Affiliate marketing is a performance-based marketing strategy where an individual or business acts as a promoter for another company’s products or services.
The promoter earns a commission for every sale or lead generated from their marketing efforts.
The commission percentage and payment structure can vary, but it’s a mutually beneficial arrangement for the affiliate and the company.
Affiliates typically promote products or services through their online platforms, such as websites, blogs, social media accounts, podcasts, or email marketing.
They use unique tracking links or promotional codes to track their sales and leads credited to their account. The company can then track its affiliates’ performance and pay commissions accordingly.
In this model, affiliates don’t work for the company but act as independent marketers.
This allows the company to expand their reach and tap into a larger audience without incurring additional marketing costs. It’s a low-risk way for companies to grow their sales and for affiliates to earn money by promoting products they believe in.
Affiliate marketing is a flexible and cost-effective strategy for both companies and affiliates
Affiliate marketing involves various stakeholders, including:
Affiliates, also known as publishers, use various forms of content, such as social media posts, blogs, videos, etc., to promote products and services. They may also use paid ads to drive traffic. Affiliates can be content creators in the same niche as the product they’re promoting but are subject to rules regarding keywords used for the promotion.
Sellers are responsible for paying commissions for sales generated by affiliates. They can be individuals or companies and might not even be the product or service creators, as in the Amazon Associates Program.
Networks (optional) manage the affiliate marketing programs for sellers by handling third-party checks and relationships between sellers and affiliates. Some popular affiliate networks are ShareASale, ClickBank, and Rakuten.
Consumers make purchases through affiliate links.
Affiliate marketing is a simple process, but there are several steps involved.
The cycle outlined in the image below shows an affiliate program’s journey from a user clicking the link on your site to getting paid commission.
A successful affiliate program requires a trackable link to monitor activity and ensure commission payments.
Utilising a spreadsheet to keep track of links or UTMs helps measure performance and monitor revenue.
Affiliate marketers have various ways to drive traffic and generate sales. Here are some of the most effective marketing channels for affiliate marketing:
Affiliate marketing can sometimes have a mysterious air, as it’s only occasionally clear if the promoter has used the product or is just promoting for the money.
In 2009, Pat Flynn classified affiliate marketers into three categories. Knowing these types can help you understand how people make money online in affiliate marketing, regardless of your ethics.
Unattached Affiliate Marketing – This type of affiliate marketing involves promoting a product with no authority or connection to the niche. The affiliate uses pay-per-click ads with their affiliate link and hopes people will click and buy, earning them a commission.
Related Affiliate Marketing – This type of marketing involves promoting products related to your niche but not necessarily used by you. The affiliate has an audience and influence, which makes them a trusted source for product recommendations, but it also carries the risk of promoting a lousy product without knowing.
Involved Affiliate Marketing – This approach only promotes products and services the affiliate has used and believes in. It is rooted in trust and authenticity and is the best approach for building a sustainable business. Affiliate marketers use their influence to promote products their followers may need instead of relying on paid ads. It takes more time to build credibility, but it’s worth it for a more honest and trusted business.
An affiliate marketer is an individual who promotes a company’s products to earn a commission.
They utilise their audience to share the products with others, typically through content creation.
An affiliate merchant is involved in the second form of affiliate marketing. They establish an affiliate program that includes their products to be promoted. Then, they search for affiliates to participate in the program and market the products. To successfully run the program, the merchant needs to install a tracking system for sales, monitor the affiliates’ results, and manage commission payments.
One of the most effective ways to start with affiliate marketing is to follow a good course.
These are the best affiliate marketing courses for beginners (the list includes free and paid methods).
Affiliate marketing has grown in popularity, and its growth potential has been estimated to be worth $8.2 billion by 2023, according to Statista.
With low to no start-up costs, it’s a lucrative business venture. But before jumping in, consider both the pros and cons.
Affiliate marketing programs are the internal systems utilised by merchants to handle their affiliate marketing efforts.
The core of an affiliate marketing program is the agreement between the merchant and its affiliate.
In this agreement, merchants and affiliates establish the terms of their partnership, such as what actions earn commissions, payment methods, methods of product promotion, etc. T
hese terms are often based on the affiliate’s ability to attract new customers to the business.
For example, affiliates with a larger audience and a proven track record of driving sales may receive higher commission rates from the merchant.
Amazon Associates is a well-known affiliate program. As a member, you can promote an extensive range of products from Amazon’s catalogue.
To join, you need a website or mobile app that meets their requirements.
Affiliates often write product reviews or compare multiple affiliate products on their websites to attract customers. These sites are prevalent on the internet, and you may have already seen one.
