Is Affiliate Marketing Profitable?

is affiliate marketing profitable

Affiliate marketing only becomes profitable if you have a wide audience, significant traffic, and clout for influence. As far as covering overheads go, most affiliate marketers will realize that they are paying more for their hosting service than what they are earning. 

Today, I want to dig deep into the profitability of affiliate marketing. I will share with you what expenses you need to prepare for, what niches to explore to succeed, and what mistakes to avoid.

How much does it cost to start an affiliate marketing business?

Affiliate marketing has overhead costs that one has to maintain. Some people who teach affiliate marketing make it seem like it is cheap or that one can do it for free.

It couldn’t be farther from the truth. In this section, I will explore the associated costs of the affiliate marketing business. 

1. Website hosting service 

You need a web hosting service provider like Siteground or Bluehost to host your website. These companies store your website data and run them on their servers. 

Hosting services vary in pricing, but the most common range is between $4 and $10 a month. Hosting services, however, charge annually. If what you selected costs $4, prepare $48 for your first annual payment. Note that this price will go up after a year. 

2. Web domain name

Domain names could be cheap or expensive. The price depends on what name you choose. Names that have high demand or possibility of demand are always more expensive—some can cost hundreds of thousands of dollars. 

Choose a domain name that is not expensive. Pick one that is below $20. Like the web hosting service, the payment for your domain name has to be renewed every year. 

3. Web content

Content refers to anything that you publish. Be it videos or blog posts, you can either hire someone to do it for you or you do it on your own. 

Content is what drives traffic to your website. Without a consistent flow of content, you will never rank. Typically, an affordable copywriter charges $30 per article of 1,000 words. If you publish four articles a month, you have to prepare $120 each month for your content. 

These expenses do not include the cost of your time and skills. If you build your own website, you will certainly spend some time doing it. If your salary is $20 per hour and you spent more than 20 hours building, the project costs $400 of your time. 

Before you start affiliate marketing, you have to consider the monthly and annual costs. Make sure that you have a budget allocated for them and that this budget will last for at least two years.

How much money can you earn with affiliate marketing?

There is no single answer to this. While some can earn tens of thousands, some only earn hundreds of dollars a month. 

If you want your affiliate marketing website to be your source of bread and butter, you have to be an influencer of some sort. As an influencer, you have better chances of convincing your readers to purchase what you recommend. 

For example, let us say that you are an affiliate marketer for automotive products on Amazon. The commission rate for this is 4.5%. 

If you manage to convince ten people a month to buy a Furion Vision RV backup camera for $433, you get a commission of 4.5% for each, or $19.49. Multiply this by ten, and you have an affiliate marketing revenue of $195 in a month. 

As you can see, it is not enough to make a living. But how come there are those who preach online that it is possible to make a living out of this?

The key to succeeding as an affiliate marketer is to choose the right niche, which I will discuss further later. First, however, I would advise you to consider promoting products whose payments are recurring. I will talk more about this in the succeeding sections.

One must not be dismayed with the numbers I presented. There are successful affiliate marketers who earn $100,000 per month, like Pat Flynn. 

Based on a poll from 117 participants, 22% of affiliate marketers earn less than $20,000 annually. About 6% earn more than $2 million a year, and 11% are in the $1 million to $2 million per year.

It is not unusual that many who succeeded in affiliate marketing took years to get to the top. This must also be your mindset. If you want to make it big in affiliate marketing, you have to be in it for the long haul. It is not a get-rich-quick scheme.

What are the common mistakes that make affiliate marketers fail?

Many affiliate marketers fail. There is no shortage of people who call it a scam, not because it is, but because it is difficult to do, and they never had any success. 

All too often, affiliate marketers make the same mistakes. And below are the three that I believe are the most crucial.

1. Joining too many affiliate programs

A newbie affiliate marketer would naturally think that joining many affiliate programs is the key to success. This is not true. It is a trap if you think about it. 

Before you know it, you are overwhelmed with the kind of content you have to produce. For example, if you are in the e-commerce niche, you will be tempted to affiliate with many companies like Shopify, Loox, Elementor, WooCommerce, and so much more. 

What I advise is that you only pick a few. Focus your content on this product, and ensure you are getting traffic and establishing your credibility before you start joining a new one.  

2. Not niching down

A lot of affiliate marketers choose a broad niche. For example, an affiliate marketer may choose the kitchen niche. As such, getting followers is a tough climb. 

My take on this is to niche down. What it means is that it is better to become an expert on barbecues only instead of taking on the entire kitchen domain.  

3. Not an expert on niche 

If you are only in it to make money, you are not likely to succeed. Sure, money is the reason for becoming an affiliate marketer—you want to earn. However, you have to set your priorities straight. 

Successful affiliates are experts in their chosen niches. They build a following because of their credibility. It is the reason why their followers will buy what they recommend.  

One thing I want to add is the quality of your content. Do not just release a blog or video post just s you can meet the quantity you are aiming for. It is better to produce short buy quality content than publishing content that does not make sense.

What niches make the most money in affiliate marketing? 

Whether you sell an Amazon product or an online course, you will be putting in the same effort in making content. As such, it is best that you choose affiliate products that will give you the best returns on your investment. 

1. Software for a service niches

These products are programs like Elementor, Shopify, web hosting services, etc. These companies typically pay 20% in commission at the get-go and then a recurring commission of 5% for the first year that the customer is subscribed.  

2. Online courses 

Creators of online courses give at 50% affiliate commissions. They do not mind because they only have to create and publish the course once. Instead of spending money on ads, they would rather give to affiliate markers who generated an income for them. 

3. Loans and personal finance

There are many banks and credit companies that offer affiliate commissions to anyone who can bring a client to them. The affiliate marketer gets a commission from the loan amount of the client that he referred.

4. Health care

From vitamins to protein shakes, there are many new health products, gadgets, and equipment that you can promote. Many of these companies offer a subscription-based program, and you will get a commission for as long as the client your referred is a paying customer.  

These four are at the top of my list, not only because they address real problems, but because most of them offer repeat earnings from the same customer. 

If you sell Amazon products, you will only make 4% for each sale. What this means is that you need to serve your content to millions of people to get more sales. With recurring affiliate commission, you can earn from one customer for one full year every month he pays his subscription. 

Summary: Is Affiliate Marketing Profitable?

Affiliate marketing is a long journey. One common mistake that I see is that people give up too soon without giving themselves the chance. They publish blog posts for a few months and quit. 

An affiliate marketing business will only succeed if you plan it right. The best advice I can give you is to choose the niche that you understand—something that you are passionate about. Although money is your priority, it becomes less burdensome if you are working on a niche that you love. 

Lastly, focus your attention on how you can help people, not just on how you can make money off them. the money will come later. 

John Kilmerstone

I'm an Aussie living in Japan who enjoys traveling, photography, and blogging. Please visit this website and explore the wonderful world of blogging. Discover how to turn your passions and pastimes into an online business.

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