Affiliate marketing’s low-risk nature makes it an attractive marketing strategy. For content creators, it opens up an avenue to earn a sizable, passive income without having to worry about challenges like manufacturing or inventory. For brands, it’s an opportunity to reach a wider audience and pay only for actual conversions.
Here’s an overview of what affiliate marketing entails and how you can use it to earn more money, whether that’s through commissions or more sales.
What Is Affiliate Marketing?
With affiliate marketing, brands (also known as the affiliate merchant) pay a small commission to an affiliate marketer for every sale that they’ve generated. To do this, the affiliate marketer shares a unique link to the brand’s website when they’re promoting the products on YouTube, for example.
Once buyers purchase the product/service using this link, the affiliate earns a commission as a reward.
In many ways, affiliate marketing is a modern version of traditional commission selling. You can think of it as a form of revenue sharing.
Who Are the Parties in Affiliate Marketing?
Affiliate marketing involves three to four parties. Here’s how Neil Patel breaks it down:
The affiliate merchant
The affiliate merchant refers to the party that provides the product (or service) for sale. This can be an individual creator, brand, or retailer.
The affiliate marketer
Affiliate marketers (also called affiliate publishers) promote the product(s) to their online audience encouraging them to buy it. Influencers generally make good affiliate marketers because they come with a ready-made online audience. They typically do this by sharing sales links on their websites (often a blog) and/or social media platforms.
The customer
They’re the group of consumers that affiliate marketers target with their promotions via various channels. They’re the ones who take notice of recommendations made by the affiliate marketers, follow their customized links, and purchase the products.
Customers essentially close the loop. Once they buy one of the products, the other two parties have achieved their goals.
The affiliate network
Affiliate networks work with merchants to create a catalog of products that affiliates may promote. They act as a type of middleman.
Working through an affiliate network is completely optional and, as such, this party isn’t always involved in the process.
Examples of popular affiliate marketing networks include:
- ShareASale
- CJ Affiliates
- AWIN
For example, on ShareASale, you’ll find dozens of categories that include everything from music to moving supplies.
Source: shareasale.com
How Do You Get Started With Affiliate Marketing?
If you want to use affiliate marketing to make money, you have two options. As mentioned, you can become an affiliate marketer or a merchant.
Becoming a merchant is more complex as you’ll essentially need to start a business. Starting out as an affiliate marketer is more straightforward as you’ll be promoting someone else’s product or service.
How to become an affiliate marketer
There’s a wide range of people who choose to become affiliate marketers. The following are some of the most common ones.
- Influencers: As they already have a sizable social audience, they can easily impact the purchasing decisions of many people in their specialist niche.
- Bloggers: Many successful bloggers already have an existing audience to whom they can promote relevant products. They also usually have an excellent understanding of search engine optimization (SEO) and know how to write reviews and other promotions in a Google-friendly style.
- Creators of specialized micro-sites: While they haven’t yet made a name for themselves online, they can create a dedicated website devoted to a product and supply in-depth reviews.
- Email marketers: If you specialize in products relating to a particular niche, you may be able to build up a sizable email list over time. You can use email marketing to promote your affiliate products.
If you fit these criteria, here’s how to start:
1. Decide on a niche
If you’re already an influencer, you’ll sell products that are of interest to your existing followers in your niche.
If you don’t have a niche yet, Neil Patel highlights that it’s crucial to be as specific as possible. For example, instead of making design your niche, you can zoom in on website design specifically.
Once you know the types of products you wish to market, you need to decide upon the exact products. Not all affiliate marketers necessarily do this, but you want to ensure that the products are of acceptable quality. If not, you can likely harm your reputation because of your association with them.
2. Join an affiliate program
Here, you have two options:
- Work directly with the affiliate merchant
- Join an affiliate network
A good place to start is to check if your favorite products have an affiliate marketing program. In fact, many influencers and top bloggers restrict themselves to products they use themselves.
For example, if you’re using Shopify or Elementor to power your website, you could join their affiliate programs.
Source: shopify.com
Source: elementor.com
To find out if one of your favorite products has an existing affiliate program, you can do a quick Google search.
Alternatively, you can check on their website. It’s typically listed in the footer area.
Neil Patel also suggests that you can do a quick Google search by entering your niche followed by the keyword “affiliate program”. The results can point you to affiliate program landing pages of brands in this niche or blog posts that review the best ones.
