What is Affiliate Marketing – A Complete Beginner’s Guide!

I have been an affiliate marketer for a good number of years now and I have seen almost everything in the industry.

And within this beginner’s guide for affiliate marketing, I will be helping you get acquainted with the essential basics of this craft and also guide you on how you can get started in the right direction.

So, let’s jump right in.

What is Affiliate Marketing

Affiliate marketing is simply the practice of promoting other people’s or companies’ products through an affiliate link and earning commissions from every product sale you make.

It is among the oldest and most popular ways of making money online.

And it is growing rapidly as the years go by.

Going by the reports from Statista, in the United States alone, the affiliate marketing spend was at $5.4 billion in 2017 and it is due to reach $8.2 billion in 2020.

So it is a marketing strategy that is proving to be reliable and one that might be here to stay.

Affiliate marketing is pretty much about going to people or companies that are selling products you want to promote. You check if they have an affiliate program where you can sign up and get your affiliate link.

You then go ahead and promote the products using the link to people who might be interested in them and lead them to the people or companies selling the product.

When they buy through your affiliate link, it is recorded that you have helped initiate a sale with the owners of the product and that earns you a commission.

An affiliate program is a provision offered by someone who is selling products that allows affiliate marketers to get a unique link tied to their personal details that helps them track the clicks on that link, record commissions earned, money paid to the affiliate marketer and other promotional resources.

An affiliate link is a unique link that has been created for a specific affiliate marketer and is linked to their details such that when someone buys a product through that link, the seller knows the buyer has been directed to the website by the affiliate marketer and give them due credit.

Affiliate marketing can be done in many ways. Some people use websites to promote products. Others use videos on YouTube or other popular video sites while others do it through emails, social media, and even word of mouth.

It all depends on the strategy you find fit for you.

One advantage of affiliate marketing over the offline marketing done by salespeople is that you can choose any products you would like to promote.

There is no limit as to what you can promote as far as there is an affiliate program for it. Many people prefer promoting products they love or are in their areas of interest.

The other benefit is that you can promote as many products as you like at the same time and get to earn from all of them.

However, it is not always that easy.

It can be fairly challenging to promote many products all at once based on what that demands from you in terms of time and effort.

But the good thing is if you understand how affiliate marketing works and follow the tips I am going to provide here, your potential in the affiliate marketing world will be unlimited.

How Affiliate Marketing Works

Affiliate marketing happens when there are 3 parties involved, that is the seller or producer or creator of the products, the affiliate marketer, and the audience which is the potential customers.

1. The seller – This the one who has the products that need to be sold. It could be a company or an individual. It could also be an affiliate network that holds many affiliate products from different owners under one place like Amazon.

The seller can also be selling a product or a service. The product can be a physical or digital product. There is no limit as to what someone can sell online through affiliate marketers.

2. The affiliate marketer – This is you and me. The person who wishes to contribute to the marketing of the products in exchange for a commission. The affiliate marketer creates an account with the affiliate program of the seller or the affiliate network and is able to get their affiliate links for the products that will help with tracking the sales they make and give them the commissions due them.

The commission is usually a percentage of what the seller gets when the product is sold. And these percentages differ with various affiliate programs. There are some that give 5% and others give up to or more than 70%. The higher the percentage, the more you will make out of each sale. So you have to make careful decisions with the affiliate programs you choose to work with.

3. The audience – This is a group of potential buyers of the product being promoted. These are people who are interested in buying these products and who most of the time end up buying. The audience can be gotten from different sources.

There are affiliate marketers who choose to create an audience through YouTube videos and gaining subscribers who they promote the products to. Others choose to create a mailing list or get traffic from search engines like Google through SEO (Search Engine Optimization) or advertisements or even through social media.

Some even decide to look for people in the offline world like normal salespeople and it works well too.

The good thing about affiliate marketers working with potential buyers is that they get to help them understand the products better and give a deeper insight into the actual products.

Another advantage is that the audience still gets to buy the product at the same price they would pay if they didn’t go through an affiliate marketer.

So they don’t pay extra because they bought through an affiliate marketer. The price is always the same even with the help and value they get from affiliates.

Let’s take a look at a typical scenario of how affiliate marketing happens in the real world.

