Posted by & filed under Codastar News.

The affiliate marketing model is a method whereby one business rewards another business for sending them customers, visitors, and/or sales. The reward usually consists of a percentage of said sale, namely in the form of commission. In the right markets, there is great potential to make a lot of money – but is it right for you? Check out our list of ‘pro’s and con’s’ to see if this strategy would be beneficial to your business:

internet marketing agency london

The Positives:

Easy to Set Up With Low Start Up Costs

As marketing strategies go, Affiliate is fairly simple to get your head around. Simply select the program you wish to be part of, add the tracking code to your website, and you are good to go! Unlike setting up a fully integrated e-commerce site (which can require a lot of start up revenue and costs up front), you don’t need much other than an investment of your time choosing the merchant that is right for you and your business.

Not a Marketing Guru? No Worries…

If you don’t come from a marketing background, or find that you are better suited behind the scenes than on a sales pitch, affiliate marketing is probably suited to you. Your main skill to ensure success is to run your website effectively and efficiently.

The World is Your Oyster…

Take it back to basics – what are your best buys? What products are profitable? What services are selling? Pick these and promote them with your merchant. It is a flexible process, so if you find that on an outside site they aren’t performing as well as on your own, change them. You are only paid on performance, so it is important that you get this right.

Money, Money, Money

Once you have the hang of Affiliate marketing, there is no stopping you! There is no limit to the number of merchants you can work for with however many products and services you chose. This can leave you with multiple revenue streams straight to your bank balance.

The Negatives:

Controlling the Situation.

Unless you are one of the few that have and maintain a close relationship with you merchant, there is very little control over what is offered (additional discounts/freebies etc)

If your competitors are offering a better services, lower costs and better deals, and the offer at the merchant end is standard, it becomes very difficult to differentiate between sites – potentially leaving you at the bottom of the pile.

Ensure you are aware of your competitors beforehand, their advantages, their service/products, their site. You might not be able to compete directly, but there might be an area they don’t cover, a product they don’t sell – and you do. Remember, Affiliate is flexible, if there really is no way to get past it, change your strategy.

Customer Ownership.

Typically, you deliver the customer, the merchant pays you your one-time-only commission, and the customer remains theirs for all subsequent purchases. The merchant’s customer base increases, and as a result, the value of their business.

To the customer, you can appear as the “outsider” – merely a link on a ‘trusted’ page. Maximise your chances at them coming back directly to you. Make conversion simple, make your website sleek. Your site’s design is key in these situations. Make the customer want to come back. They are a fickle bunch, so make it worth their while. Stand out.

Its Competitive.

As outlined earlier, it requires minimum effort and skills to set up an affiliate marketing scheme. Unfortunately, this makes it one of the cons – as everyone is doing it. Everyone wants a bit of the action – more money for little effort.

As before, you need to make sure you stand out. Optimise your website, design is key. If customers struggle to find what they are looking for, or pages take too long to load, they will leave and purchase somewhere else – with your competitors.

Pay On Performance

Affiliate Marketing is the internet equivelant of the  “commision only” sales jobs you see advertised every day. Its a guranteed win for the Merchant, only paying out when they sell something. For you? The advertising risk is on your head.  You may spend weeks on SEO, revamp and optimise your website for conversion, yet little sales are trickling through. With the lack of control mentioned earlier – it could be completely out of your hand with a poor offer or deal at the merchant end, resulting in good traffic but little else.

Limited Growth Potential

With customer ownership and little control on adapting ‘deals’ to suit the markets, your growth potential with affiliate marketing is going to be limited.

[image via]

Leave a Reply

Your email address will not be published. Required fields are marked *