2023 is expected to be an exciting year for broker affiliates, with some great opportunities to earn high commissions. However, many affiliates are concerned that uncertain market conditions and an unstable global economy may negatively impact their earning potential.
The beauty of broker affiliate marketing is that unpredictable and challenging markets are often the most profitable ones. The commodity crisis of 2022 created some superb opportunities for both traders and affiliates promoting commodities. Read on for everything you need to know about promoting commodities in 2023.
What are Commodities?
A commodity is any item or substance that can be sold or traded for profit. Commodity trading is a specialized financial niche comparable to forex trading, stock trading, and other forms of investment. Commodity traders aim to earn high profits from changes to the value of assets like gold, oil, natural gas, coffee, corn, and a host of other commodities. The commodity markets are international, operate almost non-stop, and are vital to the global economy.
For convenience, brokers and traders generally divide commodities into three broad classes.
You’ll also hear traders talking about hard and soft commodities. Hard commodities are basically any commodity that is mined, drilled, or otherwise extracted from the ground. These include oil, natural gas, and other energy products like precious metals, non-precious metals, and even diamonds.
Soft commodities include food staples like corn, wheat, sugar, animal products, and coffee. Although soft commodities aren’t as glamorous as assets like gold or platinum, they are vital. Simply put, we depend on soft commodities just to survive. They can experience considerable volatility and generate major profits for skilled traders.
Promote CFD Commodity Trading
Top online brokers like AvaTrade offer traders a wide range of commodities such as contracts for differences or ‘CFDs.’ If you understand the basics of CFD trading, and can explain it clearly in your marketing content, it’s an amazing way to drive traffic and you can promote commodities successfully. CFD commodity trading gives ordinary people convenient access to a profitable global market that used to be restricted to professional brokers.
5 Key Marketing Points for CFD Commodity Trading
- A CFD is a type of trade – not an asset.
- CFD trading is simple, convenient, and transparent.
- CFD traders don’t buy commodities, they speculate on their market performance.
- Online brokers provide a suite of risk management tools for CFD traders.
- Any potential losses are limited to the sum invested in a particular trade.
If you can communicate these 5 key points to potential commodity traders, you should be able to earn high commissions on a regular basis. The commodities markets are a great source of income for broker affiliates. Plenty of people want to earn extra money as online traders, but not everybody wants to trade forex or cryptos.
CFD trading can be an excellent introduction to the commodities markets (and the wider world of online trading) for new traders. Although CFDs are regarded as high-risk trades, traders have the option to employ risk management ensuring that any losses are strictly limited to individual trades.
Successful CFD trades can yield high profits in a very short time. A major advantage of CFD trading is that beginners can pick and choose their assets, trades, and investment amounts. Traders have absolute control over their investments and personal trading budgets.
Choosing Commodities to Promote
High-profile assets like gold and oil are frequently in the news and there are daily opportunities to promote news events and stories. There are some good examples of how global geopolitical events affected oil prices in recent years.
- The Russian invasion of Ukraine in 2022 sent oil prices soaring from $76 a barrel to $110 a barrel. Prices continued to rise when the US government announced a ban on Russian oil.
- The COVID-19 lockdowns saw a dramatic drop in oil consumption. With much of the world’s population confined to their homes, oil demand fell to the point where benchmark prices went negative in April 2020.
The easiest commodities to promote are ones that people are already familiar with, particularly if price volatility directly affects peoples’ quality of life. A sudden rise in gasoline prices or an increase in the cost of coffee or chocolate will generate a lot of chatter and comment on social media.
It’s the perfect environment for posting new creatives about commodity trading. After all, oil, coffee, and cocoa solids are all tradable commodities. Even a simple creative with an attractive image and a thought-provoking question as a title can generate high-value leads. Many people who haven’t seriously considered online trading will be intrigued.
The 5 Easiest Commodities to Promote
Of the 5 easiest commodities to promote, oil, natural gas, and gold are volatile, massively traded commodities that are always in the news. Platinum and coffee are less well-known, but are attractive to potential traders.
- Natural Gas
Platinum, like all precious metals, has a high marketing value and a special allure. Gold. silver and platinum are basically quite glamorous assets that are the perfect subject for high-converting creatives. Coffee has a similar marketing value as (almost) everybody drinks it.
Commodities for Affiliates: Risk and Volatility
When you promote commodities, it’s important to explain to traders that they can opt for a range of risk levels. Different commodities have different levels of volatility that vary according to supply and demand, currency strengths, and geopolitical events. In the case of soft commodities, volatility can be seasonal and cyclic (based on crop harvests). Basic market analysis will show which commodities are moving, and what the relative risk levels are.
Leverage and Commodities
Another strong selling point for affiliates who want to make money promoting commodities is the concept of leverage. Leverage is a complex subject but the basic principle of leverage is that a trader can use the broker’s money to gain much greater market exposure.
If a trader opens a $250 CFD trade with 400:1 leverage, the actual trade position is worth $400,000. Leverage is a high-risk/high-return proposition, but AvaTrade provides its clients with guaranteed negative balance protection. Leverage (in various ratios) can be applied to all assets. It’s a great subject for educational and SEO content for your sites, and for marketing materials.
What Traffic to Target when You Promote Commodities
One of the questions that broker affiliates invariably ask about promoting commodities is what traffic to target. It’s fairly easy to identify the main demographic that trades Bitcoin and other cryptos. They are predominantly young men with an appetite for risk and a desire to make high profits in a short time. Commodity traders come from far more diverse backgrounds and are harder to define as a trading demographic.
At one end of the spectrum, commodity traders are similar to crypto and forex traders. Younger and more aggressive traders are often drawn to the volatile ‘Big Three’ oil, gold, and natural gas. There’s a macho attraction to hard commodities and a desire to make fast profits whenever these assets show particular volatility.
Other commodity traders are looking for hedges. They typically jump into commodities like gold when other markets get rough. Inflation has been a major issue since the COVID-19 pandemic. Gold is one of the most popular hedges against inflation.
Alternatively, experienced traders may want to diversify a wider portfolio with relatively stable commodities. The reasoning is that if their high-risk assets suddenly drop in value, the more predictable commodities will mitigate any financial loss. Hedging can be regarded as a form of insurance.
When you target potential commodity traders, it’s important to remember that you’re addressing a spectrum and not a niche trading demographic. It’s best to initially create content that fits its location e.g. a specific social media group or a guest post on a third-party blog. Pitch your message to resonate with the people who will see it.
There is inevitably a large element of trial and error involved and your success rate will improve rapidly with experience. If you employ proper analysis and optimize your campaigns from the beginning, you’ll always get better results.
5 Take Away Points for Commodity Affiliates
- 2023 is likely to be a great year to promote commodities. All the early indications suggest that energies will be volatile and food staples will be in short supply.
- You can cast a wide net when you create affiliate marketing campaigns to target potential commodity traders. They cover all demographics.
- Don’t forget to focus on leverage, risk management tools, and the trading platforms provided by your broker.
- CFDs are a powerful selling point when you promote commodity trading. Invest in your content and explain them effectively.
- Work with a top-quality partner program that promotes a regulated online broker. It’s the only way to make consistently high profits as a broker affiliate.
AvaPartner is keen to sign up new affiliates to promote online commodity trading. You can also earn high commissions promoting cryptos and forex, stocks, bonds, ETFs, options, and indices.
AvaPartner is one of the world’s leading partner programs and one of the very few that can guarantee successful affiliate partners high profits on a long-term basis. Join us today and choose the commission plan that suits you!