Suppose a dad somewhere goes online and wishes to buy a product. They look the product up and find more information about it through an affiliate marketer.

They then choose to click the affiliate link to go buy the product. What happens is, an affiliate cookie is created in the dad’s browser and lasts somewhere from 24 hours to 90 days or even a lifetime depending on the affiliate program.

The affiliate cookie helps to link any future purchase of the product by the dad to the marketer whose link was clicked if he chooses not to buy that particular day.

Assuming he gets an emergency and leaves the website without having bought the product, if he comes later in the day and buys the product, the affiliate marketer will still get the commission. But if the affiliate cookies expire, there won’t be any commission made.

So when he comes back and clicks the product and buys it, the sale will be linked to the account of the affiliate marketer and they will be paid the agreed commission.

For affiliate marketers who use the Amazon affiliate program, they get to benefit twice if a buyer buyers the product they are promoting along with others that they don’t promote.

So if you are promoting a shoe and the buyer buys it along with some pair of socks, ties, and foodstuffs, you will be paid a commission for the shoes that you are promoting as well as other products bought. Interesting, right?

But before you “yes, baby!”, you should know that Amazon provides one of the lowest percentage commissions on the web, so you don’t get to make a lot of money.

When it comes to affiliate marketing, many people prefer to use websites to get an audience. It is much better to promote affiliate products through a website as you can build a mailing list to help you make the sales or search engines that offer free targeted traffic.

You also have a full online business when you run a website as you can sell the website and make more money.

Concepts To Be Familiar Within Affiliate Marketing

Here are some terminologies you should get well versed with as an affiliate marketer as they will be mentioned a lot in the industry and you might miss important details if you don’t know what they mean.

* Affiliate network – An affiliate network is a platform that has many affiliate programs from different sellers under one place. Here, sellers come and put their products up for affiliate marketers to promote. The good thing about joining an affiliate network, as an affiliate marketer, is that your payments from different sellers are managed in one place and most of the burden is lifted off your shoulders. Amazon is a good example of a well-known affiliate network.

* Merchant – The merchant is the owner or producer of the products you are promoting. Also called the retailer, vendor, or seller of the products. As earlier said, it could be an individual or a company. These are the people who pay you a commission for every sale you make them for them.

* Publisher – A publisher is another name for an affiliate marketer. You can also refer to one as an affiliate.

* Conversion rate – Conversion rate is the ratio of the number of clicks made by potential buyers to the actual number of products bought. For example, if you have 100 visits or clicks to a product you are promoting and out of that only 10 products are bought, the conversion rate is 10%.

* Affiliate disclosure – This is a statement that discloses to the visitors or potential buyers on your website that you will be making a commission, as an affiliate, if they buy any products through your affiliate links. You are required to have this by the Federal Trade Commissions (FTC).

* Search Engine Optimization (SEO) – These are practices done by affiliates to their content to optimize its value in the visitors’ or potential buyers’ eyes and /or the search engines like Google so that the content is rewarded with good rankings that in turn increase its exposure.

* Sales funnel – A sales funnel is the pathway that a potential buyer takes so that they end up buying a product. It involves a series of steps that an affiliate takes the potential buyer through, which involve connecting with them deeply, making them aware of the products, and helping them make purchases. Apart from products, it is also used in services and creating leads or building a mailing list.

* Call to action (CTA) – A call to action is a way to give potential customers an opportunity to take action on a page or post concerning a topic they have been reading about on that page or post. A call to action uses words like “Click here” or “sign up here” or “try” or “view more” or “watch” or “shop” or even “buy now”. They are normally created as distinct buttons to help the reader take action of either buying a product, signing up to a mailing list, watching a video, read more about a topic or other actions based on what the content is about.

* Landing page – A landing page is a web page that you direct your visitors to so that they can take action on a product or service you are promoting This is where you get many call to action buttons. A landing page is also called a squeeze page.

* Link cloaking – This is the act of making your affiliate links look more appealing to your visitors. Most affiliate links have long URLs that don’t look good. With the help of URL shorteners and other services, you are able to make your links look much better.

* 2 tier affiliate marketing – This is where you, as an affiliate, refer other affiliates to an affiliate program and make money out of the commissions they make. It has some similarities to multi-level marketing but it is not entirely it. Some people refer to it as a sub-affiliate commission.

