The Pros and Cons of Affiliate Marketing for Small Businesses

Affiliate Marketing

Most people have already heard of affiliate marketing, but there are still many who have failed to demystify this term. Essentially, affiliate marketing earns advertisers (usually by means of their website and traffic) sales commissions by referring visitors to other websites and related products. If the user follows a link from your website and makes a purchase, the advertising website earns a predetermined amount of money. This makes affiliate marketing a great way to monetize your site without promoting competing products or services. To gain a better understanding the benefits, let’s take a closer look at affiliate marketing pros and cons for small businesses.

Pro: It’s a Quick Process

If you’ve already got a website, the process of signing up for affiliate sales commissions takes almost no time at all. In fact, the process of adding an affiliate sales link can be as simple as inserting a short-code that makes the process painless. All you need to do is become approved by an affiliate network, who are typically motivated to expand their network of advertisers – as long as your website is up to scratch and meets their standards.

Pro: Little to No Marketing Skills Required

Most affiliate sales programs have internal departments devoted to creating banner ads and sales materials. This means that you don’t need to have hardly any marketing experience to boost conversions (though these skills certainly do help). You see, your sales will be a function of your website’s traffic, so if you already invest in an SEO professional, you won’t need to be hands-on all the time.

Pro: Compliments a Product or Service in Your Industry

You’ll find that your audience came to your site with an interest in your industry to begin with. That makes it much easier to generate warm leads that might already be in a mood to make a purchase. Just make sure that you offer products that make sense in your category. For example, if you run an IT consulting website, chances are you’re going to make more money in affiliate sales by promoting VPN connections than you will by promoting car insurance. Just make sure the products you promote align with your audience’s needs and desires.

Con: There’s No Easy Path to Success

Forget what you’ve heard – you simply can’t hope to generate five-figure sales overnight. A lot of Internet scammers set up entire programs promising overnight success and the hopes of making four or five figures per day in affiliate sales. The honest truth is that it’s never going to happen. However, affiliate sales are still a viable way to increase monthly revenue from your website by creating an additional stream of income.

Con: You’re Sending Potential Customers Away

This is probably the biggest downside to affiliate marketing.  If you have an ecommerce site, adding affiliate links will ultimately send people away from your website to others – possibly competitors.  You’ll need to think about this before setting it up on your site – are you going to make more from an affiliate link than selling your own product?  In some cases, the answer may be no.

Con: Poor Affiliate Sales Tactics Can Ruin Trust

Your audience most likely interacts with your site and information products because they feel you are credible and trustworthy. If a website owner decides to unfairly review products and makes promises the product or service has no nope of fulfilling, the website owner is going to lose trust with their audience. Remember that trust is the key to long term success, so you need promote products that you truly see value in.

Thinking about signing up for an affiliate account just to check it out? We recommend starting with ShareASale.

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