Questions to know (FAQ) about Affiliate Marketing (Should watch in 2021)Questions to know (FAQ) about Affiliate Marketing (Should watch in 2021)

Affiliate Marketing understood in Vietnamese as Affiliate Marketing, this is considered one of the forms make money online (MMO) is effective and is applied by many people. With Affiliate Marketing, there will be distributors (Publishers) and Suppliers (Advertisers).

There are many articles on how to do business online and make money from Affiliate Marketing, but this is not a business model that “always brings success”. FHC will compile the most frequently asked questions so you can quickly grasp all information from “A-Z” about this field!

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I) Advantages of Affiliate Marketing?

• Reach a large number of customers

The great advantage of this model is the ability to expand the market unlimitedly. With a regular seller, you can only sell products from one company. But with Affiliate marketing, you can sell any product you like from many different companies and receive commissions from them.

Because affiliate links are posted on websites with a large number of visitors, of course the number of customers who can access the business's products is also larger. This will help increase the popularity of the product.

• Minimize the number of virtual users

A big advantage of Affiliate Marketing is to reduce the number of fake clicks. Because only when they are really interested and have a need for the product will users choose the link and learn about it. Thanks to that, businesses can more accurately reach target customers.

Now, most affiliate programs have strict terms and conditions on how leads are generated. There are also some prohibited fraudulent methods to ensure the quality of affiliate marketing programs.

Therefore, an effective affiliate marketing program requires some strict agreement between the parties. Terms and conditions should be tight, especially if the contractual agreement is to pay for traffic and not for sales purposes. The possibility of fraud in affiliate marketing is likely to occur more.

• Developing brands on a large scale

This form of marketing also helps businesses expand their brands on a large scale, through a large network of collaborators. A company can acquire a large, innovative sales team to help sell their products or services to the world.

II) Disadvantages of Affiliate Marketing

To reach, understand customers, and provide the best choices for them, businesses need to have a long-term investment strategy. And this is not easy to do in just one or two days. With Affiliate Marketing is no exception. Only with perfect investment can this marketing campaign be effective and highly profitable.

• It takes a long time investment to establish Affiliate Marketing

Despite what many “experts” and product promoters want you to believe, becoming a successful Affiliate Marketer does not happen overnight. So, if you are looking for a quick transformation into something that will bring immediate profits then Affiliate Marketing is a wrong choice. Affiliate Marketing is not a solution if you need money urgently. It is a long-term business strategy.

On average, it takes 18-36 months to start earning real income from Affiliate Marketing websites. And if you spend full time every day on this job. Building an audience, getting ranked in search engines, gaining reader trust, and finding lucrative affiliate partnerships takes some time.

So, from the beginning, most successful affiliate marketers run their own business. This can be a challenge if you already have many obligations and responsibilities, but as long as you take your website seriously every day and stick with it, you will find success online.

• Affiliate Marketing requires a lot of self-discipline

One of the other disadvantages of an Affiliate Marketing strategy is that unlike traditional jobs, there is no set agenda, routine or guidelines. The work you put in you have to do completely alone, at least when you first start. You must also be able to set your own goals and stick to them.

The only person you are responsible for is yourself.

This can be difficult, especially in the beginning when you aren't earning much income. All of this combined with the countless distractions that come with working from home and it can be very difficult for most people to stay motivated. Truth be told, working from home isn't always a no-brainer. If you are not a motivated person, Affiliate Marketing may not be the best career path. However, if you have a lot of discipline and can focus on long-term goals, you will thrive.

• You can become a bad Affiliate Marketer

In addition to the challenges you will face with the Affiliate Marketing lifestyle, there are also some disadvantages in the industry of affiliate marketing. First is Not every affiliate partner will be a good partner. Sometimes your affiliate partner will decide not to pay you for your work or may even change leadership or go out of business.

For example: I have cooperated with Chewy.com to sell dog food products, but they discontinued their affiliate program. Unfortunately, I have also had experience of not being paid correctly, or even incorrectly in some rare cases. You have to do a lot of research before becoming an affiliate because you could end up in a bad partnership.

• You have no control over pricing or commissions

One of the major disadvantages of the affiliate marketing industry is that you often cannot negotiate product prices. This also involves having very little control over commission rates, which are typically set by the company.

For example: The Amazon Associates affiliate program pays a certain percentage based on how much you sell and is non-negotiable. Although most companies offer a sliding scale where you'll earn a higher percentage if you drive more traffic, even if you consistently send them great leads, you'll probably never be able to negotiate for more money for your work. This can cause discomfort, especially in long-term affiliate partnerships.

