What is Affiliate Marketing And How Does It Work

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If you are a beginner marketer, this guide on affiliate marketing will help you understand the business model. How it works and how you can get started.

Even if you have not run a blog before, you will find answers to many of your questions in this guide.

Affiliate marketing offers several passive income sources, but blogging isn’t the only way. Though blogging proves to be more sustainable, video, podcast, microsites, and email marketing are some ways to do affiliate marketing.

Affiliate marketing has changed the lives of many online marketers, for example, Pat Flynn, Anil Agrawal, Adam Enfroy, Ryan Robinson, and many more.

If you want to earn a full-time income through affiliate marketing, this post is for you. So let’s dive in together…

PS: I’m running a free 10-part email series that teaches How to go From Zero to $100 and above within 30 days of starting an affiliate marketing business. You can sign up from this page.

Only subscribers’ exclusive content never gets discussed or shared on the blog. You’ll discover the truth, tools, and reality of making money from affiliates’ marketing businesses. Click Here to Sign up Now

What is Affiliate Marketing?

In simple terms.

Affiliate marketing is an online business model where you promote other people’s products/services in return for a commission. Or percentage of the total sales purchased through a unique affiliate code or URL given to you.

Affiliate marketing is a performance-based business. You only earn when sales are made or leads are generated for the merchant.

This differs from contextual advertising programs such as Google AdSense, which allows you to earn a small commission on each qualified click on banner/text ads on your blog.

In affiliate marketing, you only get rewarded for results, like when a sale or leads are generated.

In the affiliate marketing definition above, I use the word “online” for a purpose. Even in the physical world of brick and mortar, affiliate marketing does exist, too.

I once fully participated in it.

I do affiliate marketing offline for about five years before dabbling into this online thing. In the real world, affiliate marketing exists in many forms and deals.

You don’t need an affiliate code, tracking ID, or link to direct a prospect to the merchant product/offer page.

You need to find a potential buyer – someone already in buying mode who doesn’t know exactly where to purchase the goods or is skeptical of his buying decision.

Find this person, and convince him to buy from your partner (the merchant). Once the deal is closed, you earn from the actual product or service sales.

How the commission is determined offline differs from online affiliate marketing. You can negotiate terms and conditions with the merchant before making the sale.

In some deals like real estate, your earnings may be determined by a predefined percentage of the actual sales. 1%0 for purchases above a million bucks, and 5% for sales below a million.

How Does Affiliate Marketing Work?

Affiliate marketing involves four (4) parties to make smooth transactions of the program:

1. The merchant.
2. Affiliate marketing network company.
3. The affiliate (you are sometimes referred to as the publisher).
4. And the consumer (the paying customer).

Here are how these four interconnected links work together to ensure transparency, accountability, and profits-oriented business – a win-win for everyone.

The first step is for you (the affiliate) to find relevant, high-demand affiliate products/services through an affiliate network company or directly on the merchant website.

The affiliate network company is responsible for managing the merchant affiliate program. This frees the merchant from handling risk associate tasks that come along with the affiliate’s management:

• Payment.
• Tracking affiliate ID.
• Marketing tools.
• Affiliate reports, etc.

These affiliate network companies, in most cases, don’t get involved in product delivery. Their primary duty is the management of affiliates. Such as affiliate registration, tracking URLs, traffic reports, clicks reports, payment options, etc.

If a potential buyer clicks on your affiliate URL, it will redirect to the merchant’s website. This is where he can access the product sales page, shopping cart, payment options, etc.

How to Find Relevant Affiliate Products?

The success of your affiliate marketing campaign depends on product relevancy, trust and authority, transparency, and an engaged audience.

You can achieve all these attributes from years of consistently offering value to the community. You build trust and establish your blog as a voice in your industry through the content and valuable advice you publish.

To find products and services to promote, you need to sign up with affiliate marketing programs.

Let’s take Shareasale Affiliate Network for a case study.

How to Create an Affiliate Marketing Account

First, sign up with an affiliate network company like Shareasale.

