Affiliate Marketing Pros & Cons: Hidden Truths Experts Don’t Want You To Know In 2024

Affiliate marketing is a performance-based business where you get a commission as an affiliate marketer for every sale made for a third-party company. Statista’s data as of October 30, 2023, reveals that affiliate marketing spending in the US from 2010 to 2020 has grown from $1.6 billion to $8.2 billion. Meanwhile, the 2022 Performance Marketing Industry Study by the Performance Marketing Association shows that affiliate marketing investment grew by 47% from 2018 ($6.2 billion) to 2021 ($9.1 billion). 

Astute Analytica’s global affiliate marketing platform predictions also illustrate the potential growth in 2024 until 2031 ($39,805.4 million). These reports signify the substantial expansion in the affiliate marketing sector and its importance as a business model for over a decade. It also shows that affiliate marketers have more opportunities because companies will spend more.

Robby Blanchard, creator of the Commission Hero training course, says earning $100-$1,000 a day in affiliate marketing is possible. Robby shares that some earn more than a thousand daily, depending on their work. In 2019, Robby’s ClickBank account made $50,000 a day. However, Germany-based Kenneth Wenhao Liu said affiliate marketing can be competitive. It can be difficult for beginners because you need advanced marketing strategies to get ahead of the competition. Kenneth Liu wrote these in his Affiliate Marketing Market Analysis report for the Global Summit on Affiliate Marketing on July 27-28, 2020, in Barcelona, Spain. The article was also published in the International Research Journal of Engineering Science, Technology, and Innovation.

In this article, we cover the affiliate marketing pros and cons, how you can become an affiliate marketer, and if it is still worth it in 2024. We will also discuss some issues that affiliate marketing experts don’t want you to know. At the end of the article, we will introduce a local lead generation business model that is more advantageous than affiliate marketing.

What Are The Advantages & Disadvantages Of Affiliate Marketing?

What Is Affiliate Marketing?

Affiliate marketing is a model where marketers can make money online without owning or creating products. You don't need to deal with customer service or supply chain issues. Instead, you're the middleman between a search and a purchase. Your goal as is to drive traffic to the offers you promote organically with a blog or podcast or paid advertising on platforms like Facebook and YouTube.

The three main types of affiliate marketing business options are:

• Unattached-no relation to the product or service 
• Related-connected to the promoted product or service
• Involved-the affiliate has used or is using the advertised item

Affiliate marketing popular digital marketing business model. It's becoming a key component in engaging consumers to purchase online products. According to Kenneth Wenhao Liu in his "Affiliate Marketing Market Analysis" article, affiliate marketing and email marketing account for over 16% of all e-commerce orders in US and Canada, making it among the biggest sources of online income.

But because the model is commission-based, you rely on a steady stream of traffic, that can be inconsistent and hard to come by. The industry is also very competitive with over 80% of brands having affiliate programs. You need to have an irresistible offer or a product that fills a gap in the market.

Affiliate Marketing Pros

Affiliate marketing has low investment costs. However, low cost doesn't mean free. So you need to plan for a budget of $500-$3000 to start. This amount will cover the costs of things like:

1. Hosting 
2. Spy Tools 
3. Tracking Software 
4. Landing Page Builder 
5. Ad Budget

There are ways to score a few quick wins that won't cost you big bucks. For example, you can publish a blog and find keyword opportunities that aren't too competitive. Look for ones with a low cost per click, and focus on long-tail keywords so you can make money faster. For example, create low-competition blog posts on topics like "best" or "review hacking."

You may also  leverage social media platforms like Facebook and TikTok to drive free traffic. Many online conversations discuss how you can start affiliate marketing without money by using social media to grow your followers. A Redditor suggested growing a Facebook group or on other platforms to “make people seek you out. Another Redditor says you can start affiliate marketing using Pinterest and a free WordPress blog. Once you set up the blog, you can create content and refer your readers to affiliate offers. 

Affiliate marketing is a thriving industry. Influencer Marketing Hub’s The State of Affiliate Marketing: Benchmark Report 2023 shows that 2024 affiliate marketing’s global spending will increase to $15.7 billion in 2024 from $14.3 billion in 2023.

In addition, the US is the top affiliate marketing country in terms of affiliate marketing spending. Statista’s data shows that from 2010 to 2017, affiliate marketing spending in the US increased from $5.4 billion in 2017 to $8.95 billion in 2022. In Australia, Japan, Germany, and France, affiliate marketing spending also recorded growth, as shown in the data collected in 2020 and 2021.

Affiliate marketers have a market-ready audience for the brands or services they’re offering. In affiliate marketing, you don’t start from scratch because there’s already a merchant who’s completed the market research and product development. Your role is to promote the seller's product or service through affiliate links.

