Buying a franchise has long been an attractive way to start a business. Using the brand recognition and experience of an established company can be very comforting to new business owners. However, with the prevalence of the internet, starting an online affiliate marketing business is giving franchises, and in particular home based franchises, a run for the money.
What exactly is affiliate marketing? Affiliates marketers sell products and services owned by others and are paid a commission when a sale is made. Typically, the website, shipping, customer service, and other business functions are all provided by the product owner, which makes it very easy for an individual to earn money online right away and break into the business without a big investment. Affiliates sell all types of products, from name-brand hard goods like electronics and tools, to software and other digital products.
Letâs look at some of affiliate marketingâs advantages over buying a franchise, even if you are considering a home based franchise opportunity.
First and foremost is expense. Franchises can be very expensive. The International Franchise Association (IFA) reports that 20% of franchises have up-front costs of more than $250,000 and 54% require initial investments of more than $100,000. Many well-known franchises cost well over $1 Million to start, plus real estate.
The start-up costs for an affiliate marketing business on the other hand can be very minimal. Expert coaching, tools, software, and advertising can be obtained for under $10,000, sometimes substantially less. Many people have started successful affiliate businesses for under $1000, although it normally takes longer to reach a steady level of success the less capital you have.
Once you do make the substantial investment to buy a franchise, it normally takes a long time to turn a profit. With fast food franchises for example, it takes as many as 5 years to get out of the red. However, with proper affiliate marketing coaching, you can turn a profit very quickly.
Many people invest in franchises for a sense of security over starting their own business or even buying an independent business. However, one study showed that during a four-year period franchises were almost twice as likely to go out of business as independent small businesses that had been purchased (not started) by their owners. Many affiliate marketing businesses fail as well, but the failure is not nearly as painful or expensive as with a franchise.
Finally, there is the question of freedom. Even in a home based franchise opportunity, franchisers may require you to follow their operations manuals to the letter. You are also entering a legally binding, long-term relationship â and it may be extremely hard to get a âdivorceâ. However, with an affiliate marketing business, you have all the freedom in the world. You are free to sell whatever products you choose to whomever you choose by whatever means you choose.
Greg Davis is the president of the Affiliate Wealth Club , which provides extensive personal coaching in affiliate marketing. Click here to find out how members are making upwards of $6000/day in affiliate earnings.
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