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What Is Affiliate Marketing? Our Complete Overview for Beginners

You’ve likely heard of affiliate marketing from Internet gurus. Or, noticed your favorite YouTube creator mentioning how they’d get paid if you shop through their link. Maybe you saw a blurb in a favorite blog post saying something like “In this post, you’ll find affiliate links…”.Affiliate marketing provides an alternative business opportunity.You’re not slapping ads…

You’ve likely heard of affiliate marketing from Internet gurus. Or, noticed your favorite YouTube creator mentioning how they’d get paid if you shop through their link. Maybe you saw a blurb in a favorite blog post saying something like “In this post, you’ll find affiliate links…”.

Affiliate marketing provides an alternative business opportunity.

You’re not slapping ads on your site, earning pennies for each click. Nor are you creating sponsored content because a brand reached out and compensated a review. Instead, you’re leveraging great products you use (or think your audience could appreciate) and earning a cut.

 

What is Affiliate Marketing and How Does It Work?

Affiliate marketing is complex under-the-hood, but the easiest way to explain it would be this…

 

Affiliate marketing is getting paid to promote and sell other people’s products.

 

Let’s say you’re a product creator or operate an ecommerce website – how do you build traffic and sales if you’re exhausted from advertising and marketing? Easy, you tap into your community by offering incentives for their promotion. In affiliate marketing, the merchant shares revenue with their partners.

Turn the tables…

Suppose you have a strong Facebook following or website – how can you make passive income with the content you create? By applying to affiliate programs of brands you trust, offering products you like, and sharing it with your community. You earn a commission whenever someone buys through your link.

However:

It starts getting complex the further you’re involved with affiliate marketing. Before long, you could have several websites in different markets or a trove of tools and services running the campaigns. Affiliate marketing has unlimited potential – the more you put in, the more you’ll make.

 

The Basic Affiliate Marketing Terms Worth Knowing

What you’ll notice, when browsing affiliate programs, are several items you’ll want to factor in your decision when joining. This includes the big ones – brand, commissions, offers – but also smaller details – payment schedule, bonuses, and payout methods.

There’s no wrong choice with which affiliate program you choose. What truly matters is whether the program clicks with your community. As in, it offers products & services your audience wants to buy.

Let’s go through the affiliate marketer terms to help you better understand what you’re looking at:

 

The Players

The “players” in affiliate marketing are those involved in its offer creators to the end consumer. Your role in all this is the affiliate marketer or if you don’t prefer the term, you can say partner. Here’s what you need to know:

Merchants/Advertisers

Your creators listing products & services through an affiliate program or on affiliate networks. These could include store merchants. Or, managed by a third-party. The brands choose if they offer programs in-house, through networks, or combine both for maximum exposure.

Affiliate/Partners

This is you.

The affiliate/partners of the programs are the ones doing the heavy work. They’re building sites, creating campaigns, and creating referrals to the merchant/advertiser offers. They employ a variety of tools, resources, and tactics to entice consumers to buy through their link.

Programs/Networks

These are the backend systems and platforms managing the campaigns. These platforms typically include a wealth of creative assets and tools to help their partners start and grow campaigns.

The programs and networks will also have affiliate managers (if they’re vested enough in affiliate marketing) to help with questions, contests, and anything else to keep the program running.

Consumers

Your end-consumer buying the affiliate offers and promotions. These individuals are part of your community or found through advertising or marketing campaigns.

 

The Payout

Most, basic affiliate programs pay when consumers buy through affiliated links. But, merchants may choose to couple other affiliate payment models for increased exposure to the market – while giving affiliates extra incentive to onboard with the program.

These payout methods include:

CPA (Cost-Per-Action)

People get into affiliate marketing to earn commissions.

Affiliate commissions are a percentage partners make with every qualified sale of a product or service. The commission amount (affiliate payout) depends on the publisher. Big brands offering physical products often pay 5-8% commissions whereas digital product creators pay 50% and more!

For example:

  • Walmart’s affiliate program pays 8% commissions for each item sold
  • Shopify’s affiliate program pays 200% commissions for a new sign-up

The earnings potential with a CPA is virtually limitless with the bonus of knowing your followers receive a wonderful offer. This is typically the easiest form of affiliate marketing because you’re promoting products you use or whole-heartedly recommend.