• There's a lot of competition

Even if you have found a great affiliate partner, you may become very overwhelmed with the number of products available to offer customers, and finding an ethical company that produces high-quality products may be more difficult than initially thought.

Many people who work with larger affiliates like Amazon or Target, find that it actually takes too much effort on their part.

The first tendency is to always sell the items that offer the most commission, but many times those items are unrelated to the seller's interests or expertise. So many people have decided to create a catalog, sometimes there will be thousands of items available to advertise and trying to decide which one their readers will find most appealing can be quite difficult. The funny thing is that although this is one of the disadvantages of affiliate marketing, having a variety of products to choose from can also give you a market advantage. You just have to do a lot of research and really understand your readers.

• Not much support

As said before, this is truly a career for the self-made. If you're stumped by something or encounter a technical problem you don't understand, you often have to figure it out on your own. Affiliate marketing can be a lonely job.

III) Concepts:

This is also the part that many people working in affiliate marketing are interested in. FHC will summarize all the most common concepts in this field.

1) What is Publisher? What is a Merchant?

Publishers are online advertisers/sellers, they can be individuals or organizations, publishers, marketers, KOLs… or they are simply people who make money online. Their mission is to share affiliate marketing links for as many people as possible to click on and convert to another action. When meeting the supplier's requirements, the Publisher will receive a percentage of the commission.

What is a Merchant? Merchant is a supplier who wants to promote products and sell products to many customers. They will bring their products/services to Publisher to promote and pay commission to Publisher.

2) What is CPO?

CPO stands for Cost Per Order, this is one form of affiliate marketing. CPO campaigns will normally require users to fill in personal information such as name, email, phone number to place an order or register for consultation, then the Publisher will receive a commission.

For suppliers, you will receive user data when users provide information to make purchases. CPO campaigns often have quite high commissions and are of interest to many Publishers.

3) Advertisers (Publisher/Merchant)

Also known as vendors hay merchants, are people who have products, they create products and want to promote products in the form of affiliate marketing, they will need affiliates to promote sales.

Often they will work through a network to simplify the affiliate marketing process, but there are also many advertisers who have their own affiliate systems and their own management team.

4) Affiliate networks

Also known as affiliate marketplace, these are intermediary companies in the field of affiliate marketing, they are the bridge between publishers and advertisers. They work with advertisers to put products on the network, and publishers will go to the network to find products to promote easily.

Regarding payment, the network will collect money from the advertiser and then pay it to the affiliate. Affiliate networks all have professional software to support this work to ensure data control, traffic statistics, payment assurance and fraud handling,…

5) Affiliate link

When you register as an affiliate directly or through a network, and promote a certain product, you are given your own unique link, This is called an affiliate link, when customers click on your link and perform actions such as purchasing, filling out forms, registering, surveying, etc. depending on the request from the advertiser, this action will be counted for you and bring you a commission.

For example: Advertiser requires that when a customer buys a product, you will receive a commission. The customer must buy the product through your affiliate link for you to receive the commission. Many affiliate programs only require customers to fill out a form through your link and you will receive a commission (CPA networks).

6) Affiliate ID

Some affiliate programs have the function that when you register an affiliate account, your account has a corresponding ID (sequence of numbers or characters), and you can create an affiliate link for any product by attaching this ID code to that link based on the instructions of the affiliate program.

This means you can arbitrarily bring customers to any product page just by adding the affiliate ID code to the link of that page and promoting it.

7) Affiliate Manager

Many advertising companies have employees who specialize in supporting affiliates in terms of promotion, product information, payment issues, consulting, and answering questions about being an affiliate for that company. These people are called Affiliate Managers.

Affiliate managers will help you with many things, for example providing a list of potential keywords that the company team has researched, suggesting to you forms of marketing that can bring high profits based on statistics, suggesting to you some effective marketing tools,…

8) Commission

You will receive a commission when a customer takes action through your affiliate link. This commission will vary with different affiliate programs, and can be calculated by percentage or specific amount.

The commission of digital products will be higher than that of physical products, because digital products will not cost much to make the product, mainly based on intelligence, making one product and can be sold to many people, while the raw materials to make physical products will be much higher because to sell to many people, that many products must be made.

Commissions when promoting affiliate products can range from a few thousand, tens of thousands, up to several hundred, even several million for each customer conversion.

When you look for a product to promote a product, you will see the specific commission level they offer. Let's take an example at Accesstrade Network (an affiliate network operating very professionally in Vietnam):

9) Physical Product

As physical products, they are products used in real life, for example air conditioners, clothes, TVs, bed sheets, wardrobes, lawn mowers, cutlery, kitchen utensils, etc. As mentioned above, commissions on physical products are usually very low, fluctuating around 3% to 10% of the product's price.

