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Writer's pictureLaurence - FractalMax

Affiliate Marketing: Physical or Digital Products, Which is Best?

Updated: 2 days ago

Affiliate marketing is a way to make money online by promoting products (or services) and earning commissions on sales. You are a connector.


One big question remains: Should you promote digital products or physical products? Each type has its own set of advantages and challenges. With this article, you'll understand both options so you can decide which one is best for you.


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Man working on a laptop at home

Key Takeaways

  • Affiliate marketing business involves promoting a product (or service) and earning commissions on sales.

  • Digital products include things like eBooks, online courses, and software, while physical products are tangible items like clothing and electronics.

  • Digital products often offer higher profit margins and are easier to distribute, but they can also face higher refund rates.

  • Physical products are generally easier to sell because people are familiar with them, but they come with challenges like shipping and inventory management.

  • Choosing the right product to promote depends on your interests, market research, and understanding your audience's needs.


Understanding the Role of an Affiliate Marketer

What is Affiliate Marketing?

Affiliate marketing is when you earn a commission for the online promotion of another company's product or service. Essentially, affiliates perform online marketing tasks to drive sales and earn a piece of the profit.


It's a great way to make money without owning a product.


Want to learn how to start you own affiliate marketing business in 7 days with a DFY system? Secure your spot for an exclusive free masterclass.


How Affiliate Marketing Works - Quick Reminder

Affiliate marketing involves three main parties:


  1. Merchants/Retailers: These are businesses or individuals who sell products or services. They partner with affiliates to promote their offerings and pay a commission on sales.


  1. Affiliates: Individuals or websites that promote the merchants’ products or services in return for a commission. They use different methods to promote, like social media, blogs, and email marketing.


  1. Consumers: People who purchase products or services via affiliate marketing promotions.


The process is simple: Affiliates promote a product, customers buy through the affiliate's link, and the affiliate earns a commission.


How affiliate marketing works infographic


Importance of Choosing the Right Products

Selecting the right products to promote is crucial for your success as an affiliate marketer. Promoting products that align with your audience's interests and needs will increase your chances of making sales.


Here are3 important tips:


  • Know Your Target Audience: Understand what your audience is interested in and what problems they need solutions for.

  • Research Products: Look for products with good reviews and a solid reputation.

  • Consider Commission Rates: Higher commission rates can lead to more earnings, but make sure the product is still valuable to your audience.


Picking the right products can make or break your affiliate marketing efforts. Always prioritize quality and relevance to build trust with your audience.

At the beginning you may face some rejections from some affiliate programs, don't worry too much about it, it's normal.


Try to understand why you're not accepted. One of the most common reason is because the traffic on your site is too low. But it can also be something else, like the size of your email list or your social media following.

Choose the right product infographic


Exploring Digital Products for Affiliate Marketing

The digital market is in constant growth. According Precedence Research, the global digital market may reach 19.43 Trillion by 2032


Types of Digital Products

Digital products come in various forms. Some popular types include:


  • E-books: They are digital versions of books that can be read on electronic devices.

  • Online courses: Educational content delivered through video, text, or interactive modules.

  • Software: Applications or programs that users can download and install on their devices.

  • Membership sites: Hubs or websites that offer exclusive content to subscribers.

  • Digital art and graphics: Creative works that can be used for personal or commercial purposes.


Benefits of Promoting Digital Products


Digital products, including eBooks, online courses, and software, offer excellent scalability for affiliate marketers.


With the SaaS market alone expected to hit $1,228.87 billion (source: Fortune Business Insights), promoting digital products provides access to high commissions without the overhead of physical products.


For affiliates looking for profitable, low-cost product lines, digital options present significant opportunities.


Ease of promotion: Digital products are often easier to promote through online channels.


Digital products eliminate the challenges of shipping and inventory management for the merchant, making them a convenient option for affiliate marketers.

From personal experience with my business in luxury fashion (fashon accessories), I know what it takes to develop a product from A to Z. It’s a complex process that goes far beyond simply having a great idea.


