Is affiliate marketing worth it?
This is the question we will address in this post.
Affiliate marketing has been a common source of income for online businesses for as long as online businesses have existed.
It’s even common among social media influencers these days.
That’s why we want to know: What is affiliate marketing and is it still profitable?
Let’s get into it.
What is affiliate marketing?
Affiliate marketing is a form of advertising in which a company pays sellers, known as affiliates, to promote their products or services.
It is one of the most popular sources of income for blogs, podcasts, YouTube channels, and social media influencers.
That’s because it’s one of the easiest ways to monetize a blog or media entity.
It requires no money to get started and can generate revenue with a small audience.
How does affiliate marketing work?
Affiliate marketing works like this: a company launches an affiliate marketing program or adds its products/services to an affiliate network.
An affiliate network acts as an intermediary between a company and an affiliate.
Basically, an affiliate marketer needs to join the affiliate network that the company is a part of. They are free to create affiliate links for that business and any other business that is part of the network once they do so.
Whether a business runs its own affiliate program or uses an affiliate network, the next step is for marketers to join the program to become an affiliate.
Each affiliate receives their own affiliate link in the form of a URL parameter attached to the end of the URL of the product page that they want to promote.
Check out our affiliate link for Blogging Wizard’s web hosting, Cloudways, which offers $10 free credit in the first month.
If you look at the end of the affiliate link, you will notice our unique affiliate ID located after the question mark «?id=«
A business pays an affiliate a commission (a percentage of total sales) when an Internet visitor clicks on an affiliate link for a product and then purchases that product.
The unique affiliate ID allows the company’s affiliate system to know which affiliate the customer referred. Each completed affiliate sale is called a «referral» for this reason.
Does affiliate marketing benefit the companies that run these programs? Absolute!
According to reports from Cheq and Start your own affiliate marketing business by Joy Renkins Affiliate marketing spending by the affiliate marketing industry exceeds $6.8 billion in the United States, with affiliate marketers generating between 5% and 25% of sales for businesses.
That’s affiliate marketing in a nutshell, but how do you start your own affiliate business? And is affiliate marketing worth it?
How to start a successful affiliate marketing business
You will need the following to start your own affiliate marketing business:
- Affiliate Marketing Niche
- affiliate products to sell
- A place to promote affiliate links
If you already have a blog, YouTube channel, podcast, or popular Instagram/TikTok account, you’re already on the right track.
You just need to join affiliate programs that fit your niche.
Otherwise, look for the best platforms and affiliate programs to join.
Combine this with researching the niches each platform and program belongs to. You want to choose an affiliate niche that has a lot of search potential.
This will give you the best opportunity to create content that will drive a lot of traffic to your affiliate pages.
Different Ways Affiliate Programs Pay Affiliates
All affiliates are paid on commission. How much that commission is and how often you get it depends on the program you sign up for.
Most affiliate programs pay commissions at a certain percentage one time, such as a 20% commission for each sale you generate.
Some subscription-based programs pay as long as the customer you refer keeps their subscription active.
So if a business pays a 20% recurring commission and a customer you refer keeps their membership active in June, July, and August, you’ll get 20% of what they pay in each of those months.
Some companies pay a flat fee as a commission rate instead of a percentage.
Others pay a commission fee for new signups and then pay an additional fee when those signups convert to new memberships.
Most companies distribute affiliate payments through PayPal 30 days after each referral.
Some will distribute direct deposits or electronic transfers to your bank account.
Is affiliate marketing worth it?
Before you jump into this new venture, you’re probably wondering a few things: Is affiliate marketing worth the effort and still profitable?
The short answer is yes, affiliate marketing is still profitable.
When you pick the right niche and the right affiliate programs, you can really make a profit.
The actual answer is a bit more complicated than that, so we’ll break it down into a few different topics:
- Is affiliate marketing still profitable?
- Advantages and disadvantages of affiliate marketing.
- Alternatives to affiliate marketing and how they compare.
Is affiliate marketing still profitable?
Here’s what you need to make money with affiliate marketing:
- An engaged audience.
- A quality affiliate product to promote.
- High-quality content to promote that affiliate product.
To break this down even further, you need to start by creating content that people care about.
You also need to find ways to encourage your audience to engage with your content. If they’re not engaged, they won’t click on your affiliate links.
