Is Affiliate Marketing The Right Business Model For You?

By Jamie McSloy / April 26, 2018
affiliate marketing business model for you featured image

Why You Might Think Twice About Going Into Affiliate Marketing

Affiliate marketing is a business model that a lot of people find when they search for ways to make money online. Because of its high visibility, many people mistakenly assume that it is the only form of online business.

Add to that the sexy allure of affiliate marketing; that is, people think that they can make a ton of money without having a product or any special skills, and a lot of people go in to affiliate marketing.

A lot of people who shouldn’t go into affiliate marketing go into affiliate marketing.

Don’t get me wrong; affiliate marketing is a viable business model, even though it isn’t exactly what people think it will be.

Recently people been asking me about different business models and so I’m going to go into depth with a few of them and in this article I will talk about what CPA affiliate marketing is and who should go into it versus who shouldn’t.

What Is The Real Deal With Affiliate Marketing?

This article isn’t about selling you a dream of turnkey moneymaking systems. It’s not about you living on a beach and pushing a button every day and generating money based on somebody else’s product.

Real affiliate marketing isn’t like that and before you get your hopes and ambitions tied up into a model based on sales pages, here are the facts:

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Most affiliate marketing is cost per action or CPA affiliate marketing. You get paid when somebody performs action. This might be a sign up to an email address or it might be when a person buys a product.

This means that if people don’t do the action, you don’t get paid. And that brings up the first downside to affiliate marketing. It is a wild ride. There are days when you will earn a lot of money and there are days when you will not earn any money.

Adding to the fact that for most affiliate marketing, you will need to be buying paid traffic to send to the offer you promoting, there will be days where you win big, and there will be days when you lose a lot of money on failed campaigns.

As with everything, this is hardest in the beginning. If you are new to pay per click advertising, then you are inevitably not going to be very good at it. Unlike with most things, if you are not good at pay per click advertising, you stand to lose a lot of money.

As such, here are the two things that affiliate marketing gurus don’t tell you in their shiny sales videos that will make or break you with affiliate marketing: you need a budget and you need quite a high risk tolerance.

Is It Worth It?

Let’s talk about the second reason you might not want to go into affiliate marketing as opposed to another business model.

Not only are there extreme highs and lows due to the business model being reliant on your budget and your risk tolerance, but things can get worse.

Not only do you have to worry about your business staying afloat, but you also have to worry about all the other businesses that you are dealing with. For instance, let’s say you promote a fitness supplement with paid traffic on a social network.

Let’s also say that you have dialled in everything perfectly. You have perfect ads, the offer is great and you have a funnel that converts very highly.

If you run your own business providing fitness supplements, then this would be the ideal setup.

But you don’t. You are an affiliate marketer, so here are the things that could go wrong:

  • The price of advertising could go up and this is outside your control.
  • The advertising platform or social network you’re using could just ban fitness answer because a bunch of scammers decided to sell Granny’s steroids or something completely unrelated to your business. Life is not fair.
  • Your campaign might be successful to the extent that some opportunist steals it and copies it down to the very last word and letter. This happens and your competitive edge is taken away immediately.
  • The offer might disappear. Perhaps the company selling the supplement goes best, but is the price up to a ridiculous amount or just decides that they have enough customers and they don’t want your affiliate business anymore. This has happened to me and it takes you from earning reasonable money straight back to square zero and again, there is little you can do about it.

What Else Can You Do?

So the above are some of the harsh realities of CPA affiliate marketing. In the concluding section I’ll redress the balance somewhat. However, before we move into the final section, let’s talk about the wider world out there.

Giving up on affiliate marketing does not mean giving up on Internet business entirely. It doesn’t even mean to give up on the same sort of skill set and approach to business that you’d be looking at developing as an affiliate marketer.

If you create your own product or e-commerce store, then you will still use email marketing. You still create funnels. You will still have to employ copywriting skills and build relationships with your customers and all of those things that would be expected of an affiliate marketer.

The difference is that you have control of the product, the offer and the wider ecosystem that your business sets in.

For many people that is an end goal and more desirable than affiliate marketing in and of itself. However, there are reasons to go into affiliate marketing and that’s what we’ll talk about to finish up this article.

Final Thoughts: Is Affiliate Marketing For You?

Affiliate marketing is a business model where you will learn a lot of skills. If you go into paid advertising then you will learn the skills very quickly. It is a dog-eat-dog world and if you are subpar then you won’t make a profit. So if you are of a ruthless mindset and you want to learn Internet marketing quickly, affiliate marketing is a great place to cut your teeth.

If you already have a business and you want to earn extra money, then affiliate marketing is something you should look into as an additional stream. For instance, let’s say you run a website about fitness and you have fitness books, but you want to recommend supplements. You can do a lighter affiliate marketing program where you recommend products that you like to your existing customers and that will add income to your bottom line whilst helping your customers.

If you have a big budget and for some reason don’t want to create your own products, or want to test the market before creating product, then affiliate marketing might also be for you. Especially if you have an incredibly high risk tolerance and you don’t mind the emotional highs and lows that come with affiliate marketing.

Affiliate marketing is a case of potentially going from zero to hero overnight and vice versa. To do that, you need to spend money and have a good emotional reaction to risk.

I’d still recommend long-term going into product development and more stable businesses, but that’s probably because I am more risk-averse than the potentially successful affiliate marketer.

  • Leo says:

    I don’t understand this Jamie. I like your articles and emails (daily emails were great). In this website and in your emails you talk about building niche websites. How to build them, how to write good content, etc. Now you’re saying affiliate marketing is not good.

    • Jamie McSloy says:

      Good question Leo, and I have come across incorrectly.

      Niche sites are great. They aren’t really what I was talking about though.

      I was talking about CPA affiliate marketing and the dream that some people peddle.

      A lot of people think affiliate marketing is little more than buying traffic to a link and churning and burning. That is what I don’t like.

      When you build a niche or authority website, you are doing something more than affiliate marketing: you’re building a resource.

      Sure, you might make money *with* affiliate marketing. It’s an income source. But if the affiliate part of your project disappears, you still have that resource which is valuable.

      Affiliate marketing is an income source for a wider business project. You should have a main offer that is in your control as well as affiliate marketing as additional income.

      The weaknesses I listed in the article *are* weaknesses and problems that you’ll face with affiliate income, so you should build a business that is resilient to those potential issues.

      I definitely didn’t get this across in the blog post very well, so I’m sorry for that.

      Thanks for pointing this out, Leo

      Jamie


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