Below you can see the finished product from the iconic art collection: The scarf Together.





You’re dealing with everything from sourcing quality materials, working with manufacturers (I enjoyed a lot visiting manufacturer, this was an amazing experience), ensuring production timelines are met, and creating a product that aligns with your brand’s vision (and values).


On top of that, managing inventory can be quite challenging—keeping just the right amount of stock, without overcommitting or running short.


I can say you one thing, It’s not easy. There are countless details to deal with, from quality control to logistics, and it requires patience, precision, and perseverance (especially in the luxury industry).

That firsthand experience in E-commerce taught me how critical it is to stay organized, focused, and adaptable when bringing a product to life.


Affiliate marketer working on the laptop

Challenges in Promoting Digital Products

Despite the benefits, there are also challenges:


  • High competition: The digital product market is highly competitive, with many affiliates promoting similar products.

  • Refund rates: Digital products can have higher refund rates since they are easier to return.

  • Quality concerns: Some digital products may have quality issues, leading to customer dissatisfaction.

  • Lower conversion rates: Digital products may have lower conversion rates compared to physical products.


Exploring Physical Products for Affiliate Marketing

Types of Physical Products

Physical products include items like clothing, home goods, and sports equipment. These are tangible items that customers can see and touch.


Physical products are easy to promote for one reason, and one reason only: Amazon.


Amazon has the world's largest affiliate program, making it simple to find products to promote.



Amazon Associates - affiliate program


Benefits of Promoting Physical Products

Promoting physical products comes with several benefits:


  • Easier to Sell: People can see what they are getting, which makes it easier to sell.

  • Brand Trust: If you promote well-known brands, they already have a reliable reputation.

  • Repeat Purchases: Customers often need to repurchase the same product, leading to regular reorders.

  • Fewer Returns: Returns and refunds are less frequent because shipping items back is inconvenient.


Physical products tend to foster stronger emotional connections with customers, leading to lower return rates. For affiliate marketers, this can mean less refunds and a more stable revenue stream when promoting well-known physical brands.


As digital and physical products appeal to different consumer emotions, you must consider your audience's preferences when choosing which type to promote.


I personally prefer digital products for affiliate marketing.


Challenges in Promoting Physical Products

While promoting physical products can be rewarding, it comes with its own set of challenges:


  • Lower Commissions: Typically ranging from 4–15%, commissions for physical products are often lower than digital ones.

  • Product Defects: Physical products can arrive defective, leading to returns, refunds, and dissatisfied customers.

  • Higher Promotion Costs: Marketing and promoting physical items can often be more expensive, impacting your profit margins.


When promoting physical products, always consider the shipping time, product reviews, and supply chain issues. These factors can impact your success as an affiliate marketer.

Physical products


Comparing Digital and Physical Products

Profit Margins

When it comes to profit margins, digital products often have the upper hand.


Since there are no manufacturing or shipping costs, the creators can afford to offer higher commissions.


For example, a digital product might offer a 30 to 75% commission, while a physical product might only offer 15% or less. However, higher commission rates don't always mean higher earnings.


Always promote products that are relevant to your audience.

Ease of Promotion

Digital products are generally easier to promote. They don't run out of stock, and customers can access them instantly after purchase.This makes them excellent for impulse buys.


52% of consumers state that convenience influences more than half of their purchases, showing that buyers are increasingly time-conscious and seek easier shopping experiences. Moreover, the rise of services like Amazon Prime, with 66% of consumers paying for such delivery services, underscores how crucial convenience has become in the e-commerce space. (Source: National Retail Federation Research)


On the other hand, physical products require more logistics, like inventory management and shipping that the vendor has to deal with. This can complicate your promotional efforts... although platforms like Amazon Associates simplify the process with a vast selection of items


Customer Satisfaction and Returns

Customer satisfaction can vary between digital and physical products. Digital products can be returned with just a click, which might lead to higher return rates.


Physical products, being tangible, often provide more value to the customer but come with the risk of inventory issues and shipping delays.


