What is Affiliate Marketing and How Does it Work?

What is Affiliate Marketing and How Does it Work?

In this digitalized world, you have many ways to make money online. But if you’re new to online marketing, owning an online business, or even starting one could be very difficult.

Affiliate marketing is one of the easiest yet lucrative monetization ways for making money online. Some online businesses are solely built to monetize the business with the help of affiliate marketing.

Since it is a great way to monetize a business of any level, create a new income stream, or earn some money on the side, affiliate marketing is still going strong, and it is most likely going to stick around for a long time.

So, to help you understand how you can take advantage of it, this post will guide you about what is affiliate marketing and how does it work. Moreover, I will let you know some bulletproof ways to make money through affiliate marketing.

What is Affiliate Marketing?

Affiliate marketing is a way of making money that helps you earn a commission for selling someone else’s product.

But what most people don’t understand about affiliate marketing is that it’s not a job. You don’t have to be a salesman and spend a lot of time promoting the products.

Instead, you can choose companies and products you support and prefer so you don’t have to hard-sell to anyone. You can share your experience with the product, review after using the product, and spread the good word about it in return for a commission if anyone decides to purchase the product.

Affiliate marketing includes a company that provides an affiliate program and marketers that join the program and drive traffic towards the company/products to make sales (to make money with a commission).

Even some of the largest companies, such as Amazon, have an affiliate program free to join and yet have no restrictions on who can apply.

How Affiliate Marketing Works?

It’s best to imagine affiliate marketing as a circle that includes:

  • A well-established company that has products
  • An affiliate program
  • Marketers who are ready to promote

From Company’s Perspective

Companies that want to grow their sales or want to get successful sales of their newly launched products, offer affiliate marketing. Why? Because it is the best way, to attract a huge audience. 

Any company can create a simple affiliate program that is determined by terms of service. In exchange for sales brought by its affiliate marketers, you will have to pay out a specific commission rate percentage (that you set).

Most companies also provide quick training, analytical tools for marketers to track their progress, and unique affiliate links and banners.

While not every company needs to offer banners or training, a unique affiliate link for every marketer is a must to indicate that they are sending a sale from their way. 

From Marketer’s Perspective

As an affiliate marketer, your main job is to find companies and products in your niche that you would be proud to promote and help spread awareness in return for a commission.

Therefore, you should find available affiliate programs in your niche and join them. Affiliate programs are free to join, but you should carefully read the terms of service so you know how much you will get paid, how you will get paid, and what rules you should follow.

In case you break any rules, your affiliate account will be deleted from the affiliate program and you will have to deal with the consequences. 

When you join and get accepted by an affiliate program, you will have to find a way to place your links to promote your products.

The easiest way to promote products is whenever you get asked a question, “where did you get that” and you can send them your affiliate link.

However, this requires manual work and might not produce a lot of money in return. Therefore, owning a blog, a YouTube channel, or a significant social presence is always a better choice.

You can set the links once and forget about them, yet they’ll continue to make sales whenever people read your content, resulting in a passive commission income.

But where does the money come from, and how does it reach the affiliates? Are affiliate marketing programs sustainable?

If these are some of the questions you’re wondering, keep on reading as the financial aspect of affiliate marketing is explained next!

How Does Affiliate Marketing Make Money?

Affiliate marketing is best to think of like a win-win situation for all parties included in the process.

Companies are not paying out of their budget and yet get more exposure and more sales in return for a small commission payout from the sales.

On the other hand, affiliate marketers get paid commission for every product purchase through their link.

Lastly, people who often read product reviews or get help from marketers get extensive research and help make the best purchase they can make for their budget.

It’s a great solution where everyone benefits somehow (even if the gain isn’t financial for the end-users).

This is one of many reasons why affiliate marketing has been around for more than two decades and why it is still one of the most popular monetization models/business models for marketers.

It is a circle that benefits everyone in the loop, and as long as it stays this way, affiliate marketing won’t go anywhere.

And how much money can you make? Companies tend to make a lot of money by gaining new sales without a sales budget and yet only have to part with a small commission rate on every sale. Therefore, they’re making money they otherwise wouldn’t make without the help of marketers.