* Affiliate ID – This is a unique phrase or pin that is assigned to you by an affiliate program that is linked to your affiliate account which allows you to promote their products. Just like an affiliate link, the affiliate ID identifies with you and only you have it. It is different with every affiliate and can be part of the affiliate link.

* Affiliate manager – Ana affiliate manager is a manager offered by an affiliate program to help the affiliates optimize their promotions and also handles any issues regarding their affiliate accounts.

* Affiliate banners – These are promotional resources that are given to the affiliate to help them promote affiliate products on their website sidebar or widgets section or even in their social media accounts.

* Affiliate link tracking – Also known as affiliate tracking or link tracking, this is the practice of tracking the performance of your affiliate links so that you have a good idea of how they are doing and how you can optimize them. It also helps to keep accurate records of how the links are being clicked on and how people are converting to buyers. Often, an affiliate tracking software is used.

How to Get Started With Affiliate Marketing

To get started with affiliate marketing and prepare yourself well to make a passive monthly income from it, here are the steps you should follow:

Step 1. Choose your niche

Before anything else, you need to determine what niche you are going to focus on. It is always important to focus on one niche, especially one that you are passionate about. As Neil Patel says, “When you feel a strong sense of passion and purpose, you get fulfilled by your work”.

Narrowing down to one niche you love helps you understand the niche well and be able to direct your efforts to not only getting better in the niche but also increase your knowledge in that area.

Many people get stuck at this point but it shouldn’t be as hard as they think. You only need to ask yourself a couple of questions to allow you to narrow down to your right fit.

Some of the questions I ask myself when I am building a new affiliate website are:

* What am I passionate about?

* What specifically am I passionate about in that area of interest?

* Is it something I have knowledge about or would love to learn more about?

* Who are the people I am competing within that area?

* Are they hugely or fairly authoritative?

* Have they been in the industry for years?

These questions give you the chance to identify an area you love and understand if it is easy to break into going by the kind of competitors you have.

When you pick your niche, it is also important to analyze it so that you are sure if it is a profitable one and easy to work with.

You should take time to understand who your competitors are, the topics you will be covering in the niche, the products you will be promoting and the commissions the affiliate programs of the products offer.

It goes a long way in ensuring that you have the right niche.

Step 2. Build an audience

For you to make sales on the products you are promoting, you need a targeted audience. This is simply an audience that you are sure is interested in the products and will most likely buy them. There are 2 main ways to gain such an audience:

* Free techniques – These are techniques you can take advantage of without having to spend money as an investment. While they are free and save you the cost, they are fairly difficult and require a lot of effort, time, and patience. But it is all worth it in the end. Free techniques include building mailing lists, running a YouTube channel, search engine traffic through blogging, and building followers on social media the natural way.

* Paid techniques – These are the techniques you spend money on. You pay to get the kind of traffic you want. It is more like advertising. They are easy to work with as you only need to have a convincing promotion. When you pay, your promotions are put in front of the kind of people who would be interested in buying them. And if the affiliate products you are working with are of good quality and reasonable in terms of their use and price, people will buy them. Paid techniques include social media advertising with Facebook and Instagram ads, YouTube ads, search engine ads like Bing and Google advertising.

Step 3. Joining affiliate programs

You will also need to join affiliate programs that are selling the products you are promoting or which you want to promote. This is where you will get your affiliate links that will make the sellers aware that you are the one who influenced a sale so that you are paid your commissions.

When it comes to affiliate programs, it is worth noting that there are high ticket programs and low ticket programs.

* High ticket programs – These are programs that pay you a high percentage commission for every sale you make happen. The commission could range from a hundred dollars to a few thousand dollars for a single sale. The beauty of these programs is that you make lots of money from one sale but they’re hard to sell as the products are usually very expensive. Very few people tend to buy such products.

* Low ticket programs – These are programs that will pay you less for every sale. You make a few dollars but not as much as the high ticket ones. The upside of these programs is that the products are cheap and many people buy them. So if you have a huge audience, you can make pretty good money. Many affiliates prefer to promote these products.

Step 4. Promote affiliate products

Now that you have your affiliate links, you should go out there and promote the products using the links. You can do reviews of the products to make people aware of them and show them how they work.

