Affiliate marketing is a business model where one recommends a product or a service to another and earns commission for the same. We all have witnessed an example of affiliate marketing around us in one form or the other. The most common instance is when you visit a tourist destination and is looking to buy a local specialty of the place; you are pestered by a few men to visit a particular shop to buy one. If you visit that shop or buy a product from there, the man receives his share of income as a result of affiliate marketing.
The Affiliate Marketing has its own pros and cons
Pros of Affiliate Marketing
- It is easy to set up since you are only responsible for affiliation and not the creation or maintenance of the product or service. You save a lot of effort and money and can focus completely on promoting or marketing the product.
- Affiliate marketing is a low cost affair. Options like travel affiliate programs are extremely low cost but can be really profitable in the long run. Unlike the commerce delivery online that requires huge initial investment, the affiliate will just need to invest his quality time.
- Once an affiliate has got the trick for affiliate marketing, he does not need to be confined to a single merchant; he can multiply his sources of income and can work for a number of them.
Cons of Affiliate Marketing
- An affiliate has little control over the offers he receives from the merchant. Even if the other affiliates are earning a better margin, there is little that he can do. Though in some cases, there are super affiliates who consistently deliver high volume of sales, they are offered attractive deals.
- While the affiliate gets the customer and receives a commission just once, the merchant enjoys regular returns with the same customer every time he returns to him.
- Since the affiliate cannot lock in the customers he gets to the merchant, his growth prospects get limited.
- If the merchant chooses the pay on performance policy, i.e. an affiliate gets a commission only once the customer buys something; all the risks of promotion and marketing are transferred to him while the merchant enjoys the revenues.
- Since affiliate marketing is easy to set up, there is high level of competition in it. This way its advantage is also its disadvantage.
Among all the industries, travel brands are frequently using affiliate marketing to tap the customers directly. There are a number of travel affiliate programs that are designed to give an all win situation for both the affiliates as well as the customers (travelers here). While the affiliates get to earn high percentage of commission on the revenues, the travelers get an access to a number of genuine and credible reviews from other customers, and city and hotel pages apart from getting the best possible price for the hotel of their choice.