On the other hand, affiliate marketers often make a small commission on every rate, but if they have a large exposure or audience and know how to help people – they can make a decent and steady passive income stream.

Of course, commission rates depend on the program, and they happen to be high sometimes, so affiliate marketing pays off.

If you’re convinced that affiliate marketing is the right business to be in – keep on reading to learn how to get started in a step-by-step process!

1- How to Start Affiliate Marketing?

Just because it’s easy to get started with affiliate marketing, you should still know exactly your way around marketing to build a successful affiliate marketing business.

Look at affiliate marketing as a tool that allows you to build a business around it and maximize the earnings you can make.

Therefore, here’s what you should do if you’re only getting started:

  1. Select a niche
  2. Select a platform
  3. Grow your audience
  4. Join affiliate programs & promote irresistible affiliate offers.

The idea is to create something of your own where you can share advice and valuable content to others to build an audience or following who can purchase from your link.

Yes, joining affiliate programs is the last thing you’ll have to do, but a lot of work awaits you first. This is the right way to do it since you might not get accepted to many affiliate programs without proof of business on the internet.

Step – 1: Select a Niche

The first thing you should do is select a niche. You have to consider the audience’s interest, understand ther pain point, and determine how much they are likely to buy something online. 

Not all niches are ideal, but the great thing about choosing a niche is that you get to choose something you’re passionate about.

It’s recommended to write down a list of as many things as you like, have an interest in, or you’re passionate about.

You want a niche that won’t make you feel like you’re only working, yet you’d have fun writing quality content and helping others in the niche.

From there, you will narrow the list by researching your top niches from the list. Even though it’s important to do something you love, it’s also important to choose a narrow niche that’s not overly competitive as you’ll achieve results faster. You’ll be able to become an authority within the niche much easier.

Step – 2: Select a Platform

When you have selected a niche, the next thing you should choose is a platform. The goal is to provide valuable and helpful content and build an audience or following.

Without audience or following, you can paste as many affiliate links as you wish, but no one will click them, let alone purchase products.

The most popular platforms where people engage with content are blogs/content sites, YouTube, or social media channels such as Instagram, Pinterest, and Facebook.

Our favorite way is to build a content site/niche site such as a blog or go for the social media platform your audience uses the most. This allows you to create written content on topics you can research up-front. Also, you can research keywords and optimize your website to rank it in search engines.

Depending on the competition, it shouldn’t take longer than 3 to 4 months to start getting rankings and for people to start visiting your website organically through search engines.

However, the choice is all yours, so you can choose any other platform if you prefer video or visual content creation.

Step – 3: Grow Your Audience

When you have a niche and a platform, it’s all about growing the audience. As we’ve mentioned earlier, growing your audience is the key to becoming a successful affiliate marketer.

As a consumer, you’ve most likely purchased products through other affiliate links (even without knowing it).

Therefore, the bigger your audience is, the better the chances are that your affiliate links will be seen & clicked, and this will lead to better results.

Of course, alongside a large audience, you will need an audience that is specifically interested in what you have to offer.

Therefore, creating content for your niche and targeting your audience is important too.

If you choose to create a niche site/blog website, you will need to research keywords people look up for in your niche, create valuable content on the topic, and acquire visitors.

When you have visitors, creating an emailing list is another excellent way to keep the communication open with your visitors.,

As you build your presence on the platform of your choice, you should also build a brand, so you aren’t only known for your content but also your internet presence.

Step – 4: Join Affiliate Programs

When you have successfully worked on the first three steps, the long-waited part is this joining affiliate programs. It’s the time when you search and join affiliate programs.

With millions of affiliate programs available to anyone, do your best to find specific affiliate programs that fit your niche perfectly.

There is no point in promoting the products that your audience wouldn’t be interested in, right? No matter how small or narrow your niche might be, there should be affiliate programs available.

However, make sure that you create a list of all affiliate programs you discover and then narrow the list down to determine what program works the best for you.

While many marketers pay attention to the commission rate, you should also pay attention to the terms of agreement, training, and other relevant information to the program.

When you get accepted to affiliate programs, you can start using your unique affiliate link (or any other elements provided by the program, such as banners) to promote products on your platform.

Also, keep in mind that you shouldn’t only promote products to sell them, but try to make unique content on the products in question that will, first and foremost, help your audience.