One rule of thumb with doing product promotions is that you have to be very honest with your audience. You have to show the good and bad sides of the product.

When you lie to your audience, it will be hard for them to trust you which will affect your ability to make sales. It is also a good idea to have tried the product you are promoting.

It gives you deep insight into it which will help you in convincing potential buyers. However, this is not a requirement. Just a recommendation.

Step 5. Earn an affiliate commission

When you follow all these steps, you will see some commissions start to hit your account. It starts with one dollar, then two, five, ten, twenty, and boom! You find yourself earning a monthly income.

Affiliate commissions are paid to your PayPal account, bank account, or other payment methods depending on what the affiliate program you are working with offers.

Here are Amazon’s payment methods.

Some affiliate programs prefer to pay the commissions instantly while others pay after every 14 days or 30 days or a period they have personally set based on their terms and conditions.

So don’t be surprised when you get paid immediately a purchase is made with one program while another one pays you after a month.

Tips to Succeed at Affiliate Marketing

* Keep up with the current trends – There are always new trends within the affiliate marketing industry, just like any other industry out there. New technologies, techniques, and marketing strategies are rolling out every so often. These trends help make work easier while still bringing higher conversions. You will want to keep up with these trends if you want to be on top of your game.

* Work with free trial products – Many people like the idea of trying out a product before they can buy it and if you can get them to have a feel of how good the product is before they spend, they will not only love the product but believe in it. Research studies have shown that people tend to go for products with free trials more often than those that don’t offer a trial.

* Work with a number of traffic sources – It is good to have a variety of traffic sources for your products. Don’t just rely on one audience. If you are in SEO, try to build a mailing list. If you have a list already, try advertising on social media. Testing different sources and audiences will not only allow you to diversify your sources but also determine which one is converting well for you and get to put much of your focus on that.

* Help, don’t sell – Although to some extent this seems contrary to your reason to do affiliate marketing, it pays big time if you use it. Many people just want to make quick and easy money and they will push products on their audience, which is a bad marketing strategy. You always want to solve a problem for your audience first so that you can sell. You need to identify which problem the product solves or how it makes life better for the one who is buying it and focus on that as your marketing tactic. People exchange money for something valuable, and if it is not helping them, it is not valuable hence no sale for you!

* Research the merchant well before promoting their products – The products you promote represent your value and integrity as a brand and if you promote products for merchants who have a bad reputation, you will be hurting your brand. Always spare some minutes or hours to find out how credible the seller of the products is. Look at their ratings and reviews from different review sites and hear what people are saying about them. This will help you build credibility with your audience.

* Start small – In your early days, you should keep things simple. Start small, if you are running a blog, start with a simple theme, target topics with low competition, and don’t compete with established brands, they will break you. Compete with smaller websites and then as you grow, you can take bigger steps and try to compete with fairly bigger brands. But don’t do it right off the bat. The effort and expenses required for that will just discourage you.

* Be persistent – If you choose to do affiliate marketing, you need to make an inner decision to go all in and keep at it as long as it takes to make money. Persistence is needed in this industry and if you don’t keep building your brand, you will slowly fade away. You need to set a plan, create goals, and milestones so that you have something to strive towards.

* Become the best in your niche – As you set out in your niche, aim to be the best. Seek to provide the most valuable content, do promotions in the best and most effective manner, and use credible techniques without cutting corners. This means spending time in the trenches learning, testing, and optimizing. You should not build a “me too” brand. Work towards offering something others are not able and willing to. This will give you the upper edge.

* Promote products you have used and ones that you believe in and which you can use – As earlier said, recommending products you have used and liked is awesome as the potential buyers can relate with you at a deeper level. However, if you can’t manage to buy the product, make sure it offers the best value to the consumers and it satisfies their needs. And as you promote it, connect with it and relate with the audience as best as you can.

* Be patient, no instant earnings – Affiliate marketing takes time to pay off especially if you are going to use the free techniques. So you will want to develop the virtue of patience. Don’t start with the goal of making money the next day or next week or even month. Yes, there is a possibility you may make money within those periods but it is not always guaranteed. So, just know that your efforts will bear fruits in good time if you keep working at it.

