Is affiliate marketing really profitable? Affiliate marketing is a business model, and like any business model individual results will vary; depending on someone’s understanding and how they manage their business.
Many affiliates are profitable with their affiliate businesses, and many are not! Affiliate marketing can therefore definitely be profitable; but this isn’t everyone’s experience of the business. In fact affiliate marketing is a tough business and many affiliates will drop out before even making a single sale online. The affiliate business model is a performance based one, which means you need to make sales in order to generate revenue. No sales means no income!
The affiliate marketing failure rate is around 95%, although it’s difficult to say this definitively because there are so many affiliates. That means only 5% make it in this business, or stick at it! That’s a huge drop out rate. But there’s a few reasons why so many people drop out of affiliate marketing.
Is Affiliate Marketing Really Profitable? Why So Many Quit
Imagine buying a franchise such as the McDonald’s franchise. You get to rent a store and with this comes the many costs of staff, equipment and advertising. As the franchisee, you already have incurred many costs before even beginning. It’s now your job to make the store successful financially. If you fail, you’re no profitable and you run out of money. The store closes and you’re in debt for all your costs, including any franchise fees which you may have a contract to pay, even if your store folds!
Now compare this to the affiliate marketing business model: no large rental costs, no equipment, no staff to hire and very little to pay. In fact anyone can become an affiliate very quickly and easily by signing up to an affiliate partner program and getting an affiliate link. Comparing the two businesses, how many people will flock to the affiliate marketing business model compared to the McDonalds franchise? This explains why so many affiliates will drop out. They risk nothing to try and this opens the business up to anyone with a laptop and internet connection.
Many people who start out as affiliates also make an assumption about it being easy. They don’t look at it like an actual business, but rather a “get rich quick” scheme!
Business Models
There’s many ways to do affiliate marketing too. Not every affiliate approaches the business in the same way. Some build email lists, others build websites. Some use paid marketing and some work on free strategies such as blogging. This gives a huge variety of experience within the affiliate marketing industry. There’s also a huge variety of products you can promote as an affiliate marketer. Some products pay much more than others. If you jump in with no experience, you may start your business on the wrong assumptions.
Selling low value physical products means you earn tiny commissions. Choosing a free marketing strategy will take much longer and may even fail. Do both and you’re doubly in trouble!
Other products can pay a lot more in commissions. High ticket affiliate products are much more lucrative than standard products. Subscription and membership products pay affiliates recurring commissions, so they can earn more from the same amount of work. Just knowing this puts you ahead of many affiliates who are destined to fail as they pursue bad marketing strategies and give up when nothing happens. With higher valued products and through using multiple products in a range, added to subscription products this will give you a much better chance of success. It also means you can more easily use paid marketing strategies which are more effective, fast and scalable.
Can You Profit From Affiliate Marketing?
The real question here is can you profit from affiliate marketing! This is a difficult question to answer. But this quote from Henry Ford I think sums it up quite well:
“Whether you think you can or think you can’t, you’re right” – Henry Ford
Belief is key to building a successful and profitable business, whatever it is. My experience of affiliate marketing is that it’s been a tough ride. I wish I could start again with the knowledge I now have, because it would be much easier. But knowledge is hard won in affiliate marketing.
One of my mentors recently said on a call that of all the entrepreneurs he knows all testified that it was never easier than they thought, succeeding in entrepreneurship.
Another appropriate expression is that the master has failed more times than the beginner has even tried. Experienced and profitable affiliates have gone through many failures in their affiliate journey. If you’re not prepared to learn from your failures as an affiliate, it’s probably not the path for you! If you’re serious about learning affiliate marketing and staying the course, access a free video series here to get some useful tips.
Is affiliate marketing really profitable? It depends on you!