How to Join Affiliate Programs?

To join affiliate programs, you first have to find programs that fit your niche. A simple Google search such as “your-niche + affiliate programs” is going to give you plenty of options. All you have to do is write down your niche and press enter.

Some affiliate programs are offered directly through the company’s website, but some affiliate programs are offered through affiliate program networks such as ClickBank.

These affiliate program networks help you register once and then quickly apply to your desired affiliate programs. However, you don’t have to join affiliate program networks if you have only a few companies with whom you’d like to work, and yet they provide direct affiliate programs through their official website.

When you find an affiliate program, the joining process is straightforward. You’ll only have to provide standard information such as the name, website, your role, and sometimes the number of visitors (or how many followers) you get or a couple more information related to your business.

Then you have to wait to get accepted or rejected. If you meet the requirements (often low), you’ll most likely see very few rejections.

How to Promote Affiliate Products?

When you’ve successfully joined affiliate programs that fit your niche and that you can’t wait to promote, it’s the time to promote your affiliate products!

Hopefully, by now, you chose a niche, a platform, worked on growing an audience, and are a part of at least one or two affiliate programs.

When it comes down to affiliate product promotion, you can start promoting products straight away. But if you don’t have much traffic, it might be better to grow your audience further before you spend time promoting products.

Depending on your affiliate program, you might have a different interface, analytical tools, or even training. But one thing that remains the same in all affiliate programs is that you’ll always get your unique affiliate link.

You can attach it to text, images or even create your links and attach it to the banners with this link. Wherever you believe it is a great place to place these links, you can add them and wait for the clicks and, hopefully, conversions to come!

Some affiliate programs will provide their banners, graphics, and even custom sign-up pages. These are super helpful as you don’t want to place your affiliate links only as a form of text.

You’ll also notice that some affiliate programs only provide a shortcode that you place at the end of the link. This is also a pretty efficient way to create your affiliate link to any page on the company’s website (regardless of the product).

This is also a great way to connect your audience with a company without only promoting products, yet you’ll still get a commission if any sales occur.

YouTubers tend to review or mention products and leave a link to the product in the description. Instagram has a bio where you can write a short offer and paste a link.

But websites are the best way to promote affiliate links as you get to play around with the links and banners without any limits.

How to Build an Audience for Affiliate Marketing?

Affiliate marketing isn’t a way of becoming a salesman or focusing on selling the products or promoting the companies at all times.

The best way to approach affiliate marketing is to find a niche that you’re passionate about or know a lot about.

This will help you choose a platform (away) that you will use to help your specific audience, help them solve their problems, and help them discover better and smarter ways of doing things.

Therefore, the best way to build an audience for affiliate marketing is to provide value and build relationships with people in your niche.

People can see through empty offers and cannot easily trust any source they come across on the internet. That’s why it is important to build trust, build relationships, and help people first.

Business is a two-way street, and you can’t make it only about your affiliate marketing.

But not any audience will do well. You are looking to target an audience already looking for advice, help, or better products in your niche. No matter how narrow a niche is, there’s an audience, too, if there is a niche for it.

Acquiring and building an audience for affiliate marketing is more of a marketing game, and to maximize your efforts, target the correct audience, and build a quality following, here’s what you have to do:

  1. Research your niche
  2. Find keywords in your niche
  3. Create valuable content and optimize it for the keywords
  4. Analyze your competitors

Step -1: Research Your Niche

If you’re going to provide help in your niche, you should know almost everything there is about your niche. Staying up to date with the latest news, learning about the latest trends, expanding your knowledge, and gaining new experience is important. This will help you stay relevant in your niche and easily help everyone.

People will notice this, and when they do, you won’t have a hard time becoming recognized as the authoritative source in your niche.

Step – 2: Find Keywords & Create Content

Finding keywords in your niche is also important. Keywords will tell you what people search for, what questions they ask for, and their solutions. This will also help you learn the visitor’s intent to write content that will fit his search.

Step – 3: Create Content

When you have to start creating valuable content and optimize it for these keywords so when people in your niche search for something, you pop up. You can help them once, but if they search for something else and you pop up again, you’ll slowly but steadily start to get recognized, which is great for building trust.