Affiliate marketing isn’t just about physical products. Many affiliates also promote digital products, which often come from less competitive niches and offer recurring commission opportunities.
Affiliate commissions are a crucial aspect of any affiliate program.
They represent the money earned from promoting a merchant’s products.
Commission rates vary based on the products being advertised.
The minimum rate is usually 5% of the sales price for programs focused on physical products with frequent purchases. Some programs pay a flat fee instead of a percentage.
There are various commission models in affiliate programs determining what actions earn a commission:
Affiliate networks act as intermediaries between merchants and affiliates. They manage multiple affiliate programs to benefit both parties.
Merchants join networks to set up their program, which is then made available to network affiliates. Access can be restricted or open.
Networks streamline management for affiliates partnering with multiple merchants, as all campaigns can be tracked from one place.
Leading affiliate networks include Shareasale, CJ, Rakuten, and Awin, with hundreds of thousands of merchants and a vast selection of products.
However, focusing on a specific niche and promoting its best products is essential.
Starting with affiliate marketing requires joining an affiliate program.
The standard process then involves promoting the products with a CPS (Cost Per Sale) commission model that pays only on successful sales.
Here’s how affiliate marketing works:
(1) Affiliate links on online platforms
In affiliate marketing, you’ll start by adding unique affiliate links to your online platforms. The merchant’s software generates these links after you join their affiliate program. Next, you can add links to your website, blog, or social media profiles to promote the merchant’s products.
(2) Customer clicks affiliate link
Visitors to your platform may click your affiliate links. When they do, tracking cookies are created in their browser to track their purchase behaviour. To receive a commission, the customer must complete their purchase within the cookie’s specified time frame.
(3)Visit the merchant site
After clicking your link, the customer will be taken to the merchant’s website, where they can review the product. The landing page will depend on the business’s offerings and your selection as an affiliate.
(4) Customer purchase from merchant
Some customers will purchase from the merchant after reviewing the product.
(5) The tracking system records purchases
Then, when the customer places an order, the affiliate tracking system will record the details and determine which affiliate should be credited. Depending on the program’s attribution model, this can be based on the last-click or first-click model.
(6) Confirmation of valid sale
Affiliate programs reviews transactions to ensure their validity and compliance with program terms.
(7) Transaction credited to affiliate account
Upon verifying the sale, the transaction will be credited to your affiliate account based on your commission agreement. As a result, you may have to wait until the scheduled commission payout to receive your funds.
(8) Commission payout
Once credited, you’ll receive your commission payout, which may depend on the payment schedule and thresholds of the program.
How much can you earn from affiliate marketing?
The amount you can earn from affiliate marketing depends on the commission rate offered by the program you promote, the average order value of the products you promote, and the number of visitors who convert into sales.
For example, you can earn 4-8.5% commission per sale as an Amazon Associate. Assuming a $100 order value and a 5% commission, you would make $5 per sale. To make $1,000, you would need 20,000 visitors if you convert 1% into sales.
Other programs, like the Bluehost affiliate program, offer higher commissions, such as $70 per sale. The average annual income for an affiliate marketer in the US is $52K (Payscale) or $66K (Glassdoor). Top affiliates like Pat Flynn have grown their affiliate marketing income to over $100,000 per month.
Tips for successful affiliate marketing:
Amazon Associates: As one of the largest and most successful e-commerce platforms, Amazon offers affiliates a vast selection of products to promote. They offer commissions ranging from 1 to 10 per cent, and the most profitable product categories are clothing and luxury beauty products.
Shopify: With over 2 million merchants across various categories, Shopify provides an excellent opportunity for affiliates. The platform offers a range of management tools, analytics, and payment options, making it easy to set up and manage. For example, affiliates can earn a 200 per cent commission for a monthly subscription if the referral is active for two months. A $2,000 payment is also given when a referral signs up for a Shopify Plus account.
Clickbank: Clickbank is an affiliate marketplace that offers various categories, making it relevant to many different types of content. Affiliates can earn commissions through revenue share or cost-per-action (CPA) methods.
Fiverr: As a freelance marketplace, Fiverr’s affiliate program is an excellent example of maximising revenue. Affiliates are provided with a dashboard and creative assets to promote the platform’s services and can earn up to $150 CPA for every first-time buyer or up to $1,000 per sale. Of course, the commission earned will depend on the services promoted.
ConvertKit: ConvertKit is a relatively new email marketing platform designed specifically for creators. The affiliate program aims to drive subscriptions and offers a 30% commission for every paid referral or webinar subscriber.
