme. Your equipment are your computer, an internet connection and your grey matter.
- Multiple Streams of Income – Depending on your capacity, you can be an affiliate marketer of several products thereby opening up several sources of income. Financial freedom is at sight, probably within reach.
- Quit Regular Employment – You can run this business from the comfort of your home doing away with the 9 to 5 routine. You do not have to put up with a boss who does not like you. You are now your own boss.
Disadvantages
Product Owner
- Huge Logistics – If the product is a physical product that has to be delivered to customers, then the order fulfilment operations could be daunting. The good news is that this aspect can be outsourced to order fulfilment houses but, of course, at a cost.
- Cost of Sales – Even though they do not spend much on selling directly to customers, they would have to let go of a proportion of the sales value as commission to the affiliates and merchant houses. This leads to reduced revenue per sale.
Affiliate Marketer
- Selling Expenses – Even though start-up cost is low, the affiliate marketer must invest in advertising, list building and other promotional methods in order to make it big.
- Learning Curve – The need to learn internet marketing methods is not dispensed with merely because you are an affiliate marketer. You will have to spend time to grasp the basics so that you know what you are doing. The impression of plug-and-play given in the sales copy is often not correct. It is not enough to just sign up and go to sleep.
What do you say? Is affiliate marketing good or bad, a blessing or a curse? You, dear reader, are the judge.
