Affiliate marketing has become very popular, especially with internet marketing. Affiliate marketing should be a business that is mutually beneficial to website owners and publishers. An affiliate usually gets compensation for all clients provided through their effort. Usually, when a purchase is made, a part of the profit is credited to an affiliate as commission.
It is important to learn all about the disadvantages that come with the affiliate marketing as soon as possible. This will allow you to know all the pitfalls and to learn the best way in which you can guard against them.
It may sound weird that affiliate marketing even has disadvantages. This is because most people concentrate on the good side and rarely look at the downsides. Due to the many sources advocating for affiliate marketing, most people fall totally in love with this kind of marketing. Many e-commerce giants have failed in this area and there are several pitfalls that everyone thinking about affiliate marketing should know about.
The disadvantages of growing business with the aid of affiliate marketing
Let us look at some of the disadvantages of this kind of marketing. Affiliates can be considered fair weather friends. If you have just found out about affiliate marketing, you may be curious to some extent. There are those who actually get euphoric about such offerings. After your sales have been spiked, the very next e-commerce business takes a great part of the affiliates. What you notice about affiliates is that they also monitor all earnings very closely and on a daily basis. If your earnings start slowing down, they might get nervous even when this is only for a short while.
During normal business, sales do slow down from time to time. During the times when your business is low, there are affiliates who will leave to look for better deals and this only worsens the way your business is doing.
Affiliate and network commissions erode the bottom line
In a good case, you increase sells when you work with affiliates. However, the growth achieved at the top line ends up being the cost of the bottom line. There are affiliate commissions, usually about 5 percent to 10 percent, that is very common. There is also the need to pay commissions to various affiliate networks if at all you select them.
Decrease in profits
Since the usual sales are routed through the affiliates, you may notice a very steep decrease in the sales, as you know them. This is one of the greatest disadvantages that many people do not know about. You may have substantial sales, but you do not use any affiliates. After you sign up for the affiliates, you notice that more sales are coming in but on looking at the aggregate level of sales; you cannot really see a difference. In such a case, it simply means that the affiliates managed to get customers to get to the site and after the click; a link to the affiliate code was given. This means instead of a direct sale, you have to part with affiliate commissions. This may happen through methods like SEM, SEO, Fake coupon codes, and even fake promotions. Sometimes the affiliate marketers can get customers to your website by providing them with a link.
Sometimes affiliates do not respect the brand or give it the care it should get
You take so much time as you develop and conceptualize the e-commerce brand. Then in comes an affiliate with no respect for the brand that you worked hard for. The affiliate can distort the brand image and sometimes they may misrepresent the offering you are making. This doesn’t mean that all the affiliate marketers are unethical. However, the short-term orientation of the affiliates causes a number of them to use some not so ethical methods.
For e-commerce professionals
It is important for all the e-commerce professionals to look at both the advantages and disadvantages of affiliate marketing. Look keenly at all the downsides and if you do decide to venture into it, make sure that you understand everything very clearly. Therefore, you may be wondering whether the affiliate marketing is worth the effort. In all truth, affiliate marketing is one of the most important tools that e-commerce marketers can use. as well as this method is, you should be careful with the downsides and find the best ways to deal with them before you lose too much.
A merchant can incur very high costs in the name of commissions as well as maintenance and set fees. This can be because of using brokers or affiliate facilitators. Beware that there are also link hijackers that can take the affiliate kings to get their hands on the commission instead of the real affiliates.
Learn as much as you can about affiliate marketing before venturing in to cushion yourself from anything that may come up.