What is affiliate marketing and how does it work? Affiliate marketing is an online business model in which third party referrers earn commissions by recommending other people’s products. Anyone can become an affiliate by joining an affiliate program and using their unique identifying link (affiliate link) to promote products and services online.

Amazon, for example has one of the most popular affiliate programs. Anyone can join the program to promote any of the many products on Amazon’s website. Once you have joined, you get access to your partner program portal where you can find your affiliate link. An affiliate link is basically a unique identifying link which tracks sales back to the person who has referred the sale.

Affiliate marketing is becoming a very popular model for earning an income online because you don’t need any experience to start and you don’t need any products or services of your own to sell.

There’s also more people shopping online than ever before and the traditional economy is being replaced by the digital economy as more people using the internet rather than visiting physical stores.

What Is Affiliate Marketing And How Does It Work?

Once an affiliate has joined an affiliate program, they can promote a product through their affiliate link. This can be done in many ways but most affiliates will choose an online promotion method to get people to click on their link. They can of course advertise in any way they want, including off-line traditional advertising methods. Here’s a few of the most popular affiliate marketing strategies:

• Blogging – Creating written content online is a cheap and effective way to put your products in front of a targeted audience
• Email marketing – affiliates build huge email lists by giving something away in exchange for a visitor’s email on a website.
• PPC – pay per click marketing is one of the most popular methods of building an email list or simply driving traffic to affiliate offers
• Social media – many affiliates leverage their social media account to get people to their products.

As a beginner in affiliate marketing, it can take some time to get off the ground and make your first sale. Long term affiliates who have been at it for several years have often built huge followings and can therefore sell many products quite easily; particularly if they have a huge email list of subscribers.

What Is Affiliate Marketing And How Does It Work? Types Of Products

There’s many types of affiliate products available to sell and although many new affiliates start out with Amazon, there’s many other platforms you can join. Clickbank.com for example is another popular platform for beginner affiliates and they can choose from thousands of digital products from the site. Although digital products can be more tricky to sell than physical products, they pay larger commissions for referrers. Typically a physical product will pay between 5-10% commission, whereas a digital product will pay more like 30-40% commission.

If you’re considering becoming an affiliate, it’s also worth considering high ticket affiliate marketing products and subscription affiliate programs. A “high ticket” product carries a much larger price tag and therefore will pay out much larger commissions to an affiliate when they make a sale. Most high ticket items will pay out $500 or more in commissions whereas low value products will often pay out less than $40 per sale you make.

Subscription products are things such as memberships and software products. These are beneficial for affiliates who promote them because they can earn ongoing commissions from each sale they generate. While most affiliate products only pay you once, subscription affiliate programs pay you a recurring income. So if you choose to promote them, you can more easily obtain a regular source of income once you have learned how to sell.

Content Creation Vs. Paid Advertising

Most affiliate marketers will choose between two categories of advertising: paid marketing or content creation. They can of course do a bit of both too! Paid marketing is often used to either build an email list from a landing page or website, or send traffic directly to affiliate offers. While paid marketing is more expensive than content creation, it offers a much faster way of getting traction with an affiliate business. Paid marketing is also much more scalable than content generation because once a winning ad has been set up, you can leave it running and scale up quickly just by increasing your advertising budget. See also how to scale affiliate marketing.

Content marketing, while cheaper, is a much slower form of marketing. Content creators will use blogging, video content or some other form of content to draw an audience towards their affiliate products. They often spend several months building content which attracts free traffic via the search engines. Search engines such as Google reward content creators with free traffic. But it can be competitive and depending on your particular topic/niche, this can take some time and effort.

See also PPC vs organic marketing.

Summary

Affiliate marketing is a business model in which third parties refer people to products and services online. Anyone can become an affiliate marketer by joining an affiliate program, getting their affiliate link, and learning how to sell products through their link.

The hard part of affiliate marketing is attracting enough of the right kind of people to your affiliate link in order to make regular sales.

Once you understand how to do this, you can repeat it, automate the process and scale up to an ever growing global audience. This can mean potentially unlimited earnings can be made from affiliate marketing.

However, this outcome isn’t typical and around 95% of affiliates will quit. The top 5% are the ones who go on to create a “lifestyle business” giving them financial and geographical freedom.

If you’re ready to start your own affiliate business, access this free video series to learn more.