Wondering why affiliate marketing is the best business model? Affiliate marketing is a referral based business model in which affiliates refer sales of other people’s products. If they successfully refer a sale online, they receive a commission based on what they sell.
They don’t have to invest in inventory, or store products. They don’t need to speak to customers or even own any products of their own. It’s not only for these reasons that affiliate marketing makes for the best business model. Affiliates can build residual income from sales they make on complete autopilot.
This gives them a huge amount of freedom which seldom can be matched by any other business model. A traditional business requires premises, staff, equipment and stock. To launch a traditional business requires a huge investment. But an online affiliate business can be started for very little. This makes affiliate marketing a hugely desirable business model available to anyone with a laptop and internet connection.
Why Affiliate Marketing Is The Best Business Model
But it’s not all sunshine and rainbows! Affiliate marketing is still a business, and although nearly everyone can “give it a go”, not everyone succeeds. The affiliate marketing failure rate is high, with only 5% of affiliates actually succeeding over the long term.
Because so many people can try affiliate marketing, this might account for the large “failure” or drop out rate. It’s accessible to anyone with a laptop! So many give it a go but don’t stick at it long enough to make it work for them.
Despite this, affiliate marketing does work for some people. Those who stick with it are much more likely to succeed than those who put a limit on what they will do.
Why Affiliate Marketing Is The Best Business Model – Location Freedom
Affiliate marking is definitely the best business model if you want geographical freedom. A traditional business locks you down to a physical location, unless of course you can afford to pay someone to run it in your absence. Since affiliate marketing can be run from anywhere globally, this makes it one of the most versatile businesses available.
Other online business models like drop shipping, import export businesses and even forex marketing also offer this flexibility and income potential. However, drop shipping is much more involved and you need to be more customer-centric than with affiliate marketing. With affiliate marketing you simply refer sales to customers. You don’t need to deal with them in the same way, or at all with the affiliate model. See affiliate marketing vs drop shipping.
Import export businesses require inventory and storage of products. You also need to invest in stock to get wholesale prices in order to make a profit. This simply isn’t the case with affiliate marketing. You can join a program for free and promote anything globally with affiliate marketing, even without purchasing anything!
Forex marketing is another location free business model. However, it takes a long time and a large investment to learn trading and make a living from doing it. Affiliate marketing does require training to learn, but you can do it relatively cheaply and without risking huge capital. Access a free video series here to learn more about it.
Why Affiliate Marketing Is The Best Business Model – Flexibility
With a traditional business, and many online businesses, you need to work specific hours, and at a specific location. Even with other similar business models like drop shipping and Forex marketing, you’ll need to stick to specific hours and be accountable to customers or market trading hours.
But affiliate marketing offers an opportunity to work as and when you like! The automation which affiliate marketers use works around the clock. This means whatever country you live in, and whenever you like to work on your business, you can do so!
By building automation into an affiliate business, you can collect emails, sell products and build your online presence all on complete autopilot! You can also outsource tasks you don’t like too! Many affiliates use outsourcing and pay others to work on their business while they sleep! So your business can build around the clock, and you can sell affiliate products around the clock to a global audience than never sleeps!
Financial Freedom
Yes financial freedom is why many people become affiliate marketers. Affiliate marketing offers the opportunity to earn from selling products online. As such, there’s no limit to earning potential. But not all affiliate marketing business models are alike, so you need to choose carefully.
For example, Amazon pays affiliates some of the lowest levels of commission within the industry. Some products on Amazon pay as little as 1% commission. Products in some categories even pay 0%, items such as gift cards! 11% is the highest amount of commission you can earn from referring a product on Amazon. See also Amazon affiliate marketing commission.
Some marketing strategies will take longer than others too. Organic marketing is a slow strategy. So if you choose a slow marketing strategy, and low paying products, you can struggle for years with affiliate marketing without getting anywhere!
Paid marketing works much better in many ways. A paid marketing strategy can be turned on immediately and you see instant results. Initially there’s a period of learning here, which is where many affiliates drop out. But paid marketing is much more scalable than organic marketing, which means your business can grow very quickly once you’re profitable.
Best Affiliate Marketing Business Models
The best affiliate marketing business models offer multiple sources of income. A small valued product on Amazon will make you less than a dollar in commission. You’re not going to become financial free by promoting products like this, unless you have a tonne of free traffic. Free traffic is hard won and takes a considerable amount of time, if starting from scratch. You can’t use paid traffic if you’re only making a few cents on a sale! So this means you need to choose products which pay you more.
Products which offer larger commissions and ongoing commissions are high ticket affiliate products and recurring income affiliate programs. The SFM Digital Business System successfully combines multiple income sources from one off sales, high ticket items and subscription products.
Using such a system means your ability to build a solid income is much more likely than through using only one-off commissions. A product range gives you the ability to earn commissions at a later date should your referrals upgrade to a larger valued product.
Most affiliate programs don’t offer this. You need to keep selling more and more items to keep earning. But with recurring commissions and a product range you can keep earning from the work you have done previously. With a larger valued offering, and larger commission rates (see affiliate marketing commission rates), you can also use paid marketing more effectively and scale up more quickly to a larger audience.
Access a free training video series here to learn more about the various affiliate business models.
Summary
Affiliate marketing is not an easy thing and still requires a lot of work in order to generate a full time income. But compared to the other business models which are similar, or even traditional businesses, it offers a lot more affordability and flexibility.
An affiliate business can give you more time and geographical freedom and financial independence. It can also give you financial freedom if you are ambitious and choose the right business model.
Access a free video series to learn more here.