MBA2693 Q&A Wednesday: Is Affiliate Marketing Still A Viable Business Model In 2025?

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Welcome to Q and A Wednesday here on the $100 MBA show where I answer your questions about starting, growing and scaling your business. Today's question is, is affiliate marketing still a viable business model in 2025? This is a great question because a lot of people are curious about this. People like my friends, people that have been in the space for a very long time have built empires of the money they made on affiliate marketing. People like Pat Flynn from Smart Passive Income or John from Entrepreneurs on Fire. Affiliate marketing used to be like the Go to online Business starter kit, but is it still a good move today? Let's break it down. Welcome Back to the $100 MBA Show. I'm your host Omar Zenholm where I deliver practical business lessons three times a week, Monday, Wednesday and Friday to help you start, grow and scale your business real quick. If these episodes help you in any way, hit the Follow button on this podcast app. It helps us to keep bringing you practical business insights three times a week for free. Thanks. Quick Refresher Affiliate marketing is when you promote someone else's product and earn a commission on the sale of that product. You don't need to create the product, you don't need to handle the customer service or delivering the product. You just send people through a special link that you get and get paid when they buy they that simple? Yep, it sounds simple and for a long time it was one of the fastest ways to make money online. You can blog about your products, rank on Google, run some ads even, and even just drop a link in like a YouTube video reviewing the product and commissions would roll in. I remember back in the day reading Pat Flynn's blog, Smart Passive Income, and he used to publish a monthly income report, and he used to make like $30,000 a month on affiliate commission on just one affiliate. I think it was like bluehost, a hosting company. So is the gold rush over? Have things shifted in 2025? So let's just answer this question head on. Is affiliate marketing still viable? Yes, but it's not as profitable as it used to be. And I'm gonna explain why in a moment. But right off the bat, I'm gonna say right now that I don't believe that affiliate marketing should be your number one source of revenue in your business because it's so volatile and it's just not the same as it used to be. You really work towards a certain level of income with affiliate marketing with your content, as you could in the past. So why is it not viable? Why do I not recommend it as your number one source? It could be a great supplemental income, but if you're relying it to pay the business's bills and your bills. Not a good idea. Here's why. Competition has absolutely exploded. Every niche, every software, health products, gadgets, it's saturated with affiliates. You know what I'm talking about. You've seen it all over Instagram and TikTok and YouTube. That means it's harder to stand out. It's harder to rank for keywords. It's harder to win people's trust, really. So in the old days, you know, if you wrote a pretty decent blog post with some helpful information about, you know, let's say the top 10 tools for XYZ, it was quite possible to rank on the first page of Google and just get free traffic and make some really good commissions. But now everybody, everywhere is selling something. Next, lower commissions. Big companies have realized they don't need to pay out as much as they used to to their affiliates. A good example of this is Amazon. Amazon used to give 8 to 10% on sales. Today, in many categories, it's as low as 1 to 3%. I mean, even software companies are tightening up. I remember Maybe back in 2015, software companies were giving up to 50% commission on sales. Reoccurring commission. Okay, so every time the customer would renew every month or every year, you would get that commission. Now you'd be lucky to get 20%. And sometimes it's not reoccurring. Next, ad costs are way up. A lot of affiliate marketers relied on paid ads to drive traffic so they can make affiliate sales. But ad platforms are crowded and are expensive now, and many of them do not allow for affiliate marketing because it's crowding the space. It's making it too expensive for other legitimate competitors of the product. You're trying to sell like competitive products to run ads as well. So running a profitable campaign where the commission outweighs the ad spend is way tougher than it used to be. Next, the trust. The trust factor. Audiences today are smarter. They have like a spidey sense when they feel like they're being pushed to buy something for a commission, right? They want authenticity, not a wall of affiliate links. If you don't actually use the product, people can really sniff it out instantly. And even if you do, they kind of feel like you're recommending it only because you're going to get paid. But that doesn't mean affiliate marketing is completely dead. It still works if you do it differently. First, I recommend you do affiliate marketing as a side revenue stream in your business instead of being your whole business, right? Use affiliate marketing as a way to compliment your core offer. For example, if you run an online course and you recommend software or books that genuinely help your students implement what you teach, those commissions add up without being your main hustle, right? You're going to recommend some tool for them to use so they can get the thing done. So you can make an affiliate commission on that recommendation. And you get to choose which product you want to recommend because most products have some sort of referral or affiliate program.

