What is Affiliate Marketing and How does it work? (2020)

Affiliate marketing has become one of the most preferred ways to make money online. If you work online, you can make money even when you are sleeping.

With the increase of demand and number of products in the market, consumers also need someone to guide them with the right product. Affiliate Marketers have a great opportunity here.

If you are also looking to make money online or have your product to sell, it is a good time for you to know - What is Affiliate marketing and how does it work?

The concept behind Affiliate marketing is – “You promote other’s products and earns an amount of commission if people end up buying the product thanks to your marketing.”

But to make the passive income, first, you need to put some effort.

Are you ready for it?

Make Money While Sleeping: This is Affiliate Marketing😊

Make Money While You Sleep
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So In this article, I’m going to tell you - What is Affiliate marketing, how does affiliate marketing work?

Moreover, you will also know about how you can make passive income successfully with affiliate marketing.

If you are entirely new to it, this post will help you to get started. If you are already into affiliate marketing, you will still probably find something you have never thought of before. This post is for all from beginner to advance.

What is Affiliate marketing?

Affiliate marketing is an online selling strategy in which a product owner allows different individuals or companies “affiliates” to earn a commission by recommending the product to others. In that way, it makes it possible for the affiliates to make money without even creating products of their own.

Wonderful, isn’t it?

As an Affiliate, you only need to work on the marketing side of the business. You have to educate your audience about the product. Guide your audience on how they can take out the best from it. Make your prospects ready to buy and send them to the sales page via your Affiliate link.

All the hard work of creating the product, maintenance, and fulfilling of what they promised is on the vendor.

Now you must be curious to know more about it and how does it work.

Right?

So, Let’s get started.

How does Affiliate Marketing Work?

In an affiliate marketing system, Wikipedia talks about 4 different parties:

The Merchant (Also known as ‘Retailer’, ‘Advertiser’ or ‘Vendor’)

The Network (an intermediary between Publishers and Merchant, that has the Offers to promote and that also takes care of the payments)

The Publisher (‘the Affiliate’)

The Customer.

While some others say, In an ideal affiliate marketing System, there are only 3 parties:

The Merchant

The Publisher

The Customer

What is Affiliate Marketing
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(Image source: Digital Ads Online)

Here, I’m going to explain about all the 4 parties in detail. But, before that, if we talk about the actual Affiliate Marketing System. There are two main sides of an affiliate equation: The Merchant (Product creator) and Affiliate marketer (Product Seller).

Smart Entrepreneurs always know that there is a way to grow their business. And one best way is to find out a way to offer more value to your customers and followers. And that’s where the role of Affiliate Marketers start.

How does Affiliate Marketing Work
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(Image source: Digital Ads Online)

The Affiliate Marketers, Partners with the Merchant. They not only reach more customers but also educates them about the product. Teach them how they can use it to its best. And By that way, both The Creator and Seller both make gobs of money from it.

Now let’s talk about at all of the parties of a successful affiliate marketing system.

The Merchant:  The first party, typically referred to as the Merchant, the advertiser, the creator, the retailer, or the vendor. It is the party that creates the product, or that is selling the actual product or service.

The Merchant(the seller) decides the commission percent and provide some build-in merchandise from their site to the Affiliates.

A Merchant can be a big company like Microsoft - a leading global vendor of computer hardware and software, mobile and gaming systems, and cloud services. Or, it can be any small company. Even a single Entrepreneur can become a merchant. They only have to have a product to sell.

The Affiliate Network: An Affiliate Network is the party that acts as an intermediate between the Vendor and the Publisher like Commission Junction or ClickBank.

It allows the affiliate marketers to find out the affiliate marketing programs more effortlessly and participate in them. And at the same time, it lets the Vendors offer their affiliate programs to affiliate marketers to reach a larger audience.

The Affiliate network generates the affiliate link for you, take care of your payments and tracking your link & cookies.

The Affiliate: The Affiliate’s task is only to increase the sales for the vendors and generate more income as much as they can.

Here we can say Affiliate marketing is basically paid for performance marketing system where the act of advertising is outsourced across a network.