PPC (Pay-Per-Click)

The PPC (Pay-Per-Click) affiliate commission type pays partners whenever someone clicks on and visits the affiliated site. This is one of the easier methods to earn as an affiliate because you’re paid for their action without relying on the brand to convert visitors.

Technically, this form of payout falls under CPA since the user acts on the link. It’s the same concept you’ll find when adding Google AdSense to your website. Except, you have better control over what promotions are displayed by selecting offers through the affiliate network.

CPM (Cost-Per-Millie aka Cost-Per-Impression)

CPM models pay based on every 1,000 impressions. Some affiliate programs and networks offer a hybrid model paying partners to display CPM ads while delivering commissions on sales. You don’t find this model used as frequently in affiliate marketing since the industry leans toward CPA.

Revenue Share

This is your path to passive income via affiliate marketing.

There are hundreds of programs paying revenue share – where you continue earning a monthly commission if a person remains a subscriber to a service. This is frequent in software and Web services merchants since their offers are memberships.

You can earn 10% – 50%+ in many cases creating quite the money-making opportunity!

 

The Extras

The last few items worth noting are ones you’ll find throughout all programs:

  • Affiliate ID/Link – This is your unique URL used for affiliate tracking & reporting
  • Threshold – The amount you’ll need to earn before being paid
  • Payment Type – Merchants can choose to pay several ways like a check, direct deposit, and more
  • Restrictions – Some affiliate programs/networks aren’t available in all regions/countries
  • Terms – Every program has their set of terms sharing what you can and cannot do
  • Incentives – Some programs include higher payouts for partners delivering exceptional sales

We’ve tried our best to keep our affiliate program directory as simple and easy-to-understand as possible. But, all good affiliates will A) read further into the terms, and B) talk with their affiliate managers to discover opportunities (and to stay on course).

 

How to Find and Join Affiliate Programs or Networks?

There are two ways to find and join affiliate programs:

  • In-house programs
  • Affiliate networks

Let’s look at how you’d find opportunities in each…

In-house Affiliate Programs

In-house programs are affiliate programs offered through the brand. You’ll find this listed under an ‘Affiliate Program’ link usually in the footer. The brand, in this case, decided to offer partnerships using a backend service of their shopping cart or software.

The benefit of working with brands directly is the tailored service and revenue sharing margins. The brand offering an in-house affiliate program don’t pay network fees – allowing them to pass earnings onto their partners (though, this is case-by-case).

Affiliate Networks

Affiliate networks are hubs where advertisers & merchants list their programs, products, or services. It gives partners an all-in-one location to find affiliate campaigns. There are several, major affiliate networks you’ll discover when starting affiliate marketing.

The benefit of using affiliate networks is having access to thousands of advertisers & brands. Also, these networks have unique tools, resources, and features to help with your promotions. You could join several affiliate campaigns and track each from within the network’s backend.

Which is Right for Me?

There’s no wrong choice between the two since both give great opportunity to earn by promoting other people’s products. That said, you may find it easier joining an in-house program. The larger affiliate networks seek performers and have higher restrictions/barriers – this doesn’t make them impossible to join but you may have trouble if you’re just starting.

Try this:

  1. Join a few in-house affiliate programs
  2. Deliver consistent leads and sales
  3. Approach networks with performance reports

Show that you can deliver sales to your partnered brands and you’ll have no trouble joining the larger, exclusive affiliate networks. The brands (and managers) look for qualities sites, high traffic, and consistent sales since so they’re not wasting everyone’s time and resources.

 

What to Consider when Joining Affiliate Programs

Many affiliates look at commissions as their leading factor when joining a program. While this isn’t too bad an idea (getting paid well is always good!) it’s not the end-all of what to consider.

You’ll want to add in:

Brand Authority & Influence

Choose a brand with staying power and influence in its market.

There’s no sense promoting a brand if they’re obscure or have trouble competing in the market. Remember, you’re in sales. Your task isn’t trying to champion/knight a brand with little prospects.

Sure, promoting Apple or Walmart puts you in competition with pretty much every other affiliate. But, these are brands people know and use. You can always add smaller programs to your set to fill gaps – for now, work with those with great offers and sales.

Offer Quality & Prices

It’s always in your best interest to find a middle ground between quality and pricing.

90% commissions look great until you realize the offer sells for $5. This is the same for earning 5% commissions on $3,000+ products. The commission is right… but the pricing may not fit your audience.