In addition, the market for affiliate marketing holds many products and services for promotion. There is no fixed number of products that you need to promote in the affiliate marketing business model. Some affiliate marketers focus on the high-priced offers in a niche. You need to find the best offers in your chosen niche. These offers should respond to the needs of your target audience. You can promote as many offers as you want as long as you comply with the policies of the affiliate platform. ClickBank, for instance, allows you up to 500 offers or products.

Affiliate marketing offers a flexible career, allowing you to work wherever you have an internet connection. You can also choose offers from anywhere in the world and cater to audiences globally. Even the type of product you offer is not limitless. Ahrefs explains that you can promote physical products, online courses, or software. You need to create unique and engaging content and leverage purchase power in a popular niche or trending market. Attracting traffic and viewers is also crucial. You can publish dynamic organic content or spend on paid ads. 

Affiliate marketing offers high income potential. You can earn a 1%-150% commission depending on the affiliate marketing program. The photo above from Travelpayout shows different rates of commission you could earn as an affiliate for travel companies. Travelpayout also offers 7% of the earnings from your referrals. There are also high-paying affiliate programs like Semrush that pay $200 for every new first sale, plus $10 for each new trial activation. Liquid Web hosting offers a minimum payout of $150 commission per sale or 150% of the monthly hosting cost.

However, success in affiliate marketing depends on your understanding of the business model. You must increase site visits (searches), improve affiliate click rates, and boost the conversion rates of these clicks. The goal is to drive traffic to your offers and get people to take action. This requires a strategic plan with effective marketing and advertising techniques rather than random content publication.

Affiliate marketers don't worry about customer service because the merchant has a team to handle clients. In affiliate marketing, you only entice people to click the link leading to the product or service's sales page. The brand or company fulfills the rest of the sales process. Customer service presents an added expense to businesses. ZipRecruiter's data shows that a customer service representative in the US has an average salary of $39,098 per year or $19 per hour. Meanwhile, Salary.com reveals that a Customer Service Manager in the US receives an average of $99,191 annually as of December 27, 2023. These are just some of the hidden costs of customer service for companies, which you don't have to worry about as an affiliate marketer.

You can scale quickly with affiliate marketing because you're not tied to a specific product or service. You can promote multiple offers and leverage platforms to drive traffic to your links. You can also include upsells for products you promote. Use spy tools or do a Google search to see what competitors are promoting or what other people are ranking for. Use other marketing techniques like email or SMS marketing, or scale by creating organic content on multiple channels. You can also run paid ads with more than one profile or have various ad campaigns. You can also increase the number of affiliate links you promote. 

Affiliate marketing gives you a global reach to market products or services to a worldwide audience. It allows you to expand your potential customer base significantly beyond local or regional limits. The digital nature of affiliate marketing enables strategies like targeting specific countries, languages, or global market segments. Based on the Digital 2023 October Global Statshot Report released by Kepios in partnership with Meltwater and We Are Social, there were 5.3 billion internet users in October 2023. It added that this figure is equivalent to 65.7% of the world’s population. Also, active social media users have grown to 4.95 billion beginning October 2023, with the addition of 215 million new users (4.5% increase) from the previous year.

Affiliate marketing is among the top side hustles online. Ben Alistor, an Amazon FBA mentor and entrepreneur, lists affiliate marketing among the top 5 side hustles in 2024. Ben highlighted that affiliate marketing is a low-investment method to earn extra income. With a low barrier to entry, affiliate marketing could supplement your income without committing to a full-time business or job. Content creator Ted Gets Bread also shared that with affiliate marketing, he could earn $7.20 to $5,024.65 or more weekly. 

You can work independently in affiliate marketing because there is no traditional office setting or adherence to standard office hours. Buffer’s State of Remote Work 2023 shows that 98% of respondents prefer working remotely, and another 98% would recommend it to others. Affiliate marketing is an option for those looking to find remote work because affiliate marketers set their own goals and choose the niches to focus on. They can select the products or services for promotion and develop their marketing strategies. 

Affiliate marketing requires no inventory management, unlike traditional retail businesses. Inventory management is overseeing and organizing the stocks or goods to ensure that you have the accurate quantity of products available for the market. A lack of proper inventory for sellers can be costly. In an article, Powerhouse AI explained that, on average, a single shipping mistake costs between $50 and $250. But, as an affiliate marketer, you don’t need to purchase, store, or manage inventory because the merchant already fulfills this. Therefore, it eliminates a significant barrier to entry for many entrepreneurs. Since you don’t have to worry about inventory, it also means you don’t have to be concerned about stock management, storage costs, or unsold inventory, boosting affiliate marketing’s low-risk approach to selling products online.

