Some would-be entrepreneurs are frightened off from affiliate campaigns because they believe there’s ‘too much’ competition in affiliate marketing. It would be easy to come to this conclusion once you figure out that (A) there is an extremely large number of affiliates practicing at any given time, and (B) nearly all of them fail. Both of these things are true, but they don’t paint an accurate picture of the level of competition in this type of marketing.
The first mistake that many people make is to compare affiliate marketing with other types of commission-only sales. We affiliates can promote as many products as we want across nearly every company and market space in all of e-commerce. Other commission-based work is almost always confined to just one company. This makes a huge difference.
Consider a car dealership, for example. There is a fairly fixed number of potential customers in the region, and a fixed capacity for the inventory that the dealership can have. With these limitations, only a small number of salespeople can be employed by the dealer and still make a good living. If the owner decides to hire every salesperson who wants to work there, then the pie of total sales has to be divided into even smaller pieces. Ultimately there’s no longer any point to working there.
That’s exactly what DOES happen with MLM companies and pyramid schemes, by the way. Because they serve only one market, that market becomes saturated while the company keeps bringing in new salespeople or recruits. The company’s revenue stops growing.
The competition in affiliate marketing does not have this type of constraint. There are tens of thousands of companies that support affiliate programs, either directly or through an affiliate network. These companies offer hundreds of thousands of products that can be marketed individually. There is no way the revenue pie could remain static for long.
Not surprisingly, the huge territory in e-commerce doesn’t have the same level of competition everywhere. Many market spaces are, in fact, full of competition, where others have almost no affiliate activity at all. Some people refer to these market spaces as “red ocean” or “blue ocean.” However, don’t make the mistake of choosing a market space only because it has very little competition. Remember that entrepreneurs succeed in hugely competitive markets all the time. All that’s required is a change of strategy. In a competitive market space, you have to differentiate yourself from other affiliates.
In the last analysis, you will be much more successful with a market space when you choose one based on how it interests you, not on how competitive it seems to be. For more information, refer to our course module on selecting a market space for your campaign.
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