Affiliate sales account for over one billion dollars in revenue last year, according to the folk at Marketing Sherpa, so why on Earth would I suggest that maybe, just maybe, affiliate programs aren’t a smart basis for a sustainable online business?
In a word: differentiators. Successful businesses in the long term have “sustainable differentiators” so that they cannot only compete effectively today, but also in the long term. If you’re selling the exact same product for the exact same price as dozens or hundreds of other sites, how the heck can you possibly differentiate?
And if you’re not convinced that differentiation is important, ask yourself why you go to the gas station you frequent, the supermarket you prefer, and the clothing store / sporting goods store you visit with frequency?
Now what I’m not saying is that the only way you can differentiate is through price. That’s commoditization and while I co-authored a popular business book on the subject (see Let Go To Grow at Amazon.com) and if everything ends up being a price comparison then we have much bigger business problems.
Instead, I ask you to consider what really makes for a truly successful business, and how much of that is the ability to be flexible on inventory and pricing? And how does that fit into a typical affiliate marketing relationship?
Dave Taylor is the author of the popular Ask Dave Taylor Tech Support blog, and on his other weblog has a considerably longer essay on this issue of affiliate programs too: Maybe affiliate marketing isn’t such a good idea after all?
[tags]affiliate marketing,dave taylor,affiliate,affiliate sales,building your business,let go to grow[/tags]