There’s many upsides, but what are the disadvantages of affiliate marketing? If you’re looking at being an affiliate, you’ve probably heard all of the upsides already. Unlimited earning potential and time and geographical freedom are often the benefits touted by those selling a program! But don’t forget that they will benefit from your participation if they sell you the course!
So of course they are going to tell you the benefits of affiliate marketing. But what about the drawbacks?! Affiliate marketing definitely isn’t for everyone despite what you may have heard. It takes a lot of commitment to build a profitable affiliate business. Most people are used to employment, whereas affiliate marketing is a performance based business model. This means you’re effectively an “entrepreneur” when you decide to build an affiliate business. There’s no safety net, it’s high risk and if you sell nothing you make nothing!
So if you want to talk yourself out of affiliate marketing, this is the article to read! For a more balanced view see the article pros and cons of affiliate marketing.
Remember also you get what you look for online too! So be careful of the material you’re reading. I almost talked myself out of affiliate marketing too after reading some negative reviews. It’s not all bad, but here’s some of the disadvantages of affiliate marketing.
Disadvantages Of Affiliate Marketing: Programs/Products
One of the disadvantages of affiliate marketing is that however good the program/product is that you choose to sell, it can always change. Programs can and do expire. This can be a bit of a disaster for an affiliate. Amazon recently changed their affiliate commission structure and often updates their API – (basically software which affiliates use to connect their websites with products).
An affiliate friend of mine had been spending huge amounts of time and energy building content which linked to Amazon affiliate products. The recent change meant his work became redundant overnight! All his backlinks were effectively worthless unless he changed all his content!
This is an extreme example of course and many affiliate programs will run for decades without any issues. Amazon is known for lowering their affiliate commissions though.
As an affiliate marketer the Achilles’ heel is that you’re relying heavily on the affiliate program you use to make money. Since you’re not in control of the product/program, you could get kicked out, or something could change which effects your income. So you need to stay tuned in to the program you choose to promote; otherwise something could change which effects you and your income could suddenly stop.
Disadvantages Of Affiliate Marketing: Competition
There’s a tonne of competition online from other affiliates who are promoting the same products as you. Although there’s many products you can promote as an affiliate, there’s also going to be a lot of other affiliates who are doing the same things as you. So if you’re building a blog, for example, chances are good that thousands of others are doing the same. If you’re running paid ads on YouTube, guess what, thousands of other affiliates will be doing the same too!
This competition can be a major problem if you’re going after a certain market. If you’re attempting to rank your website for a certain keyword, for example, there’s a lot of noise out there competing for the top place! If you’re using social media to advertise, others are doing the same.
When people are inundated with marketing messages they get more discerning about what they buy and who they buy from; so you need to be a better marketer in order to sell in this kind of climate.
More competition also means advertising becomes more expensive. So even if you’re using the faster method of paid marketing to build an affiliate business, you can expect it to become more costly if there’s a tonne of people competing for advertising space.
Cons Of Affiliate Marketing: Customer Base
With most businesses you can connect with customers and establish a customer base. But with affiliate marketing you’re simply a third party who connects customers directly with the products they want. The customer can’t be loyal to you, the third party referrer. Should there be other products and value offered by the company you have referred the customer to, you can’t benefit from these relationships you have effectively created.
The exception to this rule is with a product range from which you can earn commissions from. But with most affiliate programs, you refer a customer once, and they become a lifetime customer of the company which offers the products, not the affiliate.
Subscription affiliate programs do offer the potential of lifetime commissions from having made a referral. So these are better to use than off-off commission products which only pay you once.
No Guarantees
With affiliate marketing there’s no guarantees. If you sell nothing, you earn nothing! It’s a performance based business model and you’re effectively working for yourself. If your marketing efforts produce no sales you’re out of luck! Plus, you could spend thousands on marketing and still not make a sale if your marketing efforts don’t produce the desired outcome.
Marketers spend huge amounts on their marketing budget just learning how to sell affiliate products. So if you’re on a tight budget it’s difficult to compete in this environment.
If you’re a content creator you can spend months or even years building content (blogging or video blogging) to no avail! It takes more than most people realise to become consistently profitable with affiliate marketing and there’s a huge drop out rate at around 95% – see affiliate marketing success rate.
Discipline & Consistency
Whatever path you choose as an affiliate it will take a lot of discipline and consistency to break through the initial phase of learning and failing! As a beginner, you start with nothing; no email list, no traffic, no leads or sales. You build the blocks of knowledge first and then start to implement that knowledge in building your business. It can take months to even get off the starting blocks. After that you need to apply what you have learned consistently for a long enough time to make your first online sale.
When results aren’t forthcoming, this can be psychologically very difficult. To overcome this you need to be good at a number of entrepreneurial skills which most people have never learned:
- Mindset – see also psychology of affiliate marketing.
- Time management
- Self discipline
- Self motivation
- Controlling your mental state
- Vision, purpose and goal setting etc.
Most people don’t have these skills or the long term vision needed to overcome the most common barriers to success. So they see it not working and give up.
Bad Press
Affiliate marketers get a bad press and are often associated with spammy tactics to make quick wins.
There can therefore be a stigma associated with the affiliate marketing business. Most people are employees and don’t know many, if any entrepreneurial or business owner types. They are mostly not familiar, not comfortable with risk.
So if you venture into the unknown world of affiliate marketing, you can expect some friends and relatives to try and talk you out of it! This can be tough and without help and support as an affiliate, particularly if you’re already struggling, you may have the added pressure of your family or friends not being very supportive.
If you’re not supported, and are having a difficult time anyway with affiliate marketing, it’s very difficult maintaining a positive attitude when those who you lean on want you to quit!