It's crucial to stay in touch with the product owner to ensure they can fulfill orders promptly.


The product that will potentially earn you the most money is the one that is most relevant and helpful to your audience at the time they view your promotion. Whether it's digital or physical, relevancy is key.

Digital and physical products have their pros and cons. Your choice should depend on what suits your audience best and how you plan to manage your affiliate marketing efforts.


Digital products

The Right Niche for Your Affiliate Marketing Business

Identifying Your Interests

Choosing the right niche is crucial for affiliate marketing success. Start by identifying what you are passionate about. Your interests will keep you motivated and make the work enjoyable.


Ask yourself questions like:


  • What topics do I enjoy reading or talking about?

  • What hobbies or activities am I involved in?

  • What problems do I know how to solve?


Market Research

Once you have a list of interests, it's time to do some market research. Look for niches that are popular and have profit potential.


Use tools like Google Trends, keyword research tools, and social media to gauge interest levels.


Check if there are existing affiliate programs in those niches. This will help you understand if the niche is viable.


Google Trends - niches

Evaluating Competition

Finally, evaluate the competition in your chosen niche. A niche with too much competition can be hard to break into, while one with too little might not be profitable.


Look at other affiliate marketers in the niche and see what they are doing. Find a balance where there is enough demand but not too much competition.


Choosing the right niche is the first step to becoming a successful affiliate marketer.

It should align with your interests, be popular, and have profit potential. Avoid overly broad or narrow niches.


Find a good balance.


It's important to focus on creating the right type of content that attracts and converts visitors, such as product reviews, how-to guides, and comparison posts.


Strategies for Promoting Digital Products

Promoting digital products can be highly rewarding if you use the right strategies. Here are some effective methods to help you boost your sales and reach a wider audience.


Content Marketing

Content marketing is an effective way to engage with your target audience. When creating valuable and relevant content, you can draw potential customers to your digital products.


Consider writing blog posts, creating videos, or even starting a podcast.


Great content can position you as an expert in your field and help build trust with your audience.



Provide value in your content infographic

Email Marketing

Email marketing lets you connect with your people directly. Grow your list by offering something valuable, like a free ebook or a discount code.


Once you have a list, be consistent, send regular updates, promotions, events and valuable content to keep your audience engaged.


Personalize all your emails to make them more effective and increase your conversion rates.


Social Media Marketing

Social media platforms are excellent for promoting digital products. Use platforms like Facebook, Instagram, and Twitter to share content, run ads, and engage with your audience.


Social media marketing can help you reach a huge audience and drive more traffic to your digital products. Don't forget to use hashtags and join relevant groups to increase your visibility.


The best marketing strategies for digital products include SEO, email, and social media marketing.

Tips to help you grow on social media infographic


Strategies for Promoting Physical Products

Review Sites and Blogs

One effective way to promote physical products is through review sites and blogs.


By writing detailed reviews and comparisons, you can help potential buyers make informed decisions.


High-quality content can build trust and drive sales. Make sure to include affiliate links within your reviews to direct readers to the product pages.


Influencer Partnerships

Partnering with influencers can significantly boost your reach. Influencers have a loyal following, and their endorsement art preciouse to lend credibility to the products you're promoting.


Look for influencers whose audience truly aligns with your target market. This strategy can be particularly effective for lifestyle and fashion products.


Paid Advertising

Paid advertising is another powerful tool for promoting physical products. Platforms like Facebook, Instagram, and Google Ads allow you to target specific demographics.


While this method can be costly, it often yields quick results. To maximize your return on investment, start with a small budget and scale up as you identify what works best.


Secure your spot for the free training to learn more about effective paid advertising strategies.




Tools and Platforms for Affiliate Marketers

Affiliate Networks

Affiliate networks are essential for connecting you with various products to promote. These platforms act as a middleman between you and the companies offering affiliate programs.


Some popular affiliate networks include ClickBank, ShareASale, and CJ Affiliate.


These affiliate networks provide a wide range of products (or services), making it easier to find something that fits your niche.


Tracking and Analytics Tools

To succeed in affiliate marketing, you need to track your performance.


