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Why Should You Use Affiliate Marketing?

by Igor Shevkopyas

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With affiliate marketing you only pay for results, so there’s no cost until you have a sale.

If you are just starting your online business you likely don’t have a lot of money for advertising and most likely can’t afford to hire a sales team.

Affiliate marketing, or performance based marketing, can be as simple as an affiliate adding a text link or banner on their site pointing to yours. You give the affiliate a commission on the sales they generate or the click-through’s they send to your site.

Benefits of Affiliate Marketing

  • Low Start-Up Costs – all you need is your website and affiliate marketing software
  • No Paid Sales Force Needed – affiliates promote your offering and only get paid when there’s a sale
  • Only Pay For Results – you only pay affiliates when you have money in hand from a sale
  • Increased External Links to Your Site – affiliates promote your site for you with banners and text links
  • Improved Search Engine Ranking – as your affiliate base grows so does the number of external links pointing back to your site, which makes your site rank higher in search results

One of the advantages of affiliate marketing is also a disadvantage. As you build up your affiliates, you also increase the work required to manage them and you need to ensure you are receiving legitimate traffic. Your affiliates could be anywhere in the world so you need to have the right affiliate management software in place to keep track of your affiliates and the links and sales that they send you.

Affiliate Marketing Software

This is where affiliate marketing software can help. Be sure you don’t just select the cheapest option when looking for affiliate tracking software. The biggest question you need to ask is, “What support is available and at what cost?”

Once you’ve implemented your affiliate software and have affiliates signed on, it may not be easy to transfer those affiliates to a different affiliate management software program if you decide to switch.

There is open source affiliate marketing software, but affiliate tracking is complex and you need a reliable solution to manage click-through’s, detect fraudulent activities, and properly calculate commissions. Open source systems are also most vulnerable to be hacked.

That leaves you with two options when choosing your software:

  1. Purchase software that you run on your own hosting account
  2. Join an affiliate network

If you purchase affiliate marketing software you will likely have a one time cost and then pay extra for support through a support contract or per use. If you’re just getting started with your online business, you will have to market your affiliate offering to build up a database of affiliates to promote your offer.

By joining an affiliate network, you have instant access to their database of affiliates, but you’ll likely have a monthly fee. The affiliate network manages your payments so you only need to make one payment to the network and not multiple payments to each affiliate. A drawback of networks is your offer could be placed alongside your competition and then you need to compete on commission offered to get affiliates to promote your offering.

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