Pros and Cons of Affiliate Marketing

Intro

Affiliate marketing is one of the most flexible, low-cost, and high-potential businesses you could possibly start.

It’s also very competitive, can be volatile, and there’s a lot of compliance involved.

Overall, I definitely think affiliate marketing is worth it, and I’ve personally been a full-time affiliate marketer for several years. Here are my top 7 advantages of affiliate marketing, as well as 6 cons to be aware of.

Pros of affiliate marketing

1. You can earn a LOT

Since you earn for every sale you make with your affiliate link, if you can drive enough traffic to links that convert well, you have unlimited earning potential.

Some affiliates in high-earning niches like weight loss, crypto, casino, and other niches can earn $10K+ per day for having the #1 ranking position.

From my own personal experience, I’ve had sites with under 40 posts earn more than $6,000 per month within a year of registering the domain, all from organic SEO and zero link-building.

With the right keyword research, a good product review template that converts, and the right affiliate programs (such as the Ranktracker affiliate program!), you can earn a very high income with affiliate marketing.

My affiliate sites earned around $450K in 2022, and there are affiliates earning far, far more than this. The potential with affiliate marketing is enormous. Affiliate businesses such as Newcasinouk.com which operate in the online gambling industry, have successfully mastered the art of targeting smaller keywords with a strong user intent, generating a sharp increase in terms of conversion rates.

2. Cheap to get started

Starting an affiliate marketing business comes with minimal upfront costs – just cheap hosting, a domain name, and any software or tools you choose to help you with writing, images, or affiliate plugins to convert better.

Unlike traditional brick-and-mortar businesses, you don't need to invest in inventory, manufacturing, or shipping. You just need to set up the website and promote products.

Or, if you’re promoting affiliate links on social media, you don’t even need a website – just the affiliate link to post for free!

Costs will increase as you scale and manage more affiliate links and programs, as you’ll want to invest in affiliate link management software to save you time, but a major advantage of affiliate marketing is how low the barrier to entry is.

3. Wide variety of products you can promote

Almost every company has an affiliate program now, so even if you pick a more obscure niche, there should still be plenty of physical or digital products you can promote.

To pick the right affiliate products to promote, I recommend using the Movie Casting method for structuring each affiliate article you write, and you should also test the EPC (earning per click) and iterate based on what converts best.

Whether you’re targeting the USA, or any other country, there are thousands of affiliate programs out there – though some offer higher commission rates, have different conversion rates, and some are more reliable than others.

Some affiliate networks, such as Shareasale, show you the EPC that current affiliate marketers get with each merchant so you can see which performs well before trying them out.

But, this isn’t always accurate – and there’s no substitute for doing the work to experiment with these.

To save you some time, here’s a few resources on good affiliate programs and networks in some major countries:

• Canada
• USA
• UK
• France
• Germany

4. Location flexibility, and work your own hours

Affiliate marketing offers flexibility and freedom that traditional 9-to-5 jobs often lack. You can work from anywhere and at any time – as long as you have an internet connection.

This flexibility allows you to pursue other interests or even travel while running your affiliate marketing business.

Now, don’t conflate this with being lazy and just printing money while you lay on a beach in the Bahamas. **Affiliate marketing is not easy. **While there are ways to use AI tools like ChatGPT to do affiliate content, you can’t just sit back and expect the money to pile up.

But, if you take the time to learn the basics of SEO, and acquire some CRO (conversion rate optimization) skills, as well as take the time to master the more advanced affiliate marketing strategies, then you can both earn good income, and have the flexibility to work your own hours, and have location freedom.

5. Passive income potential

Once your content is ranking, any traffic and clicks you send to affiliate offers will continue as you sleep, and whether or not you’re at your laptop working.

However, don’t fall for the passive income myth.

Yes, this is temporarily fairly passive income, but if you don’t keep improving and updating your content, and making sure it’s fresh and valuable, you’ll lose rankings over time to competitors that continue improving their content.

So, yes, while affiliate marketing can generate passive income – it doesn’t mean you shouldn’t keep maintaining and updating your affiliate content.

6. No meetings, clients, or customer support

As an affiliate marketer, you’re not responsible for customer support! If anyone complains, it’s not your problem.

In the same way, you don’t have any clients, boring work meetings, or any other corporate commitments – your only drop is to send traffic, and send sales.

If you’re more introverted and hate that part of the 9-5 life, then you’ll love affiliate marketing and SEO.

7. No inventory or product creation

If you’ve ever run an e-commerce store, you’ll know how crazy the logistics can be – especially with holding inventory, getting prototypes back, and scaling production.

Thankfully, with affiliate marketing you can bypass this entirely. Instead of investing your resources into product development, you just sell existing products that are already proven to be winners!

