What is affiliate marketing?
Affiliate marketing is the system of a digital publisher sending visitors to an online retailer and receiving a percentage of the sales referred.
Here’s a small guide for beginners to help you understand what affiliate marketing is.
Wikipedia define it as;
Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate’s own marketing efforts.
On this page:
How affiliate marketing works
The basic step-by-step of how affiliate marketing works for publishers:
- You join an affiliate program
- Place your unique affiliate links on your website or wherever you can online (social media etc)
- Earn commissions from sales made via customers you send
- Receive your payouts
If you’re a retailer looking for sales here’s how affiliate marketing works for retailers.
How much money can I earn from affiliate programs?
It varies wildly, how long is a piece of string? It all depends on the access to potential clickers of your affiliate links, the niche, the company you’re promoting, how targeted the campaign is, and of course a bit of lady luck also.
If you have a niche website receiving 100,000 unique visitors per month and you promote a highly-targeted quality products to them (which pay fair commissions) then you should expect some healthy returns. If you push the campaign hard with good advertising and marketing tactics and get 10% of visitors to click on an affiliate link, and 2% of those people convert, that’s 200 sales per month. If you’re receiving an average of $5 per sale that’s $1000 revenue.
If you want to run more quick numbers we have a very basic calculator you can use.
An example of a website using the affiliate marketing business model
- You build a website using WordPress and publish review articles about car accessories
- You promote that website to build up regular monthly visitor numbers
- You include affiliate links to car accessories retailers in articles that talk about products
- Over time commissions start to be earned as referred visitors make purchases after clicking on your affiliate links
- You reach the minimum cashout level required for the networks and programs you’ve joined and get paid via PayPal
- You keep reinvesting your revenue until you have a sustainable online business
Does affiliate marketing go by other names?
Yes, you may have heard it referred to by other names, such as ‘network marketing’ or ‘multi-level marketing’. ‘Performance marketing’ is another popular one, which is more recognized and clearer from its name what it’s about.
Some people in the industry prefer ‘commission marketers’ or ‘retail affiliates’. To be honest you can mix up a lot of different terms, acronyms, and buzzwords but ultimately we may as well stick with the same name.
Who regulates affiliate marketing?
There’s no one central organization that regulates affiliate marketing. But there are sources you can use and methods for keeping yourself safe in the industry. Use methods such as reading terms and conditions, and considering the legitimacy of reviews, to help avoid scams.
How do I get started making money?
Here’s the overall process to go through:
- Think of a new business idea, where there’s a gap in an existing industry you think you can exploit.
- Setup your website, YouTube channel, podcast, or whatever other platform you will focus on.
- Find affiliate programs.
- Get publishing regular content and place your affiliate links in your content.
- Keep building the business and don’t stop until you’re nicely profitable.
Any tips for success for affiliate marketing newbies?
Always keep it simple. Focus on; conversion rates, commission per conversion, and how many visitors you can send. That bit of simple maths will keep you on the right track. And always pick good products to promote too, they’ll do half the selling by themselves. As long as you’re acting legally with a good code of conduct (E.g, not doing fake reviews or cookie stuffing) and you work hard to create good content and promote your digital business, you’ll bring in some good financial results eventually.