Tools like Google Analytics, Voluum, and ClickMagick help you monitor clicks, conversions, and other key metrics.


Data is crucial for understanding what works and what doesn't, allowing you to optimize your strategies.


Marketing Automation Tools

Marketing automation tools can save you precious time, I'm talking from experience


Platforms like Mailchimp, HubSpot, and GetResponse help you automate your email campaigns, social media posts, and other marketing activities.


Automation allows you to focus on creating quality content while the tools handle repetitive tasks.


Joining a community like the FractalMax private VIP community can provide additional support and resources, helping you stay updated with the latest trends and tools in affiliate marketing.

Man working on affiliate marketing


Common Mistakes to Avoid in Affiliate Marketing

Choosing the Wrong Products

One of the biggest mistakes you can make is choosing the wrong products to promote. With so many options available, it can be tough to decide. Selecting the right product is important for your success.


Make sure to research and understand the product before promoting it. If you don't know the product well, you might end up promoting something that doesn't sell.


Ignoring Market Trends

Market trends are essential in affiliate marketing. Ignoring them can lead to poor sales and wasted efforts.


Stay updated with the latest trends and adjust your markting strategies accordingly.


Lack of Consistent Effort

Consistency is key in affiliate marketing. Many marketers fail because they don't put in consistent effort.


You need to regularly update your content, engage with your audience, and monitor your campaigns.


Without consistent effort, your marketing efforts will likely fail.


Affiliate marketing requires dedication and ongoing effort. It's not a one-time task but a continuous process to achieve success.

Stay informed, choose the right products, and be consistent in your efforts.


In affiliate marketing, it's easy to make mistakes that can cost you time and money. Avoiding these common pitfalls can set you on the path to success.


Want to learn more about how to launch your affiliate business in just 7 days? Save your spot for the Masterclass (free)


Conclusion

In the end, whether you choose to promote digital or physical products as an affiliate marketer depends on your personal preferences, strengths, and target audience.


Digital products often offer higher commissions and fewer logistical challenges, making them a great choice for those who prefer a more streamlined approach.


On the other hand, physical products can build stronger trust with customers and may have higher conversion rates. Both options have their unique benefits and drawbacks, so it's essential to consider what aligns best with your goals and resources.


The key to success in affiliate marketing is not just the type of product you promote, but how well you understand and connect with your audience. Happy marketing!


Frequently Asked Questions

What is affiliate marketing?

Affiliate marketing is when you promote someone else's product and earn a commission for every sale made through your referral link.


How does affiliate marketing work?

Affiliate marketing works by signing up for an affiliate program, promoting the product using your unique link, and earning a commission when someone buys through your link.


What are digital products in affiliate marketing?

Digital products are items like online courses, eBooks, software, and downloadable content that you can promote and sell online.


What are physical products in affiliate marketing?

Physical products are tangible items like clothes, gadgets, or home goods that you can promote and sell online.


What are the benefits of promoting digital products?

Promoting digital products can offer higher profit margins, no shipping costs, and the ability to sell the same item multiple times.


What are the benefits of promoting physical products?

Promoting physical products can be easier because people are familiar with them, and they often have a lower return rate compared to digital products.


Which is easier to promote: digital products or physical products?

Both have their own challenges and benefits. Digital products often have higher profit margins but more competition, while physical products are easier to understand but may involve shipping and handling issues.


How do I choose the right niche for affiliate marketing?

Choose a niche based on your interests, conduct market research to understand demand, and evaluate the competition in that niche.

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Meet The Author

Hi, I’m Laurence Zimmermann, a digital entrepreneur and founder of FractalMax. I'm passionate about affiliate marketing and helping people to start and grow their online businesses. Transparency is a core value in everything I do, including my content. While I use AI tools to assist with content creation, every piece is ethically crafted, thoroughly edited, and reviewed by me. My aim is to provide you with the best value, ensuring that the information is accurate, clear, and easy to understand. Thanks for being here, and I hope my content helps you on your journey to success!

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