Affiliate Marketing -- Advantages & Disadvantages

Affiliate marketing is a form of online business which involves a mutually beneficial partnership between website owners and merchants. There is an agreement between the site owner and the merchant under which the former promotes the products and services of the latter and gets a commission for each sale or lead. This form of marketing is very attractive for online entrepreneurs and is suitable for both experienced and newbie marketers. However, like any other business, affiliate marketing also has certain advantages and disadvantages. Some of these are discussed below:--

ADVANTAGES --

(i) As the affiliates are promoting the products, the merchants do not have to spend their valuable time in searching for new customers. They can get a much bigger market without any extra effort.

(ii) The affiliates do not have to create their own products to promote. This is very
suitable for new marketers.

(iii) Affiliate marketing business does not require a large investment.

(iv) It is an easy way to create an additional income for website owners. The only thing they have to do is to show some banners which promote the affiliate products and generate sales.

(v) The rate of commission is generally very high. Affiliate networks, like Clickbank, pay commission which may go up to 70% to 80% of the price of the product.

(vi) The affiliate marketer is only concerned with promoting the products. He does not have to worry about delivery of the same and other e commerce related activities, for which, the merchant is responsible.

(vii) The affiliate marketer can work full time or part time, maintaining his day job.

(viii) Affiliate marketing gives people an opportunity to work from their homes. They can work on their own time. They can work only for a few hours a day and earn money 24/7. With a laptop and internet connection, the affiliate marketer can work even when he is on a vacation.

(ix) Merchants generally provide different marketing tools for promoting their products, which help the affiliates in their business.

DISADVANTAGES --

(i) The merchants have to pay high commission to the affiliates. They also have to incur additional costs to maintain them. All these additional costs reduce the profit levels.

(ii) Sometimes, dishonest affiliates may engage in misleading advertising to make sales. They make false claims and promises regarding the products or services.

(iii) In some cases, merchants may close down their programs without informing the affiliates or paying their commissions.

(iv) Link hijackers may hijack the affiliate links and steal the commission due to the affiliates.

(v) If you promote a product which is of poor quality, you may lose visitors and they may stop visiting your site again.

(vi) Success in affiliate marketing requires hard work. You must have a good knowledge of SEO and different internet marketing techniques. Due to this, only a small percentage of affiliate marketers achieve success in their businesses.