Affiliate Marketing vs. Selling Your Own Products. Which is Better?

If you want to sell products from your website or blog you will be faced with the decision of creating your own products to sell or acting as an affiliate to promote other people’s products. Both provide excellent opportunities, but there are some unique pros and cons that should be considered. In this article we’ll take a look at these pros and cons, and hopefully this can help you to decide which path is right for you.

Affiliate Marketing

With affiliate marketing you are promoting products created and sold by others. You don’t have any responsibility except to refer potential buyers to the sales page of the product, and if a visitor that you referred makes a purchase you will be paid a commission. So let’s take a look at the pros and cons of affiliate marketing.

Pros of Affiliate Marketing:

1. Requires no time to create products

One of the most significant benefits of promoting products as an affiliate is that you can start immediately. All you have to do is join the affiliate program for a particular product and add some affiliate links to your website or blog. You don’t need to invest the time to create the product yourself. Most products require a considerable amount of time and effort to create, but you can avoid that by simply promoting the products that others have already worked to create.

2. Requires no investment to create products

Not only will you not have to invest your time and effort to create the product, but you also will not have to invest any money into the product creation. Many top-selling products cost loads of money in development, but as an affiliate you are not responsible for any of that.

The big advantage here is that as an affiliate you can be profitable from your very first sale since you have no money invested into your product. If you were to create your own product and invest $10,000 into creating it, you would need to sell at least $10,000 worth of the product before you would make any profit.

3. Plenty of existing products to promote

In most industries there are plenty of existing products that you can promote as an affiliate. This gives you a lot of choice to select the products that are the best fit for you and your audience. You can be selective and choose only the best quality products with high payouts for affiliates.

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4. You don’t need to provide customer service

Another major advantage of acting as an affiliate is that once the sale is made, your responsibility is over. The product seller will be responsible for providing the customer service, not you. Depending on the type of product and the volume of sales, customer service requirements can be quite extensive.

5. High income potential

Even though you will only be receiving a percentage of the sale as an affiliate commission, the income potential is still very high. Many digital products pay affiliates 50% or more, sometimes all the way up to 100%. Affiliates that produce a high volume of sales are often paid commissions higher than what is listed by the affiliate program, and if you are referring a lot of sales you can always request a higher payout.

Another reason for the high income potential is that you can promote multiple products as an affiliate, and since you don’t have to invest time or money into creating products you are not limited.

6. Flexibility to promote a different product

As an affiliate marketer you’ll have very little invested into the specific products that you promote. That means if a better option arises you can start promoting a new product any time you want. Maybe a competitor is offering you a higher percentage to promote their product instead. Maybe you’ve found a better quality product that would would rather promote. Or maybe the product you’re promoting just isn’t converting well and you want to try a competing product instead. Whatever the reason, as an affiliate you have the flexibility to do this.

7. You can promote products that are complimentary to your own products

Affiliate marketing can also be combined with selling your own products, you don’t necessarily have to choose one or the other. If you sell a product of your own, most likely there will be some complementary products that you could promote as an affiliate. These products wouldn’t compete with your own products, but they would target the same audience and would likely appeal to your customers as well. In this scenario affiliate marketing could provide an additional stream of revenue.

8. Doesn’t require a huge audience

You don’t need to have a massive amount of traffic to your website or blog to have some success with affiliate marketing. If you were investing a lot of time and money into creating your own product you would want to be sure that you could reach a large enough audience (either through your own site, through your mailing list, through advertising, or through affiliates) to make enough sales to recover your investment and make a healthy profit. As an affiliate this really isn’t an issue. If you have a low-traffic website and you only make a few affiliate sales per month, you’ll still make some money and it may be worth your time.

9. Can be helpful for testing demand

You can also use affiliate products to help you test the demand of your audience. This can be helpful if you’re considering creating your own product, but you don’t want to invest your time into something that your audience won’t buy. Rather than investing time and money to create the product, you could promote a comparable affiliate product and see how well it sells.

If you don’t want to promote a product that is extremely similar to the product that you’d like to sell, you can also use this approach to test formats. For example, should you put your product in the form of an e-book, a video course, a webinar, or a membership website? You could try promoting some different types of products as an affiliate and see what gets the most interest from your audience.

Cons of Affiliate Marketing:

1. Lack of control

As an affiliate there is a lot that will be out of your control. You have no control over the product’s price, promotions, details and features, updates, or the sales page. Not having the responsibility for these things is part of what makes it fast and easy to get started as an affiliate, but not having control over the details makes you somewhat powerless.

2. You’re dependent on others to close the sale

As an affiliate you will refer visitors to the sales page or the product page where they can make a purchase. You can pre-sell by pointing out the best features of the product or telling what you love about the product, but once they leave your site you will be dependent on someone else to close the sale. If the sales page does a poor job of converting you will be missing out on possible commissions.

3. You are building a customer list for the seller

Another significant disadvantage of affiliate marketing is that you are helping someone else to build a customer list that they can continue to market to in the future. Making a sale to an existing customer is much easier than making a sale to a first time customer, so customer that you send may be extremely valuable.

