marketing, affiliate-marketingI’ve known a few “major” affiliate marketers over the years, but never had access to their books. Appears that the eBay’s average affiliate likely makes almost nothing:
The problem with affiliate marketing is that there isn’t much money in it. eBay pays about $70 million annually to its 26,000 affiliate marketers, according to court papers.
Source: How eBay Worked With The FBI To Put Its Top Affiliate Marketers In Prison
Is there money in affiliate marketing? My gut says no, but looking for a notable source that provides a bit more analysis of the industry.
Absolutely there is. I used to make decent money at it - I hadn't been doing it very long before I quit my day job to go at it full-time.
I don't do it (actively) anymore because I was relying on all of my traffic through SEO (95%+ on most of my sites was coming from Google). And I realized that I didn't like the feeling of having all of my eggs in one basket and knowing that any morning I could wake up to check my daily reports and I could have thousands more dollars than I did the previous day or I could have nothing and it was all at Google's whim. So I decided to make some changes, and rather than actively searching for other traffic sources I decided to shift gears completely and start promoting things I cared more about.
I was on track to make 6 figures my second year focusing on affiliate marketing (would have been my first full year doing it full-time if I hadn't stopped mid-year). Obviously that's not filthy rich, but if one person could do that without any special training, that's enough for me to say there's some money in it - and I know people that were way more successful with it than me.
But that certainly doesn't mean everyone that tries it makes money - there are many more who try and fail than those who succeed.
And it doesn't mean it's easy, there's a lot of fluffy sales letters floating around about how you can click a few buttons and make millions. Obviously as with ANY industry, those are a load of crock.
Pinterest seemed to think there was some money in affiliate marketing
And so do sites like ebates.com - though that's a different angle than most affiliate marketing takes.
Something else to keep in mind is that when someone says affiliate marketing, the first thing a lot of people think of is Amazon or maybe eBay. But most major retailers have a program that you can either sign up for directly through them or through affiliate networks like Commission Junction or LinkShare. There are also a lot of smaller niche products that can be promoted sometimes with a higher commission.
And affiliate marketing isn't all retail either. A lot of web services offer affiliate programs (for example I know a number of people that had popular blogs and made a fair amount of money off of HostGator as they got a significant number of requests for host recommendations).
A lot of those software services that offer affiliate programs will also offer a recurring commission rather than a one-time payment. That can be a good way to build up income overtime if you're referring people to a service they're likely to stick with.
This article has some interesting related info as well as a link to a white paper done by Forrester Research predicting affiliate marketing to become a $4.5 billion industry by 2016. (Have to put in contact info to read the actual white paper unfortunately).
EDIT:
I wanted to more directly address this comment in your question:
Appears that the eBay's average affiliate likely makes almost nothing
In a similar fashion to how you could say most startups make nothing/next to nothing, I would agree that the average affiliate makes next to nothing (across the board - let's not even limit it to eBay).
In the same way that everyone hears about a couple college dropouts starting a multi-billion dollar business in their garage and thinks it must be easy to run a successful business, all those fluffy sales letters make everyone think it must be easy to make a load of cash at affiliate marketing. Then in both cases, a large portion of those that don't have the right combination of drive and knowledge/skillsets fail because it's harder and more complicated than they expected.
So I would be willing to bet the Pareto principle applies to that 70 million from eBay (20% of the affiliates earn 80% of the commissions). And I wouldn't be surprised if the percentages are even more skewed toward the top than that.
That was an interesting article you linked to - I hadn't heard that story of the creator of Digital Point Solutions (I'm assuming that's the company behind the Digital Point forums?) getting raided by the FBI... But taking the total 70 million from one (admittedly large - but certainly not the largest) company and dividing by their total number of affiliates and realizing that the average (worthless number for this purpose) eBay affiliate earns less than 3k/yr from eBay isn't a valid reasoning to assume that there's no money there. I would bet more accurately that the vast majority make less than $100/yr and the cream of the crop make the bulk of that $70 million (or whatever is left of it after you knock off the fraudulent activity mentioned in that article).
And that's one company. There are tens of thousands of companies with affiliate marketing programs in just about whatever industry you can think of and most successful affiliate marketers have income coming in from more than one source.
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