Affiliate marketing is not some form of passive income that one can set up and subsequently sit back to reap the benefits. It requires effort and time in order for it to be(come) beneficial. When it's being done right however, it can generate money for a long time. For a publisher as well as an advertiser there are several benefits for using affiliate marketing as a marketing tool.
Benefits for the publisher
The following points are a few benefits a publisher will have when he applies affiliate marketing onto his website:
There is no talk of an investment
For a publisher it actually costs next to nothing to start. He simply needs a website and to set one up can cost as low as €10. Because of this low startup cost, soon everything will be profit.
Little to no operating costs
Most businesses have an upkeep cost that needs to be taken into consideration on a monthly basis. As a publisher, your monthly cost is basically your website’s subscription fee for hosting. As mentioned before, aside from these costs there are no other overheads. The upkeep cost will easily be covered and all other income will be profit.
Making money 24/7
Because of the fact that a publishers' website is not a physical store or business, it has no or limited restrictions. There are no employee costs and the business is open 24/7. People may visit a publishers' website during nightly hours or just while a publisher is sleeping. This doesn't affect the business in any way, when the visit results in a lead or sale the publisher still earns commission. Keep in mind however that the site still needs to generate traffic for visitor's to see and click on the ads. This means managing and updating the website.
A global marketplace at one's feet
In relation to the previous point, because the publishers' website is not a physical store you're not dependent on customers within a certain area and walking in between 9.00 AM and 18.00 PM. The internet is the marketplace for the publisher and therefore there are no limitations and boundaries. The publisher is actively present and visible at any time, this increases his ability to sell.
Little risk involved
Because a huge investment hasn't been made by the publisher to start with affiliate marketing, there is also little to lose. Also, when a publisher decides to run a programme and the income he generates from it isn't as he expected, then he can easily quit the programme and apply for another one.
No need for a warehouse
There are no limitations in what product and how many of this product a publisher sells, since he doesn't actually have to take any stock and storage of it in consideration. In relation to this there is also no worrying about packaging and shipping. This makes a publisher very flexible and mobile in his work.
Benefits for the advertiser
From an advertisers’ perspective affiliate marketing is a favored web marketing strategy, as it can have a significant impact on increasing the amount of traffic to his website. It can be cost effective, and the advertiser can benefit from gaining links from established websites and online marketers. An affiliate marketing program is by far one of the best advertising tools available, because it provides incentives for both the publisher and the advertiser. Affiliate marketing has grown greatly over the last couple of years because more and more webmasters are beginning to realize it's the most efficient way to handle your online advertising. It's extremely flexible and provides numerous benefits that an advertiser won't get with any other ad program, they include:
Performance based marketing
Hands down the most important part of an affiliate marketing program, the advertiser will never pay for ads that don't bring successful sales, because his publishers only make money when they deliver quality traffic.
Low Entry Price
Building an affiliate program isn't going to break the advertisers’ budget starting out. Most online ads and marketing techniques have an attached starting cost, often one that is inaccessible to a startup that is looking to invest as much money as possible into providing a good website and a good product. With affiliate marketing, all an advertiser has to do is have his website up and purchase an affiliate solution; no other costs are incurred before his ads start paying off.
The ads publishers place on their sites are going to bring traffic, but only a portion of that traffic will result in sales. So the advertiser gets any additional page views for free, a bonus on top of the sales publishers are sending.