Also, an affiliate marketer acts and as an Infopreneur. An infopreneur is someone who engages with our customers repeatedly. Therefore, they sell products to the same customers over and over again.

Customer: Also known as a Consumer. The consumer makes the affiliate marketing system go round. Without any sales, there is no revenue to share, and so there is no commission also.

The Affiliate marketers try to reach these potential customers via any medium possible. That’s where the role of Digital Marketing (like social media marketing, email marketing, and blogs) come in presence.

Also, the best thing is, you can sell new products to the old happy customers just by referring them. That reduces the cost of running ads and searching for more customers.

The consumers don’t need to pay any higher value to buy the product via your Affiliate link. All the cost of marketing and affiliate network is already included in the Retail Price.

Now, as you know all about what is affiliate marketing and how does it work. It is the best time to get started with my affiliate marketing guide.

How to Get Started with Affiliate Marketing?

To start affiliate marketing is not so tough. You can simply go and sign up for any affiliate marketing network or affiliate marketing program and start promoting.

But wait, many beginners go wrong here. They just go and start sharing the link everywhere. They don’t get any sales, and at last, they end up being overwhelmed and overloaded.

This is also a reason why many new affiliate marketers end their affiliate marketing journey before even starting.

Don’t ever be like them.

It is very much essential for you to understand - how to start affiliate marketing, from the beginning

A Pro Affiliate marketer goes with a totally different approach.

It takes time and effort to start a successful Affiliate Marketing business like them.

Take your time and follow the steps if you want to set yourself up for success. Complete the first 6 steps before consider promoting even a single product:

1) Setting the Mindset

Before you start affiliate marketing, one thing you must keep in mind - Affiliate Marketing is a business. Just like any other business, it is going to take time and investment.

You will face failure initially, but you need to keep pushing yourself and continue it. Keep testing all kinds of methods, modify and retest to promote the same product in different ways. And Finally, you will get the result.

2) Find your Niche

For some people finding a profitable niche can be very tough. So here, I am explaining the process which you can follow to find out your niche easily.

At first, you need to ask yourself a few questions:

Q1. What are you passionate about?

Go for the topic you are passionate about. What is that you can do even when you are exhausted. If you are passionate about something, it will be a lot easier to work on it. Otherwise, you will be bored easily and leave midway.

If you are really passionate about something, you will already have some ideas about it. These ideas will help you to create good content.

Q2. Is your niche profitable?

Money is not everything, but if you want to survive, you need money. Being passionate about a niche isn't enough. You need to figure out if your niche idea is profitable.

Your passionate niche must have something for your audience. You must select a niche, about which people are searching online. If not, It would be tougher for you to grow it into a lucrative business. Your online business depends entirely upon the audience looking for your product.

Q3. Is your niche oversaturated?

Before jumping into a niche, you must find out is there any room for you? There may be many Affiliate marketers are working over the same niche, and the demand is less. In that case, you might give a try to another niche.

Q4. Are there enough products in the market?

If you want to start affiliate marketing and there are not enough products out there, it won’t last long. You much choose a niche that has enough products in the market.

One best way is to check your products on an affiliate marketing network like ClickBank or Amazon Associate.

To do this, in ClickBank, go to their website and click on Affiliate Marketplace.

ClickBank Network
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From there, on the left side you’ll see all the categories in red:

ClickBank Categories
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Click on one of the categories related to your niche, and it will lead to a page with all the different products that you could sell:

ClickBank Products
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One tip for you: If you found the products in your niche. Must check it has a good Grav(Gravity) and a decent average income per sale. A product with a gravity score of at least 50 is safe.

Gravity represents - the number of different affiliates who earned a commission by promoting this product over the past 12 weeks.

3. Build a Website

The first thing you need for Affiliate Marketing is your audience. A website is an excellent way to create an audience. Also, a website helps you to nurture your audience. It's a great platform where you can have all your audience together.

We also agree that people say you can do affiliate marketing even without a website. You can do it by promoting your content on any social media. But we still I believe making a website is the best choice as it makes your online presence and proof.

A website is your online store, just like the real world. Whether you do paid marketing or free marketing, having a website can increase Sales.

