There’s a lot that goes into building a successful business, but one of the key metrics of success is revenues. Your business needs to bring in more money than it spends to make a profit. One way to increase profits is through affiliate marketing.
Affiliate marketing is a form of referral marketing that can increase sales for businesses that have products or services to offer, and it can bring in (almost) passive income for content creators and affiliate marketers. The affiliate marketing industry is estimated to be worth about $12 billion annually.
Yes there are startup costs and often substantial effort required to create or promote affiliate programs, but once you find a formula that works, the rewards can be substantial.
Here we tackle the important question, “Is affiliate marketing worth it” both for businesses that have products to sell and for affiliate marketers who want to create an ongoing revenue stream by selling them.
Why Affiliate Marketing is Worth It for Businesses
When a company creates an affiliate program, it will pay others– usually other individuals or business owners with online businesses– to promote a product or service.
Most affiliate programs pay commissions for sales. In other words, if someone brings you a customer who makes a purchase, they get a commission. These types of affiliate sales are referred to as “revenue sharing” or “pay per sale.” However there are times when companies will pay for other actions such as CPA (cost per action - such as sign up for an email list), PPC (pay per click) or CPM (cost per 1000 clicks).
There can be numerous benefits to affiliate marketing for businesses, including:
Get other businesses promote your products without paying up front
Spend less on advertising that may or may not get results
Get links and increased traffic to your company’s website or sales pages
Attract customers in your target audience from other sources
Increase social media visibility
Increase marketing channels through affiliate partners
Raise brand awareness
Cons of affiliate marketing programs for businesses:
Upfront costs to set up program
Legal documents must be created
Must find potential affiliates
Need to invest time marketing the affiliate program
Requires ongoing screening and approval of affiliates
May need to monitor affiliate’s marketing efforts
Must take steps to minimize fraud
Program maintenance takes time
Commissions cut into profits
One option to lessen this workload is to set up your program through an affiliate network. They can help with many of these steps, but they will charge a fee so you must have sufficient margins to pay both the network and the affiliate. Make sure you build all those costs into your affiliate marketing plan.
Before you embark on an affiliate marketing program, you should be intimately familiar with your Cost of Goods Sold (COGS) and figure these costs into determining whether an affiliate program will be worth it financially.
You should also consider budgeting for an affiliate program manager if your affiliate program is successful. That person will oversee many of these steps.
Why Affiliate Marketing is Worth It for Affiliates
If you don’t have your own products or services to sell, but you have built an audience online, you may want to become an affiliate marketer. That means you’ll promote other people’s products or services to your audience using affiliate links.
As a content creator you may use affiliate income to help monetize your website traffic, email list, Youtube channel, Facebook group, podcast, social media following on tiktok or Instagram etc.
There are many benefits to becoming an affiliate marketer:
Bring in additional revenue from existing activities
Relatively low-cost to add affiliate program to current marketing strategy
No need to create or ship products
Don’t have to deal with returns
Choice of many products out there to promote (depending on niche)
Add value to your community
To build a successful affiliate marketing business, you should already be creating quality content and have an engaged audience. If you’re not there yet, then you’ll likely need to focus on that first.
Keep in mind you may not need a large online audience or a huge list of email subscribers to make affiliate marketing work for your business, depending on the niche you’re in. It’s going to be harder to generate significant affiliate income from an entertainment niche, for example, but much easier to do so if your audience is interested in financial products, for example. That’s because there are more products paying higher commission rates in the financial category than in the entertainment category.
If you’ve decided to try affiliate marketing, you’ll first need to find products to put in front of your audience. (Again, this assumes you already have an audience. If not, start there.)
If you aren’t sure about what companies to work with, start by looking at the products you use, and what your target audience talks about. You may also want to check out what other influencers in your space are sharing and promoting in their social media posts. You can see what other bloggers promote.
You can find products you already recommend and see whether they offer an affiliate program. (Search their sites for the words “affiliates” or “partners.”) Amazon Associates, eBay Partner Network and Etsy are three popular affiliate programs because they are easy to join and offer a wide variety of products.
You can also join affiliate marketing networks. These networks manage affiliate programs for many companies. Examples include CJ, Rakuten, and Shareasale. There you can search for products you’d like to promote as an affiliate,
Once you become an affiliate and signed up for affiliate programs, you need to include the products you want to promote in your content along with your affiliate links. Your affiliate links track who is coming from your referrals and purchasing, so you can get credit. The good news is most companies will give you an affiliate commission on anything the customer buys even if it isn’t the affiliate product you were promoting.
You’ll want to create marketing campaigns to promote the products you are representing. You may utilize organic traffic to your site or paid traffic to specific promotions. Either may work, depending on the results you get from each effort.
Is It Worth It To Become An Affiliate Marketer?
Yes it absolutely can be. The affiliate marketing business model is pretty simple and straightforward, and it can be a relatively easy way to earn extra income from your content marketing activities. It doesn’t come with a high upfront cost, and you may be able to integrate it into things you’re already doing.
That means you don’t have to create your own products, an app or start a brand new ecommerce store. Instead you let your affiliate partners do that heavy lifting and you then promote them.
However, you will need to generate interest from your audience and convert them to buyers. You may need to come up with a marketing strategy for the products you want to offer. If you’re a blogger you may need to create some seo-optimized articles where you can promote the product. Or if you are a Youtuber, you may want to create a new Youtube video tutorial or product review video. Once you hit on a successful formula though, you can keep making money from that content.
What Does It Take To Be Successful In Affiliate Marketing?
Successful affiliate marketing depends on many factors, but two things that will really help you earn the affiliate income you want are quality content and an engaged target audience. Having a community that likes what you do and is looking to you for answers or guidance is going to be very helpful when it comes to selling products.
To really grow your affiliate marketing business, you will need to continuously improve your digital marketing skills. You’ll want to hone your sales skills, whether that’s by becoming really good at email marketing, learning how to create social media campaigns that convert viewers to buyers, or any number of online marketing activities that will help you build a solid business.