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 Vol. 1 issue #4 Mar 21, 2002


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The Pros and Cons of Earning Money with Affiliate Programs
Copyright 2002, Angela Wu


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"I don't have a product. I don't even have a product IDEA!"

This is one of the most common concerns I hear from people
interested in starting a business on the Internet.  It's
obvious that you need to sell either a product or a service
in order to make money.

That's where affiliate programs come in.  Many beginners
start online by joining affiliate programs; you sell
another company's product or service for a commission. 
Affiliate programs are available in practically every
market you can think of.  If you want to see what I mean,
visit http://www.associate-it.com/ to view an extensive
list of affiliate programs.

Affiliate programs are a convenient way for people to
get a 'jump-start' online without the time, effort, and
money necessary to create a product of their own.  However,
they're not a 'perfect' solution.  Here's a list of the
positives and negatives to building an affiliate business...

Negatives to affiliate programs:

 - You have to share the profits.  You earn a commission,
   which typically ranges from a measly 5% to a generous
   50%.  The rest of the money goes into the company's

 - You pay all marketing costs.  The company is providing
   you with a product or service to sell; it's your job to
   actually make the sales.  This is no easy task, unless
   you're a natural-born marketer!  You can choose to use
   only free methods of advertising... but these methods
   aren't necessarily the most effective.  Marketing can
   get expensive -- and you pay for your own marketing,
   regardless of whether or not it results in any sales. 

 - You can get 'sidelined'.  Building an affiliate business
   is hard work; if you intend to eventually market a
   product of your own, you may find that the affiliate
   program is taking up too much of your time.

 - You're at the mercy of the company.  You rely on them to
   pay you on time - or at all.  If they decide to change
   commission rates (usually to lower them!), you typically
   have no say, except to cancel your affiliate contract.
   And finally, if the affiliate program decides to close
   shop - well, you're simply out of luck.

Positives to affiliate programs:

 + You're free to concentrate on just one thing: marketing.
   The affiliate company handles everything else - billing,
   inventory, delivery, customer service, and all the other
   stuff that goes with the territory.  This is one reason
   why affiliate programs are so popular; they give you the
   opportunity learn how to market online without being
   overwhelmed by everything else.

 + Startup costs are lower than if you had your own product.
   There are numerous costs associated with the research,
   development, and delivery of your own product.  When
   you run an affiliate business, the only thing you're
   responsible for is marketing - and you have the option
   of using free methods only.

 + You get a 'head-start' while researching product ideas.
   Affiliate programs allow you to sell a product or service
   while you're still trying to come up with a product of
   your own.  That's not to say that they're an 'easy' way
   to riches - they're not - but you can learn how to market
   while earning an income.

 + Multiple streams of income.  A bunch of 'smaller' pay
   cheques can really add up!  It's even better if you
   already have your own product or service and just want
   to use affiliate programs to add another stream of

Many people from all walks of life make hundreds or even
thousands of dollars every month through affiliate programs
alone.  Affiliate programs aren't perfect, but they provide
a great option for those who are willing and able to put in
the necessary time and effort.

Angela is the editor of Online Business Basics, a practical
guide to building a profitable Internet business on a
beginner's budget.  Each issue is packed with valuable
tips and tools to help you to nurture your business to
success!  http://onlinebusinessbasics.com/article.html


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