What are the Disadvantages Of Affiliate Marketing?

In recent years, affiliate marketing has rapidly seeped into nearly every branch of business. It has changed the way we promote a brand and has created an exciting way to earn passive income from anywhere.

In the US alone, affiliate marketing spending is estimated to compound at a 10% rate annually and is expected to grow over the $6. 8 billion mark in 2020 (Source: Rakuten). It’s difficult to ignore this opportunity and to not want a slice of this humongous pie.

You probably have read tons of information about affiliate marketing online. Chances are you have been told how easy it is, how you can make lots of money, and how you can reap all of the lifestyle benefits associated with it.

However, before you jump straight onto the bandwagon, you need to ask yourself: W hat are the disadvantages of affiliate marketing? This article is not meant to discourage you, but rather, to reveal what can be the potential pitfalls and obstacles when running an affiliate marketing business. This way, you can assess if affiliate marketing is for you, and you will know what to expect if you progress with this business endeavor.

I have organized the list of disadvantages by different components of affiliate marketing, separating out what you can actually control and what you can’t.

Wherever possible, I put my own two cents in about what can be done to curtail the disadvantages.

Before we move on, let’s define what affiliate marketing is. Affiliate marketing is a mutual partnership between merchants and affiliates, which runs on a performance-based reward system.

An affiliate will be rewarded with the agreed referral fee (commission) based on a set of measures such as per click, per lead, or per sales.

what are the disadvantages of affiliate marketing.

Disadvantages Of Being An Affiliate

To begin, let’s look at the most crucial element of running a successful affiliate marketing business – YOU. Although it may sound like everyone can do it, not everyone can be successful at it.

Before you get discouraged, I put together a list of the very BEST affiliate marketing training courses available. So be sure to check it out after you read this article.

Choosing your niche and products can be harder than you think

In affiliate marketing, choosing the right field and products is crucial for your success. With millions of products and services out there, many newbies find themselves stranded from the beginning in their attempt to affiliate market.

It is a daunting process to pick a niche and the associated products to promote. Many feel confused and unable to tell good products from rubbish ones.  For long-term success, it is vital that you have a plan and strategy; both require some deliberation.

A good starting point would be to think of what your passion is and what you are good at. Do some research, identify your target market, and figure out how you can solve their problems by offering your products and services.

Affiliate marketing can be a lonely journey

When you are in the affiliate business, you are essentially a freelancer. On the positive side, it gives you the freedom to decide how and when you work. However, you will often find yourself working in isolation, which can be discouraging.

If you plan to get into this business full-time, you will need to be disciplined enough with your time and work plan. It is too easy to slack off or veer off track. Even if you are in it part-time, most people are exhausted after a long day at work to stay focused on their part-time business.

It’s a waiting game

Many newbies flock to affiliate marketing with the illusion of making fast money online. The harsh truth is you will not be earning anytime soon as it takes some time to establish your presence online.

You may want to create a new website to promote your affiliate products. If done correctly, it can take four to six months before the search engines begin ranking your newly built website (source: ClickBurst SEO).

Then, it’s waiting for the customers to visit your website, and hopefully, they click on your affiliate links and make a purchase.

Don’t expect three- or four-digit earnings in the first six to twelve months. It is very possible that you will earn nothing in the first few months, and that’s when most people give up. It’s a nerve-wracking phase; many are guilty of checking their earnings report several times a day, if not every hour.

Persistency and patience are some of the key traits you need to succeed in this business.

Yes, you have to work on it

Affiliate marketing is more than just copying and pasting affiliate links. It entails more effort than you think. To build an affiliate business that can support you on a full-time basis will require computer knowledge, SEO skills, lots of content, planning, and consistent effort.

Many YouTubers boast about how easy it is to generate passive income and how much they are making monthly. Seemingly they are not telling you the full story about the hard work they have put in to get to where they are.

Depending on your niche and marketing approach, there are reviews and articles to be written, sales funnels to be set up, videos to be recorded, and social media platforms to be monitored.

It takes time to establish yourself

For a sustainable affiliate marketing venture, you will need to prove yourself as the authoritative person in your specialty field. This helps build trust and give your audience the confidence to click on your affiliate offers and make a purchase.

Unless you are someone famous or a celebrity, this authenticity won’t come overnight. Work needs to be put in to build your followers, retain them, and turn them into your customers. Build your business with passion and integrity so it will become one that lasts for many years to come.

Your affiliate income can unpredictable and not guaranteed

Affiliates are rewarded a performance-based remuneration, which can be an advantage or a disadvantage, depending on how good you are. If you ask someone for a range of affiliate marketing potential, they might tell you that it’s between zero to unlimited dollars.

It is hard to estimate how much income you can make as some factors are beyond your control. If your marketing tactic is effective and you generate many sales through your links, your earnings naturally go up. But if you fail to bring in traffic and sales, you will earn nothing despite the work and money you have put in.

Furthermore, if you are just starting out, affiliate marketing cannot be relied upon as a stable source of income.

Before you launch your affiliate business, be prepared to accept the fact that your earnings can be irregular and variable. Don’t quit your day job yet if you don’t have enough savings to get you through the transition.

Unpredictable Costs

In most affiliate marketing relationships, the merchants are only responsible for paying a referral fee when a purchase is made. This means all marketing efforts and expenses are borne by the affiliates. Compared to other businesses, affiliate marketing requires relatively minimal start-up costs.

