How profitable is affiliate marketing? Affiliate marketing is a performance based business model in which third parties sell other people’s products for commissions based on what they sell. So earnings reflect the amount of products affiliate marketers sell. So if an affiliate is able to sell thousands of products there’s no limit to what they could earn – simply through referring customers to products online. Affiliates can reach a global audience on the internet and therefore sell to anyone online. With the right products and services and the knowledge of how to sell, affiliates can be incredibly profitable making millions of dollars in some cases.
However, not all affiliates are profitable. Some struggle to get into profit and the learning curve for affiliate marketing is a steep one. While you’re learning how to be the middleman for products online, there’s a lot to figure out. But essentially affiliates must learn how to become profitable by understanding a method of selling which costs less than they make. Once they figure this out, and particularly when using paid ads, they can simply scale up by turning up their budget.
In affiliate marketing the affiliate essentially learns how to spend $1 and make $2. When they can do this, they increase their budget and spend $1000 to make $2000 ($1000 profit). They can spend $10,000 and make $20,000 ($10,000 profit) and so on. This is why affiliates spend thousands of dollars on advertising, because they figured out a method of doubling what they spend.
How Profitable Is Affiliate Marketing? Why So Many Struggle
However, during the course of learning, the affiliate will normally have to spend a marketing budget to find an ad campaign which is profitable. This might require them testing different adverts and trying out different audiences. Since most ad campaigns won’t be profitable, especially for a beginner who is learning the ropes, this is where many give up. In fact there’s a 95% drop out rate in affiliate marketing!
But for the 5% who carry on there can be great rewards. Especially if you are able to find a good product and crack your marketing strategy. There’s other ways of marketing affiliate products too and you don’t have to run paid ads to sell affiliate products. You can also build content. This article is an example of content marketing. Bloggers and video bloggers create content on a regular basis and sell affiliate products from their websites and/or video channels.
To generate organic traffic through content creation can take some considerable time and patience, and is less scalable than through using paid ads. But over time as your content grows, you will naturally attract traffic to your content. This can ultimately become a source of passive income if you are able to successfully monetise your website traffic with affiliate products that are suitable for your audience.
How Profitable Is Affiliate Marketing?
If you’re starting out as an affiliate you should expect to work consistently for some time before you start generating consistent sales. Depending on your marketing strategy, it can take a few months or a few years to be profitable consistently. Many affiliates drop out and it is the few rather than the many who become millionaires through affiliate marketing; although many people are able to make a living through affiliate marketing once they figure out how to make sales.
Your choice of product and marketing method will have a considerable bearing on how well you can do. With a cheap item from Amazon, you won’t be able to generate much in terms of commission. Amazon pays between 1% and 10% on most of its items. But through using digital products you can earn between 30% and 40% typically on sales you generate. The most profitable digital products are those which pay high ticket commissions and recurring commissions.
Summary
Your success as an affiliate will depend on a number of things including your ability to learn, stay the course and be persistent in the course of difficulties and obstacles. It will also depend on the affiliate marketing business model which you use.
Ideally choose a high ticket product to promote which also offers recurring commissions. With such a business model you are more easily able to become profitable through the use of paid marketing strategies. Without using paid strategies affiliate marketing is much more difficult. You’ll need to stay persistent with creation of content and there’s huge competition. But of you choose a topic and niche which you’re passionate about, you’re much more chance of staying the course.
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