The honest answer is YES, you can lose money with affiliate marketing if you don’t know what you’re doing.
To avoid this, follow solid affiliate marketing training, join reliable affiliate programs and don’t jump into paid ads too soon.
Take the free Commission Academy course to shave years off your learning curve and see results faster.
How I Lost $35,000 In Affiliate Commissions
It was with my first-ever website.
I started it in 2014 when I was still figuring out how all this affiliate marketing stuff works.
I didn’t realise it at the time but I kinda got lucky…
I found a great niche with next to no competition and high-volume keywords.
The only problem was there weren’t that many affiliate programs to choose from.
But I found one that seemed like the perfect fit.
And everything went great for a while…
I’d send referrals over to their site and let the affiliate program take care of the rest. They had high-converting landing pages and a great email follow-up sequence.
They’d run online live events once a month and I’d always see a surge in commissions.
I ended up making $60,000 in the first year and they paid on time every month like clockwork.
Until they didn’t.
It started with me having to chase payments.
No big deal I thought. They were polite and paid me eventually.
After two years of this and they just stopped paying altogether and stopped replying to my emails.
I found out the parent company was sold off and then sold off again.
In the end, they discontinued the affiliate program. They didn’t tell me, I had to find this out myself.
The last time I checked, there were $35,000+ in unpaid earnings credited to my account that they kept.
The worst part is I’ve built several affiliate marketing businesses since then and haven’t touched that site in 5 years. So to this day, I’m sending people their way and not getting paid.
That’s my bad and I really should cross this off my to-do list at some point!
I share this story to say that, while it’s extremely rare to lose money with affiliate marketing, it can and does happen.
If you’re new to affiliate marketing there are a ton of expensive rabbit holes and pitfalls you can fall down if you’re not careful.
And sometimes it’s through no fault of your own, but you live and learn.
9 Ways You Can Lose Money With Affiliate Marketing
1. Your Affiliate Program Gets Shut Down
You can do everything right, follow a tried and tested path and still end up losing money.
Because nothing in life is 100% risk-free and there are just some that are out of your control.
Like me, you could put all your eggs in one basket only to have that basket snatched away from you.
You could go all in promoting this one affiliate program and get an email tomorrow telling you it’s been closed down…
Or they could just stop paying out and ignore your emails. It happens.
2. You Don’t Play by The Rules
You can lose money with affiliate marketing and it can be totally your fault.
If you violate the terms and conditions of an affiliate program by using spammy tactics to promote your affiliate links for example or make downright deceptive claims about what a product can do.
There are unscrupulous go-getters out there who will say whatever and do whatever it takes to make a quick buck.
Don’t be one of them. It gives the rest of us a bad name.
3. Your Website Gets Cyber Attacked
It could be one of your green-eyed competitors or a cybercriminal sitting in his mum’s basement in Belarus chain-drinking Red Bull…
Whoever it is, they’ve decided they want to take you down so they deploy what’s known as a DDoS attack to overwhelm your hosting servers and take your website offline.
It doesn’t happen often (web hosting companies are so much better than they used to be!) but it can still happen from time to time.
But if it does, you could still lose a day’s earnings which is a big deal if your website is your sole source of income.
4. You Get Sucked Into A Sketchy Scam
This is a big one, especially if you’re new to the affiliate marketing game.
The affiliate marketing world can be a scary and confusing place. It’s like the online version of the wild west out there with con artists lurking at every corner.
There are great affiliate marketing courses out there like Commission Academy and Wealthy Affiliate, but there are 100s if not 1,000s of downright dodgy get-rich-quick scams just waiting to take your money.
5. High Refund Rates
You open up your phone and see a notification you’ve made a new commission.
Hurray! Time to break open the champagne! 🥂🍾
But before you’ve taken your first sip the customer’s only gone and asked for a refund.
This is what happens when you don’t buy the products first to check they’re kosher or you knowingly promote low-quality products that don’t live up to their promises.