* Keep getting inspiration from expert affiliate marketers – It is also wise to regularly read through blogs of affiliate marketers who are killing it in various niches, especially in the affiliate marketing industry. They will help you understand what is working and what is not, and how to execute various affiliate marketing tasks, among other insightful ways that will steer you towards success. I recommend checking the top affiliate marketing blogs and making an effort of learning a thing or two every day from them, and you are going to see how it is going to positively impact your affiliate business.

* Don’t ever quit – This is one thing I struggled with myself. I had not made a dime for more than 3 months on a niche I had taken up and it really got me discouraged. Thoughts of giving up were coming frequently and I was getting that push of throwing in the towel. But I would always get motivation from a few of my marketer friends. A few months later, the money sneaked in on me and today I make a full-time income from that niche.

Lesson learned? Trust the process. Things may not seem to be working on the outside but behind the scenes, it is all working out and it will come out in the open sooner than you think.

Frequently Asked Questions (FAQs) on Affiliate Marketing

Question: How long does it take to succeed in affiliate marketing?

Answer: It depends. If you invest your time and effort into it, you can make money sooner. But if you only work on it once or twice a week or even three times a month, it is going to take some time. Ideally, the more invested you are in it and the better your marketing strategy is, the sooner you will start making money.

Question: Is affiliate marketing too competitive?

Answer: It is competitive but not too competitive. Think of it as a market where you are trying to sell something. There is a chance there are other people who are selling the same thing as you and the one who makes the most sales is the one who knows how to work things right. Another interesting fact is, while new affiliates are entering the market, there are others who are leaving for different reasons.

Question: How much money can you make as an affiliate marketer?

Answer: There is no limit to how much can make. You can make as little as a dollar and as much $100,000 a month or more. It all depends on what you are promoting, how you are promoting it, and the investment you are putting into your promotions. If you take a look at a few super affiliates, you can get good a perspective of the potential you have with affiliate marketing.

Ben and Jeff who run Dollar Sprout and Breaking The One Percent blogs reported over $350,000 within two months of January and February of 2019.

John Lee from Entrepreneurs on Fire blog made a net profit of $108,000 in April 2020.

And these are people who started where you are now and grew to that level through consistent effort. It didn’t happen overnight or instantly.

Question: What are good and bad affiliate marketing practices?

Answer: Some examples of good marketing practices are promoting good quality and genuine products, being honest with your product reviews, working with genuine sellers, and using good promotional strategies that social media and search engines recommend without taking advantage of any parties involved. Bad strategies include lying to your audience, spamming other people’s emails, mistreating potential buyers, forcing people to buy the products you’re promoting, and cutting corners on your promotional methods so that you make quick money.

Question: Is affiliate marketing a form of a pyramid scheme?

Answer: No. Affiliate marketing is more like doing the work of an offline salesperson except for the fact that you do it online. You work for a company by selling their products and you get a cut for every sale you make.

Question: Which are the different ways affiliate marketers get paid?

Answer: There are 3 main ways that affiliates are paid. The first is pay per sale. This is where you are paid a percentage of the sale you make on every product. The second is pay per click. It’s where you get paid to get your audience to visit the merchant’s or seller’s website. For every click you initiate, you are paid. The third one is pay per lead. This is where you are paid for the leads you give to a merchant or seller. There are actions you are supposed to get a potential buyer to make so that you are paid. It could be subscribing to a newsletter, filling out a contact form, or taking a free trial.

Question: Which are some of the examples of affiliate networks?

Answer: The most popular affiliate network is Amazon. Other networks include Shareasale, Commission junction, Clickbank, eBay, Jvzoo, and Rakuten (which was previously known as Linkshare).

Question: What are the advantages of being an affiliate marketer?

Answer: There are lots of advantages of doing affiliate marketing. Some of them include working from home, having the ability to earn from products you don’t own, enjoying the benefit of getting customers without having to handle the shipping and other extra activities and having low operation costs, which means more profits for you!

And that is pretty much it!

Affiliate marketing is one of the most lucrative ways to make money online. If you have the determination and willingness to make it work, you can succeed and get to create a reliable income source for yourself.

It all depends on your effort, patience, consistency, and persistence. These are the personal qualities that I have seen work for me as well as what I have seen other successful affiliate marketing experts insist on.

The ball is now in your court.

Let us know if you have any questions or other insights into affiliate marketing in the comments below.