Affiliate Marketing in 2020. A Shrinking or Growing Opportunity?

Last Update: September 05, 2019

Whenever you start anything "new" there is a level of natural apprehension takes place. If you are new to the online business world or affiliate marketing, then you are likely questioning whether or not it works. In fact, many people think affiliate marketing is something new.

Because of these misunderstandings and unwarranted fears about the industry, I wanted to offer some clarity on the common questions, and some clarity on the industry as a whole.

But first I want to start with my story.

My Start in Affiliate Marketing and Why it Matters

For those of you that have not visited my profile to read my story, I got my start in affiliate marketing back in 2002 (see picture below, from just prior to me starting out lol). At the time, I didn't really have much experience with affiliate marketing nor did I have access to a platform like Wealthy Affiliate to inform and help me with affiliate marketing. Instead, I had to learn the fundamentals of affiliate marketing, how it worked, and the revenue model on my own.

I also had to build websites, from scratch. I had to create hyper links in HTML, and I had to learn how to use Adobe Photoshop to create my own, albeit very UGLY, website templates. It wasn't the prettiest, but I was able to fumble my way through the technical elements.

In all reality, the actual process of affiliate marketing and how it worked, wasn't that complex. The same way I teach affiliate marketing today, was the same way it worked and people were succeeding with it back then. In its simplest form, affiliate marketing is the process of connecting a "customer" with a "product", often times a product that they already know they want, or are researching.

The affiliate is the entity in between the product and customer. Nothing more complex than that. Your role as an affiliate is to inform and help & inform people, that is unchanged.

Say someone is looking for information on how to solve a problem they are having. You, as an affiliate marketer, can create content about the problem, the solution, and make a product/service recommendation that is closely relevant to (or is) the solution.

Say someone is looking to a product/service review? You, as an affiliate marketer, can provide them with insights into the very product/service, offering a comprehensive review and then either making a recommendation to purchase, or making recommendations to superior and more cost-efficient alternatives.

I could go on and on with examples, but they would all fit nicely into the ROLE of an affiliate marketer being that as a problem solver & helper.

The minute you try to make it more complex than this, is usually when you are going to go into information overload.

Has Affiliate Competition Gotten Worse Since 2002?

Some people new to affiliate marketing like to set themselves up for an "excuse" if they fail. They say there surely is too much competition these days, more people are online, more people are attempting to build business, and more people can actually create something of substance because of improvements in technology.

All of these are true, and I would not argue those.

But at the same time all of these things have happened, the marketplace for affiliate marketing has also grown.

In 2002, there weren't a lot of affiliate programs. People around me and that I told I was becoming an "affiliate marketer" certainly reacted with a blank stare as well. It wasn't nearly as prominent and if anything, the opportunity within the affiliate world was fractional as to what it is now.

But the funny thing was, I felt as though there was so much opportunity that I would never have time to take advantage of all the affiliate opportunities. That was the case, and I never did.

I moved between several industries in my first 3 years though (prior to starting Wealthy Affiliate with Carson). From the health niches, from hosting, voice over IP, and even pharmaceuticals (prior to their being so much red tape in that industry). The opportunities were everywhere, but there wasn't enough hours in the day for me to tackle them all.

It's still like this. Only you have a larger audience of buyers online now. 4 billion people. You also have over 550 MILLION products/services that you can promote as an affiliate marketer, something that continues to grow at an hourly rate. If you had told me back then about today's opportunity, I would have been blown away.

Affiliate marketing is here to stay, and there has never been a better time to get involved.

The Ingrained Function of Affiliate Marketing in OUR Lives

Affiliate marketing, whether we know it or not, has become an ingrained part of our day to day lives. Every search we do online, every purchase we make, all the social media services we are part of, and how we find out solutions to our problems are deeply connected to the affiliate marketing industry.

Affiliate marketers, are authorities of the various industries out there. They are authority bloggers, they are experts, and they are credible sources of information. They are YOU and this is exactly what our focus is with our education here at Wealthy Affiliate, to teach you how to become a presence and a long term brand in your industry.