6. You Buy Worthless $250/Month Software
Affiliate marketing is the king of online business models.
Yep, I said it. Even after losing $35,000.
Because it’s the only way I know where anyone can generate passive income with so little startup capital.
But that doesn’t stop people from buying super duper sales funnel software or paying out for ridiculously expensive SEO tools that are completely unnecessary.
All you really need to make a lot of money with this is good training, a website domain, hosting and a keyword tool. That’s it!
And you can get those here for less than $100 a month.
Everything else is surplus to requirements.
7. You Jump Into Ads Too Early
Once you master the basics, affiliate marketing is super scalable.
And getting into paid ads is one of the many ways you can take your income to the next level.
That’s why we cover paid ads extensively in our advanced training.
But you have to master the basics first!
What I mean is you have to learn how to attract and convert free traffic before moving on to paid traffic.
Jump in too early and you’ll just throw money down the drain and lose more money than you make.
8. You Wait Too Long To Add Affiliate Links
A lot of newbies stress out over when to “launch” their blog or when to add affiliate links or when to apply for affiliate programs.
The truth is you don’t have to wait as long as you think.
As soon as you have 20-30 posts published, join affiliate programs and insert your affiliate links into your content (where it makes sense) as soon as you can.
That way you’re not leaving money on the table and missing out on possible sales.
9. You Don’t Track Your Earnings
I ran my affiliate business blind for years.
Seriously. I had no idea where my sales were coming from, what my conversion rates were or which affiliate offers were driving the most revenue.
I can’t even guess how much in potential earnings I lost because I wasn’t tracking this stuff
Get Google Analytics set up.
Then you can see exactly how many clicks your site is getting and how they’re finding you.
Use affiliate tracking software like ClickMagick to see exactly how much profit you’re making and what you can do to optimise and increase conversion rates.
10. You Give Up Too Soon
It takes time to develop high-income affiliate marketing skills and it takes more time to apply what you’ve learned consistently enough to see results.
mastering the art of delayed gratification (i.e. I put in the work now and get paid for it later) is a hurdle too high for many and it’s the leading cause of why many beginner affiliate marketers fail.
You want to have the right expectations going in and play the long game.
It’ll be worth it.
Do These 4 Things To Avoid Losing Money With Affiliate Marketing
1. Follow Proven Training
Let me put your mind at ease:
Affiliate marketing is a great side hustle.
IF you know what you’re doing (or are at least following someone who does!)
Try and go it alone and it’s like wandering across a minefield blindfolded.
You’ll save yourself a ton of time and money if you can find an affiliate marketing mentor who has already gone through the trial and error so you don’t have to.
2. Keep Your Outgoings Low
Let me say it again:
You don’t need to spend much money to make money with affiliate marketing!
Yes, it’ll take some investment but we’re talking $100 a month max.
Please don’t make the newbie mistake of thinking you have to pay $3,000 for a course or $300 a month for some fancy (but completely unnecessary) software.
You just don’t.
3. Promote Reliable Affiliate Programs
If you’re worried about losing money like I did stick to promoting big brands with a proven track record.
Or better yet:
Diversify your income by promoting multiple products from multiple affiliate programs on multiple niche sites. That way you stormproof your business even if the worst happens.
4. Play The Long Game
There’s losing money you had and there’s losing money you haven’t got yet.
I bet there are so many affiliates out there who never actually realise how much money they could have made if they played it smart.
I’m talking about those people who find whatever crappy product on Clickbank and promote the heck out of it regardless of the consequences. It’s shortsighted and dumb.
Don’t burn your reputation for the sake of a quick buck. It could be tomorrow, could be next month or it could be 2 years from now, but it will catch up with you.
Instead, put people first and the profits will follow.
Promote high-quality products with integrity, stick it out long enough and I know you’ll go on to make life-changing amounts of passive income.
What’s Your Story?
Have you ever lost money with affiliate marketing?
Why and how and what lessons did take from the experience?
Tell us about it in the comments, we’d love to hear from you!