Cons of affiliate marketing

1. Lots of effort upfront before you see the results

While with affiliate marketing you can sit on a beach, earn passive income, and work your own hours – it requires significant effort and dedication upfront.

SEO is not an instant process. It takes months to create the content, build links, and gain trust in Google’s eyes before you can compete for the more lucrative affiliate keywords.

And, unless you’ve got existing skills from working in SEO or for other affiliate publishers, the skills themselves take time to learn. I’m still learning new things every day, and I’ve been doing this for 4 years now full-time.

If you want instant gratification, affiliate SEO is not for you. But if you understand that this takes time and are patient and disciplined, affiliate marketing can be very lucrative.

2. Affiliate programs can close, or be unreliable

If the program you are promoting suddenly shuts down or changes its terms, this can put a huge dent in your income.

This happened to me in April 2020 when 98% of my income came from Amazon, and they halved their commission rates.

And it’s not just an Amazon thing, either. For example, Ezoic recently closed their affiliate program, and many influencers who earned a high percentage of their income (and it was a recurring commission program) were suddenly left high and dry.

It’s best therefore to diversify, and not be overly reliant on a single affiliate program – just as you shouldn’t be overreliant on a single page of your site for income, as this can lose rankings or traffic.

Now, Amazon makes up around 20% of my affiliate income, which while this would be frustrating to lose if the affiliate program closed, would not be as disastrous.

3. Very competitive

There’s no point targeting “best laptop” if you’re just starting out – there’s ZERO chance you’ll rank for it. It’s too competitive.

Literally, Google it. Unless you think you can outrank tech behemoths like The Verge, PCWorld, and TechRadar, who have 15+ years of history and huge teams, you’re just not going to rank.

To get a better idea of what’s realistic, I recommend reading this post about using Ranktracker to power up your affiliate SEO by vetting affiliate keywords. This gives you a far clearer picture of what’s realistic, and what’s not.

It’s fine to target low search volume terms at the beginning that aren’t as competitive. Sometimes, these terms have a lot more traffic than traffic estimators say they do, too.

4. Earnings can be very volatile

Display ad RPMs are generally fairly stable, and therefore if your traffic doesn’t go up or down too much, your income is fairly consistent.

However, affiliate conversions are nowhere near as predictable, especially if you promote high-ticket affiliate products with far lower conversion rates.

Other factors, such as seasonality (for example the golf niche is a lot more popular in summer), as well as Q4 being far higher earning generally due to the Black Friday rush and Christmas, affect how predictable your affiliate revenue will be.

If you’re not comfortable with uncertainty, this can be stressful.

5. Reliance on SEO

While paid ads (Google, Meta, etc) are a common affiliate marketing traffic source, most affiliate marketers drive traffic organically from SEO.

SEO is far more passive than paid ads, and the profit margins are much higher as you don’t need to pay for every click you drive.

But, you can lose your rankings overnight in an algorithm update, or high authority competitors can target your keywords and outrank you.

Therefore, being overreliant on SEO for affiliate marketing can be a major disadvantage. I recommend diversifying your traffic sources, and trying to grow your sites as brands across social media, as well as growing your email lists.

6. Must be careful with compliance and disclosures

The FTC in the USA handles regulation and legal considerations for affiliate marketing. It's essential to understand and adhere to these rules so you don’t get into legal issues.

And, if you’re promoting Amazon products, you also need to disclose clearly that you’re an Amazon affiliate, or you can get your account shut down.

For a more detailed guide on disclosing correctly, this guide also has some copy-and-pastable affiliate disclosures you can use on your site.

FAQs

How do I choose the right affiliate program?

When choosing an affiliate program, consider factors such as how relevant the product is to your target audience, the program's commission structure, conversion rate, and EPC. It’s also worth checking up third-party reviews of the affiliate program to make sure they pay on time, are reliable, and do not have a history of other underhanded tactics.

Can I do affiliate marketing without a website?

Yes! Some affiliate marketers use social media platforms, email marketing, or other channels to promote products. However, a website provides a central hub for your content – and is best to have if you want to scale your business.

How long does it take to see results with affiliate marketing?

For ranking affiliate content organically for SEO, expect it to take 3-6 months before you start seeing the results from your initial work. For extremely competitive keywords, it can be difficult to rank if you haven’t got a site that is several years old, and requires hundreds or thousands of high-quality backlinks.

Is affiliate marketing suitable for beginners?

Yes! Affiliate marketing can be ideal for beginners wanting to start an online business. While it requires dedication, a willingness to learn, and a long-term mindset, it’s a flexible side hustle that you can work on while working a full-time job as you try to grow your affiliate business.