Pros and Cons of Affiliate Marketing
Affiliate Marketing
Affiliate Marketing provides entrepreneurs with the ability to earn money through other companies. If you separate both words you can get a better understanding of what Affiliate means. It is being attached to a group or person. An example of affiliate in context is; Johnny Garcia is affiliated with Rutgers University. You get it? Now marketing in context is; the marketing team was able to generate more traffic to our consumer website. Marketing is a set of actions such as creating, communicating, delivering and exchanging offers that have value to the customers. When combining both terms, Affiliate Marketing is when the affiliate refers customers to the company resulting in a sale or action. The affiliate is then giving a commission from the company due to the results generated by the affiliate. For example, Johnny referred Rutgers University to his friends during their senior year in which resulted in his friends to register to Rutgers University. Rutgers University then gave Johnny free tuition for a year for referring 10 of his friends. You get the picture. You don’t necessarily have to promote every product in the world, in fact, spreading your wings too thin can harm your brand reputation. You want to stick to products or services you like which will make it easier for you to convince your audience to buy them. Below is a diagram of how Affiliate Marketing works:
Pros and Cons of Affiliate Marketing from both perspectives:
Pros:
The company has a wider audience to sell their products resulting in more customers and sales.
The company can focus on their core competence without spending valuable time searching for customers.
Does not require a large amount of money to become an affiliate.
The affiliate doesn’t have to worry about customer support, book keeping and other unwanted tasks.
Affiliates may work from home in their own time and generate income 24/7.
Easy way for additional income.
Cons:
Companies may incur costly set up and maintenance fees.
Companies may lie about high commission rates when, in fact, they will reduce commission rates after a two-week period.
Companies may close down the affiliate program without informing their affiliates and eventually not paying them.
Hijackers can hijack affiliate links and receive the commission instead.
False advertising on the affiliates website can ruin the company’s reputation
Some companies require cash payments to become an affiliate.
Despite dealing with scams and hijackers, Affiliate Marketing still remains an excellent, quick and easy way to reach large number of people and generate income. Both parties just have to be more cautious and build a great partnership. As a blogger artist, entrepreneur, or individual you must conduct proper research and figure out if your content is relevant to the company. Tracking your leads will help strategically plan for better results benefiting you, the affiliate and the company.