Hey fellow marketers, Tom Sage here, and in this article we're going to tackle a question many people are asking: What is affiliate marketing and how does it work?
So let's get right into it.
Picture replacing the daily 9-5 grind to earn a few bucks, with earning unlimited commissions anyplace, anytime–even while you sleep.
Yup. That's the charm behind affiliate marketing.
Affiliate marketing is a powerful strategy to drive sales and generate online revenue. It is incredibly beneficial to both, brands and affiliate marketers.
It's also growing at a rapid rate. It represents a new push towards much less conventional advertising and marketing strategies.
Just to give you an idea:
- In March 2017, Amazon's affiliate framework began giving commissions of 1-10%, offering people the opportunity to build up their passive earnings.
- 81% of brand names and 84% of publishers leverage the power of affiliate marketing, a figure that'll continue to increase in the United States.
- There is a 10.1% rise in affiliate marketing revenue in the United States yearly, suggesting that by 2022, that number will get to over $7 billion.
What Is Affiliate Marketing?
Affiliate marketing is the process whereby an affiliate earns a commission for selling someone else's products.
Sales are tracked through affiliate links that make sure that the marketer receives his commission.
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How Does Affiliate Marketing Work?
Now that we've covered what affiliate marketing is, it's time to look at how does it work. Affiliate marketing comprises the vendor, the affiliate, and the consumer.
First off is the vendor. He or she is the merchant with an offer to market. That offer can be physical or digital. The vendor owns the offer and allows the affiliate to promote his offer for a commission of the sale.
Secondly, you have the affiliate. The affiliate can either be an individual or a business. His main role is to market the vendor's product to prospective customers and convince them to purchase. If the customer ends up buying the offer, the affiliate earns a percentage of the revenue.
Finally, and most importantly, is the consumer. This is the individual who consumes the offer. The consumer is the key driver of the entire affiliate process.
WIthout him, everything would crumble.
How Do Affiliate Marketers Make Money?
Affiliate marketers get compensated when a sale is made or when a lead is converted.
Pay per sale: This is the most popular way affiliates get paid. The seller pays the affiliate a portion of the revenue generated as a result of the affiliate's marketing efforts. However, this isn't a marketing 9-5 where you get paid a fixed salary regardless of performance.
Remember, with affiliate marketing, affiliates ONLY get paid when they sell.
What are the advantages of becoming an Affiliate marketer?
Income potential
Sky's the limit when you're an affiliate marketer.
Consider a standard 9-5 where you work a certain number of hours for a fixed amount of revenue. Unless you're working an incentive based sales job, your salary will always remain fixed.
Regardless of how many hours you worked.
In affiliate marketing, you put the work upfront without pay.
However, if your upfront work was smart and effective, you'll be getting paid for years and years afterwards.
NO Customer Service
Affiliate marketing means that you're selling someone else's product.
There are many advantages to this.
For starters, you're not responsible for customer service, product delivery, or anything else after you've sold an offer.
Your only job is to sell. Whatever happens later with the customer is handled by the vendor.
Work From Home
If you're like me, then you absolutely hate commuting back and forth every day.
If you think about it, a 9-5 is actually an 8-6 if you take the commute into account.
The good news is that affiliate marketing works from ANYWHERE! That's right, you never have to get out of your pyjamas.
All you need is a laptop and an internet connection to have what it takes.
Super Cheap
Starting a business was known to cost an arm and a leg. However, in the age of the internet, launching your very own business to escape your 9-5 and work from Hawaii is actually more affordable than your rent.
In fact, affiliate marketing costs exactly $0 to start.
The vast majority of affiliate programs don't require any payment or subscription. All you need is an email address. So you don't have any excuses.
Freedom
Being an affiliate marketer basically means that you're freelancing. You get maximum independence in setting your own goals and adapting them however you see fit.
You work your own hours, at whatever pace you choose. You don't belong to a company, you don't to answer to a 'boss' and you certainly don't have a limit on earning potential.
How Do You Become An Affiliate Marketer?
1.) Become A Blogger.
Bloggers can make a killing. The fact is, if you're good at writing, you can promote offers and compel your readers to make a purchase.
Bloggers do this by ranking for powerful keywords.
These are words or phrases that a certain number of people are looking for at a given time. If you can rank on Google's first page for the right keyword, then you'll drive heavy traffic to your vendor's offer and likely make a fortune.
