What is Affiliate Marketing + The Ultimate Beginners Guide

Remember seeing someone going door-to-door selling various products or services?

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They were working as an affiliate for the company that made those products. Their job was to market and sell the company's products, and in return, they would earn a commission on every sale. The same thing goes for affiliate marketing online.

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Companies provide links to their website or a unique coupon code via an affiliate program. And when someone clicks on that link and buys something from the company, or someone uses your custom coupon code, you get a commission.

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That's affiliate marketing in a nutshell.

In the last few years, the graph for affiliate marketing has skyrocketed. There are a lot of people making a full-time income from affiliate marketing.

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The affiliate marketing industry is predicted to grow from $8.2 billion in 2017 to approximately $13 Billion by 2022 and reach an estimated market size of about $15.7 billion by 2024. Undoubtedly, the potential is there for anyone willing to put in the work.

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If you want to learn more about how it works and how you can make money doing it, read on.

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In this in-depth guide, you will learn:

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• What is affiliate marketing?
• How does affiliate marketing work?
• What are the different types of affiliate marketing?
• How much can you make from affiliate marketing?
• Pros and Cons of affiliate marketing
• How to start an affiliate marketing website
• Dos and Don'ts of being a successful affiliate marketer

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What is affiliate marketing?

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In simpler words, affiliate marketing is a way to earn money by promoting other companies 

products. You find a product you like, promote it to others and earn a piece of the profit for each sale.

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For example, Pat Flynn generated $400k in commission by promoting just one product.

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Affiliate marketing can be a very lucrative way to make money online, irrespective of your niche. Whether you are a blog owner, YouTuber, or even a product reviewer, if you can drive traffic to landing pages/websites effectively, there's money for you.

How does affiliate marketing work?‍

Let's examine the mechanics of affiliate marketing. The affiliate marketing ecosystem consists of three players:

Merchant or Network 

The merchant or network is the business that owns and operates the website, product, or service being promoted. They offer a commission to affiliates for every customer or sale generated from an affiliate link on their site, based on the terms of the affiliate agreement.

In some cases, an affiliate network is also involved in providing a platform for merchants and affiliates and tracking sales or customers generated from affiliates. In other cases, the merchant may operate their affiliate program.

Affiliate‍

The affiliate is the independent contractor who promotes the merchant's products on their website with unique tracking links. In this scenario, you are the affiliate. You identify a product you like, promote it to others, and earn a piece of the profit for each sale you make.

You are rewarded based on performance, typically a commission for every sale or lead from their site. In some cases, you may also receive other benefits, like free shipping or exclusive access to certain products or services.

Customer‍

Finally, there's the customer! This person ultimately buys the product or service, completing the affiliate marketing cycle. They click on an affiliate link and purchase from the merchant's site. Their transaction is tracked back to the affiliate, who gets credit (commission) for referring them as a paying customer.

If done right, affiliate marketing is a win-win for everyone involved.

• The merchant gets more customers and makes more sales.
• The affiliate marketer earns a commission on every lead or sale they generate.
• The customer gets a great product or service at a fair price.

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What are the different types of affiliate marketing?‍

The affiliate marketing model is divided into 3 different categories: physical products, digital products, and services.You need different strategies to make money with each of these. 

1. Physical products

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This is the most common type of affiliate marketing. You promote a physical product and earn a commission when someone buys it through your link. 

The most popular but also competitive way to do this is with Amazon Associates. You can find products in any niche on Amazon and earn a commission on anything people buy within 24 hours of clicking your link. Even if they didn't buy the product you promoted, you'd still get a commission on anything else they purchase.

For example, Homegrounds talks about anything and everything about coffee. They promote products like coffee makers and grinders on their website. 

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They use the Amazon Associate affiliate program as their primary monetization method. So whenever somebody buys one of these using their affiliate link, they earn a commission.

2. Digital products

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The other affiliate program is for digital products like ebooks, online courses, video series, etc. These affiliate programs usually have a much higher commission percentage, as high as 50% or even more. You can earn commissions on recurring payments too.

They can be delivered via email marketing or digital download platforms like Gumroad or SendOwl.

Software affiliate programs are one of the highest-paying programs. You can earn even more than $100 per sale.

One such program is Copy.ai's affiliate program which pays you a 45% recurring commission for each referred paying customer.

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With a generous 60 days cookie period, you can access educational content, email, and a private Facebook group (for all the help you need). You can also offer your audience a 40% discount.

3. Services‍

This is similar to physical products, but instead of promoting a physical product that people will buy, you're promoting a service they can sign up for, such as massage or personal training, or digital services such as web design or copywriting. The most common way to do this is with web hosting services like Bluehost or WP Engine.

For example, Quick Sprout wrote this blog comparing the best web hosting companies where they added the disclaimer at the top saying, "Our content is reader-supported, which means that if you click on some of our links, we may earn a commission."

