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What are the Advantages and Disadvantages of Affiliate Marketing?

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  • What are the Advantages and Disadvantages of Affiliate Marketing?

    When you ask what is the most popular way to make money online, affiliate marketing is probably the answer. Affiliate marketing works in a way where an individual joins an affiliate program of a merchant to become an affiliate of the merchant.

    As an affiliate, the individual will be authorized to promote the products or services of the merchant on the Internet. Every time a sale is resulted from the marketing effort of the affiliate, the merchant will pay a share of the sale revenue called affiliate commission to the affiliate.

    Affiliate marketing is popular but it is not a perfect online business model. It has advantages and disadvantages just like any other business model.

    This post is going to discuss the advantages and disadvantages of affiliate marketing:

    Affiliate marketing Advantages:
    1) For the online companies, with affiliate program set up, they can reach their product to much larger market cost effectively. The merchants can get more and more potential buyers without having to increase their marketing budget.

    2) Besides lowering marketing cost, they merchant reduces their marketing effort but still get steady amount of targeted visitors to their sale page. The affiliates will do the marketing works to generate targeted traffic for the merchant website. So the merchant doesn’t have to worry about traffic.

    3) For the affiliates, they can quickly start a business on the Internet. They don’t need to create their own product as the merchant have a range of products ready for the them to market online.

    4) The start-up cost for the affiliate become very low; making everyone can afford to become an affiliate. Even generating traffic, there are plenty of free methods where the affiliates can use to market the merchant products. Knowledge and effort are most important for a successful affiliate marketing business.

    5) Another benefit that the affiliates will enjoy is that they just need to promote the product to the potential buyers. The rest is handled by the merchant. Customer service, billing, shipping and packaging, return and refund are all the responsibility of the merchant. What the affiliates need to do focus is drive as much targeted traffic as possible to the merchant’s website and earn affiliate commission whenever they refer a sale to the merchant.

    6) Affiliate marketing is a home based business ideal for anyone who wants to work at home. With a computer and internet access, you are ready to start doing affiliate marketing. Of course you need to learn as much as possible about affiliate marketing and keep yourself updated with the latest changes in order to be successful.

    Affiliate marketing Disadvantages:
    1) Affiliates who are eager for getting sale might post exaggerated ads and sale messages leading more potential buyers directed to the merchant site and more sales generated as a result. But then the customers find that the product or service isn’t as described and they will ask for a refund. The refund rate will increase and also the merchant’s reputation can be affected due to customers’ complaints. And the affiliate’s commission earned will be reduced due to customers’ refund.

    2) Some merchants offer commission rate that is too low that the affiliates find it not profitable to promote the affiliate products. The products that sell well are often those well-known brands but usually these products offer low rate of commission where commission earned from these products are often not sufficient to cover the marketing costs of the affiliates. The affiliates may need to look for other higher commission rate products but sale may be much difficult then because they are promoting an unknown brand.

    3) Competitions were fierce. Affiliate marketing is so popular that many people want to get into it. But too many affiliates in the game will lead to tough competition. In every niche, there are many affiliates promoting something similar. You’ll need to be more creative in marketing to survive in affiliate business.

  • #2
    This information for anyone who is just starting on affiliate marketing. You have nicely explained the advantages and disadvantages of affiliate marketing. Thank you for sharing this post.
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