What Affiliate Marketing Is And How It Works

We partner with bada$$ companies that offer products that help our readers achieve their goals! If you purchase through our partner links, we get paid for the referral at no additional cost to you! Please read our disclosure for more info.

Are you wondering what affiliate marketing is all about?

Well you just landed on the right blog post.

In this blog post we shall cover what affiliate marketing is and how it works.

Let’s get started, shall we?

 

What is Affiliate Marketing?

First, I would like to tell you a little something about affiliate marketing.

According to Investopedia, affiliate marketing is an advertising model in which a company compensates third-party publishers to generate traffic or leads to the company’s products and services.

The third-party publishers are affiliates, and the commission fee incentivizes them to find ways to promote the company.

An e-commerce merchant wanting to reach a wider base of internet users and shoppers may hire an affiliate.

An affiliate could be the owner of multiple websites or email marketing lists; the more websites or email lists that an affiliate has, the wider its network.

The hired affiliate then communicates and promotes the products offered on the e-commerce platform to their network.

The affiliate does this by running banner ads, text ads, or links on its websites or sending email to clientele.

Firms use advertisements in the form of articles, videos, and images to draw an audience’s attention to a service or product.

Visitors who click the ads or links are redirected to the e-commerce site.

If they purchase the product or service, the e-commerce merchant credits the affiliate’s account with the agreed-upon commission, which could be 5% to 10% of the sales price.

It is a low-cost, effective way of advertising products and services, increasing brand awareness, and expanding a consumer base.

 

Diagram on how affiliate programs work
Diagram on how affiliate programs work
Courtesy: Shopify

 

 

To review:

  1. You show an ad or a link for Store Z on your website, blog, or social network.
  2. A customer clicks your unique link.
  3. The customer makes a purchase in Store Z.
  4. The affiliate network records the transaction.
  5. The purchase is confirmed by Store Z.
  6. You get paid a monetary commission.

With the pandemic happening and businesses switching to digital marketplaces, advertisements in this form offer the best option for reaching out to customers over large networks that might be interspersed amongst different communities.

There are three main types of affiliate marketing: unattached affiliate marketing, related affiliate marketing, and involved affiliate marketing.

 

Types Of Affiliate Marketing

1. Unattached Affiliate Marketing

This is an advertising model in which the affiliate has no connection to the product or service they are promoting.

They have no known related skills or expertise and do not serve as an authority on or make claims about its use.

This is the most uninvolved form of affiliate marketing.

The lack of attachment to the potential customer and product absolves the affiliate from the duty to recommend or advice.

 

 2. Related Affiliate Marketing

As the name suggests, related affiliate marketing involves the promotion of products or services by an affiliate with some type of relationship to the offering.

Generally, the connection is between the affiliate’s niche and the product or service.

The affiliate has enough influence and expertise to generate traffic, and their level of authority makes them a trusted source.

The affiliate, however, makes no claims about the use of the product or service.

 

 3. Involved Affiliate Marketing

This type of marketing establishes a deeper connection between the affiliate and the product or service they’re promoting.

They have used or use the product and are confident that their positive experiences can be shared by others.

Their experiences are the advertisements, and they serve as trusted sources of information.

On the other hand, because they’re providing recommendations, their reputation may be compromised with any problems arising from the offering.

 

Advantages Of Affiliate Marketing

1. It’s a lucrative and far-reaching industry.

This is a billion dollar industry waiting for new recruits such as you. In such a wide field, it’s pretty easy to look for products that you can actually use, believe in and in all honesty promote to your audience.

That kind of involved affiliate marketing where you actually have faith in what you promote has been tested and proven to produce the best results, especially commission-wise.

 

2. It’s a low-cost business opportunity

There are practically no barriers to joining.

Compared to other business ventures, you don’t need to have a huge capital on hand.

All you need to have is electricity and internet connectivity.

Knowing how to build a blog or a website is a plus.

