Every affiliate marketer creates their own set of golden rules as they progress through their journey. There are no universal rules, but over time, you learn from your successes and failures so you can double down on what’s working and scratch the rest.
I’ve dabbled in just about every form of affiliate marketing you can imagine but I have the most success when I become an authority in a niche. I want to become a go-to figure in my niche so I can continue to build on my previous work. I like to think of this as the happy medium between building a brand and running performance marketing campaigns.
Campaign-oriented affiliate marketers have to start from scratch once they squeeze the last dollars from their profitable campaigns. Maybe you’ve been there before. You find a hot offer, promote the hell out of it on Facebook, and then one day the campaign just stops converting. You tapped the well and its time to move onto the next offer.
Compare this to the power of a brand, where the brand itself has value. This brand can be a company, publication, or influencer. If a brand has a loyal following, it can continue to sell products for as long as the followers remain interested. For example, Coke could release a new product tomorrow with absolutely no marketing and customers would still buy it if it were on the shelves at their local grocery stores.
Authority Sites are not always brands, but they have similar traits. These sites can be used to build audiences and grow a business that is more than just a successful PPC campaign. You can find authority sites in a variety of sizes. For example, in the medical niche, WebMD is one of the leading authority sites, but there are also less familiar sites like Eat This, Not That, that are making a killing.
For our purposes, this niche checklist is designed with authority sites in mind. We’re focused on the bigger picture. Authority sites take time and money to build, so it’s important to get the niche right from the start.
The Competition Sweet Spot
Competition should be the first consideration when choosing a niche. The goal is to find the competition “sweet spot” where there is enough traffic to justify your efforts and low enough competition so you stand a chance of making money.
If you choose a niche with high competition, it may be close to impossible to rank.
For example, a niche like “hotel booking” is definitely lucrative and will meet the criteria we discuss later in the article, but you will have a hard time competing with mega-authority sites like Expedia, TripAdvisor, and Hotwire.
On the flip-side, if you choose a niche that’s too small, your “authority” may not yield the desired results. For example, “hotels for seniors” is a sub-niche of hotel booking, but the monthly search volume doesn’t justify the efforts involved in building an authority site.
High Ticket Products and Services
You should think about monetization before you enter a niche. You don’t need to monetize right away but you should have a plan.
Generally, it’s best to pick a niche with higher priced products. It takes the same amount of effort to market a $10 product and a $100 product so, assuming you find your competition sweet spot, you’re better off promoting the more expensive product.
Think about it. Who would you rather sell to – a frugal mom looking for bed sheets or a successful business owner looking for enterprise-level software? I’d choose the latter every time for two reasons.
- The business owner is an easier sell because she’s more willing to spend.
- The business owner is likely to need more expensive products.
If you build around a niche with average affiliate commissions of $10 you need to drive 10x the traffic you would need for a niche with $100 commissions (assuming a similar conversion rate).
High Referral Commission
The price of the product/service you’re promoting is just the first consideration. You also want to pay attention to the affiliate commission. Whereas a $100 order on Amazon will pay a referral commission of $4-$8 (4-6% commission), a $100 digital product may pay $70 (70% commission).
You’re doing the same amount of work to close a sale – may as well get the best cut possible.
In general, you will do best when choosing products and services with higher margins. If a product has a low margin (i.e. retail), the company can’t afford to offer a high commission. If a product has a high margin (i.e. software), the company can offer a more generous commission.
This should be analyzed on a case-by-case basis, but I usually aim to find commissions above 20%. Believe it or not, some companies will even offer over 100% because they know they can make more money off of customers in the long run.
Do your research and find the best affiliate programs – it will pay off in the long run.
National Appeal
One of the beauties of the internet is that you can reach people from all over the world. You should make sure you are promoting programs that have national (or global) appeal so your content can reach larger audiences.
For example, you may find that landscapers have high order values and offer high referral commissions. Unfortunately, most landscaping companies can only cater to a few cities. In order to thrive in this niche, you would have to create city-specific content which would 100x your workload.
