Affiliate Marketing – Can You Make A Lot Of Money?

I’ve been looking into online affiliate marketing recently. For the uninitiated, this means earning commission for promoting other people’s products. A common form of the system works like this:

1. You perform market research in various “micro-niches” (e.g., miniature radio controlled helicopters, wedding cakes etc) by analysing what people are searching for online (various “keyword research” tools available for this).

2. You create a website (usually a blog) about this subject and drive traffic to it.

3. You monitize your website by promoting products relevant to your niche from sites which run affiliate programs such as Amazon, Commission Junction or Clickbooth. Commission levels typically range from 5%-50% but with so many training programs out there teaching you how to achieve success in affiliate marketing you have to ask – if it is that profitable then why aren’t the people teaching the courses actually doing it themselves?!

After some considerable time looking into this I have come to the conclusion that since this is a business that you can effectively start from home with very little set up cost there are inevitably a large amount of rookies and novices operating. Therefore, there will also be large number of people making very little money and the overall failure rate will be pretty high. That said, it is certainly a scalable business (especially when much of the work is outsourced) and this is evidenced by the large number of insurance, travel and utility comparison sites which are effectively affiliate marketing businesses.

As for the people teaching the courses, one of the most profitable product types to market on the internet are knowledge-based products. This is because after the one off cost of product creation you can achieve a very high gross margin on each extra unit sold (especially when the products are delivered electronically via the web!). So you can’t blame these guys for doing this. I would also add these very same people ARE doing marketing in very profitable niches – again indicating that you can make great money here.┬áIt’s just that they are certainly not going tell you what these are because they clearly have a vested interest in keeping competition low!