Finally, don’t just choose the product that pays the highest commission. You want to promote an affiliate product to know your audience loves it.
Avoid products that have negative reviews or companies that receive too much negative press.
Instead, get to know your audience and niche. It will be easy to determine which products to affiliate with when you do.
How much do affiliate marketers earn?
Let’s talk about real numbers. Here are some affiliate earnings on blog income reports in different niches.
Low and high earners are included to demonstrate the diversity of income an affiliate marketer can earn.
Each dollar amount was earned in the month indicated in parentheses.
You should also keep in mind that high income reports are hard to come by these days, but that doesn’t mean blogs don’t make a lot of money from affiliate marketing.
It’s a common trend for blogs to stop reporting their income when they start earning six figures a month on a regular basis.
- It’s a wonderful life (August 2019, latest report)
- Affiliate Income: $103,720.49
- Total income: $222,857
- this world online (2021 overall)
- Affiliate Income: $30,806.48
- Total income: $92,614.42
- Just a girl and her blog. (December 2016, latest report)
- Affiliate Income: $27,507
- Total income: $41,700
- one hour teacher (January 2022)
- Affiliate Income: $11,234
- Income totals: $31,123
- Carl Broadbent (January 2022)
- Affiliate Income: $6,935.91
- Total income: $10,637.61
- sadie smiling (February 2022)
- Affiliate Income: $2,520.63
- Total income: $17,521
- fork in the road (January 2022)
- Affiliate Income: $986.16
- Total income: $3,148.45
Who is the most successful affiliate marketer in history?
This is hard to say because many affiliate marketers stop reporting their earnings as they get bigger and bigger (up to six figures and beyond).
However, successful affiliate marketer Jason Stone, known as The Millionaire Mentor, claims he has generated over $7 million in sales in just 18 months at once
Advantages and disadvantages of affiliate marketing
PROS: Easy to get started
Many affiliate programs do not require you to have a certain number of monthly visitors or followers before joining.
Many also do not have a quota that you must meet within a certain period to stay in the program.
This means that anyone can get started with affiliate marketing. You just need a place to create content (to promote affiliate links).
You don’t need a massive audience to get started.
PRO: Create multiple streams of income
You’ve heard the phrase «don’t keep all your eggs in one basket.»
The reason is simple. If something happens to that basket, you lose all the eggs in one go.
This is what can happen to your blog income stream if you get all your income from one source.
That is why affiliate marketing is a great source of income. Every affiliate program you join is another source of income for your blog.
PROS: It’s cheap!
Affiliate programs are free and you do not need to purchase the products you promote to generate affiliate sales.
Sure, creating a detailed review or tutorial with the product in hand makes for more unique content, but many affiliate marketers get by without it.
Plus, many affiliate marketers get by with just a YouTube channel, Instagram account, or TikTok account, running for free as long as you have a phone to shoot videos with.
PROS: Certain strategies generate passive income
The problem with using social media platforms like Instagram and TikTok to promote affiliate links is the way these platforms work.
Its algorithms are designed to display recent posts. Old posts are rarely seen.
This means that you will need to constantly post new content to continue generating affiliate income.
Blogs and YouTube channels, on the other hand, have the unique ability to host evergreen content.
With evergreen content, you can create blog posts that rank highly in search engines for years to come.
If you insert affiliate links in these posts, you can generate a passive income stream as long as these posts rank.
CONS: Affiliate marketing is unstable
This is the biggest disadvantage of affiliate marketing.
There is a lot of instability in making money marketing products that are not yours.
For starters, companies are free to do whatever they want with their affiliate programs.
This includes changing commission rates and discontinuing programs entirely.
This is what happened in 2020 when Amazon made major changes to its Amazon Associates affiliate program.
Amazon pays different commissions for different retail categories. They ended up lowering rates for several categories, some by more than 50%.
Today the the highest commission rates you can get from Amazon Associates are products sold in the Amazon Games, Luxury Beauty, Luxury Stores Beauty and Amazon Explore categories.
These products earn commissions of 10 or 20%.
All other categories earn 6% or less, which are abysmal rates for a company that brings in hundreds of billions of dollars a year.
In addition, you have no control over the reputation of the companies whose products you promote, nor do you have control over their products.
This is why it is so important for affiliate marketers to join various programs.
CONS: Takes a long time
Affiliate marketing may not cost a lot of money, but it sure does take a lot of time.
