Affiliate marketing is an industry in which companies reward people who generate business for them. These people are known as affiliates.
There are a lot of ways in which affiliates can generate leads and sales for companies. This includes email marketing, Pay Per Click (PPC) marketing, content marketing, and more.
I have monetised my websites using affiliate marketing for more than sixteen years. In that time I have seen many ups and downs, but it has helped me travel the world and fit work around my schedule; not the other way around.
I am sure you have seen the advertisements from top internet marketers that show them sitting on the beach with their laptop sipping on a pina colada.
Is affiliate marketing really that amazing?
No. It isn't.
Here are eleven reasons why affiliate marketing sucks.
1. Signing Up Can Be a Pain in the Ass
The process of signing up to affiliate programs can be a real pain.
Many companies use an in-house affiliate program. This means that for each company or service you want to promote, you need to complete one of their application forms. You need to enter information such as your name and address, telephone number, payment information, and details of your websites.
Signing up to programs who are hosted by affiliate networks can sometimes be quicker as you only need to enter your details once, however there are sometimes more restrictions in place on what products and services you are eligible to promote.
On an individual basis, completing affiliate programs is not too time-consuming, however when you are signing up and promoting a lot of different products you soon become very tired of the process.
Some companies will automatically approve your application. Others will make you wait days or weeks. Many others will make you jump through a series of hoops and then reject your application and all subsequent queries you make asking why they did so.
2. Signing Up to Affiliate Programs = A Flood of Emails
The one thing that you are guaranteed to receive in affiliate marketing is an abundance of emails.
After signing up to an affiliate program I always receive a flood of emails over the next few days.
I do not mind an email clarifying my account details and thanking me for signing up; however I hate how companies think that signing up to their affiliate program means that they can sign me up to one or more of their company newsletters without my approval.
The more perseverant companies take this one step further by not even providing you with a way of opting out from receiving their junk mail.
3. You Never Know What Will Be Successful and What Will Not
My affiliate marketing strategy has always been to recommend the products I know and love. However, as many affiliate marketers will tell you, what converts and what does not convert does not always go the way you would have thought.
Experience does count for something when you are planning your affiliate marketing efforts, but trial and error will always play a big part in the affiliate marketing world. You sometimes have to just throw everything at the wall and see what sticks.
I have seen this time and time again through this blog. There are services I love in which I have mentioned dozens of times in articles and they haven't generated me a dime. Conversely, there are services that I have only referenced once in a review and they have gone on to generate hundreds or even thousands of dollars.
When you do find a product or service that converts well, be sure to promote the hell out of it :)
4. Income Will Go Up and Down
Affiliate income goes up and down due to a number of factors including website traffic, shifting trends online, and the closure of affiliate programs that were converting well for you.
This is why it is risky to put all of your eggs in one basket. If your income comes from just a couple of sources you are at risk of seeing your income drop significantly if your situation changes.
I have seen my affiliate income drop considerably a number of times in the past. The biggest crash came after online poker was banned in the USA. My affiliate income from online poker dropped from several thousand dollars a month to almost zero within just two years.
5. Stats Manipulation
Affiliate networks are not always as honest as their marketing suggests they are. I have signed up to a lot of affiliate programs and affiliate networks that manipulate stats. As you would expect, stats always go down for you, not up.
I track clicks on all outgoing affiliate links from this blog. This helps me see which links are being clicked the most, but it also helps me see if the stats on my end match those with those from the affiliate program.
The nature of tracking means that stats will never match up 100%, but sometimes the difference is so large that the affiliate program cannot hide the fact they are stealing commissions from you.
Companies need to handle problems such as chargebacks and fraud, but there is no excuse for an affiliate company messing with the stats of their affiliates. Unfortunately, affiliate marketing is still a little like the wild west and proving stats have been manipulated can be very difficult.
6. Minimum Payment Thresholds
Minimum payment thresholds are a necessary evil in the affiliate world. Companies cannot be expected to send payment every time an affiliate makes a $2 commission.
Unfortunately, the nature of minimum payment thresholds mean that affiliates do not get paid for all the sales they have generated. I have lost thousands of dollars of potential earnings over the years because of minimum payment thresholds.
Beware of affiliate programs that have a minimum payment threshold that is too high. There are companies that pay a $20 commission for a sale but will not pay out until you make the payment threshold of $100.
What that means is that if you have $80 in commissions sitting in your account, it will never be paid unless you generate a fifth sale.
My advice is to not promote companies that have purposely set their minimum payment thresholds too high.
7. Affiliate Companies Do Not Always Pay Out
I won't sugarcoat it: There are a lot of scumbags out there running affiliate programs who are not paying out commissions that were truthfully earned.
I have lost obscene amounts of money to companies that simply refused to pay affiliates. Fiverr, for example, didn't pay me for a year or two and over the last year their affiliate program has simple stopped tracking clicks and sales (despite their affiliate program still being active).