One of the benefits of blogging is that you can promote your affiliate products either through ads or targeted content.

Tech-savviness is not 100% required, though.

Some people have become successful in affiliate marketing through social media.

A combination of both is what I suggest. The more avenues you explore, the more chances of winning!

 

3. No expertise required in affiliate marketing

You don’t need to be an affiliate marketing guru to succeed. Not right away.

This is a field where practice makes perfect.

You’re free to choose what campaigns to test and what learning method you want to use to become better at your trade.

If you’re a blogger, for example, you can choose to start by writing optimized content to attract more people to your blog.

The more visitors your blog gains, the higher the chances of getting in touch with the right kind of people.

 

4. It’s good as a supplementary source of income

With affiliate marketing, you aren’t required to quit your job.

At least not if you don’t want to.

You can just use it as your side-line or side project and see how much you can earn overtime.

However, if you choose to go full-time with affiliate marketing, it can very well turn into your best bet at making money fast through passive income.

How much work a passive income investment requires is still up for debate.

Still, affiliate marketing is promoted by a lot of people because it has so far been able to turn up good results.

Done correctly, it’s really possible to make money while you sleep.

 

5. Independence. Flexibility. Convenience.

Just like most passive income opportunities, affiliate marketing lets you work when you want to, if you want to.

You’re free to work in a flexible schedule and environment of your own choosing.

You don’t even have to worry about any after-sales customer concerns.

You can just conveniently pass it on to the merchant’s own customer support team.

 

6. No need to come up with your own marketing Kit

Vendors and merchants most of the time provide you with any and all marketing materials you’ll ever need.

No need to come up with any other promotional materials.

You can just get right on it and start earning commissions.

 

7. The techniques and strategies you can choose from are limitless

There are myriad ways you can market your chosen affiliate programs.

You can promote it on your blog, create online courses and then recommend the product to your students, using affiliate emails.

Social media is also a good tool that you can explore when marketing.

Also, you can create a website dedicated to your affiliate product.

Then you can install the best plugins for digital marketing to generate more commissions.

 

An Example of Affiliate Marketing

Amazon’s affiliate marketing program, Amazon Associates, is one of the world’s largest affiliate marketing programs.

Creators, publishers, and bloggers sign up to have Amazon products and services shared on their websites or apps, and in return, receive compensation for the sales their sites generate.

Amazon sets strict criteria for the types of sites and apps that host their ads.

For example, sites must not contain replicated content from another site or creator and be available to the public.

Websites must be active with fresh content and suitable according to Amazon’s standards.

Related:

For example, they must not contain obscene or offensive content, promote violence or illegal acts, or contain any content deemed harmful to others.

Approval is contingent on a thorough review by Amazon staff and meeting a qualified sales quota (3 within 180 days of the application).

If an application is rejected, it will not be eligible for reconsideration.

Once approved, commissions are earned as site visitors purchase products or services from Amazon.

Amazon Associates can earn up to 10% in commissions for qualified sales.

Rates are fixed and based on product and program categories.

As a bonus, Amazon offers special commissions on certain events.

 

Is Affiliate Marketing Profitable?

Affiliate Marketing is very profitable. Many bloggers are making over $10,000 per month from just affiliate marketing alone.

You can also make this much money from affiliate marketing provided you are willing to put in the work.

I make a decent amount of money from affiliate marketing and I can tell you this is a business that can allow you make thousands of dollars in passive income for the years to come.

In a good week I make $1000 to $2000 blogging. The biggest chuck of the money I make comes from product sales but I also make a considerable amount from promoting different affiliate offers.

weekly income

 

Here is a screenshot of a commission I made from promoting a single product on my site.

commissions

 

This is also another example of an affiliate commission I made promoting a different product.

example of commission

The amounts may seem small but they keep piling and by the end of the month you will have made a sizeable amount of money by simply referring people to various products and services.

I love everything about saving, investing, earning, and building net worth.

Leave a Comment