What is Affiliate Marketing: Complete Guide for Beginners
Affiliate marketing has become a solid path for many solo entrepreneurs, bloggers, and content creators alike. The idea of it might sound like an appealing way to make money online. However, you shouldn’t just jump into it without any plan whatsoever.
In this article, we’ll give you a crash course on the basics of affiliate marketing and a quick “get-started” guideline. So, let’s dive in!
What is Affiliate Marketing?
Simply put, affiliate marketing is a method for you to earn money online by promoting products, services, websites, or businesses and getting commissions for every successful sale.
One of the most common examples of this is the referral link whereby you, as a publisher, put a link on your blog/site, which then takes the user to another website. If he buys something, you’ll get a commission from that purchase.
There are other variations of this – asking a user to perform some action like signing up, completing forms, or getting email addresses. Generally, you can expect to use a unique link of some kind for an affiliate product or service.
As for the commission amount, it depends on the affiliate program itself. Some give you a percentage of the sale, while some might give a fixed amount for every conversion.
Tracking conversions can be done in various ways. Some use a link with a code that’s unique to you to track where the conversion comes from. Others might give you a unique “coupon code” that users can use which lets them track conversions.
Examples of Affiliate Marketing
So you have a basic understanding of what affiliate marketing is. But how exactly does it work?
Well, here are two examples of how affiliate marketing is done:
Using Ads and Banners to Promote
This is the easiest and most straightforward example of promoting affiliate products. Whether you have a blog or a personal website, you can promote affiliate products by using and placing banner ads.
Visitors who are interested in the product/service will then click on the ad, which then redirects them to the merchant’s page where they can then purchase it. If the sale is successful, you’ll then get a commission from it.
Including or Adding Links to Your Content
Another method for promoting affiliate products or services is to include the link inside of your content. This works well, especially if you’re a blogger or a content creator.
One of the more common ways is to include a link to a relevant product in an article. Similarly, you can create content on a particular topic and include an affiliate link to products that are useful to the reader or user.
Knowing the Affiliate Lingo
Before we get into how you can begin with affiliate marketing, there are a few terms that you should be familiar with.
If you’re considering doing affiliate marketing, knowing the key terms will help avoid any confusion. Some of the more essential terms are:
An affiliate comes in all shapes or sizes, but generally, they tend to be bloggers, content sites, or creators that are related to the merchant’s industry.
Affiliates are the ones that introduce the merchant’s products, services, or brand to the visitors.
As we’ve mentioned, they can do this either by writing or creating content related to the merchant’s product or service, use banner ads on their site, or give coupon codes.
Compared to other channels, affiliate marketing gives merchants a higher ROI as it’s performance-based. Meaning, they only pay for actual customers instead of just visits.
Because of this, when multiple affiliates are invoiced in a single transaction, it can get pretty messy. You might even have cases where other affiliates claim a commission for customers brought by other affiliates in the last minute.
A good affiliate program will offer a multi-channel attribution to ensure that affiliates that create the most value will receive the most payment.
Some of the more common types of payment method used by merchants are:
- CPS (Cost Per Sale) – You’ll receive a flat fee per sale or a percentage of the product or service value.
- CPL (Cost Per Lead) – You’ll receive payment for every validated, completed lead.
- CPC (Cost Per Click) – You’ll receive payment for driving traffic to the merchant’s site via ad clicks.
- CPA (Cost Per Action) – You’ll receive payment when users complete actions you advertise (filling forms or surveys)
Most affiliate programs are administered and organized through an affiliate network. They are quite useful as it provides a central database with available merchants, which makes it easier for an affiliate to find opportunities.
It also gives merchants access to a large pool of publishers (affiliates), and they will usually have access to tools such as payment processing, refund processing, tracking, reporting, and affiliate management.
Some of the most popular affiliate networks that you can join are, ShareASales, Clickbank, CJ, and even Amazon. Of course, if you prefer an individual affiliate program, companies such as Hostinger offers an affiliate program that you can join.
The Pros and Cons of Affiliate Marketing
Just like with any other marketing programs, there are various advantages and disadvantages to using them.
While affiliate programs might seem lucrative, especially for a blogger or a solo entrepreneur, it’s a good idea to be aware of what the pros and cons are before joining an affiliate program.
