ch18 Why is affiliate marketing a lucrative business model

 

''Why is affiliate marketing a lucrative business model''

 

Running an affiliate marketing website is an increasingly popular way to make money online. It is a desirable business strategy, as it can generate large returns with a small initial investment. 

So why do so many people want to get into affiliate marketing? Let’s look at some of the top reasons. 

Low acquisition cost

Affiliate marketing is a lucrative business concept for people looking to start a side business or earn an extra income due to its low initial cost. 

If you have the skills and knowledge to create an affiliate marketing website yourself and write the initial content it needs to get off the ground, it will cost nothing more than your time and initial setup fees for hosting and a domain. 

Even if you choose to buy an established site to speed up success, the likelihood is your ROI will quickly exceed the cost of acquiring the site. 

No shipping or inventory required

Unlike e-commerce models, you don’t have to worry about inventory or shipping as an affiliate marketer. Because the sponsoring retailer or business handles these tasks. As a result, you can focus solely on promoting the goods and services of your affiliate partner.

You can earn income reasonably quickly

Although you may not earn six figures straight off the mark (which is definitely achievable over time), you can earn a decent income or at least enough to cover the costs of running your site within a matter of months. 

In January 2023, I started an affiliate website on an aged domain that is now (just) generating four figures in affiliate commissions per month. Although the site is only just getting off the ground, commissions are steadily increasing (along with traffic). 

Granted, this site has a high-paying private affiliate at $80–$150 commission per sale (higher than most affiliate programs) in a specific but popular niche (low traffic with high conversion rates). But it shows it can be done. 

Just for comparison, I also started another affiliate site around the same time in a different niche, which is solely monetized through Amazon Associates. This is also now earning affiliate commissions but at a significantly lower amount. Still, it’s earning.

 

Flipping niche sites is also a highly profitable business model that many friends in the SEO community have their hand in. The idea is (much like flipping a house) to either build a site from scratch and sell it or buy an existing site, do some work on it, and sell it for a profit. 

Affiliate sites sell now for anywhere between 30X to 40X their monthly income. That means if you can build a quality site that earns $1,000 a month within a few months, you can sell that site for anywhere between $32,000 and $40,000. 

You can sell your site (or pick up a new one) from a reputable website marketplace like Flippa, Investors Club, or Empire Flippers. 

These sites will assess your site and do full checks on the quality of your content and backlinks. This is to ensure you get an accurate estimate for your site and that a potential buyer doesn’t buy something that may be hit by a Google penalty.