When you click on their recommended hosting provider, "Hostinger," and sign up, they will get paid based on their monetization method.

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You can also identify the affiliate links by looking at the URL. Here is how it looks:

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How do affiliate marketers get paid?‍

There are three main ways affiliate marketers get paid.

Cost-Per-Sale (CPS) ‍

The advertiser pays whenever the publisher gets an affiliate sale or lead. This is an older model and quite common with physical products (such as selling a product on Amazon).

Cost-Per-Action (CPA)‍

The advertiser pays only when the publisher takes a specific action, such as getting a sale, leads filling out a form, or completing a registration. This is quite common with digital products and services.

Cost-Per-Click (CPC)‍

The advertiser pays whenever the publishers click on an ad placed on their website or blog.

These methods have pros and cons, but they all require you to generate traffic to your site before you can start making sales or generating leads.

So there you have it! These are the most common ways that advertisers pay publishers for their traffic.

Now, let's talk about how much affiliates typically earn.‍

Affiliate commissions are typically paid on a performance basis. That means you make money based on how many sales or leads your digital marketing efforts generate.

The more traffic and conversions you drive, the more money you earn! This can be very lucrative if you know what you're doing, but it does require some strategy and effort to get things off the ground.

When you're starting, your commission rates will typically be low. This is especially true if you're promoting products from companies that don't have an extensive affiliate program. But over time, as you build up your traffic and learn which types of ads perform best for you, your commissions will increase.

Pat Flynn, in 2007, earned $163 in the first month of his career. In 2009, he earned around $10,000! Then by 2017, his affiliate marketing business had grown to over $150,000 per month.

According to Flynn, "how much you can earn from affiliate marketing depends primarily on how committed you are to making it work and how much time, energy, and focus you're willing to put into it."

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So, if you see affiliate marketing as a way to make money while you sleep, know that it is not a get-rich-quick scheme. Instead, it is something that requires dedication.

Advantages of affiliate marketing

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Apart from giving you the chance to earn some extra money, affiliate marketing also offers many benefits.

Low startup and ongoing costs‍

You can start an affiliate marketing business with little capital. You can begin promoting products as an affiliate for free in many cases. This low barrier to entry makes it easy to get started, even if you have a limited budget. Many affiliate programs are even free to join. All you need to do is to pick the products and affiliate network and start promoting.

If you’re creating an affiliate website, domain and hosting costs are fairly affordable. By writing content with the help of an AI writer or writing it yourself, you can save on paying freelance writers. 

Flexible hours and location‍

One of the best things about affiliate marketing is that it allows you to work from home or anywhere in the world with an internet connection. You can set your hours and work around your other commitments. Because there are no geographical boundaries, you can target customers from all over the world.

Low-risk‍

Many people want to make money online but are afraid of scammers. If you're one of them, affiliate marketing is the best way. You don't need to do anything other than promote your chosen products to the right audience. There's no risk of losing money or getting involved in legal issues. You can also try different affiliate programs and products without spending a dime.

Scalable business model‍

With affiliate marketing, your earning potential is only limited by the time and effort you put in. You can start small and scale your business by hiring freelance writers as you increase sales. This makes it an ideal option for people who want to build a passive income stream.

High ROI‍

Affiliate marketing can be highly profitable, with some programs offering up to 50% commission on sales. This means that for every $100 you generate in sales, you could earn up to $50 in commissions. Many high-ticket affiliate products are also available, leading to even higher earnings.

Disadvantages of affiliate marketing‍

While affiliate marketing has been proven to be an effective digital marketing method, there are some disadvantages that you should be aware of before getting involved.

Dependency on the merchant‍

If the affiliate merchants you are promoting change their terms, product offerings, or prices, it can significantly affect your earnings. You may be left without anything to promote and no way to earn an income.

Lack of control ‍

As an affiliate marketer, you're not controlling the product or service you're promoting. You have no say over how it's priced, what features it has, or anything else about it. This can be problematic if the product isn't well made or is overpriced compared to similar products on the market.

Takes time‍

Affiliate marketing can be a slow process. You need to build trust with your audience, which takes time. 

Also, ranking your affiliate content organically in search engines can take several months after starting a new site until you start to see traffic. Some affiliate marketers choose pay-per-click advertising to generate affiliate revenue faster, cutting your profits. While other affiliate marketers choose organic traffic at no direct cost, they need to know how to do link building to increase their rankings and traffic sooner.

Highly competitive‍

The affiliate marketing industry is highly competitive, so it can be difficult for new potential affiliates and merchants to stand out from the crowd. You'll need to find an affiliate niche with lower competition, or a unique angle that sets you apart from the competition, or you'll be lost in the sea of affiliates promoting similar products.