Shareasale has hundreds of merchants, including AI affiliate programs, and over 4,000 products/services available for promotion upon merchant approval.

In most affiliate account openings, you need an email address and a unique password.

You must apply to become part of their affiliate program to promote a merchant affiliate product.

You can do this right there on the Shareasale website. In most cases, you won’t need to navigate to the merchant website to do this.

After submitting your application form, the merchant may approve it automatically. But sometimes, it will require more marketing information from you and days to review it.

One of the advantages of affiliate network companies like ShareAsale is that you have one central dashboard to access all merchant’s affiliate reports. Every detail about your affiliate performance is in one main dashboard, from clicks and impressions to qualified sales.

It makes it easier to reach the payment threshold on time since all your affiliate earnings are tied into one central account. And you can promote several affiliate products within one affiliate network company.

This means you can promote the WP Engine Affiliate program, which earns you $200 on every affiliate sale.

Also, you can promote the TOP10 Ware affiliate product, which can earn you $109.90 in affiliate commission from a single sale. And have both commissions paid through your ShareASale affiliate account.

You don’t have to visit the WP Engine website to receive your affiliate earnings or the Link-Assistant website to request your affiliate commission.

No!

You will receive all your affiliate earnings through ShareASale on their due or payout date.

How do Affiliate Marketers Get Paid?

This is an exciting question and one that needs a bit of explanation.

I wasn’t sure this whole thing was confirmed when I started with affiliate marketing.

How on earth would this merchant know the sale was from my website? I might send customers who buy from the merchant and never get rewarded for my hard work.

Don’t worry, and thanks to your affiliate ID. The technology that is used to track sales to an affiliate.

What Are Affiliate Links?

When you register as an affiliate, you get a unique code, URL, or, let’s call it, “affiliate links” that represent you as an affiliate for that particular merchant.

When users click on this affiliate code, URL, or ID, your affiliate ID is stored on the user’s browser in a text file known as a “cookie.”

This cookie stayed in the browser for a period, such as 30 days, 45 days, 60 days, 120 days, etc. This allows the merchant to track a sale to your affiliate ID even if the customer didn’t buy on his first visit.

Although the cookie can be cleared manually from the browser, such as when the user reformats his computer, removes all cookies manually, etc.

In such a case, tracking the sale to your affiliate links will be impossible if the user buys from the merchant later.

The lifetime of a cookie depends on the merchant cookie terms; it is not something you control on your part.

These cookies help track your sales because they have your unique affiliate ID and tell the merchant where the sales traffic originated.

Affiliate links, codes, URLs, or IDs are unique and exclusive for you only. No two affiliate marketers shared the same affiliate codes or ID.

This has never happened!

Through your affiliate code, URL, or ID, you start promoting the affiliate product/services. Take a look at the TOP10 ware affiliate cookie lifetime below. It lasted for 90 days.

How Affiliate Marketers Make Money

Affiliate marketing can become a real business.

A business that makes you full-time income if approached with the right mindset. The more you put into making it work for you, the more you make from it.

It is like any real business; you won’t make much out of it if you don’t pay attention.

Apart from one-on-one blog coaching, affiliate marketing has been the #1 source of income for this blog since its inception.

I have earned a decent income and am still doing it.

Review posts are among the best strategies that have significantly impacted affiliate marketing. These are posts published to promote discount sales, especially during specific times like Black Friday, Summer sales, Xmas sales, etc.

This strategy, backed by targeted paid content marketing, has worked well. I have great success each time I do this and a better return on investment.

Facebook paid advertising has worked well for promoting content to a target audience. And Reddit’s paid advertising hasn’t poorly done, too.

Aside from these marketing channels, search engine traffic has been better. It seems to be the overall leader in the percentage of traffic that I bought through my affiliate links on this blog.

Also, I like to promote high-ticket affiliate products and recurring commissions. This is because it’s easier to reach $500 and above in commissions with fewer sales than with $27 affiliate products.

You may think selling products under $50 will be easier than selling for $500 and above.