However, the purchasing power of physical products is huge and year-round, so although the commission is low, it compensates in quantity and you can bring in year-round income.

10) Digital Product

Being a digital product means that the product can be used on a computer to serve many different purposes, mainly studying, business, computers,…for example Online courses, software, tools to support online sales, internet marketing, ebooks to learn English, learn to make money online, etc.

These products are created once but can be sold to many customers. Because of this nature, the commission for digital products will be extremely high, often over 30%, a lot over 50%, there are even many products with commissions up to 100%.

11) Promote Method

These are forms of product promotion. Although promoting affiliate marketing products is promoting products for others to get commissions, you still have to be as dedicated as promoting your own products, because it has the potential to bring you a lot of money.

So there are many different ways to promote, depending on the nature of the product you make. For example, physical products have low commissions, so you have to choose forms that cost less (The best option is SEO), as for digital products with high commissions, you can promote them in many different forms, you can pay to run ads to get customers, as long as you make a profit.

12) Payment Method

The payment method by which the affiliate program or network will pay you. Including where to pay, when is the payment time? Foreign networks will often pay you via Payoneer or Paypal, and can send a check to your home, but it's a bit inconvenient.

13) Landing Pages/ Sale Pages

As a sales page, all affiliate links go here. This means that when a customer clicks on your affiliate link or another affiliate link, the affiliate link directs the customer to the sales page. Some companies use A/B testing for the sales page, so maybe at one time the customer clicks on your affiliate link to a sales page, and at another time clicks back to another sales page.

14) Coupon

As a discount code, many advertisers provide discount codes for affiliates so that affiliates can promote sales. Depending on the affiliate program, the discount code can also be attached to your affiliate link, which means you will be able to create a separate link for this discount code, when a customer clicks on your affiliate link, the discount code will be automatically accepted and the price will be automatically reduced. Or maybe the discount code will be separate. When promoting the product, you tell customers to enter the discount code at checkout to receive a xx% discount or a specific amount of discount.

15) Link cloaking

Affiliate links often look very messy and unprofessional, because they are separate links that perform the role of control and measurement. So if you want your affiliate link to be shorter and more professional, you should use a method of shortening the link according to your domain name, this method is called link cloaker.

For example: https://www.chantroituonglai.com/obsbc0 is an affiliate link that has been cloaked with FHC's own domain.

However, if you work in any affiliate program, carefully read the affiliate terms there, because some large affiliate programs (for example Amazon), will not allow you to shorten links, because so they can check and measure which page your customers are coming from.

16) Cookie

Is a file created by affiliate programs to store customers' web browsing information. For example, if a customer clicks on your affiliate link, the browser will save a cookie, and the time the cookie is saved depends on that affiliate program.

For example, if the cookie is saved for 30 days, if that customer does not buy immediately, but within 30 days they go to the right computer and the same browser to buy the product, the commission will still be calculated for you (but make sure not to click on the affiliate link of another affiliate). There are many affiliate programs that have cookies for life to bring maximum benefits to the affiliate.

17) Last click

Today's affiliate programs are all implemented using the last click mechanism. This means that a customer clicks on person A's affiliate link first, but does not make a purchase. After a few days, they click on person B's affiliate link again. This time they buy, the commission will be calculated for person B, that is, calculated for the affiliate link that the customer clicked last. The new cookie will be overwritten with the old cookie.

18) CPA (Cost Per Action)

It is a form of affiliate marketing where the affiliate program will pay you a commission when a customer performs an action through your affiliate link, this action can be a purchase, filling out a form, registering, completing a survey,…

Depending on the level of the action, the commission can be high or low, for example, filling out a form (CPL) is a very simple task, and conversion can happen easily so the commission will be low, while purchasing (PPS) is a more difficult thing to happen so the commission will be high.

19) Pay Per Sale (PPS)

It is an affiliate marketing program that will pay you a commission when a customer makes a purchase through your affiliate. The customer must make a successful payment and the payment is authenticated for the commission to be charged to you.

20) Cost Per Lead (CPL)

It is an affiliate marketing program that will pay you a commission when customers fill in personal information through your affiliate marketing. The information customers fill in is usually email, name, address, phone number, etc. Companies providing products and services often need this information to market to customers. The information will be verified to be valid before the commission will be calculated for you.

21) Earn Per Click (EPC)

It is an index that most affiliate programs compile and display for you. It will calculate how much money you earn on average with each customer click (can be viewed for each product, or the entire affiliate marketing process).