Check out my article to learn more about how to write top-drawer content!
2.) Become An Influencer.
An influencer is an individual who holds the power to influence the buying decisions of a certain niche within the populace.
He or she is in a wonderful position to take advantage of affiliate marketing. They've already built a substantial following by establishing themselves as authorities in their niche.
So it's easy for them to guide consumers to the vendor's offers through social media sites, shout outs, and other interactions with their followers.
3.) Build An Email List.
I know what you're thinking, 'email marketing is so last decade.'
Let me stop you right there. This is an urban myth. In fact, email marketing is one of the most robust marketing mechanisms you can leverage today.
Email lists allow you to build incredible brand awareness and trust with your subscribers.
Once that trust is built, you can start recommending offers that you believe will benefit your list. Imagine having a list of 30,000 subscribers with a 1% purchase rate for a $100 offer.
Do the math.
Yup, $30,000! And that's just from one email!
Tips To Becoming A Successful Affiliate Marketer
1.) Pick A Niche And Stick To It.
This can be tricky, especially in the beginning. Many people tell you to pick a niche you're passionate about. However, this is incomplete advice.
The reality is, you need to pick a niche that meets three criteria:
- A niche you're passionate about
- A niche you're an expert at
- A niche that's profitable
Personally, I wasn't particularly in love with online marketing. In a way, I learned to love it and decided to focus on it as my primary niche. It might be different with you.
Whatever you end up choosing, make sure it meets the three criteria above.
2.) Build An Avatar Of Your Target Audience.
Before you embark on your affiliate marketing journey, make sure you understand your audience. For example, if you're focused on the gaming niche, you might want to take a snapshot of a typical individual who belongs to your audience.
He might be between 18-32, Male, interested in Fortnite, unmarried, attends E3, follows PewDiePie and reads Retro Gamer magazine.
As long as you have a clear picture of your target audience and what their pain points are, then you're much more likely to speak their language. You're more likely to touch them on an emotional level and compel them to trust you and later buy from you.
3.) Start Choosing Offers In Your Niche.
Now that you've gained an understanding of your niche and target audience, it's time to look for an offer to promote.
Here's the thing, you don't want to focus on yourself and your commissions. You want to put yourself in your target audience's shoes and think about what benefits THEM.
You should see making money only as a side effect of adding value to your niche. It shouldn't be the primary goal. Keeping that in mind, you want to pick an offer that:
- Genuinely benefits your niche
- Is sold by a reliable vendor
- Is profitable
4.) Avoid shiny object syndrome
Shiny object syndrome is the phenomenon whereby you constantly get distracted with different ideas. For example, you might focus on building an affiliate marketing business around your blog.
Then you see a video of someone who's killing it on YouTube, and you decide to focus on that.
Then you hear a story about someone else who made it big with Facebook ads, and you decide to explore that as well.
Before you know it, your mind is divided between 5 different pathways. You'll end up burning yourself out and achieving nothing.
Avoid this at all costs. FOCUS on a path and STICK to it. Once you've mastered affiliate marketing through blogging, then you can look at other venues to scale.
The same thing applies to your offer. Ideally, you should focus on selling one offer at a time. Give each offer at least 2 months of your full attention before you shift to another offer. That way you can build a robust, effective marketing campaign around that specific offer.
5.) Build A Connection With Your Target Audience.
In the beginning, you need to focus on adding value to your niche. You should aim to cultivate a relationship with your audience and establish yourself as an authority in your niche.
You can do this by making things personal. Be very honest and upfront in your blogs or videos. If you establish rapport, build credibility, and nurture trust, you're on a solid path towards success in affiliate marketing.
What Is Affiliate Marketing And How Does It Work (A Final Word.)
Affiliate marketing is the polar opposite of a 9-5. You can't walk into this expecting to get paid in a day, a week, a month or even a year.
You need to accept that you're putting all the work upfront to get paid later on. Walking in with the wrong expectations is the #1 mistake I see people making.
Because when your expectations are shattered, your motivation crashes and you end up quitting like 95% of people who come into this business.
I truly hope I answered your question: what is affiliate marketing and how does it work.
If you benefitted from this article, make sure to drop a comment and let me know what your thoughts are.
If you have any questions, I would also love to hear them!
Talk soon!
Great article!
Thanks Mike, I hope you gained some value and I look forward to seeing more of your comments!