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Next, you need to add value. Don't just drop a link, right? Create tutorials, create deep reviews, maybe even comparisons with other competitors. A lot of affiliates are really successful when they offer bonus resources for people who use their affiliate link. So you're not selling, you're really helping people make a decision. It's also a great way to supplement high ticket products. It's hard to make real money when you're pushing $20 gadgets and making 2% commission, right? But if you're in a where the product costs a thousand dollars and you earn 30%, that's $300, suddenly the numbers start to make a little bit more sense. And finally leveraging community and trust. If you already have an audience that trusts you, whether it's a podcast, a YouTube channel, an online forum or group, a newsletter, right? Affiliate links can be a great way to be the cherry on top type of revenue. Now you want to make sure you recommend products you trust and hopefully that you have used or use. Because that way you can actually talk about it in detail and say why you recommend it. And also you're able to kind of put your name behind it. You don't want to recommend something that later on people are just like, hey, this didn't turn out to be so good, or it, you know, ruined my experience, or it cost me X, Y and Z, maybe time and money. So you want to make sure that whatever you recommend, you're happy to put your name behind it because that's basically what you're doing. You're vouching for this product. Here's the thing, affiliate marketing is absolutely fine, but you're always building on someone else's land. You don't control the product, you don't control the price, you don't control the commissions or whether the program even exists. Tomorrow they can just decide not to give you any more commissions from tomorrow on. That's totally possible and happens all the time. So the better long term move is to use affiliate marketing as training wheels while you build your own products and offers. By the way, this is exactly what Pat Flynn did with Smart Passive Income. He used to make a to most of his money on affiliate commissions. But then he said publicly that I realized that I need to diversify my income. I can't rely on affiliate commission because things are changing. So he started to create his own products and offers. If you can sell someone else's product for a 10% cut, you can sell your own product for 100% cut. By the way, the skills are the same. You got to build trust, you got to create content, you got to drive traffic. But when your product is yours, you're the creator, you keep the margins, you control the experience and you build real equity in your business, a business that you can sell one day. So back to the question. Is affiliate marketing still viable in 2025? Yes, but not as a standalone business model. The commissions are smaller, the competition is tougher, and the days of getting rich quick on affiliate links are gone. I mean, that was not really the case back in the day, but it was easier to make money with affiliate marketing definitely 10 years ago. Instead, I want you to use affiliate marketing strategically. Use it as a side income revenue stream, as a bridge while you develop your own offers. That's how you can build a business that lasts when you build your own offers, your own products, your own services, that has real value. Thanks, Steph. Who asked today's question on Q and A Wednesday? That was an awesome question. I was glad to get into it because things have changed. Before I go, I want to leave you with this. There's a lot of options out there on how to make money online. But what I'm interested in when I'm building a business is building a valuable asset, building something that has value in itself, that I can control, that I can sell, that I can be able to leverage and scale and work without me. And affiliate marketing is not a bad option, but it should not be the whole business. In my opinion. You should build a product or a suite of products and services that lend itself to being incredibly valuable to the marketplace, that can be able to be leveraged later on as a part of a sale of your business. So that's how people really get incredibly wealthy, is that they build a valuable vehicle that generates wealth, a business, and then it becomes such a great business that, you know, generates hundreds of thousands, if not millions of dollars every single year. And that has value. People want a business like that, and you could sell that business for, you know, multiples of the revenue that you're making. And a lot of people don't ever have to work after that, you know, and there's many people that do this over and over. They build businesses, they grow them, they create value and sell it. They do it several times and just pile up the millions in their bank. So this is what the pros do. And you could do it, too, if you found today's episode helpful and you want more practical business lessons to help you start, grow and scale your business. The best thing you could do is subscribe to this podcast, hit subscribe or follow on your favorite podcast app, the one that you're using right now, whether it's Apple or Spotify or ever you listen to podcasts by hitting subscribe, you get our next episode automatically, and it's the best way to support the show. It's absolutely free and it's a way for you to commit to growing your business. And now that you subscribed, I'll check you in the next episode.

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