There has been a huge increase in launching affiliate websites lately. Many believe them to be a great way to start you e-commerce career. Let’s find out whether it is true and analyze the pros and cons of such a choice.
To begin with, we’ll define the difference between traditional e-commerce and affiliate websites. The first, and basically the key difference is that an e-commerce site sells products directly to its customers. On the contrary, an affiliate site refers website visitors to an e-commerce website/membership site that does the selling itself.
So, in what way can affiliate websites be better as compared to e-commerce sites?
- The greatest problem that newbies to e-commerce usually face is that their products are new and unrecognized in the market. People invest into designing a website, web hosting, creating a network of suppliers and customers; and still it can take quite a long time before they generate sales high enough to reach the profitability level. Instead, you can start promote existing products from well-known membership sites and companies, using your affiliate site. Although there are some critical thoughts as for the fragility of affiliate sites, we think that this experience will you give some to time to learn how to run business online and engage customers in case you decide to launch an online store.
- Your risks are minimal. You don’t have to invent products or services to attract customers. Being an affiliate site owner you will only have to send referrals via links or codes, meaning that you bear no responsibility for the products quality, shipment and delivery. Thus, when opting for an affiliate site, you can count for a lower start up cost.
- As for the profits, you should clearly understand that you will only get percentage of the sales made due to your referrals. Moreover, e-commerce sites will pay you only when a sale is made. So, you will have to work hard to make users visiting your partners’ sites and making purchases there.
- Finally, be ready to meet the challenges of having to rely on your vendors. You can launch the best pre-selling website ever, but if your partner fails to provide high-quality customer service, or having issues installing affiliate tracking (see our magento affiliate extension) your affiliate site is likely to get its lumps from unsatisfied and disappointed users.
With all the described pros and cons in mind, we still think that affiliate websites can be the most cost-effective and reliable projects to start an online business. And what do you think? Leave your comments below.