Step – 4:  Analyze Your Competitors

Analyzing your competitors is also a great way to stay relevant, get ideas in your niche (never copy), and see how you can improve everything you do to be the number one.

These four steps will prepare your website for targeted traffic looking for content you provide, and from there, you can start building an email list or lead them to your other social profiles to become a follower (or a supporter).

How do Affiliate Marketers Get Paid?

Getting the work done first and then worrying about everything else is a great way to take action and get started. But if you’re wondering how and when will you get paid, you’re doing great research!

By now, you know how affiliate marketing works, who benefits, and where the money comes from.

But when it comes down to affiliate marketers, they get paid based on the commission percentage for every sale they refer. There are some specific programs that pay per every single click they receive from your link and pay you on the basis of it/ 

The commission percentage depends on the company’s agreement and policy and the payout date, which is sometimes weekly, bi-weekly, or monthly.

The percentage of affiliate commissions ranges from 20% or lower to 50% being the highest. A few to mention here are 

  • Builderall Affiliate Program, offering 30% recurring commissions.
  • GrooveFunnels Affiliate program, offering 40% recurring commission, and
  • GetResponse Affiliate Program, offering 33% recurring affiliate commission.

Payments are either made directly to bank accounts, or via PayPal, Stripe, or services such as Payoneer.

What are the Best Affiliate Networks?

Remember when I’ve mentioned affiliate networks above? 

It’s time to show you some of the best affiliate networks so you can find affiliate programs straight away, apply, and join them as soon as possible!

Affiliate networks are very convenient because you have to register once and fill out the sign-up for the first time only. So, whenever you want to apply to an affiliate program within the network, you won’t have to fill out a new form again. Yet, all your information is passed onto the company that owns the affiliate program.

There are dozens of great affiliate networks, but here are some of the best ones:

  1. ClickBank
  2. CJ Affiliate (formerly Commission Junction)
  3. ShareASale
  4. Rakuten Marketing (formerly LinkShare)
  5. eBay Partner Network

1- ClickBank – The Largest Affiliate Network

Clickbank affiliate program

ClickBank is excellent because it offers plenty of affiliate programs that provide digital products with high commissions that can go up to 75% per sale. The processing goes through ClickBank, so you will always get the payment on time, and recurring commissions are possible.

ClickBank also provides advanced analytical tools to help you keep track of all your affiliate programs in one dashboard.

2- CJ Affiliate

CJ Affiliate is another excellent choice because it has a great range of companies of all sizes that you can work with.

Once you fill out a registry profile, joining affiliate programs is made simple, and when you start making sales, you’ll be able to see and track your performance in the intuitive backend dashboard.

Another great thing about CJ affiliate is that it comes with a great link generator that makes affiliate links pretty, and it’s super simple to generate them for all affiliate programs you’re a member of.

3- ShareASale

ShareASale affiliate program

ShareASale is a great affiliate network to join if you are looking for a great mix of digital and physical products.

They’re one of the oldest affiliate networks on the internet, so they have an excellent reputation and are known as a very trustworthy network.

When it comes down to merchants, they have a wide range of all sizes in almost all industries. ShareASale also has some pretty exclusive and popular merchants such as Reebok, Omaze, US Polo Association, etc.

What’s also great about ShareASale is that it has a Power Rank integrated into the platform, which tells affiliates what companies sell the most and are the most profitable.

4-  Rakuten Marketing Network

Rakuten is a well-known affiliate network that works closely with merchants to help them create affiliate programs and then match them with affiliates in their niche.

Therefore, if you’re trying to find affiliate programs that fit your niche and you might need help, Rakuten Marketing Network is an excellent affiliate network to be a part of.

Along with great support, they have very decent tools that help affiliates track their performance and find ways to improve and even match with better affiliate programs.

5- eBay Partner Network and Amazon Associates

Even though eBay and Amazon aren’t affiliate networks, they’re the founders of two of the most extensive affiliate programs in the world.

Even though they’re not known for providing great commission rates, many affiliates only work with Amazon and eBay because of the brand recognition and product availability.

With thousands of products available in almost any niche, you can think of, combine this with visitors who already trust Amazon and eBay – and you’ll never struggle to improve your conversion rate.

