Affiliate marketing is about promoting other people’s products. As an affiliate, you’ll never carry inventory or deal with customers.
You simply refer visitors to websites, and if they buy something, you get a commission. Awesome, right?
In the first half of this post, I’m going to teach you the basics of affiliate marketing (what it is, how it works, etc.). Then, I’ll give you a few tips on how to succeed. Let’s get started.
Any good mechanic knows what a ratchet is. Likewise, any good affiliate knows what a “tracking code” or “affiliate link” is.
The following terminology is important. If you don’t learn it, a lot of my advice won’t make sense. With that said, here’s what you should know:
- Affiliate: The individual (you) who promotes a product or service on behalf of a company. In return, you earn commission on whatever the visitor buys.
- Merchant: The company that produces the product or service you’re promoting. They take a cut of whatever you help sell.
- Affiliate Link: When a visitor clicks on an affiliate link, they’ll be sent to the merchant’s website. If they buy something, you get a commission.
- Tracking Code: Every affiliate link contains a unique tracking code. This code helps identify which affiliate referred the customer.
- Commission: The amount of money you receive after a visitor you referred buys something from the merchant. Commissions will vary from merchant to merchant.
- Conversion: The percentage of visitors who visit the merchant and buy something. The higher your conversions, the better.
There are many other terms to know, but these are the most important. Remember- you (the affiliate) are referring people to a merchant.
Important Note: Affiliates can also be called “publishers”, while merchants can also be called “advertisers”. Some sites used these terms interchangeably, so they’re important to know.
Profit Hero Founder
If the visitor buys something, you get a commission. As with any sales position, you make money when the company makes money.
The only difference is that you’re NOT an employee. You’re an independent marketer.
Summary: To get started in affiliate marketing, you must learn the basic terms. Otherwise, it will slow down the learning process.
The Affiliate Marketing Process
Affiliate marketing is all about referrals. Your only job is to refer visitors to a specific website. That’s it.
If the visitor buys something, you get a commission. If they don’t, nothing happens. It’s a simple concept, right?
The goal is to refer as many visitors as possible. Why? Because that increases your chances of making a sale.
Below, I’ve outlined the affiliate marketing process from start to finish:
- Step #1: Visitors Come to Your Website: The first step is to drive traffic- either from Google or other sources- to a website that contains your affiliate links.
- Step #2: Visitors Click on Your Affiliate Links: Not all visitors will click on your affiliate links. Only some. The ones who do are sent to the merchant.
- Step #3: Visitors Are Sent to The Merchant: Once on the merchant’s site, the visitors have the option of making a purchase.
- Step #4: You Earn a Commission: If the visitor buys something from the advertiser’s online shop, you’ll receive a commission.
As you can see, the process isn’t all that complicated. You’re basically a middleman between visitors and advertisers.
I’ll repeat what I said earlier: the goal is to refer as many visitors as possible. The more people you refer, the more likely you are to get a sale.
Now that you know what affiliate marketing is and how it works, let’s look at a few example sites.
Summary: Visitors come to your website, click on your affiliate links, get sent to the merchant, and if they buy something, you get a commission.
Examples of Affiliate Websites
This Is Why I’m Broke is a great example of an affiliate website. The site is centered around promoting cool products to people.
They don’t have inventory or take orders. They simply refer people to other websites.
Allen (the owner) reviews popular RC drone models. He then links to these models on Amazon.
When visitors go to Amazon and buy a drone (or anything else), Allen earns a commission.
5 Great Reasons to Become an Affiliate
As a beginner, affiliate marketing is arguably the easiest way to get started online.
It’s way easier than having inventory, dealing with customers, or making your own product.
In fact, affiliate marketing is how I made my first dollar online back in 2009. Here’s why I love it:
- Passive Income: Affiliate marketing is, for the most part, a form of passive income. Once you have it setup, your income will be automatic. Don’t confuse “passive” with “easy”. Creating a passive income stream isn’t easy. It takes a lot of hard work to do.
- Low Startup Costs: Unlike regular businesses, affiliate marketing requires very little startup capital. Your only expenses are hosting ($5/month) and a domain name ($10/year). This means that anyone, regardless of income status, can get started.
- No Inventory: Inventory costs money, takes up space, and adds to your overall stress. With affiliate marketing, there is no inventory. You’ll never need to worry about lost packages or angry customers. The ability to make money without inventory is priceless.
- No Ceiling: There’s no limit to how much you can earn. You have full control over the growth of your business. This can’t be said for a regular job, where your income is capped. Personally, this is my favorite part of affiliate marketing.
- Flexible Schedule: The final reason why affiliate marketing is awesome is because you create your own schedule. There are no deadlines or quotas to meet. You work when you want, wherever you want. It’s great for people who want more control over their time.
I’ll be the first to admit- affiliate marketing isn’t easy. It’s doable, yes, but you’ll need to work hard.
Important Note: For me, it took 1-2 years to earn a full-time income with affiliate marketing. Does this mean it will take you that long? No, it doesn’t. Some people succeed sooner, while others need more time.
Profit Hero Founder
My advice? Don’t focus on how long it’s going to take. Instead, focus on mastery. You’ll experience faster results this way.
Summary: The benefits of affiliate marketing include passive income, flexible scheduling, no ceiling on income, no inventory, and low startup costs.
Tip For Success
There’s no single path to success with affiliate marketing. Once you learn the basics, it’s up to you to find what works. Below, I want to share some tips and strategies that have worked for me.
Become an Authority Figure
Here’s a fun fact that you already knew: people trust authority figures. When an authority figures “I recommend this product”, people listen.
Therefore, you must establish yourself as an authority figure in your niche. People who visit your website should get the impression that you’re an expert in your industry.
The best way to do this is to write high-quality articles/reviews that provide value. Look at The Wire Cutter as an example. Their reviews are nothing but pure value.
And guess what? This builds TRUST. When The Wire Cutter publishes a post, you can bet that it’s going to be good. That’s the way people should feel about your site.
Promote Products You've Actually Used
When I first started in affiliate marketing, I promoted products that I never used. Not only that, but I would only promote expensive products.
Looking back, it was clearly a mistake. Why? Because readers aren’t stupid. They can tell whether you’ve actually used the product or service you’re reviewing.
This strategy might work in the short-term, but it will kill your long-term success.
A better tactic is to promote what you know. Or better yet, promote your PASSION. A great review site to model is Outdoor Gear Lab.
Their product reviews are authentic, well-written, and most importantly, authoritative.
The reason? They actually own the products they're reviewing. That makes a big difference.
Readers can tell when you’re passionate about a particular topic. This makes your reviews more credible.
Think About Budget
Can your visitors realistically afford what you’re promoting? If not, you shouldn’t promote it (Correction: you can promote it, but you probably won’t make much money).
For example, if you run a blog about frugal living, you shouldn't promote a Louis Vuitton handbag. Why? Because your readers probably can't afford it.
For Amazon Associates, I promote products in the $50-$200 price range. Many of the items my readers buy fall in this price range, which is why I recommend it.
The Bottom Line
I hope you enjoyed this introduction to affiliate marketing. To learn more, check out my article Best Websites to Learn About Affiliate Marketing.
Also, for more examples of affiliate websites, check out this article. If you have any questions, I'll be happy to answer them. Thanks for reading!