Affiliate Marketing: What is it and how does it work?

The internet is inundated with useless content about affiliate marketing.

What I want to do today is to help you understand what it is, once and for all.

Affiliate marketing has been around for decades, and not just on the internet, but in the offline world, too.

Today, I want to give you a run-down on how it works, and I will also give you some tips on how you can get started.

Our topics are:

  • What is affiliate marketing?
  • How does affiliate marketing work?
  • How do you post your affiliate links?
  • Why should you become an affiliate marketer?
  • The challenges of affiliate marketing
  • How can I get started with affiliate marketing?

Let us get started!


What is affiliate marketing?

Online affiliate marketing is a business process where you endorse or promote someone else’s products or services.

If your audience buys this product, you get a commission.

In short, you are a brand ambassador—a salesperson who promotes a product.

To understand affiliate marketing online, we need to step back a little.

Affiliate marketing is not an entirely new concept. It has been around for decades, even when there was no internet yet.

For so many years, a lot of people knocked on doors to sell Tupperware—a company that manufactures plastic containers.

These salespeople were not employees of Tupperware. They had a brochure that they showed to their prospects.

If a prospect buys, the salesperson delivers the Tupperware, takes the payment, and reports the sale to the local Tupperware sales headquarters.

What this salesperson got was a commission, but he was not paid a salary.

That is how affiliate marketing was done before the internet.

Today, you no longer need to walk on a hot day and knock from one door to another; all you have to do is to put up a website and sell someone else’ products online.

If you make a sale, the product developer or manufacturer, is going to pay you a commission.


How much do you get paid?

There is no concrete answer to this. Amazon pays at least 4%.

What this means is that if you brought a customer to Amazon and this customer buys products worth $100, you get $4 from that sale.

what-is-affiliate-marketing


How does affiliate marketing work?

Affiliate marketing works through links. Since everything is online, you need a link that identifies you as the product referrer.

Below is the process by which affiliate marketing works from start to finish.

  • You register in an affiliate program
  • If your registration is approved, you get a link. This is called the affiliate link. It is a link that identifies you as the person who referred a client or customer to the company’s website
  • You promote the product and try to convince people to click on your link
  • People click on your link, and they buy
  • The purchase is recorded, and then you get paid

As an affiliate marketer, you do not just post someone else’s product and ask for a commission.

It does not work that way. You must be a member of the company’s affiliate program.

Not all companies have affiliate programs. To find out if they do, just explore their website and see if there is a link or page that is labeled as “affiliates”.

If they do, you can read the terms and conditions and then register.

As I mentioned earlier, the commission structure varies from one company to another.

Some pay 20%, and some even pay as much as 70%.

On top of the differences in the payment amount, some companies also offer recurring commissions while some don’t.

A recurring commission means you will get paid a commission on a monthly basis, for as long as the customer you referred is a paying subscriber.


How do you post your affiliate links?

In this section, I will explain several ways how you can post your affiliate links.

These are promotion methods where you can drop your links and ask people to click them.

  • Blogging – set-up a blog and publish helpful content on a regular basis; your blog is your website asset where you can park a lot of affiliate links. A blog is one of the most powerful ways to get free traffic, provided that you d it right.
  • YouTube – there is a reason many people post tutorials on YouTube. While the primary reason is earning via ads, they can earn more from endorsing products. For example, you can create video tutorials on how to create cabinets. Below your YouTube post, you can post the name of the tools that you used, and the links people can click so they can buy them. These links are your affiliate links.
  • Forums – you can go to forums like Quora and answer people’s questions. Somewhere in your answer, you can insert an affiliate link that people can click. Be careful when doing this, as there are so many forums that frown upon affiliate markers. Read the rules and comply with them; the last thing you want is to get banned from the forum site.
  • Social media – this is all too common, but it is the least effective. You can post your links in social media platforms, especially in groups. The problem with this approach is that your posts will get buried soon in people’s feeds.
  • Advertisements – this is the most effective with the quickest turnaround method to get affiliate sales, but it is also the most expensive. You can use paid advertising on Google, Facebook, Instagram, and other channels. These ads will take your potential customer to your affiliate product page, (the company’s sales page), and if the customer buys, you get a commission.