To do this, you help people. You solve their problems. You interact and engage with them. You make product/service recommendations to them. Affiliate marketing is just one of the potential monetization methods on your website, but it is also one of the most lucrative. You can literally promote any product/service in the world to your audience, and get paid for it...often times at a ratio more than the net profit of the merchant (the owner of the affiliate program).

We go online to buy, there is likely an affiliate connected to that sale.

Affiliate Marketing is THE Focus of All Major Online Corporations.

You have likely read the doom and gloom on the news about retailers suffering. Many of the staple stores of our early childhood are going out of business. We have seen Sears, Toys R Us, Brookstone, Rockport, Nine West, Payless Shoe Company, Diesel, Gymboree, Claires, Forever 21 and MANY others file for bankruptcy in just the last few years in what some would deem as the retail apocalypse.

Below is a chart outlining some bankruptcies from the past few years.

Retail Apocolypse 2020

Reference: CBINSIGHTS

But how could this be, if they all of these companies had an online presence? They have online stores that you can shop at and buy their merchandise.

That is correct, but the problem is they haven't taken the "online first" or "online only" approach that many of the thriving retailers have taken. The successful and well run companies have been investing a great sum of money into their online divisions, and affiliate marketing.

You don't have to look further than Amazon, they are by far the biggest retailer in the world and they run strictly an online operation. They have been investing and have understood the power of affiliate marketing since their inception, and they continue to advance their Amazon Associates (affiliate program) technology, offering, and resources.

Love or hate the actual cookie and commission structure of Amazon, it is indisputable that a key reason they have been consistently growing their brand and revenue over the past 10 years is because of their affiliate program and investment in their online platform.

Look through the Affiliate Programs tab here at WA, you will find some really awesome affiliate opportunities and companies that are taking the "affiliate marketing first" approach to their online marketing. Companies can have 10,000's, and in some cases, millions of marketers promoting their products/services on a performance basis. Gone are the days of relying on an in house, salaried marketing force to sell products. That simply doesn't work online, and in the new 2020 world retail economy.

If you want to be a big fish, you invest in your affiliate program and you invest in your online retail platforms. According to a recent Awin Report, it was reported that the global annual investment is worth more than $13 BILLION annually now and this number is only continuing to grow. This is good news for affiliate marketers and is a business opportunity and model that will continue to become a more prominent fixture for many years to come.

The Idea of Opportunity Dilution


Is the opportunity fading though? I mean, it is getting more and more competitive right?

Yes, and no. The opportunity is growing, and there are more people getting involved. But MORE people doing something, doesn't mean more competition. In particular when most of them are doing it right.

You should be thankful that so many people these days are going in the direction of "funnels". This is being presented like some sort of new form of marketing, but "email marketing" (all this is) has been around for many years. It certainly is not the starting point of any business, but it can be a very important aspect of your business as you build an audience (as you can collect email addresses).

You are Building a Business. Treat it like one.

OK, so now that you can relax on the idea of affiliate marketing somehow vanishing (which there is NO CHANCE of happening) you can focus on building a business. That is what you are doing, and although affiliate marketing is likely going to be one of the core revenue models that you leverage within your online business, you are establishing yourself as a brand and authority in your niche.

If you want to succeed at a high rate and establish a long term and sustainable source of income online, you are going to need to invest your time, energy and personal resources into building an actual business. There has never been a more cost-efficient time to build a business (in particular with what you have access to here within the Wealthy Affiliate Premium membership), and there has never been more opportunity online.

The affiliate marketing space is going to continue to grow through 2020 and far beyond. We are going to remain on the bleeding edge of this industry and continue teaching you what works and provide you with all the tools, services, training, and support you need to create a thriving affiliate marketing business.

Treat your affiliate marketing ventures like a REAL business, and that is exactly what it will become.


So I want to hand over the floor to you now. First, have I put your mind at ease when it comes to the affiliate marketing space? Second, what excites you the most about the affiliate marketing industry in the year(s) ahead now that you have read this? And if you have any questions or personal insights into the affiliate marketing space, I would love to hear it.

I look forward to hearing your feedback and I can't wait to see what you all achieve in the affiliate marketing space in 2019, 2020 and beyond!

