It’s widely known that there are many people making money with affiliate marketing, but is affiliate marketing a business? Absolutely! Unfortunately, though, many new affiliate marketers don’t treat it as a business and that’s why the overwhelming majority fail to ever make a single penny. Let’s dive a bit deeper into the affiliate marketing business by starting with an analogy.
Affiliate Marketing Is Similar To Outdoor Advertising, But Better
Whenever you take a road trip, you will pass hundreds and perhaps thousands of billboards scattered along various roadways. From huge electronic signs to small bench ads, you pass them every day. Lamar is the largest owner of billboards in the United States and they have been in business since 1902. They are a publicly traded company on the NASDAQ and the business is estimated to be worth billions. Advertisers are happy to pay Lamar hundreds or even tens of thousands of dollar each month to place their advertisements on their billboards. Not only does Lamar earn some nice profits from these billboards, but advertisers have been able to get a return on investment from these ads for over 100 years now. In general, the more people who pass by a billboard each day, the more Lamar can charge for that ad space.
Well, affiliate marketing is similar, only instead of using expressways, we use websites. Affiliate marketing is an advertising business where we create our own virtual highways and place advertisements on those highways. Only, unlike conventional highways, we know what the mindset is with our traffic. For example, I know that on this website, you are here to seek information about whether affiliate marketing is a business or not, so you will notice affiliate marketing related advertisements on this site. On the other hand, on my site DogFoodInsider.com, I know people are there to try to find the best dog food for their dog, so you will find dog food related ads on that site. This is HUGE, because conversion rates through this type of targeted marketing leads to some rather insane conversion rates when compared to traditional advertising.
Think about free television and radio stations – are they legitimate businesses? Of course! you don’t pay them a dime, but they still broadcast to your radio and television (for the few of you that still use over the air television!). They make their money by drawing in enough viewers, which advertisers can then advertise to. You get free television, advertisers get a very good way to get their product in front of people, and the TV station gets paid by the advertiser so you can keep watching their programming for free.
…Once again, affiliate marketing works in a very similar way. People get free content (or services, apps, games, etc.), and in exchange, visitors will be presented with some advertising.
Why Affiliate Marketing Is Better Than Any Other Advertising Model
Affiliate marketing has some truly enormous benefits for everyone. It’s a win-win-win situation. You win because it’s highly profitable, advertisers win because it’s highly profitable, and your website visitors win because you can promote only the products and services you truly believe in. Let’s get into a bit more detail about all these winners:
YOU Win – If you are successful at running an affiliate marketing business, you can earn a phenomenal living while having the freedom to work anywhere you want and setting your own hours. Plus, you never have to deal with customer service, returns, shipping or storing items, etc. All you have to do is promote other peoples stuff and you get a HUGE cut of the profits. I am involved in one affiliate program that pays me 50% of the sale and another that pays me 75% of a RECURRING monthly membership fee. I’m still earning monthly revenue from people who used my affiliate link more than a year ago. Oh, and did I mention I travel across the United States in an RV while working whenever I feel like it? Trust me, if you’re good at affiliate marketing, you will most certainly win.
ADVERTISERS Win – Technically, as the owner of an affiliate marketing business, your real “customer” will be other businesses, so this is really more of a B2B (business-to-business) operation. Believe me, businesses LOVE affiliate marketers because unlike TV, radio, billboard, or other types of advertising, they don’t have to pay you a single penny until you’ve already made them a sale. Once you make a sale, you get your cut, they get theirs, and everyone is happy. It is a completely passive form of advertising for them because you’re doing all the research and work. They just wait for the sales to come in and they are more than happy to split it. It’s arguably the most profitable form of advertising for any business owner. If you drive them enough in sales, they will treat you like a king.
WEBSITE VISITORS Win – If you truly run affiliate marketing like a legitimate business, which you should, you never have to advertise for any product, service, or company you don’t like. I only refer my website visitors to products and services I would personally buy myself (and usually I have been a customer myself). Yes, there are the bad affiliate marketers who simply promote what is most profitable, but they are just the bad seeds and you don’t have to be unethical to run your affiliate marketing business. When you’re honest and truly help your website visitors find the answers they were seeking, at no charge to them, they are also winners.
So, you can see that the services provided is extensive. You’re helping everyone and that’s a great business to be a part of.