Pros of Affiliate Marketing
Let’s start with the pros. If you’re considering doing affiliate marketing, here are some of the perks:
- Inexpensive/low start-up costs. In general, you won’t have to pay to join an affiliate program. The majority of the affiliate company will handle the service and product, which means you won’t have to worry about inventory or supplies.
- Easy to join. The barrier of entry for an affiliate program is very low. You just have to fill up a form, and then you can start promoting the products immediately though some programs might be harder to join than others.
- No need to deal with shipping or product returns. As an affiliate, all you have to focus on is promoting the merchant’s brand, product, or services. The actual product or service itself is handled entirely by the merchant.
- No need to create products or services. Again, your focus as an affiliate is to deliver the clients and customers. The merchant will take care of the rest, as starting your own online store can take quite a bit of effort.
- There are no special requirements. As long as you can promote affiliate products or services effectively, you don’t need any other training or licenses. (Though it helps to set up a website!)
- It makes money 24/7. Just like any other online business, you can do affiliate marketing at any time, even when you’re asleep!
Cons of Affiliate Marketing
Of course, as great as affiliate marketing seems, it’s not entirely perfect. There are a couple of downsides to it. Some of them are:
- Building up referrals takes time. For an affiliate to make any significant amount of money, it’s going to take some time to generate enough referrals
- You need to be good at internet marketing. Yes, there’s no specialized training required to be an affiliate. If you want to be successful, you need to be good at (or at least know) Internet Marketing.
- There are advertising restrictions. Certain affiliate programs will enforce advertising restrictions, such as not allowing email marketing or using PPC ads with certain keywords.
- There are payout requirements. Some affiliate programs will only give you your payment once you’ve achieved a certain amount of sales or money.
The First Steps as an Affiliate Marketer
By now, you should have a good idea of what affiliate marketing is and what the pros and cons are. But how do you make money as an affiliate marketer?
Compared to other online ventures, starting with affiliate marketing is relatively simple as you don’t need much. While it’s recommended to have at least a blog or a website. Check out our tutorials on how to make a website. If you have more interest in sharing your content to the audience, read how to start a blog.
To start your affiliate marketing journey, you need to:
- Settle on a niche market. You have a better chance of being successful if you focus on a specific topic.
- Look up affiliate products and services that are related to your niche — research on the program’s reputation and whether they take care of their customers and affiliates.
- Figure out how you are going to promote affiliate products or services. The easiest way is definitely through a blog or a website. However, you can use other methods such as email lists and promoting the affiliate products to your subscribers.
- Another way would be to use social media platforms such as Facebook, Twitter, or Instagram.
- Research and learn some internet marketing strategies for effective ways to share your website, blog, or affiliate links.
- Since you’ll be making money from home, it might be a good idea to look into business licenses and business laws in your area to ensure that your business is legal.
A Few Examples of Great Affiliate Marketing Websites
Affiliate marketing has been around for quite some time, and there are many successful affiliate websites. Here are three that we think are great examples:
Smart Passive Income (Pat Flynn)
Pat Flynn’s uses his popular blog (Smart Passive Income) and podcast (Smart Passive Podcast) to promote his affiliate products and services.
The reason why Flynn is so successful is that he only recommends products that he’s passionate about and familiar with. He believes that affiliate networks should: provide significant value, understands what users want and need, lead and teach by example, and have earned considerable trust.
Web Hosting Secret Revealed
Web Hosting Secret Revealed (WHSR) is an example of a niche affiliate website that focuses primarily on web hosting content. It conducts reviews, case studies, interviews, and in-depth articles on anything and everything to do with web hosting.
The website has established a reputation for providing in-depth and detailed reviews on web hosting companies. So users will trust its product or service recommendations.
Pinch of Yum
They managed to achieve such success by ads, sponsored content, and affiliate partnerships with Amazon. Of course, the key ingredient (no pun intended) to their success is high-quality blog content.
Jumping into the world of affiliate marketing can be overwhelming if you’re a complete newbie. But, just like any other business, you’ll need to put in the work if you want to be successful in affiliate marketing.
Remember that it’s important to be passionate and well-rounded in the niche that you dive in. If reading has been your life-long hobby, setting up a book blog can be your path. Or perhaps you’re into computer games, then making a gaming website (or even a server) can be a solid starting point.
With this beginner guide, you should have a better understanding of what affiliate marketing is about, how to get started, and hopefully, become a pro at it!