Photo by Mimi Thian on Unsplash
Affiliate marketing’s allure is undeniable. Just promote products online, drive sales, and collect commission checks — an enticing business model that has minted millionaires from home offices.
However, a dark cloud looms over this picture. As more marketers flock to affiliate sites, competition swells. Some prognosticators claim affiliate marketing’s best days are behind it, that it’s now an oversaturated shell of its former self. Is this an accurate portrayal of the industry in 2023? Let’s examine the evidence.
In the 2000s, being an affiliate marketer meant enjoying a first-mover advantage. Most industries had sparse affiliate penetration, allowing standout sites to dominate traffic and sales.
A well-executed affiliate site was a license to print money. Fast forward to 2023, and the landscape looks much different.
Affiliate networks report member growth rates between 15–30% annually, swelling the ranks of marketers promoting largely the same products. This inevitably leads to declining earnings.
In a 2021 survey of top affiliates, over 60% said their earnings per click had dropped compared to the previous year. One respondent reported their EPC plummeting from $2 down to just $0.35. With more affiliates chasing each customer, individual payouts are shrinking.
No company exemplifies this saturation better than Amazon. Over 2 million websites now participate in the Amazon Associates program. In response to this overcrowding, Amazon has slashed commission rates across its most popular categories.
The latest round of cuts saw rates fall upwards of 10% in categories like furniture, wireless accessories, and Amazon Devices. These verticals once promised rich payouts, are now diminished.
Even beyond lower commissions, affiliates face other saturation headwinds. The growing use of ad blockers reduces potential traffic. Business consolidation leads to mega-affiliates cornering the most lucrative niches. It all points towards market saturation making it much harder for newcomers to gain a foothold.
However, tales of affiliate marketing’s demise may be premature. Despite the challenges, there remain compelling arguments that this industry still offers substantial income potential in 2023.
While more competitive, affiliate marketing’s barrier to entry remains extremely low. You can launch a basic affiliate site for less than $100. This ease of entry guarantees new marketers will continue replacing those who leave.
The sheer volume of active shoppers online also buoys the industry. E-commerce sales grow at roughly 14% annually, generating ever-rising consumer demand that benefits affiliates.
Niche focus provides the best-saturated market strategy. By concentrating on specialized niches with passionate audiences, affiliates can deeply engage potential buyers and avoid head-to-head competition against mass market websites.
A prime example is the site OutdoorGearLab, generating over $5 million in annual income through meticulous gear reviews targeting niche outdoor enthusiasts.
Many assume affiliate marketing depends solely on Amazon’s volatile commission rates. However diversifying into software, services, and non-Amazon affiliate programs can circumvent this risk.
Promoting higher-ticket items with recurring payments, like SaaS products, can yield lifetime customer value instead of one-time sales commissions.
International expansion presents a final frontier for revenue growth. Affiliate marketing remains in its infancy across much of Asia, Africa, and South America. Launching locally-optimized sites in these high-growth emerging markets allows escaping saturated English-speaking countries.
In truth, pure product review and comparison sites with wafer-thin content built purely for affiliate income do face extinction in saturated markets.
But for affiliates focused on genuine audience engagement through high-quality content, brand trust, and value-driven recommendations, substantial income potential still exists — even in 2023’s more competitive landscape.
Rather than relying on gimmicks and mass-produced articles, today’s successful affiliates double down on audience loyalty. They provide truly useful advice tailored to their niche’s needs. This value-first approach earns consistent traffic and conversions over the long term, despite present-day saturation challenges.
So, is affiliate marketing saturated? Perhaps for some. But for those committed to cultivating hard-won authority within carefully selected, under-optimized niches, affiliate programs continue to offer a proven business model.
Adjusting strategies and expectations will be required, but rumors of affiliate marketing’s demise in 2023 and years to come are greatly exaggerated.
