Who says affiliate marketing is dead?

Is affiliate marketing dead?

Apparently affiliate marketing is dead is you pay attention to some noise on social media. That’s about as true as saying email is dead or blogging is dead.

In short, affiliate marketing is not dead. In fact it’s alive and kicking. There are plenty of statistics to back this up. Over 81% of brands use it to derive a portion of their sales. The affiliate spending is projected to exceed $6.8 billion in 2020 in the United States alone. It can also be a very lucrative income stream for affiliate marketers. It’s a win-win.

There is a good reason why affiliate marketing is actually gaining in popularity. A product vendor allows others (affiliates) to promote the product and when a sale is made the vendor pays the affiliate a commission.

This is as simple as it gets.

The biggest attraction for the vendor is no upfront advertising cost. Affiliate marketing is a form of performance marketing. There is no marketing cost until the product gets sold.

Other forms of performance marketing have been around for a very long time, certainly predating the Internet, in the various forms of commission-only sales.

According to Mediakix, 81% of brands use affiliate marketing programs to derive a portion of their sales. This statistic is actually a few years old now, so the actual percentage is probably higher now. One only has to browse the products (and the brands) available in SaleASahre or CJ to quickly realize that this not an exaggeration.

eMarketer reported a forecast for US affiliate spending in 2020 to exceed $6.8 billion.

Affiliate Marketing Spending USA
(source: eMarketer)

 

Affiliate marketing is thriving more and more each year. More people buy online every year. More companies realize each year they have to either advertise upfront, or choose the affiliate model where they pay commission only after the product is sold, with no advertising costs.

Many companies chose to adopt the affiliate model (at least for a portion of their sales) as it makes financial sense to them.
Hopefully you can see the picture. But what does it mean for affiliate marketers?

 

Is affiliate marketing profitable?

If you look at how Amazon slashed affiliate payout rates few moths ago, you might be excused for thinking that affiliate marketing is not very profitable, or indeed that affiliate marketing is dead.

However, Amazon is only one source of affiliate revenues. Even if Amazon decided to close their affiliate program completely, I believe this would not make a dint in the market.

In any case, the affiliates that make big affiliate commissions, usually do it from various sources anyway.

For example, as of this writing, Awin reports it generated $12.2 billion revenue to its advertisers in the last financial year and more than $900 million of that was paid to the affiliate marketers via their various networks (ShareASale and others).

But there are plenty of other affiliate networks also. On top of that may vendors run their own in-house affiliate programs.

When researching for my earlier post on blogger income reports, it became very clear to me that affiliate marketing is one of the major sources of income, even for the large sites and even when they sell their own products.

Some of the top sites I came across in my research were making upwards of $50k per month from affiliate marketing alone.

 

Is affiliate marketing easy?

That’s a very relative question. But the short answer is no.

Here is the longer version: It’s not easy in the sense that you have to put the work in to rip the benefits. Sort of like everything else that is worthwhile I guess.

If it didn’t require any work, everyone would be doing it and getting fabulously rich. Well, no, scratch that. If promoting products didn’t require any effort, the product vendors would not need any affiliate marketers, they would save heaps of money by just doing it all themselves.

How do you get started and, more importantly, how do you succeed in affiliate marketing?

Affiliate marketing can be done successfully in a number of ways.

Typically it would be using one of the two main traffic methods: using either free search engine traffic, or paid traffic that can be almost instant but requires money and a good deal of expertise.

Typically, many bloggers use affiliate marketing as one of the monetization methods, once their blog starts getting some decent free traffic from search engines and/or social media.

Free traffic is usually slow slow to grow and requires patience. It typically takes 1-2 years to see good results.

With paid traffic on the other hand, it’s possible (but not easy and not typical) to build a full time income within 30-60 days. You have to know what you are doing, you have to be skilled in running ads profitably. You can also get in massive debt very quickly if you don’t know what you are doing. Paid advertising is very risky and not something that should be attempted by beginners.

 

What is better than affiliate income?

I personally see only one thing better than affiliate income (besides selling your own digital products). It’s called recurring affiliate income.

In case you are not familiar with this concept, many companies will pay you a recurring commission once you get them a customer. What this means is that every time that customer purchases anything from that company, you will be paid a commission. Nice.

If that customer keeps reordering for the next few years, you will keep getting recurring income.

This is particularly popular with software companies. Also possible in other niches. For example, some companies in health and beauty space pay recurring affiliate commissions.

