Affiliate marketing is about promoting or recommending other people’s products, and taking a commission when the product or service is bought. Affiliate marketing is like eating a good pizza and recommending it to others to try and getting a commission when they try the pizza.
Online affiliate marketing is a great way to earn money without the hassle of creating your products or the considerable start-up cost faced in setting up an offline business. You can promote products that you are passionate about and genuinely love. However, it takes time to get it up and running just like any other business.
1. Performance-based earnings
Affiliate marketing is a result driven business. Affiliates are paid a commission only when the product or service they recommend is taken by the customer they recommended it. This motivates affiliates to provide value to their audience to drive sales.
As an affiliate, you will earn more commission based on the effort you put into promoting the affiliate product or service. If you are not a result driven individual, an affiliate marketing business will not be the right business for you.
2. Low start-up cost
The start-up cost for an online affiliate marketing business is relatively low compared to that of a traditional business.
As an online affiliate, you do not have to create the products or services. You are promoting other people products for a commission after a sale is made. You do not face the cost of producing the product, hiring staffs or renting an office space. All you have to do is to join the right affiliate program in a niche you are passionate about and have a marketing budget for at least three months to promote the products or services.
3. Work Flexibility
As an online affiliate, you have the freedom and flexibility to work wherever suits you and at any time you wish to. You can decide to work from home like most affiliate business owners do or work at a local coffee shop or anywhere that suits you.
You are not restricted to a particular geographic location. As long as you have a laptop and a decent internet connection, you can work from anywhere you wish to. The most important thing is to be self-disciplined and to stick to your work schedules. You can either be your best boss that challenges yourself to achieve your goals or your worst boss. If you lack self-discipline, this might not be the right type of business for you.
4. Scalability with technology
An affiliate marketing business can be easily scalable depending on the product and your use of technological tools. For some products you decide to promote, the customer lifetime value can be ten times more than the initials commission earned for the first purchase. This can be residual income via monthly or yearly memberships, or through upselling without spending any extra money on advertising. You can also scale your business by using Google Analytics or other tracking & analytics software to track all your promotional campaigns and identifying the once that are the most profitable and least profitable. This will you to scale by investing more in the most profitable campaigns and cutting back on the least profitable campaigns.
You can also install a retargeting pixel on your website that enables you to advertise products that were viewed by your website visitors on other sites if they are yet to purchase at a fraction of the cost of typical advertising. For example; have you ever shopped on Amazon or eBay, and not check-out your order but notice that when you visit other websites such as Facebook or YouTube, you see the products you viewed on Amazon and eBay following you and been advertised you.
You can promote products and services within a particular niche that you are passionate about. It is more profitable for you to promote products within a niche that you know about and know the real problem within the niche.
For example, if you passionate about dogs and dog training because you have a dog as a pet, it will be advisable for you to promote affiliate products with the pert category must likely dog training products. This is because you will know how to communicate effectively to people within this niche compared to you promoting a within golf niche, selling golf products and services.
However, selecting the right affiliate program the right affiliate product with a particular niche can be difficult and risky at times. This is because you do not have control over the affiliate program or your competitors within your chosen niche.
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You also need to find evidence that the affiliate program pays its members commission on time, this can be done by looking at reviews and what other members are saying. You also need to the commission structure of the affiliate program join. Is there an opportunity to upsell, which give you more commission? What is the lifetime value of each customer you refer, to determine advertising budget?