Affiliate Marketing: Time & Effort Payoff Comparison

One of the most popular ways to make money with a website is with affiliate marketing. This involves promoting products or services for sell by other people or companies.

When a sale is referred, the affiliate receives a commission. Even though it is one of the most common methods used to monetize a website, there may actually be other things that site owners can do to make more money.

Affiliate Earnings & Commissions

It is important to understand a few of the basics of affiliate marketing before it can be compared to other ways of making money on a website. Typically, commissions on referred sales are paid based on a percentage of the price of the product or service sold.

For example, if you get paid a 4% commission rate on the sale of a $100 product, you’ll earn $4. Low rates like these are very common with physical products like those you’ll promote with the Amazon Associates Program.

Since earnings are based on price of a product, it is typically better to promote higher priced products to earn higher payouts. On the opposite end of the spectrum, lower priced products may offer lower earnings but will often be easier to sell. People will simply buy $10 products much more frequently than one that costs $500. Always consider which one could give you a better income despite the actual commission earned per sale.

Despite the price of what is being promoted, it will generally take multiple unique visitors to refer a sale. In some situations it may even take more than 100 visitors to refer a sale. For this reason, some sites will have daily traffic but still not earn frequent commissions. Ultimately, you’re going to need thousands of daily visitors on your website to stand a chance at decent earnings with this method.

Alternate Monetization Methods

Even though affiliate marketing can be a very profitable business for many websites, there are other ways to make money that can be even more lucrative in some situations. Other options can include selling self-made products or services or even something that doesn’t require any kind of selling, such as placing paid advertisements on your site.

Certain types of advertising that could be considered affiliate advertising, like pay per click or pay per lead, offer payment for site owners without the need to sell anything. These methods can often be better in niches that have lower priced products because the lower prices offer low commissions.

Any of the options can work, but each website must be judged on an individual basis to determine which method really offers the most money with the same amount of traffic. Taking the time to actually figure out which method is definitely the best can be well worth the effort for affiliate marketers.

Split Testing

Ultimately, there is only going to be one way to find out for sure which monetization method works the best to make the most money for your site. Sites owners should run split testing campaigns to give each potential strategy a chance to prove itself. Tests should be run for a reasonable length of time to allow for a wide variety of traffic to be evaluated. A few hundred visitors is NOT enough to give you a clear idea of performance. When you can send 5,000 or even 10,000 visitors to each option, you’ll have a much more accurate idea of which ones outperform others.

Conducting a split test is fairly simply but it can sometimes involve a lot of work. Copies are made of the entire website or individual pages of the site. Each copy uses a different method to make money. Then these site copies are run as the live website, one at a time.

Once results are obtained for a split test, it should be pretty clear what works the best. Even if the numbers are obvious, site owners need to do one more thing to validate their test results. Traffic trends and amounts need to be compared between the split testing periods. One of the most common types of trending traffic is seasonal, which I’ll talk about next.

Seasonal Traffic

Various times of the year, especially holidays, can alter the amount of traffic that a particular niche receives or the demand that is available for their products. The months leading up to Christmas will have much higher sales than the rest of the year for most niches.

Traffic levels can also fluctuate from one month to the next. As a result, these various factors should be taken into consideration before making a final decision on which money generating method will work best for a particular site.

Certain types of products have strong seasonal tendencies too. You won’t be selling many swimming pools in the middle of the winter, although tropical areas may still show interest. Likewise, snow gear and Christmas decorations aren’t going to sell that great during the summer. Sites like these will need to be aware that their income can fluctuate wildly throughout the year. Results from split tests could also be skewed depending on the season.