Many software companies operate on a subscription model (also called SAAS, or software as a service). Once you get them a customer, via your affiliate link, that subscribes to their software offering, they will pay you recurring commissions every time the customer renews their subscription.

Typically this could be on a monthly or yearly basis. It’s not uncommon for a customer to keep renewing their subscription for years, if the software meets their needs.

What kind of software services? Things like website templates, marketing funnels, email autoresponders, keyword research tools, payroll and accounting software and many more.

In my humble opinion this is where beginning affiliate marketers should be focusing their efforts more than anywhere else.

When you are just starting out, it’s probably also wise to focus on just one or two products. If you try to promote too many, you are probably going to make it very hard for yourself to succeed.

However, longer term you can also diversify, so that if one company closes their doors (or even decides to adversely change their affiliate program), it will not result in a complete disaster as far as your income is concerned.

One of the best ways to protect yourself from larges fluctuations in income is also to start building your email list as soon as your blog or website is starting to get some decent traffic.

This is well beyond the scope of this blog post. However, in a nutshell this will allow you to be independent, to a large degree, from things like changes to free search engine traffic, changes to the affiliate products you promote, etc.

It will also allow you to follow up with your subscribers many times in the future, rather than someone visiting your website once and never to be seen again. Why is this important? Because only a tiny percentage of people will buy via your affiliate link on their first visit.

 

Why most people fail with affiliate marketing

Most people fail with affiliate marketing for exactly the same reason why they would fail in stock or options trading, or running an offline business, or running an e-commerce site, or anything else for that matter.

Yes, those are diverse examples and for each type of venture there will be different key requirements.

However, at the end of the day it all comes down to one major factor: your mindset.

Most people will fail in affiliate marketing because they come into it with wrong expectations, with the wrong mindset, and then they don’t have the patience to see it through.

With such a low barrier to entry (affiliate marketing can be started literally with less that $100 and even for free if you are really stuck) the only obstacle to your success is your own mind.

Let’s say you decided to start a blog and monetize it with affiliate marketing.

You started with high hopes and high level of enthusiasm. You read some of the income reports of other bloggers and were mesmerized with their high affiliate income.

You started publishing content on your blog and in about three months harsh reality started setting in. Your blog essentially still has no visitors at this point.

This means that you can’t earn any affiliate income either, because there is just not enough people seeing your product reviews.

But on top of that you also feel discouraged because you know that the next blog post you publish will not be read by anyone, at least not anytime soon.

At this point it’s very easy to either give up completely, or start looking at other ‘opportunities’.

It’s very easy to forget that those bloggers earning $50k+ per month were in most cases building out their blog for several years up to this point.

Go and read their first income reports and you will realize that this is just the way it is. Their income in the first few months was also close to zero. However, they were able to make their mind and stick with it and learn, and see their blog traffic and income grow.

Most people don’t have this kind of discipline.

When you have been blogging for just a few months and see no results yet, it’s very easy to get sucked in by some ‘easy’ opportunities out there. This is known as a shiny object syndrome.

You get an email in your inbox promoting some push-button software that promises to do all the work for you and you will be just collecting money. Your logic tells you that this is too good to be true, but your emotions tell you to try anyway. You buy and few weeks later you realize this idea doesn’t really work. The marketer selling it has never actually tested the idea himself and the only people making money from this idea are the ones selling it. You have lost time, money, and in the meantime you could have spent that energy to publish few more pieces of content on your blog.

Blogging does work. Affiliate marketing does work. But both require patience and discipline.

 

Is affiliate marketing worth doing?

Affiliate marketing is not a get rich quick scheme, but certainly can be one of the most lucrative income sources for a blogger or a website owner.

You may be pleased to know that affiliate websites seem to have resale value comparable to the more traditional e-commerce websites. Just a cursory look at EmpireFlippers (they are one of the brokers specializing in reselling websites) will show you that an affiliate site can be valued at 30-40 times its monthly net profit figure at the time of this writing.

Affiliate sites can be very lucrative.
(source: Empire Flippers)

 

The bottom line is, you could start a website (or a blog) with less then $100, build it out for 3-5 years and then sell it for a cool 7 figures if you wanted to. Yes, it requires a lot of work. But the monthly income and the potential payout if you decide to cash it in, can be substantial.

Affiliate marketing is not dead and not even on life support. It’s alive and doing better each year.

Best of all, it’s one of the most accessible (no $ outlay, no inventory) and one of the most lucrative income models online for an average person like you and I.

Until next time. Stay focused.

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