How to start an affiliate marketing website‍

Pick your niche and set up your website‍

The first and most crucial step to starting an affiliate marketing website is choosing an affiliate niche you're passionate about. If you can develop your passion for the niche, it will be easier for you to write content that helps the reader. You'll also be more likely to stick with it if you have fun doing it.

Once you've chosen your niche, set up your website. Choose a domain name that's easy to remember and relevant to your niche. Sites like Namechk will show you if the domain you want is available, as well as the social media handles across dozens of popular platforms. It will make it easier for potential customers to find you online, and having a social media marketing presence will be another source of traffic to your website

Create great content that helps readers‍

Create affiliate content by considering E-A-T (Expertise, Authoritativeness, Trustworthiness). Google aims to give its users the best experience possible by referring them to websites and content that is the most accurate and relevant. 

You'll gain authority in your niche by creating helpful content for readers, building trust with potential customers, and attracting valuable backlinks.

Find an affiliate program in your niche‍

Picking the right affiliate program can help you earn income while you build your site and grow your traffic. The wrong affiliate program can cost you money if it doesn't fit well with the rest of your content. 

You can find an affiliate program in your niche by:

• Looking for popular products or services that you'd recommend to a friend.
• Checking out companies that are doing something different or unique.
• Researching companies that promote products and services related to your content.

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Finding an affiliate program doesn't have to be difficult, but it does require research. 

Many affiliate marketing programs will have an affiliate manager that can provide promotional materials for your website or display advertising campaigns. Build a good affiliate relationship with these programs and managers so they can help you with your affiliate and digital marketing efforts.

Review and promote products‍

You want your readers to trust you and your recommendations. If you constantly promote products you haven't tried, people will eventually catch on and stop trusting your opinion.

It is important to review products before recommending them to your audience for a few reasons:

• You want to ensure the product works as advertised.
• If a product does not live up to its claims, it will reflect poorly on your brand.
• You want to steer your readers toward the best options.
• You can build up a relationship of trust between you and your readers.

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When you've tried and used a product, you'll be able to give a much more informed opinion that will carry more weight with your audience. 

Grow your traffic and optimize conversions‍

To build a successful online business, you need to do two things well:

• Drive traffic to your site.
• Convert that traffic into paying customers.

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Growing your traffic gives you more opportunities to convert readers into customers. Most affiliate marketers count on creating valuable content and earning backlinks to their site to increase their rankings and organic traffic. Others also use social media sites like Pinterest and Facebook to build a following and increase traffic from multiple sources.

Optimizing your conversions ensures that every visitor who visits your site has a higher chance of becoming a paying customer. Some examples could be adding a comparison table to the top of a post that shows the main features of multiple products, adding call-to-action (CTA) buttons after affiliate product reviews to let customers know where to buy, and mastering copywriting that converts readers into buyers.

Hence, if you want to build a successful online affiliate website business, you must master both of these skills.

A huge part of this is learning about your target audience and understanding their needs, wants, desires, and fears. You need to know what type of content they are looking for and provide it in a way that positions you as an authority. Take a look at some of the best affiliate blog post examples in the industry to get an idea of how industry leaders write great product reviews for their audience.

Get paid with affiliate commissions‍

The last step is to follow all the above steps and get paid with affiliate commissions through your affiliate offer. Look at the affiliate marketing programs you’ll be working with to determine their payouts, what threshold you must reach, and your affiliate commission rates.

That's it! If you stick to these simple steps, you'll be well on your way to building a successful online business.

Dos and don'ts of being a successful affiliate marketer

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Affiliate marketing is a great way to make money online, but there are some dos and don'ts that you should be aware of before getting started.

Dos

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1. Do your research ‍

Before promoting any products or services, you must research them thoroughly first. This will help you better understand the product or service and create more effective promotional materials.

2. Build a strong relationship with your audience‍

For people to trust your recommendations, they need to know who you are and your credentials. Be transparent about who you are and build rapport with your audience by sharing helpful information.

3. Focus on one niche ‍

Promoting different products and services to maximize your earning potential is tempting, but this will only lead to confusion. Instead, stick with a niche you're interested in so people can come to you for information on a specific topic.

4. Be consistent ‍

Once you've established your credibility, it's essential to maintain a consistent presence so people know they can rely on you for accurate information. Share new content regularly and be responsive to questions or comments to keep people engaged.

5. Re-invest in your brand ‍

As you become more successful, don't be afraid to re-invest in your business so it can continue to grow and improve. This might mean hiring someone to help with the workload or investing in better equipment for higher-quality content.

6. Follow best SEO practices‍

As you create content on different platforms or other websites through guest posting, be sure to use relevant keywords and link back to your website or blog so people can easily find you. 

Optimizing your content on your affiliate website for search engines will help more people see it and potentially increase organic traffic to your site.