Why Affiliate Marketing Is A SUSTAINABLE Business
We know for sure that affiliate marketing works right now. Many people said affiliate marketing died in 2011 when Google drastically changed its search algorithm. However, here we are in 2015 and I’m having my best year yet. I will probably DOUBLE what I did last year. With that said, how can I be so sure affiliate marketing will be around for a long time? Because there’s too much money at stake.
Affiliate marketing is insanely profitable. If an affiliate marketer fails, it’s no sweat off the backs of an advertiser. But if an affiliate marketer is good at what they do, advertisers will earn 10’s or even 100’s of thousands of dollars off of them. I have at least 2 advertisers that I drive well over $100,000 to every year. The crazy part? I’m not even their top affiliate. In fact, I was told by my affiliate manager that the top affiliate sends more in business than all of the other affiliates combined, myself included. The money that goes through the affiliate marketing industry is in the billions.
Plus, even though I earn hundreds of thousands of dollars for those I advertise for, I am not on their payroll. I am a sub-contractor and they only pay me AFTER I make them money. I basically guarantee an ROI for them. What other advertising method can give advertisers a GUARANTEED ROI?
Now it’s true, the affiliate marketing industry took a huge hit back in 2011 when Google updated its algorithm. With that said, and I’m opening myself up for criticism here, the changes Google made had to happen. Yes, some good affiliate marketing businesses did suffer unfairly from the updates, but affiliate marketing was getting out of control. It consisted of too many people making crappy websites that didn’t help anyone except for the affiliate marketer. These days are over and thank goodness.
An Affiliate Marketing Business Should Truly SERVE Website Visitors
If you put up a 20 page website that simply pushes one single product on every page of the site, like a digital brochure, you can expect to fail. This is what Google cracked down on. On the other hand, what if you actually provided a real service? Take this article, for example. Sure, I have some banner ads here and there, but do you see me pushing any products and services in the article? No, I’m taking time to truly provide value for free to anyone who wants it, whether they click on my ads or not.
Another good example is my website DogFoodInsider.com which is a website I made that reviews dog food. I don’t simply try to push one brand of dog food, but rather, there are hundreds of reviews covering all different types of dog food and the dog food blends are rated in an honest way. If a certain type of dog food is crap, I say so. If it’s awesome, I let my visitors know that, too. It’s completely unbiased, and yet, if someone clicks on my Amazon affiliate link to purchase dog food through Amazon, I get a commission on that. It doesn’t matter what they buy. Plus, I include all sorts of other free articles on how to choose the best dog food, how a dogs digestive system works, how to help a dog that isn’t eating, etc. It provides REAL value and so Google sends me thousands of very highly targeted visitors every day. This virtual highway earns me money while I sleep. Provide real value and the rest will happen naturally.
An Affiliate Marketing Business Is Like Any Other Business – It Takes Time And Dedication
There are SO many scams and “courses” from “guru’s” offering get-rich-quick promises out there. This is really unfortunate, because affiliate marketing is no different from setting up any other business. The good news is you don’t need much capital to get started. Setting up a very nice WordPress blog will easily cost you less than $100. However, the time and dedication needed is about the same.
With most traditional businesses, you must put in about 1 to 3 years before you start seeing any profits at all. This is also true with affiliate marketing, although it would be closer to the 1 year mark than the 3 year mark if done right (proper research, niche selection, etc).
If you plan on truly running a legitimate affiliate marketing business, you need to be realistic about how soon you can expect to see a return on all the hard work you put in initially. Don’t trust the get-rich-quick guru’s out there. That’s not business, it’s just a scam.
Affiliate Marketing Is A Business If You Treat It Like One
So, is affiliate marketing a business? Absolutely. I operate under a registered LLC and have experienced growth every year since I started in 2009. I have about a dozen writers that work for me and 2 programmers on-call when I need help with my sites. So not only do I provide free services to website visitors, 6 figure profits for my advertisers, and a great income for myself, but I also help support jobs both through my own business and the ones I am helping to succeed.
Just be warned, affiliate marketing is not “easy” and anyone who says so is lying to you (probably to sell some cheap e-book or training program). You must truly believe in this business model and you also must focus on a niche or topic you are passionate about. Keep learning, keep growing, and never let any setbacks keep you from achieving your goal. As a former long-haul truck driver and someone who struggled through school, if I can do this, you can to. Just make sure you treat affiliate marketing as the business it is and there is no reason you can’t succeed.