Therefore, tiered pricing works best with promotions:

  • Low-tier – Inexpensive products for frugal types
  • Mid-tier – Promotions for your average consumer
  • High-tier – To land the “whales” and earn big

What this does is give people choice.

The nice part of this? You’ll earn affiliate commissions if they buy any of these items since most programs pay regardless of which product page they landed on. So, as long as it’s a quality item at a nice price-point for your audience… you’ll be on track to earn commissions.

Commissions Structure

There are several variations to commissions structures:

  • Flat-rates
  • Variable
  • Tiered
  • Incentivized
  • Bonuses

Most programs use either flat-rate or variable commission structures. You’ll see most merchant shops offering something like 5% – 8% for all products sold through links. However, some brands choose to use tiered commissions (ex. 5% for $0-$1000 in sales, 6% for $1,000 – $5,000, etc.).

You’ll also run across programs offering incentives and bonuses for affiliates. This attracts super affiliates to the program which amounts to massive earnings for consistency. It’s very possible to reach these higher levels as your affiliate marketing efforts grow – so keep them in mind when joining.

Affiliate Cookie

The affiliate cooking (the tracking cookie) is the code placed on the user to track & report actions.

In programs, you’ll often notice this:

  • 14-day
  • 30-day
  • 90-day
  • Lifetime

This means you’ll earn any time from the moment they click to the end of the “cookie window”. Of course, this also depends if they clear cookies between sessions.

Most programs use a “last click” affiliate cooking meaning whichever partner received the final click (before them buying) will earn the commission.

Creative Assets

Affiliate programs typically include creative assets to help partners launch campaigns – including:

  • Banners
  • Product pictures
  • Sample blog posts
  • Newsletter templates
  • Social copy/tags

This isn’t the end of the world if they don’t provide them. But, it certainly helps!

Some brands go through extensive QA with creative asset creation – providing highly optimized creative & copy to increase clickthrough and earnings potential. This cuts down on your development time while knowing your launching campaigns with a strong baseline.

Management & Resources

The better affiliate programs have affiliate managers. These individuals help partners increase their opportunities while fielding questions. They are also involved with improving backend features, creative assets, and reporting.

Incentives and Bonuses

Do you think you’ll do well with the program? If so, then consider the long-term advantages of the incentives and bonuses. These items reward affiliates as they reach new sales tiers. A +1% bump may not seem like much in the beginning, but this could amount to thousands throughout the year!

 

Which Products & Services to Promote?

The hardest part of affiliate marketing is choosing what products to promote.

Why?

Because there are so many!

There are several factors to consider:

  • What is my niche?
  • What does my audience buy?
  • Have I used this product or service?
  • What are influencers promoting?
  • Is an affiliate program available?

Some brands and programs provide hundreds of thousands of products while others may provide just one.

It’s easy to feel overwhelmed when you’re beginning because there’s simply so much opportunity.

To begin:

Niche Selection

It doesn’t make sense promoting loan programs when you’re selling bicycles.

The affiliate program should match your website topics – you should include yourself in a niche that’ll make you money.

For example:

  • Talk a lot about electronics? Consider promoting Newegg
  • Talk a lot about cosmetics? Consider ULTA Beauty
  • Talk a lot about building sites? Consider Bluehost

There are ways to fit affiliate programs outside your niche with enough effort. But, 99% of new affiliates should stick to what’s available in their market.

The Market

You can’t force people to buy items and services they don’t care about. This may come as a shock but not everyone cares what you love. So, if you’re promoting certain brands the market hates… then don’t expect to earn much because they want offers from the competitors.

It’s this: Don’t go against the grain.

How do you find what people are buying?

  • See what people are sharing on social media
  • Run reports of top buying keywords & phrases
  • Ask your community what they’ve bought (or plan to)
  • Look at the competition and see what they’re promoting
  • Check the program’s back-end stats (like EPS and conversion rates)
  • Browse through top selling and popular product lists on websites

Again, talk with your affiliate manager on networks to see what’s hot. They have detailed reports and stats to help affiliates. This info explains which programs include top sellers & market movers.

Usage

The easiest way to fill out a variety of affiliated promotions are from what you use:

  • Use a web service for your work? Share it!
  • Own a cool product and know its ins and outs? Talk about it

In-depth reviews are some of the highest earners in the affiliate market.

Why?

Because they’re created from the viewpoint of someone who uses the product. This person knows the fine details not explained on offer pages – it resonates with the audience more so than marketing copy & creative.