It requires the same marketing efforts and resources to sell a product for $50 and $1,000. The only difference is your knowledge and marketing budget.

It’s all about knowing what you’re supposed to do and ensuring you’re doing it. If you can’t sell a product that sells for $1000, I bet you can sell a $50 affiliate product.

However, it will take more investment on your part to look good selling high-ticket offers than it is to sell low-ticket offers. But it is all about making sure you’re doing the right thing.

Here are other ways you can make money from affiliate marketing.

• Join a reliable affiliate program.
• Promotes quality, high, in-demand Products.
• Build a niche-specific website – this is huge if done right.
• Build a list of active Subscribers – this is very important.
• Write quality, honest product reviews – be honest.
• Take advantage of sales promos, discount codes, summer sales, etc.
• Offer extra freebies to your readers.
• Give away a bonus to intending buyers.
• Give away flyers with your affiliate’s signature on them.

Why You Should Consider Affiliate Marketing

1. Doesn’t Require Huge Traffic

You don’t need thousands of website traffic daily to profit from affiliate marketing. What you need is high-quality targeted traffic.

The kind of traffic that is looking for what you’re promoting.

With 500 regular visitors, you can make more money from affiliate marketing than known monetization methods like Google AdSense.

AdSense requires thousands of unique daily visitors to earn significant income from it.

2. You Don’t Need Special Knowledge

You don’t need any qualifications in marketing to be an affiliate marketer.

If you want to start promoting health-related products, you don’t need to be a qualified Doctor, nutritionist, or whatever.

As an affiliate marketer, you need the readiness to give what it takes to make things happen. The right strategies and tactics to discover the right affiliate product. And effective marketing tactics to get this product in front of targeted buyers.

3. Zero Startup Cost

Affiliate marketing is the reality of starting with zero or empty pocket business on the internet. You can even start without a website or blog.

Yes, you can.

Besides having a blog, many intelligent marketers have recorded tremendous success with forum marketing, social media promotions, and other content marketing channels.

Having a site for your affiliate marketing business builds a long-term professional business—a place where people can transact business with you on demand.

In our next blog update, I will discuss ways to start affiliate marketing without a website and still make good money.

4. Better Than Sponsored Post

Yes, affiliate marketing is better than sponsored posts on your blog.

Unlike sponsored posts, where you get paid once for your work, affiliate marketing allows you to earn continuously from your one-time publishing efforts.

Here is an example of what I am talking about.

The content that generates the commission in the image above will continue to do so for as long as it remains relevant and drives traffic. The product discussed in the post is an evergreen product—an essential product required to start an online business.

Suppose I had considered taking $100 for a sponsored post back then to publish the same post. That would have been the end of it. Only the advertiser will keep enjoying the long-term benefits.

5. You’re Not Selling Your Readers for a Penny

Affiliate marketing doesn’t work like contextual advertising, where the number of clicks determines your earnings.

In affiliate marketing, you offer your readers quality content— helping you solve a problem. You’re helping You’reudience make better buying decisions based on honest product reviews and recommendations.

6. You Earn Passive Income

If done right, affiliate marketing can earn you passive income regularly from your one-time effort.

A review post you publish today can earn a referral commission for as long as that post remains relevant and attracts the targeted audience.

And if you’re promoting recurring affiliate products, you keep earning commission for as long as the customer remains subscribed.

7. You Don’t Need to Create a Product

Creating a product/service affiliate marketing saves you from all the hassle. All you need to do is find other people’s products/services; then, you promote it as an affiliate.

You’re not involved in product cYou’ren, management, delivery, handling customer complaints, etc.

You only need to presell the affiliate product by publishing a review post. You describe the benefits, features, and pricing details in the post.

Conclusion…

Affiliate marketing is a serious business that can earn you a lifetime opportunity to live your dream life. But like any other real business, it requires your utmost attention and readiness to give it what it takes to make it work.

PS: If you have not subscribed to my 10-part affiliate email series that teaches How to go From Zero to $100 and above in affiliate marketing, click here to subscribe now.