Earlier this year Tyler Cruz talked about how one network refused to pay him $15,000 he was owed. It's sad hearing stories like this, but non-payment is still a big problem in the industry.
Another minor frustration comes via companies that only pay you when you chase them up about non-payment. These companies only pay out when you email them and ask why they haven't paid you yet.
Again, my advice is to move your affiliate marketing strategy away from companies like this and more towards those who act professionally.
8. Companies Switch Affiliate Platform
In order for companies to track what sales and leads you have generated, you need to link to their products and services using a special link. These links are normally referred to as affiliate links or affiliate tracking URLs.
Embedding affiliate links into articles and reviews is an effective way of sending traffic to companies and increasing your affiliate income.
Unfortunately, companies sometimes switch their affiliate platform. This means that all the tracking URLs that you had embedded into your website need to be changed.
Companies switch affiliate platforms for good reason. For example, it may be to change from an in-house solution to a network to gain more exposure. Alternatively, a company may switch from a network to an in-house affiliate program in order to have full control over their affiliate system.
If you only have a few affiliate links on your website, this is a minor inconvenience. If you have thousands of affiliate links on your website, changing tracking links can be a time-consuming task that will make you tear your hair out.
9. Affiliate Programs Close Down
As an affiliate marketer you have to invest a lot of time, energy, and money, promoting the products and services of a company. You are effectively an online salesman that only gets paid if you generate a sufficient number of sales.
Sometimes that investment pays off right away and you start generating income. Sometimes it takes years for you to generate any sort of return. Sadly, many times you do not generate any commissions despite spending days writing content and promoting a company's products and services.
This is perhaps why it is so frustrating when an affiliate program closes.
Make no mistake about it, as an affiliate marketer you are disposable. Your investment into promoting a company will not be a factor when they decide whether to continue supporting their affiliate program.
Every month affiliate marketers receive emails stating that an affiliate program they are a member of is closing down. If you are an active affiliate of that program, its closure means that your monthly income is going to decrease.
10. Lifetime Commissions Aren't Forever
Do you want to earn money for the rest of your life? Do you want lifetime commissions? Then step right this way and earn a percentage of all income your referred customers generate.
Sounds good, doesn't it?
The idea behind lifetime commissions is that instead of being paid a large fee up front, you are paid a percentage of income over the lifetime of the customer. This is beneficial for the company as it reduces the initial cost of attracting new customers and means that they are not paying out a lot of money on leads for customers that cancel a few months later.
When an affiliate program pays by Cost Per Action (CPA), the company does not break even with the payment paid to you until the referred customer has remained in service for a certain period of time e.g. six months (assuming it's a good affiliate program and it pays well). Paying a percentage of income greatly reduces the risk the company has to take on paying for referred customers as the commissions paid out to affiliates are directly tied how much money that customer spends.
Lifetime commissions can be good for affiliates too as just a couple of referrals can generate tens of thousands of dollars.
The promise of lifetime commissions look great when you sign up, but lifetime commissions are rarely paid for a very long time. Sometimes lifetime commissions means you will be paid commissions for six months, a year, or two years. I have seen many profitable affiliate programs close down without any notice because the company no longer wanted to pay affiliates money for customers that were referred years ago.
This was a big problem in the poker industry. The players I referred to poker companies were generating tens of thousands of dollars and they had to pay me a percentage of that profit. How did they make more money? Simple. They closed down their affiliate programs and stop paying the affiliates who had promoted them for years.
Lifetime commissions can sometimes be a good route to go down, but if you do promote companies who use lifetime commission affiliate models, go in with your eyes open. Do not be under the illusion that you will be paid forever as it is very rare that you are.
11. Affiliate Marketing is Not as Glamorous as People Make it Out to Be
Affiliate marketing allowed me to leave the rat race and work online full time. It gave me the freedom to work my own hours and travel all over the world.
However, this industry is not as glamorous as many people would make you think. It can be difficult to strike the right work-life balance at times because you work at home (well, many of us do).
It can also be difficult to enjoy your downtime. Anyone who is self-employed will know that you never truly switch off. When you go to bed at night you are usually thinking about the work you need to do the next day. Likewise, if you have planned a day off and your websites go offline, tough luck. Whether you want to or not, you will need to resolve that as soon as possible or your business will be affected.
If you have considered venturing into affiliate marketing you will have come across many marketers who are pushing their online courses as a ticket to your financial freedom. They use pictures of themselves sitting on the beach with their laptops and promise to show you “The Secret” to making money online.
99.9% of these people are selling a dream rather than telling you the truth. The reality is that affiliate marketers spend an abhorrent amount of time checking stats, crunching numbers, doing tests, and sending emails.
It can be a boring job and it can be a frustrating job.
The nature of affiliate marketing also means that it can be quite a lonely job as there is a lot of work that you cannot outsource to others.
Do not let any of this dissuade you from being an affiliate marketer. Affiliate marketing can be profitable and it can be rewarding.
Just be sure that you go into the affiliate world with your eyes open and an understanding of the hard work you need to put in to become successful.