Affiliate Marketing Cons

As an affiliate marketer, you're building someone else’s brand and not your own. You don't own the product or service and have no customer loyalty. Instead, you're doing the hard work to find new and innovative ways to deliver content and drive traffic to affiliate links. YouTube content creator Ceo Dose explains that affiliate marketing is not a get rich-quick scheme. The YouTube channel adds that it typically takes 18 to 36 months to earn a significant income from affiliate marketing. But once that consumer clicks on the link, they belong to the merchant. 

Traffic is unpredictable in affiliate marketing. As an affiliate marketer, getting purchase-ready traffic is the crux of your business. Authority Hacker's survey among 2,270 affiliate marketers reveals that 45% of affiliate marketers consider getting traffic as their biggest challenge. Converting traffic to sales ranks second with 19.5% and choosing the right products comes in third place with 8%.

Content writer Raymond Kubode explains in his 7 Proven Traffic Sources for Affiliate Marketing article that one of the most important things you'll need in starting affiliate marketing is "a steady flow of traffic to your site." Raymond adds that without traffic, "you won't be able to generate leads or make sales." A few of the more popular options for generating traffic include:

You also have no control over affiliate programs because the business isn’t yours.You promote products or services others created. You cannot decide on the quality, availability, or delivery of these products. If the product or service cannot meet market expectations, it can affect you as the promoter, even though you had no role in its creation or fulfillment. This lack of control can be a significant downside, especially if the company you're affiliating with has quality control issues.

Wisdom Speaks, a content creator and affiliate marketer shared in his “Revealing THE UGLY Truth About Affiliate Marketing” video how he lost money doing the traditional strategy of affiliate marketing. He said within the first 3 weeks, he generated over $10,000 selling ClickBank products. But when refunds came piling in, “it all came at a huge cost,” Wisdom added. The next month, he made less than $1,000. 

Affiliate marketing is prone to market saturation because of its low-barrier entry business model. Over 80% of advertisers and publishers use affiliate marketing in their marketing strategy. Data from a study conducted by Forrester Consulting in January 2016 shows that 81% of the 302 advertisers and publishers currently include affiliate marketing in their overall marketing mix. Meanwhile, 84% create content for affiliate marketing. This shows a lot of opportunities for entrepreneurs looking to start their affiliate marketing business. However, since you don't need a lot of skills or upfront capital, it results in a pretty crowded online space. You need to create content with value to stand out to drive organic traffic or you need to be willing to pay for ads. The more popular the product, the more you'll need to spend to get clicks that convert to sales.

Affiliate marketing requires time and money. Bill Widmer, in his article on ahrefs blog, shared that it takes around 6 to 12 months on average to earn money as an affiliate marketer. Bill added that it would take “around 2 years to earn enough money to quit your day job.” Affiliate marketing is a long-term business strategy that takes time to establish. You need dedication and discipline to earn consistent affiliate commissions. You need to: 

How Long Does It Take To Make Your First Money in Affiliate Marketing? Top Answers From Quora

It takes five minutes to three years to make your first money in affiliate marketing, according to top answers from Quora. Steven Horne, an affiliate marketer since 2015, says earning your first money in affiliate marketing depends on several things. Steven said those who have a following on social media sites and are active in making content could make a commission “within 5 minutes.” However, he added that beginners could take a week or up to 3 years to earn money in affiliate marketing. 

A marketing specialist shared that he also said he made money in 2 weeks even without spending on ads. Another commenter who is a data consultant took about 8 months before making money with affiliate marketing. Lastly, Nannie Dokez shared that making money with affiliate marketing needs persistence. Nannie took 6 months to try all the methods. In the 7th month, he earned $41.15 from the product he was promoting. 

Affiliate marketing is vulnerable to fraudsters and hijackers. An article published by web hosting company Hostinger listed the most common affiliate marketing scams that can affect your revenue. These scams include cookie stuffing (aka cookie dropping), fake products, pay-to-join programs, get-rich-quick schemes, and spoof traffic. One of the leading cases of affiliate marketing fraud reported was the case of two of eBay’s top affiliates who made $35 million in commissions with cookie stuffing. In 2020, Jonathan Marciano, citing a study by CHEQ and the University of Baltimore, wrote that the projected cost of affiliate marketing fraud is $1.4 billion. 

Income from affiliate marketing can be unpredictable as your earnings largely come from commissions you get from sales, clicks, or leads. Factors such as changes in consumer behavior, seasonality, competition, or even changes in the affiliate program's terms can reduce earnings. Faisal Khan, a content creator, shared on Quora that while you can earn from affiliate marketing, the money you make is not sustainable. Faisal explained that affiliate marketing benefits the merchants and not the affiliates, especially when thousands of marketers promote the products. This lack of predictability can be challenging, especially for beginners in affiliate marketing who rely on it as their primary source of financial support.