22) Conversion Rate

It is the conversion rate, calculated in % units, for example, if 100 customers click on your affiliate link, but only 15 customers complete the action and bring you a commission, the conversion rate is 15%.

Note that in this case, I'm talking about conversion rate in the field of affiliate marketing and it starts from the moment the customer clicks on your affiliate link, not the overall conversion rate during the process of making your website.

23) Advertising Network (Ads network)

These are companies that provide advertising networks. When you do affiliate marketing, you also need to promote products in many ways and for some products with high commissions, in addition to finding free customers, you need to find suitable advertising to run ads that bring in higher revenue.

There are two largest advertising networks at the moment: Google Adwords and Facebook Ads. Advantages and disadvantages as well as basic comparison of these two networks at this article.

24) Search Network

It is a form of advertising of Advertising Networks, which means that when customers search for something, your ad will be displayed along with the search results that customers see. Ads networks often make ads more prominent than regular search results so that customers are more likely to click on the ads.

For example, when I type “Buy washing machine” into Google, up to 1 first result is an advertisement from Google Adword's Search Network. These ads will be distinguished from search results by a yellow box or the word ADS/Ad (advertisement). These ads can represent a brand or be one Landing Page/Sale page of an Affiliate marketer.

25) Display Network

It is a form of advertising from Advertising Networks, which means your ads will be displayed to users on websites, applications, etc. that users are using with the permission of the service provider and according to your settings. Popular display ads are Facebook Ads and Google Display Network (GDN)

Every day when you surf Facebook you will see ads with the word Sponsored, these are Display Network ads from Facebook Ads.

26) Bid

Is the bid price in the field of advertising, is the maximum amount you can spend for 1 click or for 1000 impressions, 2 common bid types are CPC and CPM.

+ Bid by Cost Per Click (CPC) : The amount you have to pay for 1 click from a customer when running an ad.

+ Bid by Cost Per Impression (CPM) : Also known as Cost per thousand impressions, is the amount you have to pay for 1000 ad impressions

27) SEO (search engine optimization)

Optimizing your website accordingly and being friendly to both users and search engines is very important. It helps your website rank well when users search for the corresponding keywords.

SEO is a long process that you have to learn and practice every day if you want to make money with affiliate marketing. Whether you have a large or small budget, you still have to use SEO because affiliate marketing revenue coming from free visits from Google is huge, you cannot ignore it.

SEO knowledge is very broad, with many different factors, but the factor Google values most is the quality of your website content, so the first job you need to learn in SEO is to create high-value content for users.

28) Content Marketing

As a form of marketing that focuses on content, when customers read the content you write and find it interesting and reasonable, their purchase rate will be higher. Doing content marketing is like building customer trust with your words.

If you have better and better content than your competitors, even if you start later, you still have many advantages, for example, Google will evaluate your website higher thanks to the customer's behavior on your website and you gradually surpass your competitors, the chance of customers trusting and buying through you is also higher and you earn more money,…

29) Hosting

To make a website, you need a place to store data. Hosting is a data storage space, it stores your content, images, and database while making a website.

There are many different hosting providers, some free, some paid, but you get what you pay for. If you are determined to do affiliate marketing seriously, you should invest in a paid hosting or get advice from units specializing in designing and building websites, IT infrastructure for stores and businesses.

30) Domain

As a domain name, or an address to your website, it will be connected to the hosting so that when the user types your domain name into the browser, it will automatically display the content pre-configured by you on the hosting.

The domain that is commonly and widely used and carries the highest prestige and trust is the .COM domain, followed by the .NET domain and the .ORG domain, however I still recommend that you choose the .COM domain which is better.

Choosing a domain is not “doing it for the sake of it”, but you should also pay attention to this if you want long-term development, you can read the article. Instructions for choosing a domain for website development to know how to choose a domain.

CONCLUSION: What can we do?

Now I know this article focuses on the disadvantages of affiliate marketing, but I wanted to include some positives. Affiliate marketing is actually a great way to start a company without a large investment. You can make a good income if you work hard and make smart choices. Best of all, you'll finally be able to free yourself from the rat race and truly pursue a career in a field you're passionate about. 

So if you are a self-starter who can patiently build your business and know the obstacles you will face in the industry then you will be successful in this job because Opportunities and challenges of Affiliate Marketing is still a mystery.

I wish when I first started affiliate marketing someone would have talked to me about the disadvantages of affiliate marketing so I would have a better understanding of what I was doing. So don't let the disadvantages of affiliate marketing discourage you, instead use them to motivate you to avoid some of the pitfalls of the industry. In addition, you should learn more Great affiliate marketing tips to develop it in a sustainable way.

– FHC team