What Exactly Is Affiliate Marketing? And How Does It Work?

Chances are if you have found this article, you are interested in making money online. You've begun to research the different options that are available to you. So naturally to find out about making money online, you turn to the internet. As you begin to dig into the world of online entrepreneurship, you have most likely run across the term “Affiliate Marketing” a time or two.

Affiliate marketing is a fantastic way to create income online. It can also be one of the best ways to make passive income. But it might be that no one has taken the time to explain it.

In this article I will do just that.

First we'll discuss The Basics. I'll give you a simple explanation of affiliate marketing.

Next we'll go A Little Deeper. I'll describe the basic mechanics of affiliate marketing; the process.

Lastly we'll Put It All Together. I'll discuss how money ends up in your bank account.

What this article will not do

That being said, this article is not a comprehensive A to Z guide on how to be an affiliate marketer. This article will provide you with a broad overview of what affiliate marketing is, and how it works.

If you read through the rest of this article and decide you are interested in learning more about affiliate marketing, that's awesome!  I will leave you my top two recommendations for learning how to start your own affiliate marketing business at the bottom.


The Basics

The first thing we should do is define what exactly affiliate marketing is.

Affiliate marketing is the process of earning a commission by promoting another company’s (or person’s) product.

You find a product or service you like and show it to your audience. If someone decides to buy that product, you earn a portion of the profits from that sale. The affiliate marketer does not own the product.

It’s similar to a salesperson at a store earning a commission, except you don’t work for the company that created the product. I like to think of it as a referral fee.

There are two different ways you can be involved with affiliate marketing:

  • As the person or company that has a product to sell (the seller)
  • As the person promoting the product (the affiliate)

Me, I'm an affiliate marketer. Most of what you'll find on my blog, revolves around affiliate marketing. So for the purposes of our discussion here, we'll look at things as an affiliate.

A Little Deeper

Next, let's talk about the 3 main parties involved in an affiliate marketing arrangement. The first two, you already know.

  • The Seller – The person or company that has a product to sell
  • The Affiliate – You. (and me). The person who promotes The Seller's product

And the third…

  • The Buyer – The person who buys the seller's product as a result of the affiliate's promotion or marketing

 

The seller will make their product available to affiliates either through their own website, or through an affiliate network. I'll talk about affiliate networks in just a moment.

Sellers can be large companies that we all have heard of such as Nike or Best Buy. Or they can be one individual who has a product of their own.

The affiliate finds products that are available to promote either by visiting the seller's website itself or from an affiliate network.

An affiliate network is a place where seller's can go to make their products available to affiliates.

Here is a list of some popular affiliate networks:

  • Clickbank
  • JV Zoo
  • Commission Junction
  • Max Bounty
  • Warrior Plus
  • Commission Gorilla

On the network site, the seller will describe their product; describe what marketing tools they have made available for their product; the cost of the product and how much commission the affiliate will make as a result of a sale of that product.

The seller will also give instructions on how to sign up to be an affiliate for their product. They will also tell you what method they will use to pay you. Many use PayPal or some other similar payment service. However, some will transfer your commissions electronically directly into your bank account.

Other companies choose to provide all the same information on their own website rather than use a network.

The last party involved is the buyer. The buyer discovers your product through a link that you have provided them in your marketing. When they click on that link, they are taken to a site where they can learn about the product you're promoting and also purchase it.

So now that we I know all the players involved, let's talk about how all of this comes together.


Putting It All Together

At this point, we know how seller's put their products out there. We also know how affiliates find the products to promote. So let's pick it up from here and I'll show you how the rest of the process works.

Getting Started

So I, as an affiliate marketer, have found a product I like and want to promote; I will just call it The Thing. Now I will go to one of the networks that I listed above, or I will go directly to the website of the company that manufactures The Thing and sign up for their affiliate program.

Once I have become an affiliate of that company, I will have access to what is known as an affiliate link. An affiliate link is a link that takes you to a sales page for The Thing. That affiliate link has a unique tracking tag that is tied to me and only me.

Making The Sale

When someone clicks on that link, and then subsequently buys The Thing, that sale is tracked back to me. The seller gets his portion of the sale. Because that tracking link is unique to me, the seller knows that I am the one that gets the commission for that sale.

Usually the seller takes care of the sales copy if it's a textual ad, or the video presentations they use to sell The Thing. The seller also takes care of all the web pages and forms and merchant accounts necessary to conduct the sales transaction.

All of this happens automatically behind the scenes. The only way that I know a sale has been made is usually in the form of an email. Most systems have an email alert to let you know when you have received a commission.

My Task

With the seller taking care of the selling and the back office tasks, my job as an affiliate marketer then simply becomes driving traffic to my affiliate link.

Generating traffic (aka – leads, potential customers, prospects) is the heart and soul of what affiliate marketing is all about.

This is easier said than done.

A Quick Word About Traffic

Now I'm not going to dive deep into how to generate leads…that would take an entire course or a book or both.

But I will give you just a couple of methods that affiliate marketers use to drive traffic to their offers: Free, and Paid

Free methods would include sharing your links to places you already have an audience.  Such as:

  • a blog (personal, or public such as Medium)
  • social media (Facebook, Instagram, LinkedIn, Pinterest, etc.)
  • YouTube
  • Question & Answer sites (Quora, Reddit, etc.)

Paid methods involve advertising on different platforms such as:

  • Facebook
  • YouTube
  • Instagram
  • Google
  • and many more

It used to be that an affiliate marketer could throw his affiliate links around willy-nilly and people would click through and buy things. That is not the case today. People are smart and can see spam from a mile away.

Give Value

Whether it's in the physical world or the online world, people buy from companies and people that they know, like and Trust. To gain that trust, an affiliate marketer must provide value upfront, before the sale

We have to remember that on the other side of that blog post or YouTube video or Facebook ad, is a human being that is looking for your help. If you provide them value upfront, they will be more likely to trust the product you are promoting is also valuable. That is the approach one should take as a marker today.

That also makes it important for me as an affiliate marketer to be wise in what I choose to promote. Not only do I want to provide value before the sale in my marketing, I want to make sure the product I'm promoting is also valuable and useful


Where To Learn How

If you have found from this article that you want to learn how to start your own affiliate marketing business, let me give you my top 2 recommendations for doing that.

My first recommendation is probably the most comprehensive course I have come across. It covers just about every aspect of affiliate marketing and much, much more. Click HERE to check it out.

My second recommendation is the absolute best if you are interested in marketing using a blog. Whether you have your own blog and want to learn how to monetize it, or you want to start a blog from scratch, this is the place to go. Check it out HERE.

Takeaways

  • Affiliate marketing is getting paid to sell other people's products
  • If done properly, It can be lucrative
  • It can be a means to create passive income
  • Ultimately, you are getting what you need by helping others get what they need. So run your business with honesty and integrity

That's A Wrap!

I really hope you found value in this article and learned a little bit about affiliate marketing. If so, leave me a comment below!

  • Are you thinking about starting an online business?
  • Have you heard of affiliate marketing before?
  • Are you currently an affiliate marketer?

Let me know!

Until next time…always be helping others.

Jeff


Affiliate Disclaimer

There are affiliate links in this blog post. If you decide to make a purchase after clicking through one of these links, I earn a small commission for that. It does not change the price for you whatsoever. Prices do not change regardless of where you buy.

Any income claims, or claims of success are not necessarily true for everyone. Just like any other career or business venture, hard work and persistence is required. Many people succeed…and many fail as well. It is up to YOU to determine your fate.

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