This Is What You Need to Know About Affiliate Marketing

Want to make money in your sleep? Sounds too good to be true, doesn’t it?

Apparently, it isn’t. Or at least not for those in the know when it comes to affiliate marketing.

If you’ve never heard of affiliate marketing before, don’t worry. We’ll let you in on marketing’s best-kept secret. 

What Is Affiliate Marketing?

The idea behind affiliate marketing is simple, but it can be tricky to get your head around due to the many different parties involved.

From a business perspective, you can pay a person or another business to promote your products on their site. Said party earns a small commission if a customer ends up buying one of your products through a link from their site.

From an affiliate marketer’s perspective, you promote products on your site and earn a commission if anyone buys a promoted product by clicking on your link.

The whole idea is based on revenue sharing. For businesses who want to sell more products, you can offer a financial incentive for those who promote it. For affiliates, they can promote products they feel have value and earn an income doing it. 

To make matters a little more complicated, there’s actually a third party often involved in affiliate marketing — affiliate networks.

Affiliate networks are a kind of middleman between businesses and marketers. The most notable example is Amazon’s affiliate program, Amazon Associates. They’re not the only affiliate network by any means, just by far the largest.

For most affiliate networks, anyone can join, business, or marketer. The network acts as a go-between the two, finding sites to promote products, or finding products to be promoted on sites.

The final party involved in affiliate marketing is the most obvious one — the customer. Customers play their part simply by being recommended products and purchasing them.

Customers are not charged a higher price for buying through an affiliate link. The money paid to affiliate networks and affiliate marketers comes from businesses’ pockets.

Now you know who’s who, we’ll look more in-depth at how affiliate marketers get paid.

How Do Affiliate Marketers Get Paid?

So we know affiliates get paid either directly by businesses or via an affiliate network. But the pay structure can vary a little depending on the agreement between publisher, network, and affiliate. Depending on the pay structure, the affiliate’s commission will be measured differently.

The most common way for affiliates to get paid is via a pay per sale structure. In this structure, the affiliate receives a set percentage of the sale price of the product only when it is purchased through their affiliate link. They are not paid solely for hosting the affiliate link on their site. 

Where there is no physical product, pay per lead programs are common. As an example, this could be for filling out a contact form or subscribing to an email list. Affiliates are compensated based on the number of leads brought in through their affiliate link. 

There’s also pay per click programs. They’re similar to the former two in that a customer must click on the affiliate link, but the customer doesn’t have to purchase anything for the affiliate to get paid. These programs are popular for businesses looking to increase their web traffic or promote brand awareness. 

Benefits of Affiliate Marketing

There’s a whole host of benefits to affiliate marketing, for businesses and marketers. We’ll start with the latter.

Earning a passive income is one of the main reasons people love affiliate marketing. Once you’ve invested the initial time into creating the page to promote the product and optimizing it, you receive money anytime someone clicks. So long after your initial work, you can still earn money. 

Because of its digital nature, the vast majority of affiliate marketers work from home. For those who can’t stand the office, and don’t want a boss, it’s a realistic way to earn money. All without ever leaving the house!

Affiliates also get the benefit of not actually having to deal with customers. If they’re unsatisfied with the product, they can certainly let the affiliate know, but the onus is still on the business to rectify the issue. 

Finally, it’s also one of the most cost-effective options to be your own boss. You don’t need to finance anything but your own website. There are no products, employees, or storefronts necessary. 

For businesses, the main benefit is obvious. Higher chances of sales.

A small commission fee is a small price to pay for the opportunity of more sales coming in from places you otherwise wouldn’t be found. You also don’t pay unless a sale is made, so the return on investment is guaranteed.

How to Become an Affiliate Marketer

As we mentioned above, anyone can become an affiliate marketer and any business can start affiliate marketing. 

For businesses, the easiest way is by contacting bloggers or influencers directly. You can come to an agreement on exact terms and commission with each. The downside to this approach is that it’s very time-consuming.

It’s why many businesses opt to work with affiliate networks. This takes out the hassle of finding bloggers and influencers to work with. The downside is that this obviously comes with higher costs generally. 

For marketers, it’s pretty straight forward. All you need is a website, an audience, and a strategy to help you at succeeding in affiliate marketing.

Like above, you can contact businesses directly. This can be great for getting a higher commission. But it also means you can really cherry pick products you actually think are great and you’d be happy to promote.

Alternatively, most affiliate networks will have you. For the largest, Amazon, literally anyone can sign up to become an affiliate marketer. Then it’s a simple case of drawing in a decent audience through SEO and convincing them to purchase. 

Find More Tips

There you have it, the basics of affiliate marketing! As you now know, it’s a great option for those looking to promote their products or make a passive income. We’ve got loads more tips for how to level up your affiliate marketing on our blog.