Wix: Wix is a popular web hosting platform that offers $100 for a premium payment made through an affiliate link. The company provides affiliates with all the necessary creative materials to drive traffic to the platform quickly, including banners and landing pages. There is a minimum earnings threshold of $300, so affiliates will only be paid once they reach this amount.
The best affiliate marketing channels are websites/blogs, social media, email, and microsites.
Websites/blogs allow original content creation to drive traffic to affiliate links.
Social media platforms like Facebook, YouTube, and Instagram provide reach and targeting options.
Email marketing allows for targeted communication with opted-in subscribers.
Microsites can target niche markets and provide valuable content.
Remember to avoid becoming spammy and only provide content your audience has opted into and is interested in.
Is affiliate marketing a good career choice?
The answer is yes, as affiliate marketing is a lucrative industry, with U.S. spending expected to reach $8.2 billion in 2022. Beginners in affiliate marketing can earn a small amount when they get started, as it takes time to build up links, audience, and revenue. An average affiliate marketer earns $53,000 per year, according to PayScale, with more experienced affiliates earning up to nearly $100,000. However, some bloggers report earning anywhere from $3,000 to $31,000 a month through affiliate marketing and other activities. Profitable industries in 2022 include fashion, lifestyle and wellness, technology (including gaming), travel, home and lifestyle, personal finance, and pet care. With 80% of the world’s brands having affiliate programs, there are ample opportunities for growth in the field.
How much do affiliate marketers make per sale?
The amount earned per sale as an affiliate marketer varies depending on the commission structure and affiliate network. For example, with Amazon, you can make a 1-10% commission on each product sold based on category, with luxury beauty products having the highest payout. For example, if a luxury beauty product is sold for $50, you would earn $5, while a 1% commission on a $10 product would earn you $0.10. To maximise earnings, choosing profitable products and allocating time wisely is important.
What are good examples of affiliate marketing?
Let’s look at some great examples of affiliate marketing on websites and blogs.
This water bottle retailer used affiliate marketing and influencer marketing to build its brand and reach millions in sales. Instead of using traditional affiliate marketing techniques, Healthish leveraged the power of Instagram influencers with large followings to promote its main product, the WB-1 bottle. The brand continues to partner with hundreds of influencers monthly, offering them a commission for every bottle sold through their unique affiliate link.
Owned by The New York Times, Wirecutter is a review website that features thousands of product reviews across various categories, including tech, gifts, and more. With over 12 million monthly visitors, the site generates significant revenue for The New York Times through its affiliate marketing program.
As a review website for financial products, Nerdwallet has been a go-to resource for consumers for years. It offers comparison information on products like credit cards, insurance, and mortgages, as well as handy guides, blogs, and tools like its “How much mortgage can I afford?” calculator. The site’s revenue is solely generated through its affiliate marketing program with big financial brands.
Abby Lawson is a top-earning blogger who runs the home organisation and decor blog “Just a Girl and Her Blog.” Through her blog, she shares home improvement tips and includes affiliate links in her content. She also has a sidebar that displays ads for various companies and places ads in the middle of her blog text. To further increase her revenue, she’s created ebooks and courses sold through her website.
Your Dream Coffee
For coffee enthusiasts, Your Dream Coffee is a one-stop shop for all things coffee. The site is part of Amazon’s Affiliate Program and other affiliate networks, and its original content and high-quality imagery have helped it rank well on Google. From coffee recipes to brewing guides to coffee bean recommendations, Your Dream Coffee has carved out a niche in the market and has built a loyal following.
Affiliate marketing trends
Here are four key trends to keep an eye on and consider in your affiliate marketing strategy:
Collaborations with micro and nano influencers for hyper-targeting
Brands want affiliates that connect to their product or service, so they are increasingly looking for influencers in relevant niches, such as a yoga company partnering with healthy recipe influencers or a home improvement retailer collaborating with decor influencers. This trend presents more opportunities for nano (500 to 10,000 followers) and micro (10,000 to 25,000 followers) influencers across social media platforms like TikTok and Instagram. If you have a captive audience, consider becoming an affiliate for brands in your niche.
Building communities and respecting privacy
With the elimination of third-party cookies on Google, brands seek other ways to gather customer data. Affiliate marketing can help fill this gap by driving traffic to a website, microsite, or blog to join a newsletter list or sign up for a special offer. The key to success is working with affiliates that engage with their audience and have built trust by providing valuable and relevant content.
Live shopping is a growing trend, especially in China, where it has become a popular way for brands to showcase their products and services to a live audience. The trend is now spreading to Twitch and YouTube, which have introduced live shopping options. Live shopping effectively allows brands to offer special offers and discounts and create a sense of urgency among their audience. It also enables users to interact with presenters or influencers through Q&A sessions.
