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What is Affiliate Marketing and How does it work?

What is Affiliate Marketing and How does it work

All of us at some point have dreamed about getting paid without actively working all the time.

Affiliate Marketing is the closest we can get to that dream in real life.

But it does not mean it won’t take any effort.

The truth is that its just like doing any other business and if you can persevere to set up the system correctly, you can enjoy all the benefits of your hard work.

The benefits include choosing your work-hours, high passive commissions each day and most importantly the benefit of working on something that you love or interests you.

Affiliate Marketing works on the principle of referral income.

You make a commission each time you make a sale happen.

Let’s understand this more closely,

What is Affiliate Marketing?

Affiliate Marketing is one of the most profitable ways to make money online.

As we already know, there is no shortage of people who are looking to sell and buy things online.

Literally, everything that can be sold is being already sold online.

But it is not always easy to sell stuff online because of immense competition that exists.

This is the reason anyone that is selling any product or service online, needs to come up with innovative ways to compete with its competitors.

This is where Affiliate Marketing comes into play.

Sellers are more than willing to give commissions to anybody who can make the sales happen.

This anybody is usually referred to as an Affiliate Marketer or Affiliate.

Definition

So, Affiliate Marketing is basically a process in which Affiliate marketers or Affiliates can make commissions by helping sellers make sales and by helping Buyers find the right product.

The affiliate commissions can range anywhere from 5-70% of the total value of the product, depending on various factors.

How does it work?

If you want to make money as an Affiliate Marketer, the process is very straight-forward.

This is how it works:

1. You find people or companies which sell stuff online and have an affiliate program.

2. You need to sign up for their Affiliate programs as an Affiliate.

3. Once they verify your application, you will be given your affiliate link to promote their products.

4. You start promoting their products using different marketing channels like Blogs, Social Media, Youtube etc.

5. Once someone buys the product using your affiliate link, you get a commission for making that sale happen.

Basic Sign Up Procedure

Let’s see how this works practically by signing up for Amazon’s affiliate program.

1. You just need to go to Amazon Associates for signing up as an Affiliate for their program. Please make sure to read all terms and conditions before applying as it will make your life a lot easier.

Amazon Associates Affiliate Program

2. Once your account is set up you will notice Amazon’s affiliate toolbar at the top of every product you see on Amazon. Just click on get link to get your own Affiliate Link.

3. This is your very own Affiliate Link which has a tracking ID. Once someone purchases anything from Amazon you will be credited with a commission.

The good thing is that you will get commissions even if someone ends up buying more products or even any other product from Amazon within 24 hours of clicking on your link.

Basic Terms in Affiliate Marketing

What is Affiliate Marketing and How does it work

Beginners often get confused with different terms which are often used interchangeably in Affiliate Marketing.

Hopefully, This explanation will clear all your doubts about all the terms that are used by different people in this industry.

This is also a more in-depth explanation of how the process works.

Basically, there are just three terms you need to aware of in Affiliate Marketing, i.e, Seller, Buyer and Affiliate Marketer.

Seller

Sellers could be people or a company that’s looking to sell something online.

The other terms which are sometimes used to denote Seller are Merchant, Retailer, Brand, Vendor or the Product Creator.

In Affiliate Marketing terms, sellers could be anyone who has their own Affiliate Marketing program.

A good example of a seller could be a person who sells online courses online or even a Company or Brand like Amazon which runs its own Affiliate Marketing Program.

If you have a product to sell online, you can even start your own Affiliate Marketing program.

You just need to have your own product and you can use SendOwl, Gumroad or Digital Products Delivery to easily start selling your products online and also to set up your very own Affiliate Marketing System.

You just need to find Affiliates who will promote your product in exchange of commissions.

Affiliate Network

As a seller it could be a little difficult to find the right people to promote your products, this is where the Affiliate Networks come in.

Affiliate Networks basically act as an intermediary between a Seller and an Affiliate Marketer.

This is the place where Sellers can find lots of potential Affiliate Marketers who can promote their products and Affiliate Marketers can find lots of sellers, vendors, merchants, and brands who are looking to sell their products.

This is a win-win situation for both Sellers and Affiliate Marketers.

Some of the Affiliate Networks are very reputable like Clickbank, Share a Sale, JVZoo, etc.

Affiliate Marketers can find lots of products in almost every niche to promote here.

As an Affiliate Marketer, you will have to go through their verification process which they conduct to ensure that only genuine people are let in.

As a seller, these Affiliate Networks make your products visible to a lot of genuine Affiliate Marketers who can help you make a sale.

They also take care of the Payments part so that you don’t have to go through any hassle.

Affiliate Marketer

Affiliate Marketer or Affiliates are at the core of Affiliate Marketing and they are responsible for making the sales happen.

They are also often called as Publishers or simply Marketers.

You need to sign up as an Affiliate by individually applying to different Affiliate Marketing Programs run by Sellers and Networks.

Once your account verification is done, you will be given your very own Affiliate Link.

This affiliate link looks just like any other regular link, but it has a tracking ID to track the number of people who click that link and use it to make a purchase.

These affiliate links are stored as cookies in the browser and are valid for a duration of 24 hours to sometimes even 2 years.

If the buyer purchases the product anytime within that duration, Affiliates get paid a commission for making that sale happen.

