Is there a business model where you can forego product development and go straight to marketing and sales?
There is, and it’s called affiliate marketing. As an affiliate marketer, you get paid commissions on every sale you make. Better still, you don’t have to put any energy into selling unproven products. If you know how to do your research, you can build your website entirely around third-party products that have a proven track record out in the market.
This doesn’t mean that there aren’t any risk factors when it comes to growing your affiliate website business, however. Here's how to build a rock-solid business that’s also saleable:
More From Entrepreneur.com
Being aware of the risks and how to avoid them
As good as affiliate marketing may sound, you need to be aware of certain risks involved in running and building an affiliate business. Here are several important factors to keep in mind, and how to avoid them:
- The affiliate program itself. Are you working with an established company? Is it growing, and is it likely to be around for a long time to come? For instance, Amazon probably isn’t going anywhere, and would be a reliable partner over the long haul. You need to take a close look at the company that you want to partner with, and whether or not it's likely to have longevity.
- Strategy. Do you have set targets and goals for how much you want to profit from your affiliate site? It takes a bit of planning to start your affiliate business from the ground up, and sometimes you need guidance from an outside consultant to grow a profitable affiliate website.
- The product itself. Is there demand for the product, and will there continue to be demand for it? Some products are passing trends that won’t have a long shelf life. Finding and promoting “evergreen” products can help you reduce the risk of losing revenue streams.
- The terms of agreement. An affiliate website is a valuable property that can be bought and sold. If you decide to sell your business, you need to determine whether or not the terms of agreement are transferable to a new owner. If not, this will affect your valuation. Isabel Isidro, co-founder of PowerHomeBiz, also notes that commission structures may can be changed by advertisers, sometimes without notice. So, finding a reliable program should be a priority.
SEO and link-building
As with many other online businesses, SEO and link-building are key to growing an affiliate website.
Many site owners in affiliate marketing focus on keywords with high buyer intent. While that's not a bad strategy, it can present some risks. First, it’s important to have keyword diversity. Relying too heavily on one or two keywords can lead to your site being penalized by search engines. So, when you’re building links, be sure to vary the anchor text.
Second, be aware that purchased links and links from private blog networks are worth less, and could negatively affect your site over the long haul.
Additionally, you should also examine how much time and effort your ongoing SEO and link-building efforts require. Should you sell your business, this will affect your affiliate valuation. It’s also an important consideration from the perspective that it’s just one of many things you will need to oversee and manage in your business.
Optimizing site speed is important, because it can increase search traffic. There are many ways to go about achieving this goal, such as using browser caching and Smush.it image compression; and if you’re using WordPress, there are also plugins that can help you achieve this end.
Fundamentally, if you focus more on natural link-building and SEO best practices than on trying to game Google, your business will have more longevity. Recovering from penalties can be difficult, and complete recovery is typically impossible, so make sure your SEO and link-building strategy are built around a long-term game plan.
Most affiliate businesses rely heavily on content for organic search traffic and even for sales, making it one of the most vital components to your website’s success.
Here’s what you need to be aware of:
- The development of content can be costly and time-consuming. How are you going to go about creating content for your business on an ongoing basis? Will you be hiring freelancers or an agency, or will you be working on it in-house? Recognize that there are pros and cons to each.
- Your content needs to be high quality. Since content will be a significant part of your marketing and sales strategy, you need to ensure that it is of high quality. In order to attract visitors organically, your content will have to be both relevant and informative to your customers.
- A reliance on content poses a risk. Search engines are constantly updating their algorithms, and since that is the case, a reliance on content can be risky. This is all the more reason to focus on the creation of high quality content.
- Your keywords and traffic sources should be diversified. This goes hand-in-hand with what was said earlier about SEO.
As for what kind of content to create, product reviews tend to be the go-to for most affiliate marketers. Offering a balanced perspective, pointing out a product’s flaws as well as its merits and not talking up the product are a few key strategies for writing honest and transparent reviews that convert.
Serial entrepreneur (and Entrepreneur contributor) Neil Patel suggests:
- Building your email list to market directly to your prospects
- Hosting live webinars to educate your audience and make special offers
- Marketing your business with PPC advertising
Choosing a product to promote
If you want to succeed in affiliate marketing, you have to choose the right product niche to get into.
Here are several steps for finding a product that’s right for your business:
- Scan affiliate marketplaces. You can often find great products to promote, on sites like ClickBank and ShareASale.
- Look into the product’s social virality. Find out what’s getting social shares on BuzzSumo.
- Enter your keywords into YouTube. You can instantly see how many videos there are on a particular topic, which can help you validate your niche idea.
Following the above steps should help you build an ironclad business that will grow steadily, and can be sold in the future, if that’s what you choose to do.
Keep in mind that while the strategies described here are effective, they all require a long-term commitment to your business. There are no shortcuts.