Affiliate Marketing Basics for Small Businesses: Pros and Cons

Understanding the affiliate marketing basics for small businesses need to be prioritized. Learn the advantages and drawbacks of it to improve your goal.

Affiliate Marketing
Guide Series
September 12, 2022
min read

An effective affiliate marketing program can be critical to the overall success of your business. Having said that, around 63% of businesses still believe that generating leads and traffic to their website is their most difficult challenge. You can accomplish this challenge by understanding affiliate marketing basics for brands in order to promote your business by leveraging various partner types, such as influencers or bloggers. Affiliate marketing entails an affiliate/influencer joining an affiliate program offered by a retailer in order to promote and sell their products in exchange for a commission. The affiliate promotes the brand's services or products by using its own unique link. This link then directs visitors to the brand's website. If the person then purchases something through this link, the affiliate receives a percentage of the sale.

From a business standpoint, it's a fantastic way to reach thousands of thousands of new potential customers. It's also a low-risk method for promoting your brand and generating leads because you only pay when a sale is made. Between 2017 and 2021, global interest in affiliate marketing increased by more than 300%. Customers began to use adblockers to silence online ads, and brands began to tend to be drawn toward affiliate marketing as an alternative to traditional paid advertising. Affiliate marketing, in addition to providing an interesting way to build customer trust, also provides:

  • Low starting and operating costs
  • High return on investment (ROI)
  • Low risk

In today's world, businesses use a variety of marketing strategies and channels. It can be difficult for businesses to embrace a completely new way of marketing. However, there are numerous reasons why affiliate marketing is becoming increasingly popular among brands seeking to expand. Brands that use affiliate marketing will see significant growth. Let's look at some of the advantages of using affiliate marketing.

Increasing brand awareness

Customers frequently choose to buy from retailers with whom they are familiar or have previously done business. They will frequently purchase something from a familiar brand they trust even if it costs more than the same item from a different label they haven't heard of. Affiliate marketing enables both small and large businesses to increase brand awareness by boosting customer exposure. They may have never heard of it before. You can gain exposure to new audiences for your products by collaborating with a select group of affiliates. You can also raise awareness that can spread beyond single product promotion.

As a business owner interacting with affiliate marketing, you will quickly realize that it is a highly effective way to quickly build strong brand recognition and improve your company's customer acquisition strategy. Because affiliates are mainly people spreading the brand online, often in a delightful and friendly manner, you have a group of your own brand advocates who advertise your company while also strengthening its market position and recognition. Companies use affiliate marketing to cultivate relationships with influential bloggers and influencers on social media in order to drive organic traffic to their websites. This type of marketing also assists businesses in building brand recognition through word-of-mouth adverts and quickly obtaining customer feedback on new products.

Foreign market access

Using reputable affiliate marketing networks can allow you to market your products all over the world. Affiliate marketing is a low-cost and efficient way to enter the global market. If your skilled affiliates are based abroad, they can use their knowledge of their home markets to strategically market your products in other countries. This strategy is also a low-risk way to determine whether your brand will be likely to succeed in other countries.

Increased traffic and ROI to your brand

While there are numerous potential traffic sources that could direct your website, affiliate marketing is a clear leader in this field. Your eCommerce platform will see an increase in the number of visitors to your website in addition to a high, risk-free ROI and low start-up costs. Because affiliates generate nearly 65% of traffic through blogging, this type of advertising will greatly benefit your website. Everything you need is a group of affiliates who could promote your company in exchange for a commission on purchases made as a result of their content.

More website visits equal a higher chance of successful sales, so it's a huge advantage to look forward to in your eCommerce space. By incorporating affiliate marketing into your online advertising strategies, you will not only be able to reduce your start-up costs, but you will also be able to increase your overall revenue. All because of the great ROI it provides.

According to research, businesses in the US can earn more of what they spent through their affiliate programs. Isn't that a pretty good ratio? As a result, many eCommerce brands (such as Amazon) around the world have fully embraced affiliate marketing and are giving it a shot.

Only charge for sales and results

Using traditional pay-per-click marketing, you will be charged for each lead generated. However, those leads must be converted into paying customers, and this is not guaranteed. You will only be paid when a sale is made when you use affiliate marketing. That is, you save money while also allowing your affiliate marketers to be compensated for influencing a sale. If you use affiliate marketers and they run an ineffective campaign that fails to generate sales, this will have no effect on your budget. If you run a poor PPC campaign, you will continue to pay even if you are creating low-quality leads and not attempting to make any sales.

Because affiliate marketing is based on performance rather than clicks, it is a very low-risk method of marketing. You will not be losing any of your marketing budget on generating leads that need to be nurtured and persuaded to make a purchase. Rather, you will create a direct customer base with whom you can later develop a relationship and upsell. As a result, having a full grasp of affiliate marketing basics for brands is an extremely cost-effective way to advertise your products and brand.