In the beginning, the operating costs are insignificant. You work from home, save money on transportation, and only have the basics such as electricity, Internet, web domain, and hosting to cover.

As competition heats up, you might be tempted to enroll in a course, buy high-quality video equipment for YouTube videos, purchase a sales funnel software, hire content writers, or use paid advertising.

The costs add up, and if you are just getting started, your income is very likely to be small and sporadic. You could lose money if your effort does not bring any sales.

Disadvantages of Working with Affiliate Merchants, Affiliate Networks, and Indirect Partners

An affiliate network is a mediator or channel between the merchants and the affiliates. It allows the affiliates to find a suitable program and participate in them easily. Some of the popular affiliate networks are Amazon, ClickBank, and ShareASale.

No control

A significant disadvantage of affiliate marketing is that you will have no power in many aspects. These include the product’s features, quality, prices, sales page design, and customer service. If these are not appropriately managed by the merchant or network, it can put a dent in your business and reputation.

An affiliate merchant or network can decide to reduce their referral fee, to discontinue a product, or even to close down without informing and paying its affiliates. There are also incidents of cheeky merchants using high referral fees to attract new promoters and who then drop them back down after they have signed up.

The anonymous nature of online affiliate programs makes it more possible for fraud to occur, and some affiliates are left without getting paid.

Before committing to an affiliate program, you should do some research, read the terms and conditions, and watch out for complaints and reviews about the program. This will help you to spot the bad apples from the good.

Rules and restrictions

As an affiliate, we are living at the mercy of the merchant partners or affiliate networks with whom we work. Driven by profit and bottom line, these partners are continually changing the rules and regulations for affiliates to protect their company’s own interests.

For example, Amazon and ClickBank prohibit the posting of direct affiliate links and boosting them on social media such as Facebook. Such change of marketing policy means you need to re-strategize your marketing effort or else you might be booted out from the program if you fail to comply.

Another instance is Amazon Associates’ dormant account rule. After you have signed up to be an associate, you have 180 days to generate three sales before Amazon will even look at your application (source: Amazon.com). You can apply again, but when your account is dormant, the links will be unusable. You will need to generate those links again using your new affiliate ID.

More Rules and Restrictions

At some point in your affiliate business journey, you will need a medium to promote your products. Websites and blogs aside, many have opted to amass more of an audience through social media such as Facebook and YouTube.

Each of these platforms has its own policies and rules on affiliate marketing. You will need to continually keep abreast of what’s going on. One small change might affect your entire marketing strategy, and rework is probable.

Your customers belong to the merchant

As an affiliate, your role is to bring traffic to the merchant’s sales pages through your affiliate links. While you might be paid once, it is likely that the customers will make future purchases directly with the merchant.

Moreover, many buyers have the misconception that they will pay a higher price if they purchase through an affiliate link. This makes them likely to ignore your links and buy directly from the merchant instead, which means you lose the referral fee.

For a viable affiliate business, you need to build credence and relationships with your audience while establishing your expertise in the field. Consequently, your audience is more likely to stick around and be ready to buy the next products you are promoting.

Other External Factors

Competition can be fierce

Yes, anyone can get into affiliate marketing, but this low barrier to entry also means an intense (and insane) amount of competition on the market. The moment you have decided on your niche and products you are going to sell, many others will have already been promoting them.

The Internet is bombarded with so many ads, posts, and videos all trying to entice customers to buy or to provide their email addresses. Capturing the attention of a prospect is becoming harder and potentially more costly (i.e. paid ads).

If your competitors are naturally more skilled at marketing than you are, then you are at a great disadvantage. When your website’s rankings drop, you will need to keep up with the content to remain in the game. Furthermore, if a product is proven to be hot-selling, its referral fee has the tendency to be lowered. This means you will have to sell more to earn a substantial income.

Link Hijacking

Although this does not happen often, and there are steps to take to lessen the chance of it, there are cases of link hijack where affiliates’ links are stolen or manipulated. This can result in the earned commission being paid to the hijacker instead of the domain owner.

Notwithstanding the disadvantages discussed above, affiliate marketing still is a lucrative way to make money online. It remains a useful tool to drive traffic and boost sales.  Before venturing into affiliate marketing, take your time to weigh the pros and cons to decide if it is compatible with your personality and lifestyle. If carried out properly, it can become a prolific source of extra income. The current trends are indicating that there’s an emergence of more sophisticated and successful affiliates. Hence the competition within affiliate marketing should not be ignored. More acumen and creativity are required from the marketers to sustain their business.

Related Questions:

Why does affiliate marketing have a negative reputation?

Affiliate marketing is a great concept, but it has recently gained lousy press thanks to the sudden surge of aggressive campaigns and ads.

Some (but not all) merchants and affiliates are tarnishing the reputation further with deceiving advertising, unreliable products, bad business antics, and the use of spammy, blackhat approach.

Is affiliate marketing hard?

Affiliate marketing is not hard; almost anyone who is computer literate with basic internet browsing ability can make some earnings online. Its ability to become lucrative does come with challenges, however. The industry is highly-competitive and is ever-evolving.

To shine at it requires persistence, patience, constant effort to build your presence, and a suitable way to draw and retain your traffic.

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