Cookie lifespan limitation affects your income from affiliate marketing because your earnings as an affiliate marketer depend on the cookie duration terms. Affiliate management software provider Post Affiliate Pro explains that cookie lifetime parameters determine how long a relationship between affiliates and visitors will exist after the visitors click the affiliate links. You can only receive the commission when a customer buys the product within the time frame. Once the cookie lifetime expires, you will no longer earn affiliate commissions. The duration of the cookie lifespan depends on the affiliate program. For instance, Zalora pays a commission when a customer who clicks your affiliate link purchases within 7 days. Meanwhile, Nike’s affiliate program has a 30-day cookie period.

Merchant and brand reputation dependency also affect the earnings of affiliate marketing, making revenue inconsistent. According to Statista’s report published on October 20, 2023, 58% of adults in the US recognize that a company’s reputation is a major factor when purchasing a product or availing a service. Again, affiliate marketers don’t have control over the quality of the products or services they’re selling. In affiliate marketing, you only promote the brand, product, or service. When a brand’s product quality declines, customers can be dissatisfied, affecting your credibility and future marketing efforts. 

How Do You Become An Affiliate Marketer?

Is Affiliate Marketing Worth It in 2024?

Yes, affiliate marketing is worth it in 2024 because there are always new products and services. In addition, the global social media reach is 4.62 billion (10.1% YoY from 2021-2022), and 76% of consumers have purchased a product they saw on social media. Compared to other online business models, like Amazon FBA, you don't need to wear as many hats as an affiliate marketer. In affiliate marketing, product inventories and supply chain issues are matters left to the merchants.

But despite the simplicity of the affiliate marketing business model, only 5% of marketers succeed. So why do 95% of affiliate marketers fail? Most people don't succeed because they choose the wrong niche or lack a content strategy. Others don't treat it like a legit business and focus more on the money than on providing value.

To succeed with affiliate marketing, you need to build trust with your audience and be the best marketer by giving value to your potential clients. Think about the following questions when creating content:

• Why should people click your link? 
• How does your offer enhance their life?

You need to understand customer psychology and how to leverage impulse or emotional purchases. Take the time to learn about your audience and learn what platforms they use. Where are they spending the most time online? Then, access the competition: Where are they making money? How can you execute a better offer or fill a void in the market?

To be successful with affiliate marketing, you need a marketing strategy that will get your audience to sit up and take notice. It takes an irresistible offer and on-point content or scroll-stopping creatives. You need copy that hooks your audience and makes them buy what you're promoting. 

Hidden Truths About Affiliate Marketing That Experts Don't Want You To Know in 2024

Local Lead Generation Gives You More Control Than Affiliate Marketing

Local lead generation gives you more control than affiliate marketing because you own the digital assets rented by local businesses. In local lead generation, you build websites targeting a specific niche and rank it on Google using organic traffic. Once ranked, you can rent it out to local businesses. You own the websites, and this gives you control. Having control makes income predictable as you get to decide who rents your websites and the monthly rental cost. 

Affiliate marketing is a low-cost way to make money online. It also has a low barrier to entry, making it a suitable business model for beginners. But you need to invest time to build an audience or create a following on social media. Also, having a low barrier to entry increases competition and the risk of saturation. Generally, experience matters in a job, making it more challenging for newcomers to compete with experienced affiliate marketers. Authority Hacker’s survey also found out that affiliate marketers with over 3 years of experience earn 9.45x more than beginners. 

Compared to affiliate marketing, local lead generation requires a certain skill set that increases its barrier to entry. You can narrow down the competition because not everyone has the patience to master local lead generation skills like data analysis and research, sales, and negotiation. Also, when you pick a profitable niche in your local area, you can decrease the competition more. 

Spending on ads can also be a challenge for new affiliate marketers. If you’re a beginner who does not have that many followers on social media or blog readers, you would need to spend on ads to get the content in front of your target market. Chad Bartlett, creator of Affiliate Marketing Boss, shared that when he was 19 years old, he would spend $200 a day on Facebook ads. While he made $700 per day from the same ads, this may not be the case if you have no effective content. Also, Chad shared that when his Facebook ad account got shut down, his profits went down to zero. 

In local lead generation, you don’t have to spend for ads because you are maximizing Google’s organic traffic. Plus, once your systems are in place, you can automate the process to secure a passive and predictable income. Join our local lead generation program to learn how you can start a more scalable online business model.