The commissions can be anywhere between 5 to 70% depending on the program.

If you are thinking about making commissions simply by posting links here and there, hang on

An Affiliate Marketer is also responsible for building an audience and guiding the buyer through the entire sales process and helping them find the right product.

You can read this guide if you want to get started as an Affiliate Marketer.

Marketing Channel

No one talks about this separately, but this needs to be discussed.

Just like Sellers have trouble approaching the customers, affiliate marketers face the same troubles in finding the right people who would be interested in buying what they are promoting.

Without a proper Marketing Channel, Affiliate Marketers would be solely dependent on their luck.

And that is not a good business model by any means.

Let’s be honest, only a small percentage of people that are surfing the internet are actively looking to buy things while the majority is just passively surfing.

Affiliate Marketers are the ones who use their magic to convert these potential customers to buyers.

But none of this would happen if there isn’t a proper marketing channel which attracts the right kind of audience.

Marketing Channel is used by Affiliate Marketers to drive the right type of traffic to relevant products.

It could be a Blog, Youtube channel or maybe even a Pinterest account.

Without this, it would be very difficult to make any substantial income with Affiliate Marketing.

Related Articles:

How to Choose a Blogging Niche that You won’t Regret

How to Start Blog in 2018: Step-by-Step Guide

Buyer

The final and most important piece of Affiliate Marketing Equation.

Buyer is also sometimes referred to as a customer, consumer or even market.

There is a term in Marketing called as Product-Market fit.

If you sell hair-products to bald people, it does not matter how much marketing effort you put, it’s not gonna work.

This is the reason it’s very important to focus on building a marketing channel that brings the right kind of products in front of the right kind of people.

Pro Affiliates very consciously create content that attracts the right kind of audience.

Even if they manage to make a small percentage of people to convert they can make huge amounts of profit.

Affiliate Marketers also need to keep in mind about guiding the people correctly as there is no substitute to trust that you establish with your audience.

A buyer does not need to pay anything extra for purchasing through the affiliate links, on the contrary, they might receive additional discounts or sometimes bonuses for purchasing through a particular Affiliate Marketer.

Frequently Asked Questions

These are some of the most frequently asked questions about Affiliate Marketing.

Do buyers have to pay extra for buying through Affiliate Links?

No, The buyers don’t have to pay anything extra while purchasing through Affiliate Links.

Some of the Affiliate Marketers also give further discounts because they tie up with Brands and Companies to promote their product.

Buyers can also receive special bonuses in some cases.

Is it really that easy to make money with Affiliate Marketing?

The straight-forward answer is no, it’s not that easy.

It can be easy if you already have a marketing channel like a Blog, App, Coupon/Review site, Youtube channel or any other way that brings a consistent amount of traffic.

Just like any other way of earning even Affiliate Marketing has a learning curve associated with it, if you want to do it the right way.

The reason many people fail at Affiliate Marketing is because they are married to the results and not the hustle.

There is no shame in making mistakes as a beginner as it’s the only way to learn.

How to get started with Affiliate Marketing?

Even though as a beginner you would be inclined to directly searching for good Affiliate Programs and signing up for them, it’s not essentially a right way to approach things.

Even if you get accepted as an Affiliate you will have lots of difficulties in making sales.

Instead, Start with finding a profitable niche and setting up your own marketing channel to drive traffic to products you are going to promote.

Having your own blog is the most efficient way of doing Affiliate Marketing.

Once you have built sufficient traffic on your blog, making sales would be a natural consequence.

So this how a step-by-step process for becoming an Affiliate Marketer looks like:

1. Find a profitable niche you are interested in.

2. Start a Blog or set up any other marketing channel like a Youtube channel or by using any other social media platform.

3. Start posting Quality content to attract the right type of audience.

4. Find good Affiliate programs in your niche and sign up for them.

5. Start promoting your Affiliate links using Marketing Channel that you built.

Related articles to help you take the next step:

Affiliate Marketing for Beginners: The Complete Step-By-Step Guide

Which are the best affiliate Marketing programs for beginners?

There is no dearth of good Affiliate Programs that can pay you very high commissions.

But depending on your niche, the Affiliate programs you need to apply for could be different.

The best way to find good Affiliate Programs in your niche is to look at competitors in your niche to see which product are they promoting.

Here are some of the general Affiliate Programs that can be used by anyone:

Amazon Associates

Amazon runs one of the biggest Affiliate programs that hand out millions of dollars in affiliate commissions each year.

The best part is that they have a huge variety of products in almost all niches.

This means you will never be short of products that you can promote.

Just be cautious of some of the terms and conditions they have and read them thoroughly before applying.

Share a Sale

Share a Sale is a great place to find thousands of products to promote.

The commissions are much higher than Amazon and it’s a network where you can find something in every niche.

You need to have a blog or website to apply.

Clickbank

Registering for Clickbank gives you access to their entire database of thousands of products.

They have a huge variety of products for you to choose from, plus the commission rates are also high.

They will verify your application once you sign up for their program.

Closing Words

Affiliate Marketing offers a very exciting opportunity to make money online.

But it is also not a get rich quick type of scheme.

If you are willing to learn and invest in yourself, this could be a very fulfilling way to make a living.

If you want to learn more about affiliate marketing, you can read my other articles.

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