Bumps and Pitfalls of Affiliate Marketing

Before we can discuss the bumps and pitfalls of affiliate marketing we need to know exactly what is affiliate marketing.

What Is Affiliate Marketing?

According to wikipedia “Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate’s own marketing efforts.”

In other words affiliate marketing is one of the ways that people can make money online.  There are many products sold online.  The people who own these products will often have other people selling their products for them.  These people are known as affiliates.  When an affiliate sells the owner’s product the affiliate gets paid a commission.

The commission is usually 50% or higher on digital products and much lower on physical products.

Cost of Promotion

There are certain costs that can be incurred through the actual promotion.  How does the affiliate intend to get traffic to his website?  Is he/she going to drive traffic using free methods or paid methods such as Google Adwords?  If you don’t know what you are doing Google Adwords can be quite expensive.  Often times an experienced marketer will use Google Adwords to “feel” out the market.  He/She will run a campaign using adwords.  Experience will tell them whether or not to promote this product.  This could potential save them some money in the long run.

Commissions Offsets Cost

So why would the owner of a product give such a high commission to the affiliate?  Well for one thing the affiliate bears all the cost of advertising and promoting the product.  Since we are looking at online businesses these cost may include the cost of a website, a domain name, hosting etc.

By offering the affiliates a large commission, the seller is trying to get as many affiliates as he can to promote his product.  Remember the seller is still getting approximately 50 per cent also but he is getting 50 per cent from a lot of affiliates.  Needless to say if it is a good product both the seller and the affiliates will do well.

Now that I have given you a brief description of what affiliate marketing entails let’s look at some other aspects of affiliate marketing.

Advantages of Affiliate Marketing for Product Owner

As a product owner there are many advantages to having other people trying to sell your product for you.  First and the most obvious one is the cost which I touched on earlier.  All the cost involved for the affiliate to promote the owner’s product is picked up by the affiliate.

Often times the product owner will supply banners, links and articles, although they are not obligated to do so.  If an affiliate decides to use the material supplied by the owner most times the affiliate is told not to modify it in any way.  However when articles are supplied quite the opposite is true.  Owners want the affiliate to rewrite the articles into their own words.  Basically the articles are used as a guide.  After all just image if there are 5000 affiliates promoting the same product and they all use the same article.  There would definitely be an issue over duplicate content.

The other advantage for the product owner is instead of just his site promoting his product he has the potential of having many websites promoting the product.  He can have websites in different languages all around the world promoting the product.  He could never achieve this on his own without a whole lot of work.

The product owner can have a whole army of people creating multiple websites to promote his product and not even pay them unless they sell the product.

Most product owners join online marketplaces like Clickbank and Clickbank is the one who handles paying the affiliates.  In fact these online marketplaces handle all the administrative duties involved with the transactions.

Clickbank must first approve the product and then, once approved, the product owner will be charged a onetime activation fee of $49.95.

There is also a transaction fee every time the product is sold and every time Clickbank issues you a payment there is a charge of $2.50.  This is called a processing fee.

Also if your account is dormant for some time and it does have money in it Clickbank will start charging for having a dormant account.  You need to be making regular sales to avoid this charge.

Whether you have an affiliate account or a seller account at Clickbank the dormant fees apply.  As the owner of a product with many potential affiliates trying to sell your product you shouldn’t have to worry too much about the dormant fee.  However as a lone affiliate promoting a product you will need to be making regular sales consistently to avoid this charge.

Marketplaces like Clickbank have earned themselves a reputation over the years for a place to go to get quality digital products to promote.

One problem that affiliates face when they first start using Clickbank is the requirement needed to get their first paycheck from Clickbank.  First you need to meet your threshold which is the minimum amount you need in your account before Clickbank will issue a check.  The other requirement is that you need a minimum of 5 sales using at least two payment methods that they list on their site.

This may sound easy but a lot of people tend to use PayPal when purchasing online so you may have a lot of sales before you become eligible for a paycheck.

As you become more experienced with the online world and affiliate marketing you may come up with your own product idea.

Then you become the seller looking for affiliates to promote your product.  Then you have a choice of trying to have your own affiliate program to sell your product or get your product listed at one or more of the many online marketplaces like Clickbank.

Having your own affiliate program to run will give you insight as to what is needed to actual promote your product.  You are going to need promotional material to promote the actual product and material to attract potential affiliates.

You will also need some way to process payments such as PayPal.

There will be some initial costs to setting it all up but once it is in place your costs will then be only for maintenance.

Learning To Overcome The Challenges of Affiliate Marketing

As a lone affiliate if you have never done any affiliate marketing then you have taken on quite the challenge.  To truly have a chance at being successful there are many things you are going to have to know.  Things like SEO, how to get traffic, how to convert traffic to sales etc.

Being in a community of like-minded people who are also trying to earn money online may be just what you need to be successful.

Wealthy Affiliate is just that community.  At Wealthy Affiliate you will learn what it takes to earn money online.  There is a lot of training on many topics.  Topics like using social media to get traffic, building a website, purchasing a domain name etc.

If you want help navigating the bumps and pitfalls of affiliate marketing join Wealthy Affiliate today for free.  That’s right you can join for free.  No credit card needed.  If you like what you see you can then join as a premium member.  Sign up today and start your journey towards financial freedom.