Is There A Negative Side To Affiliate Marketing?

Fortunately or unfortunately, there is no single way to do affiliate marketing. If you have a website and want to make money as an affiliate marketer, you could do this based on revenue-share, CPA (cost per action), or CPL (cost per lead).

Revenue share

Revenue share is just a fancy way of saying that you sell a merchant’s products and receive a commission. For example, you could become an Amazon Associate and promote any of its thousands of products for which you would earn a 4% commission.

CPA offers

These are offers you put on your website and when someone does the required action, you make money. One of the best paying of these offers is eHarmony, which is currently paying $4.75 for every person who visits your website and fills out its form.

Cost per lead

As you might imagine, this is where you create leads for a merchant. This usually takes the form of an application on your website that the visitor must fill out for you to earn revenue. The most common of these is probably a credit card application or those requests for auto insurance quotes.

Of course, you could always do a mix of these three.

The negatives

There are a lot of people making a lot of money with affiliate marketing. However, there are some negatives you need to be aware of before you dive in. First, you have no control over the programs or the products offered by your merchants. You could learn that a competitor has a much better offer but there’s nothing you can do to get your merchant to change its offer. For that matter, you may be making the same offer as thousands of other affiliate marketers making it very difficult to stand out from the crowd.

Intense competition

While one of the best things about affiliate marketing is how easy it is to sign up for a program, it’s just as easy for other marketers. In fact, no matter which products or program you select you can count on the fact that there will be thousands of other affiliates across the world offering the same program or products. The level of competition will be very high. And you’ll be competing against highly skilled people who are experts at generating traffic.

Not paid until the sale has been made

Another problem with affiliate marketing is that you get paid only when a sale is made and you ultimately have no control over that sale. You take all the marketing risk. You can send a lot of traffic to a merchant but if it loses the sale because of a bad offer, you earn nothing. In other words, you end up paying for the merchant’s faults.

The middleman

If you do affiliate marketing through an affiliate network, the network becomes a middleman. It will provide lots of good reporting and tracking tools but takes a share of the revenue you generated. Plus, working through a network reduces the level of contact you have with your merchants.

A direct partnership

These are the reasons why many affiliate marketers choose to have a direct partnership with their merchant or merchants instead of going through an affiliate network. Marketers who can generate a good level of traffic, which turns into sales for a merchant, can often negotiate better terms and conditions. Plus, they earn more revenue from each sale as they don’t’ have to share it with an affiliate network.