Contrarily, you may find that small business CPA’s cater to clients across the company, making that service-based niche a better alternative.
Room to Scale
When you start a new site, you usually start small and grow over time. Creating 100 articles may seem like a long-shot when you’re starting out, but if your business is successful, there will come a time when you hit that point and need even more content. The last thing you want to do is hit a wall when you’re dominating a niche.
Think about the realistic scalability of your niche. Can you create 50 articles? 100? 1000?
You’ll do the best in niches where you can create 100+ resources. You won’t create all of these resources over night, but if the sites do well, you’ll want to keep growing your content base. By planning in advance, you can make sure you don’t plateau.
Choosing the Right Audience
We touched on this one briefly when we discussed the importance of choosing high-ticket items to promote.
You can take this one step further by thinking about who you are selling to.
This is very important. Certain people are far more likely to buy than others. Compare the following two groups and it should be glaringly obvious which ones are more likely to open their wallets:
- Office workers, sports fans, and musicians
- Small business owners, real estate agents, and investors
This isn’t a biased judgment. 99% of the time, a musician is spending less on music gear than a small business owner is spending on business expenses.
Of course, this isn’t limited to the people themselves; timing plays a role as well. A middle-class worker may be thrifty year-round but less cost-conscious when it comes time to book an annual vacation.
The Easy Sell
If you’re familiar with the marketing funnel, you know that customers go through different stages of the buying process. There are a few variations of the marketing funnel, but here’s one example of the steps a customer may take before buying a health supplement:
- Awareness – Customer sees an influencer using MagicProtein X9 on Instagram
- Interest – Customer continues to see MagicProtein X9 on blogs and social media sites and decides to do some more research
- Consideration – Customer looks up reviews, ingredients, and alternatives for MagicProtein X9
- Commitment – The customer has decided to buy MagicProtein X9 and is now looking for a trial or coupon
- Sale – Customer buys MagicProtein X9
You should instantly recognize that it becomes easier to sell to the customer as he moves down the funnel. As a digital marketer, you can enter this funnel at any time, so why not enter as close to the sale as you can?
You can market the same product/service in a variety of ways so you may as well focus on bottom-of-funnel marketing strategies. To expand on the previous example, here’s how you could create content at each step.
- Awareness – Market to an existing audience (i.e. subscribers, followers, or paid traffic)
- Interest – Expose the customer to MagicProtein X9 (or the broader category) benefits via blog posts, social media posts, or paid advertising.
- Consideration – Create a review of MagicProtein X9
- Commitment – Provide customer with a MagicProtein X9 coupon code
These steps can be taken by the same marketer or multiple marketers. Regardless, the conversion is most likely to be triggered by the content in the Consideration and Commitment steps.
This is part of the reason coupon sites have grown in popularity over the years. Coupon sites can “hijack” a sale by targeting customers who are ready to buy.
BONUS: Recurring Commissions
The only thing better than a great commission is a great commission that continues to fuel your bankroll. In certain industries, you can get recurring commissions that payout every month or year.
For example, a software company may offer a 30% recurring commission as long as your customers keep their subscriptions active.
Recurring commissions increase your bottom line and add to the security and predictability of your business. If you have 100 referrals making you $30/month, you know you can expect to make roughly $3,000 every month. If a commission doesn’t recur, you can estimate your commissions but nothing is guaranteed.
Niche Analysis Process
This checklist should be used EVERY TIME you enter a new niche, and the niche you choose should meet ALL of the criteria. If you miss any of these, you have a crack in your foundation. Here’s what will happen
- Competition is too high – Your content won’t rank
- Competition is too low – You won’t get enough traffic
- Low-ticket services – Low commissions won’t justify your efforts
- Low commission rates – Low commissions won’t justify your efforts
- Local appeal – You won’t be able to scale OR you’ll get stuck writing hundreds of articles
- No scalability – Site may never rank if the content is too thin OR you’ll plateau after your initial content ranks
- Wrong audience – Your affiliate offers won’t convert
- Hard sell – your affiliate offers won’t convert
