Is Affiliate Marketing Worth It? Can You Make Money Today?
There was a time when blogging was the only way to make money with affiliate marketing. However, with the advent of social media, online influencers jumped on board, and many became rich as affiliate marketers.
Today, there is no shortage of news articles about influencers making money through their affiliate partnerships, like this 24-year-old who makes $8,600 per month.
With such gaudy income numbers floating around, you may be wondering if affiliate marketing is something you should try. Of course, the news makes it sound like it’s all unicorns and rainbows, but surely there’s some truth to the stories?
So, does it make sense to start affiliate marketing? It depends. Let’s take a closer look to find out when affiliate marketing is worth it and when it’s not.
Is Affiliate Marketing Dead?
Nope, not even close!
Before we start, let’s get something out of the way. Affiliate marketing is a growing industry. According to Statista, affiliate marketing is expected to be an $8.2 billion industry in 2022, up from only $2.5 billion in 2012.
It reminds me of something out of a Monty Python movie.
Regardless of what others say, affiliate marketing is not dead yet!
Google Trends is an excellent source of the zeitgeist of what’s happening worldwide, demonstrating that affiliate marketing is more popular than ever.
When starting a business, entering a growing rather than a shrinking space makes sense, and affiliate marketing meets this criterion. (By the way, Google Trends is also an excellent tool for researching your niche.)
When Is Affiliate Marketing Worth It?
Here are the situations when it makes sense to do affiliate marketing.
1. When You Have Expertise In A Niche
When I owned the investing blog Investor Junkie, I could talk about all sorts of topics. Because I knew the niche and was passionate about the subject, it made it easy for me to speak and write about it.
When you have the expertise, it makes creating content easy. That’s not to say you shouldn’t start affiliate marketing if you lack the expertise, but it certainly helps. If you don’t have the experience, you need to educate yourself on that niche or hire others with that expertise.
Realize that you cannot discuss an affiliate product you’ve never used. If you recommend a product without using it, you will come across as a used-car salesperson, and no one will click on your affiliate link.
2. When You Have an Engaged Audience
Suppose you are an influencer with 100,000+ followers on your social media channel, a blog with 100,000+ monthly search engine traffic, or 100,000 email subscribers on a mailing list. In those cases, affiliate marketing is worth it.
Of course, you don’t necessarily need that large of an audience, but it certainly helps.
Affiliate marketing matters not how large your audience is but how engaged they are. An engaged audience is an audience that watches every video you publish, listens to every podcast, opens up every email, and reads every article you write.
If you recommend an affiliate product, you certainly will get commissions.
Influencers have an audience that trusts what they say because they are an authority in that niche. People respect what you have to say.
3. When There’s Competition
Entering a highly competitive niche may seem counterintuitive, but it’s how entrepreneurship works. When there’s competition in the space, you should get excited.
Take it from my own experience owning a web hosting business. I thought a business idea had to be unique and challenging to implement to be successful. How wrong I was!
With that business, I created a complex business that wasn’t only hard to implement but also hard to manage.
Forget about looking for a unique business idea no one has done before. For the most part, that doesn’t exist. Instead, you should find an existing niche and execute better.
Every unique business idea has been thought of, and a website exists for it. If it is truly a fantastic idea, it’s untested, and it hasn’t been tried and may or (in most cases) may not work.
With affiliate marketing, it is better to improve an existing idea than create a new one.
In the early stages of my affiliate blog, Investor Junkie, I presented my idea to a previous business partner. He responded that there were already too many investing blogs and that I shouldn’t create a new one.
When I sold my blog in 2018 for $6 million, it had become pretty clear how wrong he was.
4. When You Promote Relevant Affiliate Products To Your Audience
I’ve seen all too often people promoting products that are irrelevant to their niche or audience. Imagine you are a mommy blogger discussing everything related to raising a family. But you then promote Bluehost as an affiliate. Wait, what?!?
In almost all cases, you should stick to your wheelhouse and discuss and promote only affiliate products within your niche.
Promoting relevant products to your audience resonates better and will convert better too. Your tribe, by very nature, will have specific topics they are interested in but also ones they are not.
A mommy blogger should stick to topics related to that niche and not venture too far off. A topic like side hustles could work if done correctly, but in most cases, it’s a stretch for a mommy blog to promote Bluehost.
Stick to your brand!
5. When You Are Already Selling Products
If you sell your own products, affiliate marketing makes sense. In fact, every business should add affiliate marketing to the mix.
Remember, you can’t be everything to everyone. This is where affiliate marketing makes sense. You offer products that are complementary to your existing products. What better way to keep your current customers happy than by recommending affiliate products?
Your clients will buy these complementary products anyway, so why not through you?
6. High Converting Affiliate Products
High-ticket affiliate programs can be part of this equation. An affiliate program offer that’s $200 per conversion is undoubtedly enticing. What matters isn’t the potential payout of an affiliate program but how well it converts.
With most affiliate marketing programs, you only get paid if the visitor converts.
Combining a high payout with high conversion and affiliate marketing is a very effective means to make money online. It is much more effective than many other ways to monetize your business.
When Is Affiliate Marketing Not Worth It?
I’m not going to lie. Affiliate marketing isn’t for everyone and every niche. Here are five reasons why you shouldn’t try affiliate marketing.
1. You’re Looking For A Get Rich Quick Scheme
Affiliate marketing seems to get a bad rap on this. Perhaps other affiliate marketing “gurus” make it seem like you can do this, but make no mistake, affiliate marketing is not some get-rich-quick scheme; it is far from it.