Reporting is a crucial aspect of affiliate marketing, and it is essential to know if promoting a brand or product results in clicks, leads, or sales. Mobile Measurement Partners (MMPs) can be used to track attribution to improve reporting. Make sure your MMP integrates with most affiliate networks and e-commerce apps. Social networks are also continuously improving their analytics and reporting, so keep an eye on your critical data points and KPIs to improve your titles, messaging, and imagery.
The first step is to pick a niche or vertical. As an affiliate marketer, you want to focus on a specific area instead of offering a general store. For example, you could be an affiliate for the golf niche and promote: golf equipment, online learning and books, golf courses, professional golfing events, etc.
Consider your passions and what you buy to pick a niche, such as hobbies, financial products, wellness, lifestyle products, tech, or alternative products.
After choosing the niche, select a platform or channel for affiliate marketing. Blogging is one of the easiest and cheapest options, but other platforms like YouTube, Instagram, or social media can also work. When promoting on these channels, clearly state that it’s a promotion and use affiliate link disclaimers.
Next, pick affiliate products to promote, keeping your target audience in mind. Choose high-quality products to benefit your audience and ensure they meet your financial goals. You can also search for “your niche affiliate” for more options.
If you have a website and audience, join an affiliate network or program to access brands and tools. Some popular networks include ShareASale, Awin, Amazon, etc.
Use your website analytics to understand your audience and find matching products with the desired payouts.
How to Choose the Best Affiliate Programs?
When selecting affiliate programs, consider these key factors:
Now that you’ve chosen your niche, platform, products, and affiliate network, it’s time to start promoting your affiliate products! Here are some tips on how to effectively promote your affiliate products:
Create quality content: Your content should educate and inform your audience, not just try to sell to them.
Product Reviews: Essential in affiliate marketing and simple to create, reviews can be written or recorded as videos. Be honest about what you like and don’t like about the product to maintain trust with your audience.
Case Studies: A step up from product reviews, case studies demonstrate the success of the product you’re promoting. It’s a “show, don’t tell” marketing approach.
Tutorials: How-to articles and videos show your audience how to use the affiliate product or demonstrate cool things they can do with it. These actionable pieces of content help set your audience up for success.
Product Comparisons: Compare your affiliate product with another product that serves the same purpose and provide an honest opinion. This honesty builds trust with your audience, even if the affiliate product isn’t the best in every scenario.
Resource Page: Although not significant sales drivers, resource pages are an easy way to earn additional income through affiliate marketing. Create a page that lists recommended products and includes affiliate links.
Be consistent: Post regularly on your platform to keep your audience engaged and interested in your products.
Utilize social media: Promote your products and content on social media platforms to reach a wider audience.
Build relationships: Connect with affiliate marketers and influencers in your niche to collaborate and cross-promote each other’s products.
Offer discounts and promotions: Offer exclusive discounts and promotions to your audience to incentivise them to buy through your affiliate links.
Email List Building: Email marketing has a high ROI, so we suggest building an email list. Unlike social media followers, email list ownership is yours, so you can still access it even if your social media changes its promotion policies.
Grow your list quickly by offering a lead magnet, such as a checklist or free course, in exchange for email addresses. Then, send valuable content and promotional emails. Consider using the best email marketing platforms to maximise your results.
SEO: Organic traffic from search engines can be boosted with SEO. Target keywords your target audience searches for, create content around those keywords, and ensure search engines index your site.
Paid Traffic: After earning profits, consider reinvesting in paid traffic through ads on search engines or social media platforms. This increases traffic and can improve search engine ranking, making it easier for interested parties to find your site. Paid traffic may not guarantee affiliate sales, but it’s an excellent way to increase visibility.
Track your affiliate marketing efforts to see what’s working and what’s not. Several ways to track your results include using Google Analytics and tracking codes in your affiliate links. Make sure you’re tracking your clicks, impressions, and conversions. Use this information to optimise your content and adjust your strategy as needed.
Once you’ve made your first sale as an affiliate marketer; it’s time to get paid! Different affiliate networks have different payment options and terms, so review the details when you sign up. For example, some networks pay out monthly, while others payout quarterly or annually. Be sure to choose a network that offers a payment option that works for you.
As you start to see success in affiliate marketing, it’s time to scale your business! Here are some tips on how to scale your affiliate marketing business:
Affiliate marketing is a dynamic industry, and it’s important to stay up-to-date on the latest trends and best practices. Follow affiliate marketing blogs, join online communities, and attend industry events to stay informed. You can also subscribe to newsletters, follow influencers on social media, and connect with other affiliates in your niche.