7. Keep at it!‍

Developing a successful blog or website as a content creator takes time and dedication, so don't get discouraged if you don't see results immediately. Keep producing quality content and promoting your site, and eventually, you'll start to see results.

Bonus Pro Tip: If you look at the top websites and blogs in any vertical, you’ll notice a pattern of the same sites appearing on the first page of Google. These are the authority sites in these niches or industries.

You'll notice a general pattern if you check how many pages or posts they have on their website or blog. He who has the most quality content pages and posts ranks better. The more high-quality content you produce, the more power, authority, and rankings it accumulates.

You can’t beat authority sites, but you can become one.

Don'ts‍

1. Don’t plagiarize‍

Copying someone else's work is unethical and can also get you in trouble legally. If you want to use someone else's content, get permission first and give credit where it's due. But having duplicate content on your website won’t rank that content, and could get you penalized, so always strive to create quality, unique content.

2. Don't over-promote your site or blog‍

You don't want to be spammy or salesy when promoting your site or blog posts on social media or other websites. Instead, focus on providing value and helpful information that will interest a potential customer in your target audience.

3. Don't rely on one affiliate program‍

Diversifying your affiliate income sources is a smart move in business. If you rely on one affiliate marketing program to provide all (or most) of your earnings, you're at risk if that program stops working, suspends you, lowers its commission rates, or changes its rules.

4. Don't ignore Google's rules‍

Don't use deceptive practices when promoting your site. For example, don't use a low-quality website to get backlinks and promote your main website (Google frowns on this). Also, paying for backlinks can get your site penalized by Google, which will instantly drop your organic traffic and isn’t worth it.

5. Don't overdo your keywords‍

If you stuff your keywords into every sentence on your site, Google will think you're trying to game the system and may penalize you. Use them sparingly and naturally while focusing on creating helpful, readable content for your readers.

These are just a few of the many things you need to remember regarding affiliate marketing. Now, it's time to get out there and practice this advice!

Frequently asked questions about affiliate marketing‍

How do affiliate marketers make money?‍

Affiliate marketers make money by promoting and selling other people's products. When a customer purchases a product through an affiliate marketer's link, the seller of the product pays the affiliate marketer a percentage of the sale price.

They can do this in a few ways:

• Being paid directly by the merchant.
• Receiving a commission from an affiliate network.
• Creating and selling their products (this is called product promotion).

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Although there are many ways to make money with affiliate marketing, most people do it by promoting other people's products.

How to do affiliate marketing without a website?‍

There are a few ways to make money with affiliate marketing without a website:

• Run solo ads.
• Create a YouTube channel and produce videos with an affiliate offer.
• Run paid advertisements in email marketing newsletters or on other websites.
• Utilize social media platforms like Twitter, Pinterest, Facebook and Instagram.
• Post your link on forums and directories.
• Giveaway freebies that include your affiliate link.

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How fast can you make money with affiliate marketing?‍

In general, it can take 6 months to start earning through affiliate marketing if you go the organic traffic route, which takes time to rank your website. You can make money sooner if you get traffic from paid advertising.

With the proper training and website, you can start earning within 1-2 months. It also depends on the product you are promoting and the affiliate network you are working with.

What is high ticket affiliate marketing?‍

High-ticket affiliate marketing means selling expensive products and getting a higher commission on each sale. For example, if you promote a product that costs $2000 and receives a 10% commission, you'll make $200 per sale. This is compared to selling a $50 product and getting only a $5 commission.

So, high-ticket affiliate marketing can be more profitable, although finding and promoting expensive products requires more effort.

How is affiliate marketing different from influencer marketing?‍

The critical difference between affiliate marketing and influencer marketing is that it focuses on driving sales conversions, while influencer marketing emphasizes developing relationships between a brand and its potential customers. Affiliate marketers earn sales commissions, while influencers typically earn money through sponsored content or product placement. 

Is affiliate marketing legit?‍

Yes! It's legit. You only need to remember that you have to be honest with your audience and not recommend something just because it will make you money. You need to add a disclaimer to your website saying that you are an affiliate for the product, company, or affiliate marketing program.

Also, if someone clicks on your link and purchases the product, you need to tell them that you will receive a commission. It will help you stay away from any potential legal issues down the road.

In conclusion, affiliate marketing is a great way to make money online. You can be your boss, set your hours, and work from anywhere worldwide. You don't need to invest much money to start an affiliate site. Affiliate marketing is an excellent option if you're looking for a passive income stream. Pick a niche, build a website, consistently create resourceful content, and start promoting products.

Affiliate marketing requires creating quality content to drive website traffic and convert visitors into subscribers, leads, and sales. So, if you are looking for a simple way to generate engaging content, check out Copy.ai. It's an ai writing tool that can help you create tons of SEO-friendly content and drive traffic.

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