Here are some things to know about affiliate marketing. Affiliate marketing is a business model in which people get paid for referring customers to products online. It’s a little like recommending a friend to a nice restaurant. Only, the affiliate gets paid when someone makes a purchase based on that recommendation.
Affiliates use affiliate links which are tracked back to them when a sale is made. They are then credited with the sale and paid a commission. Companies use affiliates to promote their products and services because it’s a very cost effective way to advertise. Affiliates only get paid when a sale is made. This works well for companies who are able to extend their market reach with many affiliates who promote their business/products.
For affiliates, if they can make a consistent profit from their marketing efforts, it means they can become self employed and work for themselves from a laptop from anywhere globally.
Things To Know About Affiliate Marketing – Beginners
Beginners can struggle when they are learning affiliate marketing. In fact most affiliates will quit (around 95%). See affiliate marketing failure rate. This is because it’s not easy making money from affiliate marketing. At first there’s a lot of work to be done and a lot of learning to do. This all takes time and effort. Results might come only after a long period of learning and through trying out several marketing strategies. It is this period which is the most difficult and many will see their efforts as futile. That’s generally when they quit!
But if you know this, you’re much better prepared to keep going and if you do, you will eventually break through and start making progress. The learning curve is steep for affiliate marketing. Once you start making sales consistently, you’ll have some results to draw from. Until this happens it can be difficult to believe in affiliate marketing.
A good analogy of the affiliate marketing journey is the Chinese Bamboo tree which gestates under the soil for up to 5 years. Once it breaks through the soil, it can grow 90 feet in only a few weeks! If you didn’t know about the Chinese Bamboo tree, you would probably assume your plant is dead! Affiliate marketing can be like this too, on the positive side, and grow very quickly once you are making consistent sales.
Things To Know About Affiliate Marketing – There’s Many Ways To Do It
There’s many ways to do affiliate marketing although the successful marketers have generally all got email lists. See free autoresponder for affiliate marketing to get your own email marketing service. An email list lets you control your traffic. As you build an email list, and offer useful email messages, you can build trust with your subscribers. When they get to know, like and trust you, they’re more likely to buy your recommended products (through your affiliate links).
Top affiliates build their lists of subscribers into the tens and even hundreds of thousands. A single email sent to a large email list can mean many sales on the same day! As a beginner, your list will be very small, and so you won’t see the same success as someone who has been building their list for several years.
Email lists can be build quickly and slowly using different methods. Some affiliates will use free methods of traffic generation which take some time. Others will use paid marketing and build their email list very quickly. You can also promote affiliate products in other ways and even without an email list:
- Blogging
- Social Media marketing
- YouTube, TikTok
- PPC – pay per click marketing (paid marketing)
- Niche websites
- Landing pages
- Etc
Different Products Pay Different Commissions
Another thing you should know about affiliate marketing is that there’s a huge range in commission percentages. Some products will pay from 1-10% in commissions whereas others will pay 30-40% commissions. Digital products tend to pay more than physical products and of course larger valued products offer better commissions too.
The largest commissions can be found from top valued digital products such as training courses and mentorship programs. The smallest commissions are from physical products with a low price. So your choice of products to promote as an affiliate will have a large bearing on your success.
You will need to sell considerable more of a low value physical product, for example, to make the same amount as selling only one or two high valued products or digital products.
Some Products Keep Paying You Long After The Sale
Some affiliate products will keep paying affiliates for the referral long after the sale, even years later! This is definitely something you should know if you’re considering being an affiliate marketer. In the early days as a beginner, you will likely have a few weeks or months of not many (or any) sales. When a sale does come in, the success can be short lived with a one time commission. But with subscription products, you can earn a monthly income from each sale you generate.
Even with a small commission of $20 a month, 5 sales would mean a monthly income of $100 – passive income. 100 sales would mean a monthly income of $2000. Of course there is attrition – the dropping off of members over time. But if you choose your products wisely and use those which offer the most value, customers will keep using them for years. An example is a software product which is needed to run a business, such as an autoresponder (email marketing service).
Selling this kind of product can give you lifetime commissions which come in month after month. See subscription affiliate programs.
High Ticket Products Pay The Most
High ticket products are those which offer commissions of $500 per sale as a minimum. You can promote both digital and physical high ticket products as an affiliate. Here’s an example of a high ticket physical product available from a site called Hammacher Schlemmer.
Hammacher Schlemmer pays its affiliates 8% commissions on sales they generate which means you could earn $31,600 in commission for a single sale. Compare this to promoting a product from Amazon which sells for $40 and you would earn only $8 given their top commission rate of 20%. Amazon affiliate marketing commission rates vary from 1% – 20%. So as you can see, you’ll need a lot of the lower value sales to make up for only a single sale of a high ticket item.
While not everyone is in the market for a $395,000 helicopter, people do buy these kinds of items. Once you learn how to sell online, selling a higher valued item will often require the same work as selling a low value product. So it’s clear that your product choice plays a strong part in your success as an affiliate.