Affiliate marketing tips
Recommend familiar products – Promote only products you have personal experience with and can give honest feedback. Building trust with your audience is crucial in affiliate marketing.
Align with your brand – Stay relevant and consistent by recommending products that fit within your area of expertise and align with your brand.
Promote multiple products – As a beginner, test and experiment with various products to find what resonates with your audience. Keep products aligned with your brand but don’t limit yourself to just one.
Optimise conversion rates – Keep track of your landing page and blog conversion rates and make improvements to increase revenue. Improve landing pages, load speed, call-to-action, and visuals to optimise conversion rates.
Create valuable content – Generate original and engaging content to attract visitors to your website or blog. Explore different types of content, such as infographics, ebooks, and videos.
Seek partnerships – Build connections with other affiliates for support, tips, and cross-promotion. For example, consider guest blogging and participating in affiliate marketing events.
Learn digital marketing basics – To get the most out of affiliate marketing, understanding the fundamentals of digital marketing is essential. Take a course to learn new skills and stay up-to-date on industry trends.
Begin with Product Reviews
As an affiliate marketer, it’s crucial to establish yourself as an expert in your niche. One of the best ways to do this is by reviewing products and services in your vertical. This will not only build trust with your audience but also help you become more familiar with the products you’re promoting. When writing product reviews, explain why your audience would benefit from using the product or why they should avoid it. After a few product reviews, you can also include product comparisons in your content.
Make your review personal by sharing your experience with the product in your blog, social media post, Instagram Story, or YouTube video. Give an honest opinion based on your experience with the product. People are more likely to trust your advice if they can relate to you.
Build Trust With Your Audience
Trust is everything in affiliate marketing. You’ll quickly lose their support if you betray that trust by promoting products your audience doesn’t want or need. So instead, focus on promoting products that you genuinely believe will benefit your audience. Remember, you’re offering your expert opinion, so be helpful and recommend only quality products to keep your audience coming back.
Interview a Product Expert
Get more depth in your review by interviewing others who use the product or the person who makes or sells it. This will create a narrative for the reader.
Create a Product Tutorial
Another way to drive traffic to your affiliate offer is by providing a tutorial on the product. People often perform “how-to” Google searches, and a tutorial can solve their problem and showcase the product’s value.
Build an Email List
Email has the highest conversion rate (66%) compared to other marketing channels. Gather emails from your content and send subscribers a weekly or bi-weekly newsletter. Promote affiliate products to subscribers occasionally and show value to them.
Find Relevant Search Terms
Research keywords someone might use in a search engine to find an answer related to the problem your affiliate offer solves. Google Ads Keyword Planner is a free tool that can help.
Consider Your Angle Depending on the offer, invest energy in instructional or tutorial content. Record a video of yourself using the product and showcase its benefits. Offer promotions and bonuses to encourage customers to buy. Remember to disclose that your post contains affiliate links, as the FTC requires.
Stay Up to Date
The online world and affiliate marketing are constantly evolving. To stay ahead of the competition, keeping up-to-date with trends in your vertical and marketing is crucial. For example, if you’re a master of social media, you don’t want to miss out on the next big trend, like TikTok.
Diversify Your Affiliate Products Don’t limit yourself to just one seller or product line. It’s lovely to work with multiple sellers and promote various products. This adds variety to your content and protects you as an affiliate. In addition, you won’t be left high and dry if your favourite seller decides to cut commissions or discontinue their affiliate program.
Test and Optimize
Finally, don’t forget to test and optimise everything. Analyse your analytics and use the data to inform your marketing and promotion strategies. It’s impossible to know how something will perform until you try it, so give your campaigns time to run and gather data. Once you have some data, start tweaking and focusing on what serves best, then do more of that.
Affiliate marketing can be a lucrative path to earning an income online.
While it may not bring instant riches, with the right affiliate programs and an engaged audience, you can establish a steady source of revenue over time.
Affiliate marketing is a performance-based marketing strategy where affiliates promote a company’s products/services to earn a commission.
The main players are affiliates, sellers, optional networks, and consumers.
Affiliates can use various channels like blogging, influencer marketing, email marketing, coupon sites, mass media sites, etc. to drive traffic and generate sales.
There are three types of affiliate marketing: unattached, related, and involved.
Affiliate networks act as intermediaries between merchants and affiliates to manage multiple affiliate programs.
The process of affiliate marketing involves adding affiliate links to online platforms, customers clicking the link and making a purchase, tracking the sale, and crediting the transaction to the affiliate account.