You can also join an affiliate network. In addition to the affiliate networks mentioned earlier, you can also, for example, check out:
- Amazon Associates
- eBay Partner Network
- ClickBank
3. Create content
Your content will typically take the form of reviews. That said, it doesn’t necessarily need to be a traditional product review.
Other content ideas include:
- YouTube videos that show product demonstrations
- Blog posts that discuss related trends
- Social media posts that share ideas for how you can use the product
Whatever you create needs to be honest and helpful.
For example, Charlie Chang, one of the top content creators in the financial niche, is best known for the valuable content he shares on YouTube. On his channel with 1.2 million subscribers, he has shared 790 videos that include:
- Software tutorials
- How-to videos
- Interviewing event attendees, digital nomads, young millionaires — even strangers
This approach has served him well and, according to one of his YouTube videos, he makes $90,000 per month in passive income with affiliate marketing.
Also, remember to add the affiliate link in the content and disclose it. For example, in the US, the Federal Trade Commission (FTC) requires that affiliates disclose any links.
For example, on our website we have an Affiliate Disclaimer.
We also ensure that we have an advertising disclosure at the top of articles that mention products for which we may receive compensation.
4. Drive traffic to your content
One of the challenges of affiliate marketing is that unless you already have a sizable online audience you won’t earn a lot of money.
Email is a great way that you can grow your audience. Some affiliate marketers create a new website for each product where they ask website visitors to subscribe to their email newsletter or share a lead magnet in exchange for an email address.
For example, Danny Rusteen, the creator behind OptimizeMyBnb and an affiliate marketer promoting Airbnb and vacation rental software solutions, offers an 8-day course for new hosts as a lead magnet.
Source: optimizemyairbnb.com
The secret is to have an engaged audience and keep them engaged. To do this, ensure you use it to send emails about niche-specific topics about once a week.
Also, not every email should include an affiliate link. It’s a communication channel.
Only share affiliate links from time to time to ensure that it doesn’t become overly promotional. The focus is on building an engaged audience, not pushing sales.
You can also consider scaling your affiliate marketing with pay-per-click ads (PPC). Though, Neil Patel suggests that you leave this for a bit later once you know that you’ll make your money back.
How can merchants get started with affiliate marketing?
Many affiliate merchants are large companies looking for additional ways to sell their products. However, you don’t have to be a large company like Amazon to become an affiliate merchant. Quite a few small businesses, even solopreneurs, create knowledge/digital products that they sell online using affiliate marketers.
You just need to be somebody with a valid product to sell.
Once you have that, it’s best to use affiliate marketing platforms to find potential partners. Aside from connecting marketers with merchants, affiliate marketing platforms also help to track earnings and sales performance.
By going this route, you prevent fraud and privacy issues. You also minimize the learning curve from trial and error.
You can, for example, check out Refersion. It has apps and plugins with a number of eCommerce platforms like Shopify, BigCommerce, and WooCommerce to make setup seamless. If you have a custom platform, you can use its API.
It offers solutions to help with all the essential tasks like:
- Affiliate discovery and recruitment
- Affiliate management
- Creative assets
- Payments
- Reporting
Ozzy Garcia, GetResponse’s affiliate program coordinator, shares the following tips with brands starting new affiliate programs:
- Identify and roadmap your goals by asking what is the end goal and how will you get there
- Know what your ideal affiliate partner looks like and which tools they’ll need to help you achieve your goal
- Network by going out and trying new events in different parts of the world, meeting new people, and asking for referrals, constantly
- Get in tune with your marketing team
As affiliate marketing relies on other online marketing strategies, it should be all hands on deck.
He explains:
“Our affiliate team heavily relies on our marketing team, like our SEO team for blogging to recruit and optimize partners, our design team to produce high-quality content and banners, and our localization team to help us run promos in multiple languages for our key markets etc.”
Examples of Successful Affiliate Marketing Programs
Here are a few examples of how brands are using affiliate marketing successfully to grow their business:
1. GetResponse
GetResponse is an email marketing software solution perfect for small to midsize businesses. Not only do they offer tools that affiliate marketers can use to build their email lists like a website and landing page builder, but they also have an affiliate program of their own.
It serves as a great example of how you can target different types of affiliates and use different rewards.
They essentially have two affiliate programs: one aimed at individual affiliates, like bloggers, content creators, and marketing consultants and one for marketing agencies.
