5 Reasons to Avoid Using Affiliates to Sell Your Products

One of the biggest challenges to selling products or services from your own website is generating targeted traffic to your site. If you rely on organic SEO, it can take months – or even years – before your website starts to rank high in Google searches. However, buying online ads is costly. Therefore, many brand owners opt to use affiliates to promote and sell their products for them. While using affiliates might seem like an easy, affordable way to boost your online sales, doing so often comes with some unintended consequences.

1. Difficult to Recruit Good Affiliates

Finding good affiliates who will put in the time and effort to successfully promote and sell your products is hard. That’s because many affiliate marketers aren’t willing to spend the time and effort it takes to generate targeted traffic to your site. Therefore, you likely won’t get any sales from most affiliates that you recruit unless you offer a big sales commission to them. For example, most internet marketers won’t consider promoting a product or service for anything less than a 25% commission. However, to recruit the very best affiliates, you will likely have to offer a 50 – 75% commission.

2. Steep Commissions

The problem with paying big commissions to recruit the best internet marketers is that it takes a big bite out of your profits. Think about it: you invest the time and money to either create a product to sell, or buy inventory to sell. Then you have to hand over most of your profits if your products do sell. Therefore, before you recruit affiliates to promote your products, calculate how much it will actually cost you.

3. Bad Affiliates Hurt Your Brand

Your brand’s most valuable asset isn’t the products or services that you sell. Instead, it’s goodwill: how your customers and prospective customers view your brand. Unfortunately, many affiliates only care about making money, not boosting your brand’s goodwill. Therefore they will often use aggressive online sales tactics – like spam – to promote your products. If online consumers are getting spammed by messages promoting your brand, it will make you look bad to them.

4. Unscrupulous Affiliates Can Rip You Off

Losing brand value isn’t the only thing that bad affiliate marketers can do to hurt you. They can also indirectly steal from you. For example, it’s quite common for unscrupulous affiliates to purchase your products using stolen PayPal accounts. Unbeknownst to you, you assume that the affiliate just made a sale. Therefore, you pay them their commission. Later, the rightful PayPal account owner realizes that their account has been used to make a fraudulent purchase. They file a claim with PayPal to get their money back. Then, PayPal forces you to refund the money. Unfortunately, you are still out of the commission that you paid to the unscrupulous affiliate marketer.

5. Your Payment Processor Can Dump You

Payment processors like PayPal and Stripe get suspicious when a large number of your customers start requesting refunds – also known as chargebacks. Let’s say you make 100 sales, but 10 of your customers request refunds. Your chargeback rate would be 10%. Payment processors don’t like issuing refunds because they have to refund their transaction fees. Also, a high chargeback rate makes you a high-risk seller to them. Oftentimes, PayPal and Stripe will drop you if you are considered a high-risk seller. Unfortunately, if you no longer have a payment processor, then you no longer have a way to make sales online (because you won’t have a way to collect payments from online customers).

In short, before you start recruiting an army of affiliate marketers to promote and sell your products or services, you need to figure out whether the costs of paying commissions will be worth it. For example, if you have to pay most of your profits in commissions to affiliates, then your online business won’t really be that profitable. Remember that bad affiliates can not only hurt your brand, but steal from you by making fraudulent sales. If you end up with too many fraudulent sales, your payment processors can drop you for being a high-risk seller.

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