Affiliate marketing is a tricky subject, one I’ve had a lot to say about over the years. For those new to the game, affiliate marketing is when a business asks another business (the affiliate) to sell their product for them. You find someone with an audience, and utilize that audience’s trust in the affiliate to move your product. In exchange, when anyone buys your product using the affiliate’s special link, the affiliate gets a cut. Everyone wins. Or do they?
I’ve been asked whether this strategy, with all its advantages and drawbacks, is a good idea for new entrepreneurs. It’s certainly a popular one. And while I’ve definitely had my reservations about affiliate marketing, I can’t deny the potential benefits of doing so…when it’s done right.
I’ve launched many a product, both with and without affiliates. Whether it’s right for you will depend on a few variables. The beauty of entrepreneurship is that unlike traditional business, you don’t have to do anything. You get to make the choices that seem best for you and your company. So before you decide, know what can go right— and what can go otherwise.
The Pros
When you work with affiliates, you’re increasing the size of your audience (and potentially the number of sales) exponentially. Someone else has done the work required to earn the trust of a whole pool of potential customers. Now, your product is being recommended to them. It could take months or years to reach the people your affiliates have already reached, and here they are being handed to you on a platter.
The value of this is hard to estimate. Assuming your product is good and it sells well, it’s priceless exposure. The benefits can continue to accrue over years, as strangers become first-time customers, who become longtime customers, and who ultimately recommend your product to others. One good affiliate relationship can snowball into years of profit, especially if it’s not just a one-time thing.
All of this requires relatively little from you, at least compared to the cost and effort required to earn that following on your own. Affiliate marketing can be a fast lane to notoriety and credibility. As long as your product delivers, hitching your wagon to someone else means trust by association. And as market value goes, trust is a priceless commodity.
The Cons
All that said, the downsides can be considerable— especially for new entrepreneurs. When you’re just starting out, it can be tough to get credible affiliates. No one knows or trusts you yet, and affiliates may not want to risk their own credibility on someone’s first or second product. That means the caliber of affiliates available to you might not be…ideal. Businesses who rely too heavily on being affiliates (rather than selling their own products) quickly lose credibility with their own audiences. These kinds of operations are not wagons to which you want to be hitched. Unfortunately, they might be the only ones willing to work with you.
Once you do find an affiliate, you have to be very careful about their effect on your brand. It’s important not to just let anyone market for you, because the way they do so reflects on you! You’re trusting these businesses with your brand. They could be unprofessional or scammy. They could simply have an aesthetic or set of values that’s too different from your own. Being misrepresented by an affiliate is a damaging experience.
And obviously, you’re giving up profits. 50% is standard, but even higher commissions aren’t unheard of (some businesses even forego 100% of the profits if they think the exposure is worth it). You have to ask yourself: with the money you’re giving the affiliate, could you market and advertise just as effectively for yourself? If your affiliate wants to sell your $100 product on a 50% commission, is it possible that you could take that $50 and buy ad space that’d get you the same result (or better)?
Cautious Affiliate Marketing
I’ve always been very wary of affiliate marketing, for all the reasons above. Most of all, I’ve always wondered if outsourcing the marketing of my own brands runs counter to the independence that makes entrepreneurship…entrepreneurship! That said, independence doesn’t mean never working with others or refusing mutually beneficial partnerships. That’s why I do choose to go the affiliate route sometimes— but only on certain conditions.
First, I don’t do “open” affiliate marketing, in which anyone can sell your product. While it’s tempting to sort of crowdsource your marketing this way, you completely lose control over your brand. When any jerk with a Twitter feed can call themselves your business partner, you’re setting yourself up for some bad press.
Instead, I hand pick my affiliates, and only let my business be associated with companies I know and trust, and whose audiences identify with my outlook. This means my reach isn’t quite as wide, but it is deeper. Most importantly, I can rest assured knowing that people I’m proud to associate with are increasing the value of my brand, not detracting from it.
Secondly, I insist on controlling the message. I provide the copy for emails, social media updates, videos, pdf’s; you name it. This makes life much easier for the affiliate, as all they have to do is share my work with their audience. More importantly, it keeps me in control of how my product is presented. I don’t surrender control of the narrative; I simply “borrow” the attention of my affiliate’s audience for a bit. That’s easier for the affiliate, and safer for me.
The Right Call For You
If you’re a brand new entrepreneur selling your first product, I have to recommend that you not choose affiliate marketing. It’s a better idea to go it alone at first, learning how to market and build your own credibility before trying to leverage someone else’s. Both your marketing skills and your product itself are in the early phases. Both should be “matured” a little before you’re ready for the kind of exposure affiliate marketing brings. Otherwise, the partnership could backfire.
If, on the other hand, you’ve been in business a while and you’re ready to launch or relaunch a tried-and-true product, affiliate marketing might be a great boost. Just make sure to take the time you need to find the right affiliates, and give them the materials they’ll need to represent you well. So long as it’s done with restraint, affiliate marketing can be mostly upsides. And it can give your business just the bump it needs to reach the next plateau.
For a predictable revenue stream, nothing beats the subscription model. Customers sign up to pay a fixed rate, monthly or annually. The business owner gets to map their budget and growth goals with greater confidence and stability. Everyone wins. But unfortunately, this model doesn’t work for regular old e-commerce…or does it?