These companies also stay up to date with affiliate marketing techniques as they provide more than just affiliate links to help support their affiliates.

How to Grow Your Affiliate Income to Six-Figures?

The biggest advantage of affiliate marketing is that it’s very easy to start, scale and grow. It doesn’t require a lot of investment, very flexible – and yet, it can become a billion-dollar business!

While some people have a look at lower-end commission rates and don’t even give it a try, on the other hand, we have affiliate marketers who have built successful affiliate marketing businesses that helped them quit their job and even make more money.

The high-income potential is not a secret, and that’s what makes affiliate marketing even more lucrative. But only because it is lucrative doesn’t mean that everyone succeeds.

Affiliate marketing takes a lot of work and time up-front before you even see a single dollar out of it. But if you stick with it and build and grow a great business, the potential is huge.

Just like in any other business, strategy is important, and this is what you should do if you’re trying to build a six-figure affiliate marketing business:

  1. Be unique and grow a brand
  2. Promote affiliate products in your content
  3. Maximize revenue from the existing traffic you have
  4. Don’t ever skip building an email list

Step -1: Be Unique and Grow a Brand

Niche selection is important because some niches are highly competitive while other niches are easier to work in. Also, some niches are more profitable while others aren’t – and that’s the truth.

But no matter the niche you select, you will always have at least a couple of competitors. That’s why you have to be unique.

By being unique, you will attract visitors to you, you will be memorable, and for example, the next time visitors come across your website in search engines, they will be happy to visit you VS any other website in the top search results.

With that being said, you should always think of your project as a business. Even if it is only a YouTube channel or a blog, it is your business, and it’s your mission to grow it to success.

Therefore, it’s highly recommended to give your business a brand and make it memorable. A catchy domain name, a great logo, unique font, a decent theme, and a brand-unique color scheme are some things you can start working on immediately.

When you have it, you can always improve from there as you progress.

Step -2: Promote Affiliate Products in Your Content

When people come to read something on your platform, this is naturally the best place to promote affiliate products. The platform could be a blog, social media page, youtube channel or even quora answers. 

Even if you’re sharing information and aren’t reviewing anything, you can always make a quick note of how a product benefited you, improved something you’ve been struggling with, or helped you save time doing something.

This way, you won’t ever come across as a sleazy salesman, and yet people who trust you will most likely follow your advice and at least check out the product you’ve mentioned.

You can also test using banners and affiliate links in other places of your platform, but in-content affiliate promotions tend to do the best.

Step -3 Maximize Revenue from Exiting Visitors

You don’t always need a lot of traffic to make a lot of money. Instead, it would be best if you worked on optimizing your affiliate promotions, affiliate placements, and call-to-actions to ensure that your visitors at least visit the offer.

Suppose you have quality traffic interested in your niche and might need a solution to a problem. In that case, your conversion rate will most likely increase as long as you optimize your affiliate offers.

There’s a big difference between hiding a link in an anchor and creating a bolded subheading that guides people to your offer. Optimize your content and even test what works the best so you know that you’re doing all you can to make yourself a lot of money.

Step -4 Don’t Ever Skip Building an Email List.

An email list is often underestimated, yet it is one of the most crucial steps to building a six-figure affiliate marketing business.

Everyone has at least one email address, and prospects don’t always purchase products the first time they see them.

Even if people look up reviews to research the products, they might not be ready.

Collecting email addresses will help you build a way to communicate with your visitors. From there, you can send promotional emails (along with helpful informational emails). You never know when you might send the email at the perfect time where someone might end up purchasing a bit more expensive product.

Therefore, if you are not building an email list, you are most likely leaving the money on the table!

Our Final Verdict

Affiliate marketing might not be for everyone, but what’s so great about it is that you can easily implement it in many business models to create another income stream.

Since it’s very easy to get started with affiliate marketing and there is no actual cost to build a business around affiliate marketing, returns are very high. They can even become a passive residual income.

Hopefully, this post taught you everything you needed to know about affiliate marketing. By the time you finish it – you are now ready to start building your affiliate marketing business.

Remember, it’s not going to be an easy road in the beginning, but later down the road, you’ll thank yourself for starting today!

What attracted you to affiliate marketing? What do you like the most about it and why?

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