This is due to the content creation process required for affiliate marketing.
If you’re promoting affiliate links through Instagram, TikTok, or your podcast, you’ll need to create new posts, stories, and episodes on a regular basis.
You can create permanent affiliate pages on your blog, but it will take a lot of time and effort to get your blog to a point where you get enough organic traffic.
CONS: Skeptics exist
This is less of a concern than other affiliate marketing downsides, but it’s still something to be aware of.
Some Internet users are skeptical of blog and social media posts that contain an «affiliate disclosure» or «#ad.»
Some may go as far as accusing you of being paid to write positive reviews or deliberately ignoring a product’s flaws in order to increase affiliate sales.
That’s why it’s best to promote only proven products that you trust.
Trolls, haters, and naysayers exist in every corner of the internet. As long as you are sure that you have chosen to affiliate with the best products in your niche, the majority of your audience will feel that way too.
Alternatives to affiliate marketing
There are alternatives to affiliate marketing if you don’t want to use it as an income stream or want to diversify your income stream.
We will cover three alternatives and how they compare to affiliate marketing:
- drop shipping
Sponsorships vs Affiliate Marketing
Sponsorships are personalized offers you make with the companies you promote.
In affiliate marketing, a company only pays you when you help them generate sales.
When a company sponsors you, you pay up front. Then you are obligated to promote them in your content.
Most sponsors also prefer to choose how you promote them, often requiring you to submit blog posts and videos for approval before they go live.
It’s up to you to negotiate how much you want to charge for sponsorships, so you’ll make more money from a single sponsorship offer than from a single affiliate sale.
However, finding companies to sponsor you can be difficult, especially when you are new.
Because they spend more, companies prefer that you have a much larger audience than they need for affiliate marketing programs.
Still, adding sponsorships to your income stream is a great way to increase the amount of income you generate from your online business.
Dropshipping vs Affiliate Marketing
Dropshipping is another way of selling products that do not belong to you.
Basically, you create an online store with an eCommerce platform that supports dropshipping, like Shopify or BigCommerce.
The main difference between a dropshipping store and a regular eCommerce store is where your products come from.
With dropshipping, your products are hosted on a service like aliexpress. The prices you see in this marketplace are the prices you will pay for each product sold in your store.
Sell the products at a higher price to make a profit. He delivers them himself dropshipping provider when customers complete orders in your store.
You only pay the dropshipper when a customer completes an order, so you don’t have to prepay for wholesale products like you would in a traditional store.
Dropshipping is a legitimate way to make money online, but it can be much more difficult to make money than affiliate marketing.
Also, if you don’t want to pay for ads, you’ll need to use many of the same marketing strategies that you would for affiliate marketing.
Advertising vs Affiliate Marketing
Advertising can actually be a cost-effective way to monetize a blog when you join the right ad network.
This mainly means avoiding Google AdSense and using another ad network.
Some of the best ad networks for bloggers include Media.net, Monumetric, and AdThrive.
In fact, here are AdThrive earnings reports from two food bloggers:
- A pinch of mmm (November 2016)
- AdThrive Earnings: $52,313.13
- Total revenue: $95,197.34
- The Midwestern Food Blog (March 2022)
- AdThrive Earnings: $18,100
- Total revenue: $22,571
When you use the right ad network, you may find it easier to generate revenue from advertising than affiliate marketing because you will be generating revenue from ads. from any page that receives visits.
The only downsides are how ads can affect your site’s performance and appearance.
Is affiliate marketing worth it? — The Final Verdict
So is an affiliate marketing business worth it? Yes, if you are willing to work!
All you need is an audience, quality affiliate products to promote, and content to drive traffic.
All of this is easier said than done, but it’s definitely possible if you’re willing to take the time to do it.
Again, if passive income is what you’re looking for as an affiliate marketer, a blog is the best way to create evergreen content for your affiliate pages.
Check out our guide on how to start a blog for a step-by-step tutorial on how to get a new blog up and running today.
It covers all the bases, including:
- Choose a profitable niche.
- Registration of a domain.
- Creation of a website with WordPress.
- Choose a WordPress theme.
- Setting up your WordPress site.
- Creating your first pages.
- Tips on how to make a blog.
- Strategies to grow and monetize your blog
Divulgation: This post contains affiliate links. This means that we may make a small commission if you make a purchase.