You can’t create a blog and start making money tomorrow. That’s not how it works, and anyone who gives you a 15-day “challenge” or tells you that you can make good money in 90 days is lying.
Affiliate marketing takes time, like any legitimate business. From my experience, it takes about 1-2 years before you start seeing significant results.
Most affiliate marketers give up too quickly, only after a few months. If you are interested in your niche, you’ll have to do it for a while.
With affiliate marketing, you are playing the long game. I almost gave up after a year and a half. Good thing I didn’t; otherwise, I wouldn’t have sold my blog.
2. When You Have No Audience
Compared with other ways of making money online, affiliate marketing doesn’t require much of a following to start making money.
It’s because affiliate marketing rewards you on conversions compared to other monetization methods that reward you based on the number of views. All it takes is one follower or visitor to your blog who clicks and converts, and you are committed.
That said, you do need at least some sort of audience. Don’t expect much with affiliate marketing if you only have 1,000 monthly visitors to your website or 1,000 Instagram followers. Instead of focusing on monetization, you should focus on building your audience.
The average click-to-conversion ratio (aka conversion rate) is 1-5%. That means for every 100 clicks of an affiliate link, only 1-5 people will convert if you are lucky.
The conversion rate depends upon many factors. Many affiliate programs convert at a sub-1% rate. On a positive note, affiliate marketing scales well. It takes about the same effort to market to 10 people as it does to 10 million.
3. Lack of Ability To Learn New Skills
You do not have to be a technical genius to make money with affiliate marketing, but you have to learn skills you may not currently have. Like any business, it’s much more than just your knowledge in that niche.
Unless you outsource everything with affiliate marketing, more than likely, you will have to learn new skills.
When I started in affiliate marketing, I didn’t have all the skills I have today.
They include:
- Writing – How to write helpful content, email marketing, copywriting
- SEO – Keyword research, how to write content so you can be found on Google
- Tech – How to start a blog, web hosting, Email lists, domain name registration, and DNS, to name a few
- Marketing – How to promote yourself, how to promote affiliate products, grow your audience, build your brand
- Social Media – Creating an account, uploading content, learning the social media rules
Some of this will seem foreign to you, and that’s okay. Everyone has started on this same journey at some point.
As you grow, some of this you can outsource to others. However, if you are starting affiliate marketing on a shoestring budget, you may have to do all of it yourself.
Fortunately, many free YouTube video tutorials and online courses can help you with every step of this process.
If not, you can find people on services like Fiverr or Upwork.
4. Lack Of Affiliate Products
From my experience, almost every niche has an affiliate program. That means, at least at some level, you can use affiliate marketing. Some niches, however, lend themselves more to other types of monetization.
One example that comes to mind is couples counseling. You may have an existing practice helping couples and want to become an online influencer. That’s great, but it probably won’t work well with affiliate marketing. Other than maybe a few products, you are best to monetize via one-on-one consulting or online courses instead.
I’m comparing it to something like tech product reviews, which have many affiliate programs to choose from.
Understand that just because affiliate marketing isn’t working for you doesn’t mean you chose the wrong niche. Instead, the issue is the business model you’ve selected is wrong for your niche. Affiliate marketing isn’t the right business model.
5. The Merchant Is Using An Internal Affiliate Program
If a merchant’s affiliate program is built in-house, it is a red flag. There are, of course, exceptions to this rule, but the issue has to do with several problems.
The first issue is accountability. You are relying on the merchant to report conversions accurately. Who’s to say they don’t miscount a few conversions? There’s no audit trail other than relying on the merchant to say this was the reported amount of conversions.
When the merchant uses a third party for tracking clicks and conversions, there’s a buffer between you and the merchant. This allows for a somewhat neutral party to audit lost clicks and conversions.
The second problem is with tracking. Tracking affiliate marketing results can be complex. Especially with today’s multi-device use, it’s much more than just using cookies. This doesn’t even consider issues with privacy settings blocking tracking affiliate clicks.
With modern-day affiliate marketing software, you can purchase off the shelf; there’s no reason to create your own. There are different versions – some do tracking, and others add networks that can benefit the affiliate and merchant.
If a merchant is using something that was built internally, in most cases, they don’t fully understand how to attribute conversions properly.
Affiliate Marketing Pros and Cons
Pros
- It’s a scalable business model
- works well if you have expertise in your niche
- ideal for creators with an engaged audience
- effective in competitive niches
- works well if you already sell existing products
- You can make more money by increasing your conversation rate
Cons
- It is not a get-rich-quick scheme
- You need an audience
- Requires you to learn a new skill set (or outsource)
- Some niches don’t have affiliate products for them to be successful
What Else Is There Besides Affiliate Marketing?
Plenty!
Affiliate marketing is perfect for someone who wants to start a side hustle. With affiliate marketing, you make your own hours and work from anywhere as long as you have an Internet connection.
If you are sticking to a blog or are focused on being an online influencer, there are other ways to monetize. Some niches do not work very well with affiliate marketing because of the lack of affiliate products.
If you are struggling with business ideas, check out Millennial Money Man’s best side hustles.
Summary
Is affiliate marketing worth it? Yes, if you will put in the effort and time, it takes to build an affiliate marketing business. Building an audience is the cornerstone of affiliate marketing to become an effective influencer.
Just remember, not all niches make sense for using affiliate marketing. If it makes sense to you, make sure you check out my guide on how to become an affiliate marketer.