To succeed in affiliate marketing, you need to focus on adding value to the reader, not by selling.

People hate salespeople, but they love value-adding content.

What you need to do is to build credibility—enough that if you tell people to click your link, they will click it and buy the products that you recommend.


Why should you become an affiliate marketer?

Affiliate marketing is a business that provides you with a passive income.

It takes years to build content, like videos and blog posts, but these contents will be on the internet for a long time.

And since your contents are already up there, people will eventually find it even after years of publication.

Readers who buy the products you promote will provide you with commissions, even years after you have posted your content on YouTube or your blog.

Here are the benefits of affiliate marketing:

  • Passive income – earn money long after you have published your posts; the links do not change, except if the company decides to remove its affiliate program, like what Oberlo did.
  • Recurring income – there are many affiliate programs where you can earn money not just once, but for the entire lifetime of a subscriber’s account. An example of this is Shopify where you get paid a commission monthly for as long as the customer you referred is a paying subscriber.
  • Performance-based income – top paying affiliate programs increase your earnings after you have hit a goal. One of the best examples of this is SiteGround. If you make 1 to 5 sales in a month, your one-time commission is $50. If you make 6 to 10 sales a month, that commission you get paid is $75 for each sale. This range gets higher, with a maximum payout of $100 per month if you made at least 11 sales in a month.
  • Cost-effective – affiliate marketing does not have a high start-up cost. All you need is a website or a YouTube channel. What I recommend is a website because you own that asset. If you rely solely on YouTube, you are not in control. A simple change of one policy on YouTube can put your business down. Worse, YouTube can shut you down.

As you can see, affiliate marketing is one of those online businesses where you do not need inventory.

You also do not have to worry about customer service because once a customer makes a purchase, he is dealing with the company, not with you.

why-you-should-become-an-affiliate-marketer


The two challenges of affiliate marketing

Before you get started, you also need to know that the road to affiliate marketing success is not always rosy.

This business model has its own challenges, which can prove to be a major source of frustration.

  • Getting Traffic – there are more than 4 million new blog posts every day, and you will be fighting for the attention of people against giants. Traffic is difficult to come by, and you need the grit to stay the course and be in this business for the long term.

    Traffic in itself is a huge subject matter, and you need to develop your skills to be able to get traffic, such as your SEO skills and marketing skills.

  • Creating content – this is another problem, as writing content or creating videos take time. You need to learn copywriting skills to make your content attractive, and you also need to find out what kind of content resonates with your audience.

Starting out is difficult, but you need to keep on pushing yourself.

Content creation has to be done on a regular basis, as Google and YouTube love channels and websites that produce fresh content all the time.

These challenges exist. It is best that you look at these challenges as things that can help you become better, not as obstacles that will be the reason for you to quit.

Affiliate marketing is a long game, and only those who have patience will see success.


How can I get started with affiliate marketing?

To get started with affiliate marketing, I highly suggest that you take a course.

It will make your journey easier, and you will not waste a lot of money experimenting with different marketing methods or different software programs.

Study what you can and look for the best affiliate programs for beginners.

Save enough money to get your website started.


Summary

The internet gave us so many ways to earn money, and affiliate marketing is one of those.

It takes a lot of hard work, but it is a passive income that is going to produce long-term income.

Before you get into affiliate marketing, you have to take a course or study everything that you can.

Look for websites about affiliate marketing.

You cannot get started with it after reading a single blog post or a few YouTube videos.

There is so much that goes on into it that you need to have a strategic plan to succeed.

Most importantly, patience is the key to success. Affiliate marketers do not become millionaires overnight.

It takes years to build an asset. While some can make some money within a few months, this amount is not substantial.

If you want a lot of money, stay in the game for the long haul.

Keep producing valuable content, and you will see the fruits of your labor.

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