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Tich4 Premium
First off, I would like to thank you Kyle for this very insightful article. It is helpful to those of us who are new to this type of business, and I encourage you to keep up the good work that you are doing here at Wealthy Affiliate.

I for one am excited about the future of affiliate marketing. With a 250% plus annual growth in the number of people connecting to the internet, there is definitely reason for people to want to take advantage of this lucrative business.

The competition also has without a doubt grown over the years and it is only going to continue on this trend. This fact however should never be a deterring factor when chasing your dreams. I actually am all the more determined because of this, as it gives me the opportunity to become more innovative in my approach to my business. And just to add to this point, i would like encourage the WA community to never feel like they are fighting a loosing battle. You made it this far, so you can undoubtedly become a brand name in this industry.
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AlexEvans Premium
I was thinking about Kodak today, they originated the photography niche so to speak and yet filed for chapter 11 in 2012.

That was a watershed event, they were iconic yet failed to grasp the need to have that online presence.

So many companies are exploring the affiliate marketing trail as a way to create sustained growth.

The mobile-first world that we are living in will continue to drive the affiliate marketing sphere.

We all search online to find the best deal or offer, we can even make that purchase while living our daily lives, and that product will turn up at the door.

Of all the online gateways affiliate marketing is the most legitimate, and moving forward definitely an industry worthwhile being involved in.

Never tire of hearing about WA history and bylines.

Thanks for sharing that Kyle.
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Intention Premium
Thankyou Kyle. clearly affiliate marketing is here to stay yes it may well be more competitive. but with all the support we have here at WA which wasn't available just a few short years ago makes it still possible to succeed in this industry. Thank heavens we don't have to do all the behind the curtain technical stuff because most people would not be here today if it wasn't for those innovators like Kyle and Carson making it possible.
Thankyou.
Marcus
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juanavila49 Premium
You've said something very true, and it actually was my major stumbling block when I tried to think ahead when I wanted to plan success selling on line: ¿how can I build a website to my fit if I'm not a techy guy?

Affiliate Marketing is a blessing by solving that.

Thank you for pointing it out!

Juan
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Kghosh Premium
A great article. You definitely have dealt with affiliate marketing in a great detail. You made some lines on niche selection where I am still stuck. I don't know, why I cannot come out with bravity. I have to do something quick. Time cannot be wasted. I don't have any language to praise this article which has dealt with all its pros and cons and above all its acceptability in the present time. One thing is made clear that this trade needs rigorous action with strategic planning. I know that understanding is bit easier than implementing. I still don't know, how far I will be able to transform all these into reality being a fresher.
Anyhow, lot and lot of things to know and do. It will take time and that is what I have been thinking seriously.
My regards,
Kalyan.
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Rob001 Premium
Hi Kyle, thanks for your description of affiliate marketing and how you started.

The fact that so many traditional retailers are disappearing in the US and the UK tells me the online market must be growing by at least the same rate.

People are not going to stop buying products and services because the way they buy them is changing. Markets are becoming bigger and the number of potential customers is also increasing. Buying online has increased year on year by enormous amounts. It is easier to buy online, it takes less time, the retailer does all the work involved with delivery, many offer better than next day service, the customer does not need to go anywhere and can buy 24/7.

Online retailers and suppliers do not need to maintain impressive premises, shops or offices. All they need are efficient distribution centres and good logistics which need less staff. All the advances in distribution technology, stock control and automation are helping to reduce costs, provide better selling prices, and higher margins. The prospect of driverless vehicles and other advances planned for the future can only improve efficiency and increase online business all the more.

There are bound to be changes in the way affiliate marketing works but as the number of affiliate marketers increases the more the online retailers and suppliers will rely on them to recommend their products and services. Regarding future changes, the more successful of them will find ways to acquire others, which will expand their businesses more quickly and build protection for their existing positions.

As you say, I believe the affiliate market can only increase in size at the same rate as the online business increases, which makes it the biggest business opportunity and the most sensible way forward at this time.

Thanks Kyle for your article.
Best wishes, Rob
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