Low initial investment

When you own a business, you are undoubtedly concerned with your bottom line and strive to keep your operating costs as low as possible. If you don't do this, you're unlikely to succeed. To keep your company financially healthy, you must carefully consider each purchase and conduct preliminary research to ensure that your actions are cost-effective and your fixed costs are as low as possible. It is crucial to reduce getting your company involved in something extremely costly and completely unprofitable.

When you compare it to other advertising techniques, this type of performance-based marketing lets organizations generates more income from their marketing efforts by collaborating with online retailers and promoting their brands on the organization's website at a much lower cost.

Offers flexible and adaptable affiliate pricing structures

Paid media or traditional forms of advertising limit you to the pricing models that they establish. However, affiliate programs provide greater flexibility. They allow you to create affiliate commission strategies that are specific to your business/goals. As a result, you will be able to motivate your affiliate partners and build strong, better relations.

Affiliate programs give you more power than other marketing channels. If you want to increase your customer base, you can compensate affiliates for referring new customers. You can charge a higher commission to them and by integrating your program goals with those of your brand, you can ensure that your affiliate program delivers the results your company requires. In addition, when determining your commission rates, research competitor affiliate programs to develop a pricing model that is both competitive and appealing.

What are the drawbacks to affiliate marketing?

Now that we've covered the rainbows and butterflies, we believe it's time to discuss the potential drawbacks of launching an affiliate campaign for your brand. While there are fewer cons than pros, as a business owner or content creator, you should consider them and plan your affiliate marketing approach wisely to reduce the risk of these cons occurring.


First and foremost, keep in mind that, in addition to hard work and patience, there is no guarantee of success. Every business and content creator's decision is fraught with uncertainty, and you'll never be certain that something will turn out well. As a result, affiliate marketing may appear to be a difficult path to take, but once you get past the uncertainty, you'll see that it can be a fantastic way to grow your business and generate income. If it doesn't work out, the low, or sometimes non-existent, start-up costs should make up the difference for the possible future loss of time for you.

Harmed reputation

One of the most difficult challenges in allowing someone to advertise your products and services on your behalf is the possibility of a damaged reputation if something goes wrong. While it is critical to find and take full advantage of every affiliate deal available to you, you should also be responsible and cautious when selecting your affiliates. There are numerous affiliate opportunities available, but make sure you consider what is best for your potential customers rather than what is best for you. Consider what qualities your suitable affiliate marketer should possess, and always keep your target audience in mind!

You should mention what kinds of offers you're looking to take advantage of and include a link to a page where people can get more info about the promotions you're mainly interested in, all to ensure that your affiliate acquisition goes as smoothly as possible. There will be several distinct offers sent out to your email address, but be cautious of your brand image and always prioritize your company's good image and consumer confidence. This will allow you to keep your excellent rating while avoiding involvement in any controversies.

Dishonest conversions

Nothing is worse than your affiliates trying to fake leads, installs, or other actions. It is undeniably a big threat to businesses that invest in affiliate marketing. When affiliate marketers lie about their efforts, you lose money and possibly your reputation, and you end up with no positive results at all. To avoid this, you should be cautious and closely monitor your affiliate marketing results. Fortunately for you, this will not be difficult because fake conversions are uncommon and should not be taken seriously. Fake conversions will not be a threat to your business if you find trustworthy affiliates.

Patience and perseverance are required

Affiliate marketing is an excellent source of income because there is no initial investment required. Furthermore, it doesn't matter if you believe you aren't good at sales, social media, or any other marketing channels since affiliate marketing can provide you with the opportunity to learn these skills as your business grows.

However, there is a catch. We will not lie to you and claim that everything is simple. Affiliate marketing necessitates perseverance and hard work. You will need to work really hard to see the benefits, just like with any other business strategy. The results and profits will not appear magically out of anywhere. Avoiding these disadvantages is not difficult, and it is entirely up to you to ensure you choose trustworthy affiliates. Just do some thorough study before signing any deals, and you'll be fine!

How to Begin and Maintain Affiliate Partnerships

What should you do now that you've decided to start? With these affiliate marketing basics for your brand, you are in high demand as more people seek to enter the business community. This has contributed to the development of a large pool of affiliates with whom businesses can collaborate. This enables you to find the ideal partner for generating the most leads and sales.

By using a partnership platform like ours, you can avoid the time-consuming task of manually starting an affiliate program. We can take care of your affiliate marketing programs. We can get you set up on global affiliate platforms, connect and converse with affiliates on your behalf, and handpick the best affiliates for your business to ensure maximum sales. Visit our website or contact us to learn more about our affiliate marketing services!

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