When it comes to making money online, you will no doubt have read or heard many people singing the praises of online affiliate marketing. It is fair to say that it is possible to make money with this strategy and a good number of people have made a lot of money online. However, just because you don’t hear the negative stories or the failures as much as you hear about the success stories doesn’t mean that they don’t exist.
There are pros and cons of online affiliate marketing and before you decide that this is something that you intend to benefit from, it is important that you know what you are doing.
Online affiliate marketing is a link between the merchant and the affiliate. The affiliate aims to provide promotion to the service or product offered by the merchant by offering links, adverts, recommendations, testimonials and all other ways to point traffic towards it. In return, the merchant offers up commission for the promotional work carried out by the affiliate. The rate of commission and how commission is earned will differ and depend on the agreement between both parties but it can depend on:
It can be a good way to create a passive additional income or it can be used as your main source of income.
The Pros of Affiliate Marketing
Merchants only have to pay for results that can be proven. With pay per sale, pay per click, pay per lead, pay per download options, the merchant can tailor their agreement so that they only have to pay out if a certain criteria is met. This should greatly reduce their advertising expenditure and minimise wastage.
Merchants will have their products or services placed directly in front of the people who are looking to buy their product. When it comes to niche marketing or target markets, having an affiliate pick out your product as something that their web visitors would want to buy provides all of the benefits with none of the work for the marketer.
Merchants can obtain great feedback and statistics about their products from the affiliate and the people who click through to buy their products. This information can form the basis of future products or services.
Affiliates can often provide adverts on their site at no real cost or problem to themselves but this can create a steady income. If the affiliate site receives traffic and the guests are interested in the product, without doing much work, the affiliate is likely to earn a good deal of money through guests to their site clicking through and buying the product. A simple 5 or 10 minute job in installing an advert on a site could net an income that keeps on rolling in.
Affiliates can receive a high rate of commission for promoting a product so it often doesn’t require a high volume of sales to make a reasonable amount of money.
The Disadvantages of Online Affiliate Marketing
While it is good for the merchant to have free publicity and promotion directed towards their product or service, they will have no control over what is said. If affiliates make large promises about what is on offer and the product or service cannot deliver, the merchant may have to deal with complaints from the consumer. This can be hurtful to a merchant’s reputation in the long run.
The level of commission can often be low for a merchant, providing a much lower return than would be expected or hoped for from selling a product or service.
In extreme cases, affiliates run the risk of not being paid for their hard work. Working with a reputable affiliate firm as a medium can minimise this risk but in some cases, some merchants have been known to close affiliate programmes before commission has been paid.
Some affiliate links have been known to be hi-jacked with unscrupulous people stealing commission that was intended for other affiliates.
Affiliates should be aware of what they require to do to be eligible for a campaign or to obtain their full commission. Always be sure to read the terms and conditions.
Affiliates will sometimes have to wait a considerable period of time before they receive their payment for their promotional work.
Weighing up the pros and cons
There are obvious disadvantages and pitfalls to online affiliate marketing but in many cases, common sense and properly reading all the terms and conditions can minimise all risks. If a deal sounds too good to be true, it probably is and if you have concerns about an agreement, move on to another agreement.
There are plenty of opportunities for merchants and affiliates to benefit from the online affiliate marketing agreements and it is a good way to make money if you know what you are doing.