Individuals are given the following two options:
- Earn a recurring 33% commission for every payment made by the referred user
- An upfront $100 for every sign-up
Then, to help their affiliates earn, Get Response offers free marketing materials like banner ads and detailed referral statistics via a dashboard.
2. HubSpot
For an example of how you can use a tier-based approach for incentives, you can take a look at HubSpot’s affiliate marketing program. This approach gives affiliates room to grow which serves as an added incentive.
With the help of impact.com, one of the top-rated affiliate marketing platforms, they can offer dynamic payouts using certain performance thresholds. For example, once affiliates reach the second tier they receive extra bonuses, while the top tier unlocks custom commission.
Not only can affiliates increase their earning potential as they climb the ranks, but they will also get more support. This includes:
- Website audits
- Website optimization suggestions
- Guest blogging opportunities
- A dedicated affiliate marketing manager
- Comprehensive reports
- Co-branded landing pages
Rewarding high-performing affiliates with extra support is a clever way to focus your resources to those affiliates showing the best conversion.
That said, first-tier affiliates aren’t neglected. Everyone, irrespective of your tier, has access to a huge creative library with over 400 marketing assets (like banner images and demo videos), tips, and training guides.
It also uses their own customer relationship management (CRM) platform to grow relationships with their affiliates. One way that they do that is by sending custom performance emails to all of their affiliates.
Combining their own platform with the features offered by impact.com, HubSpot has increased their affiliate revenue and signups by over 50%.
3. Tripadvisor
Most brands use a pay-per-sale affiliate model. Tripadvisor is different — they use a pay-per-click model. Affiliates earn a commission from every visitor who lands on the Tripadvisor site then clicks out to one of their hotel booking partners. Even if the user doesn’t complete a booking, the affiliate still earns a commission.
For travel influencers, this can be a great affiliate marketing program since there’s no pressure for visitors to complete a sale. It’s also great for beginners since no minimum traffic is required to join the program.
Tripadvisor pays 50% of the commissions they receive from hotel partners to their affiliates. Although, commission rates per click vary depending on the booking partner, the seasonality, and the length of stay.
Key Takeaways
With the advances in digital marketing, affiliate marketing has become better, more sophisticated, and more accessible. In fact, nearly 30% of decision-making marketers that participated in a survey have listed the fact that there are continuously entering new, innovative marketing partners as its biggest unique strength.
While there are issues of fraud, theft, and misrepresentation in affiliate marketing, the benefits far outweigh the risks. Every brand should consider affiliate marketing part of their digital marketing arsenal to gain new customers without acquiring a lot of extra marketing costs.
For content creators and influencers, affiliate marketing is another way to monetize the following they’ve spent countless hours building. It can also further cement their credibility and expertise since they can offer products that will improve the lives of their audience.
What’s more, many begin as affiliate marketers and then decide to increase their incomes by creating products themselves – a genuine case of passive income. By creating a few products that other affiliates can sell (digital products in particular work well), you can have a foot in both camps and optimize your income-earning potential.
Frequently Asked Questions
How does affiliate marketing work?
Merchants decide on which percentage of the sales revenue they want to share with the people who sell their products. They can work directly with affiliate marketers or through an affiliate network. The merchant/affiliate network will give a personalized code to each affiliate marketer that they can include in the URL when they link to products they wish to promote. This way, the creator/affiliate network will know who sent each customer that makes a purchase.
What are the benefits of becoming an affiliate marketer?
- Affiliate marketing is low risk. You only spend time and resources marketing the product. You don’t have to develop the product, manage inventory, or deal with customer service.
- You don’t need any upfront investment. Joining an affiliate marketing program is usually free.
- The business is scalable without the need for additional manpower. You can always introduce new products to your followers and increase your affiliate revenues without hiring extra help.
Do influencers make good affiliate marketers?
Influencers can make great affiliate marketers as they already have a sizable audience. Plus, when you’re an influencer, you have sufficient clout with your audience that you can convince them that it would be a good idea to purchase these products. Your followers already trust you and value your authenticity. They know that you won’t risk your reputation by endorsing a bad product.
What features should you look for in an affiliate marketing platform?
The following are key features that an affiliate marketing platform should offer:
- User-friendly interface that makes it easy to access data about campaigns
- Integration with tools like eCommerce platforms and payment solutions
- Real-time tracking and reports that show which campaigns are doing well and which ones need further optimization
- Accessible customer support
