So little risk, so much potentialAffiliate marketing is a low risk, high potential business. This is one of the reasons that it is becoming so popular. Many new entrepreneurs start their businesses off with affiliate programs. Here are some of the reasons why this business model is considered low risk:
1. Low start up costs: Affiliate programs are usually free to join. Tools and ad copy come with the package and the only expense incurred will be the cost of promotion. Of course you will be starting your own website and newsletter, but this will not really cost too much. If you start with a simple website template you can actually do it yourself. There are no office expenses or employee overheads.
2. No inventory: Of course you will not have to buy product, except for personal use. This saves a lot of money and means you will not have the risk of having to keep unsold inventory.
3. No Employees: as mentioned there are no employees to pay or hassle with. The only time you will have to pay people to work for you is when you outsource or hire others for a project. You can do this fairly cheaply when you use freelancers.
4. Very Little Customer support: One of the best parts about affiliate marketing is the fact that there is little or no customer service needed. Usually your sponsor as the actual seller will handle all this.
Of course Affiliate marketing has a lot of potential. This will depend on exactly how hard you wish to work your business. In fact once you have done your research into each and every promotion you do, you will be seeing good returns on your advertising dollar. Even with affiliate marketing you cannot expect too much for the first three months but after that it will increase as you expend promotions and gather tools, so that you will realize a growing return on investment.