Earlier I mentioned that some affiliate products pay a commission as high as 100%. Typically, the reason for a 100% payout would be that the seller is mostly interested in building a list of buyers that can produce even more revenue in the future through additional sales.

4. Poor customer support can hurt you

While it’s great that you’re not responsible to provide customer service as an affiliate, if the product seller is doing a poor job with customer service it can hurt you. If the customer is unsatisfied and requests a refund, you will lose that commission.

Even though you are not the one selling the product, your reputation is still on the line as an affiliate. If you promote a product and the customer has a poor experience it could negatively impact the trust that they have for your future recommendations and promotions.

5. Can be difficult to choose the right product to promote

With so many affiliate programs out there, it can sometimes be difficult to decide which products to promote. You may have to decide between several different direct competitors, or between several different types of products. Choosing the right product is essential to your success as an affiliate.

6. Competition with other affiliates

If you are promoting a popular product as an affiliate, you are essentially in competition with all of the other affiliates out there promoting the same product. The product seller will be making the sale regardless of which affiliate makes the referral and gets the commission, but only the affiliate credit with the referral will be paid for the sale.

Selling Your Own Products

Another option is to create and sell your own products. This is, of course, a lot more work, but it does give you more control. Here is a look at the pros and cons.

Pros of Selling Your Own Products:

1. You will be building your own customer list of buyers

Your customer list is extremely valuable. Those people who have bought from you in the past are much more likely to buy from you in the future. By selling your own products you are the one building the customer list, and if you have affiliates they are even helping you to build your customer list. You may be selling a low cost product and adding a lot of customers to your list. In the future you may add a higher-priced product and you can promote that product to your established list of people that have already bought from you.

2. You have full control

When you are the one creating and selling the product you will have all the control over details like pricing, promotions, details and features, updates, and the sales page. You can make decisions based on what will benefit you and the buyers of the product.

3. You keep 100% of the revenue

Instead of only getting paid a percentage of the sale, like you would be paid as an affiliate, you will keep 100% of the revenue when you are selling your own product. Of course, if you choose to have affiliates you will have to pay their commission out of the revenue, but it’s up to you whether you want to offer an affiliate program or not.

4. High income potential

While affiliate marketing offers a high income potential, so does selling your own products. In fact, selling your own products can be even more lucrative than being a good affiliate marketer, especially if you have a number of good affiliates promoting your product. As you build your customer list and offer more products, your income can grow even higher.

5. Affiliates can exponentially extend your reach

While you may want to sell your own products in order to monetize the existing audience that you have at your own website or blog, you can significantly increase your reach and exposure through an affiliate program. Even if you have virtually no existing audience of your own, it’s possible to still make money with product sales if you can get some top affiliates to promote your product. A successful affiliate program is often what makes a good product a top-selling product.

6. Can help to build your reputation as an expert

Creating and selling your own products can also be helpful for establishing your reputation in the industry. Anyone can promote a product as an affiliate, but not anyone can create a great product. If you want to be seen as an expert or authority in your industry, consider creating a product that will help you to earn that reputation. Once you’ve earned the reputation as an expert, selling products becomes even easier.

Cons of Selling Your Own Products:

1. Time and money are needed to create the product

One of the biggest cons of creating your own products is the amount of time, effort, and money needed to create the product. In order to create a great product you will need to invest plenty of time, and probably some money as well. Unlike affiliate marketing, you can’t get started quickly.

2. Customer service can be a major commitment

When you are selling a product you will be responsible for providing customer service. The type and amount of service will vary depending on the type of product that you’re selling, but every product will require some level of customer service. This could include things like buyers needing help with downloading or installing a product, questions about payment, and refund requests.

Simple products like e-books tend to require a small amount of customer service, but other products like software and WordPress plugins tend to require much more customer service. Consider the amount of service likely to be needed before deciding if you want to sell your own products, and also factor the customer service needs into your pricing.

3. You’ll be responsible for optimizing and tweaking the sales page

Having control over the products that you sell is a great thing, but it also means that more responsibility will be on you. As an affiliate you just make the referral and it is someone else’s job to close the sale. When you’re selling your own products you will need to be able to create a sales page (or hire someone who can do it for you) that will close the sale.

4. You’ll need some expertise

Promoting products as an affiliate does not require an expertise on the subject, but creating and selling your own products does require expertise. In order to create a great product you will need to know the subject very well, and you’ll also need to know and understand the people who will be buying your product.

5. No guarantee of sales or profit

While there is also no guarantee that you will be making sales as an affiliate, the difference is the investment. As an affiliate you have no need to invest time or money into the development of the product, but when you’re creating your own product you’ll have a lot invested.

You may have invested several months of work into the creation of a product, and if that is the case you will need to make enough sales to justify dedicating that much time to the product. If you don’t make enough sales it could wind up not being a good use of your time, and you could lose any money that you have invested into the development of the product.

Conclusion

Both affiliate marketing and product sales are great options for monetizing a website or blog. Both bring plenty of income potential, and either can work in just about any industry or niche. Neither approach is better than the other, it just depends on your situation. And remember, it’s possible to do both.

What’s Your Preference?

Do you prefer to monetize your website or blog through affiliate marketing or by creating and selling your own products?

For further reading, please see these related articles:


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