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Having your business based on money received from affiliates programs is not a very smart idea. Because is not sustainable in time and the benefits are hundreds times less a real business.
So, the opportunity costs that you miss by focusing on affiliates are very high. Let me demonstrate:
Affiliate program: You deliver a sell, you get a commission. Next time, the buyer goes directly to the seller, not to you (he interacted with him, he paid to him, he received the product with his name on it, he has the client service programs, he entered in his newsletter database, etc, etc).
There is no Life Time Value for you, the affiliate (most of the times), only for the seller.
And if there are repeated purchases, let’s say, 100 times, you only get comission for the first one (most of the times)
Extra, a happy client will become a brand ambassador for the seller, (maybe less for inflatables women and other “shame products”). And, let’s say if the seller’s client brings another 5 clients of the same value as his, that means, you’ll get commission for one sale, while you’ll generate 100 + 500 = 600 sales for the seller. So, you’ll get 1 of 600 sales!
Indeed, there are domains where you’ll get affiliate commission for lifetime (like gambling industry). But there are few and most of them unreliable. Not to mention that you’ll get no brand ambassador benefits. Players will recommend the seller service to the other players, not the affiliate business.
Also, there are a lot of dropship options. Unfortunately, most of them are crooks. And is very difficult to guarantee the quality of your business if you don’t control the quality of the products, the deliver time, the services, the guarantees process, and so on.
There are some advantages on short term, but on medium and long term the best thing is to control all aspects of the business.
- Excellent business growth idea. Anyone interested?
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