Influencers

Let others do the hard work of offer selection by lifting what they’re promoting:

  • Scan income reports finding top earners of those in your niche
  • Follow social influencers and note what they promote
  • Look through YouTube descriptions and see which products are paired to popular videos
  • Compile your competitor’s sales efforts and figure out what works for them

Or, bypass all this by running polls with your community to see what they like buying. You could point this polling to the social influencers, too, getting a quick rundown of what everyone is promoting.

Chances are: If social influencers are promoting something then it’s going well with the community – this gives you an easy “in” with what you decide on promoting, too.

Availability

A hot product or service isn’t always available to the public – not every brand offers an affiliate program.

What can you do if they don’t?

  • Find comparable products from competitors
  • See if the product is listed on a general retail program
  • Get in touch and become a direct partner

Most, big brands have affiliate programs because they see the value in free promotion.

A small cut to drive thousands of new leads to their business is well worth the trouble of setting up the program.

 

How are Affiliate Links Promoted?

Once on board with an affiliate program, you’ll have access to your affiliate ID & unique link.

Note: It’s crucial to disclose your affiliation either by including a blurb mentioning your use of affiliate links or with a privacy page detailing their inclusion.

From here, you can place your link wherever you feel it fits.

Will this produce the best results? Not really.

Your better opportunities lie in how you package the affiliate offer with supporting content:

Content

Your content is the best place to place affiliate links.

The content is a valuable item helping your brand get found in search and social. The content acts as a sales page for the affiliate links. Or, offers a bonus to an already valuable piece.

What content type works well?

  • Buyer’s guides
  • Product roundups
  • Reviews
  • Tutorials

Each either explains the product and its benefits or ties it in to add to what you’ve created. A person going through your content gets something of value but also has an option to get more by buying a product or service associated with the topic.

For example:

You could create a detailed guide to getting started with model trains. This post could include a complete, step-by-step tutorial on how to pick & choose the models. Each time you mention a model is an opportunity to earn a sale if the person likes what they see and wants that item.

Email

You’ll find many promotions through email– it’s a chance you’ve been on the receiving end of these.

How would you do it?

  • Drive people to a new post with affiliated links throughout
  • Talk about a new product launch with your affiliate link attached
  • Share a neat discount or coupon linked to your URL

It’s generally better to point people to a page versus selling directly in the email. Why? Because you’d also gain the chance they’d share the content on social – driving more people to the page. But, that option is yours and does earn big bucks if you’ve built a strong newsletter.

Websites

Google has slapped niche sites around, but they remain viable if you’re doing more than creating thin content and spamming your affiliate links. What you’re doing, in this promotional tactic, is creating a niche authority site.

It would go like this:

  1. Use keyword research and market tools to find a profitable niche
  2. Develop and publish interesting and engaging content on the topic
  3. Build links and optimize the site to rank in search engines
  4. Keep adding reviews, news, lists, and other great content as it grows

This affiliate avenue is great for those itching to build websites. It lets them explore neat topics while earning money from affiliate sales. An example of this could be building a niche site around a hobby – one where you know and use the hobby’s items making it easy to review and discuss.

Advertising

Check with the affiliate terms and conditions before doing this… but:

  1. Create an attractive landing page touting the benefits of the affiliated offer
  2. Test and develop a strong set of banner and text ads
  3. Run the ads across several domains like Facebook, Twitter, Google, and niche sites

Are you earning more from the sales than you’re paying for advertising? If so, then keep at it!

Webinars

This is taking your content to the next level by sharing information to a live community. Webinars create hype and leverage long-form discussions – keeping people engaged because it’s informational.

You have the chance to casually mention products & services throughout the webinar. Plunk links into the discussion or point people to a landing page and you could earn whenever referencing these items.

Offline

Most, if not all, programs don’t allow you to earn commissions from offline sales. They’re strict about if you’re including an affiliate link in a printed book or slapping it on flyers. However, you can do some offline marketing by pointing people to one of your domains or landing pages.

For example, posting flyers for moving services around college campuses driving people to a comparison website for those services. The services include links to rental programs.

We have a lot of great tutorials explaining how to promote affiliate links throughout our blog.

Be sure to deep dive into the archives else follow us on FB/Twitter.

Or, join our newsletter for the latest tutorials and information in the affiliate marketing industry!

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