Our primary focus by creating your site is to create your blog. Start an Affiliate marketing blog and increase traffic to your website. It can make more sales for you without daily efforts. Also, it can be helpful to build authority.

Here, I have also shared some pages your blog must-have.

a) About Page: Having an About page helps your visitors know you better and connect with you. Make it personable and let people know about you.

b) Contact Page: Your readers, advertisers, or potential partners all need to find your contact information. In this Page, you should include all the contact information you want to share.

c) Disclaimer:  If you are promoting any affiliate products on your site, this is where you disclose how you do it.

d) Privacy Policy: Privacy policy page is crucial for every website If you collect any information about your visitors. Let them know about it and how you use it.

e) Terms of Service: It is a legal document on your site. It allows you to limit your liabilities in case of any misuse of information or services provided on your website. It also allows us to inform the users about their responsibilities regarding copyrights and trademarks.

f) Custom 404 Page: A custom 404 page can be very beneficial to increase your user's experience. It is where you can turn your lost visitors into your ideas Customers.

g) Advertise:  If you are planning to sell ad space for on-site ads. Include a page for advertisers with information about - why investing in your site is a wise decision for them. Share available spots, monthly views, audience demographics, and a contact form.

Note: It is very important to check that your policies are clear and upfront to avoid any confusion and to build trust with your audience. Also, we recommend taking any professional help to write your legal documents(Terms of Service)

4. Create Quality Content

Now, as the framework of your website is ready, you need to create quality content. The reason behind this is giving some value to the visitors so they can know you and trust you.

Quality content means content which is worth sharing — content which fulfills the demands of the visitors.

Google always promotes the content which serves the needs of the audience. Your content must be original, well-written, and properly researched. It must be comprehensive and easy to read.

 Also, some affiliate programs and networks need - you to have an established website with traffic and monthly views. And, for that, you don’t have to have so many blogs, but a few quality content articles are sufficient with consistency.

5. Grow Your Email List:

Here is good news for you. Email marketing can let you make immediate sales after the campaign. You can earn $44 sale for each email you collect; it is that powerful technique.

According to a survey, a company gets an average of 23% of its total sales using email marketing only.

So here are some tips for you to grow your email list really fast.

To collect emails, you need a lead magnet, and I am also sharing you some different types of lead magnets that work for me.

a) Launch a Viral Contest:

It can be basically a giveaway where you will giveaway a gift of a handsome price, let’s say $500.

Invite people to that contest, and they need to submit their emails to participate in the giveaway contest.

Then they have to do some tasks to win the contest.

The tasks will include sharing the contest link to their Facebook, Linkedin, Twitter, Whatsapp, and other platforms. Then they will get some points for doing that.

After that, there will be some extra points for each referral they make.

In this way, You will get a lot of emails, and the cost per lead can be as low as $3.

But your revenue using those leads can be 40 times of that.

Note: Be specific with the requirements to join the giveaway content, so that you'll only get the people who will be interested buying from your emails in future.

b) Free Webinar

Webinars are one of the most compelling ways to generate leads and sales. A webinar is not like a simple video course. It has a micro-commitment to join at the right time, and it creates urgency.

An ideal length of your webinar should be 30 minutes to 45 minutes. And it can be very easily turned into a direct sales funnel with an almost 10-40% conversion rate.

Things that you have to keep in mind before going for webinars.

The webinar must contain some amazing tricks that can really help the audience.

Also, on the other hand, it should not contain all the secrets that you know and always create urgency so that they can buy faster.

c) Free ebook:

Create an opt-in to your content page and offer them an ebook in exchange for their email.

Remember that the ebook must be related to your niche.

d) Free Tutorial:

A Tutorial is a very important tool to teach your audience. It is any piece of content that teaches your audience how to do one specific thing. It could be a video series or simply any PDF.

Just like an e-book, a tutorial can be used to share for free in exchange for their email.

e) Case Studies:

In my experience, Case studies work very well. Case studies are compelling, convincing, and credible.

You can easily create a case study to show how your potential customers and other people like them can solve a specific problem.

A Case study can be a superb lead magnet since the audience wants to know exactly how your strategies helped your customers and how they can also apply those to solve their own.

6. Find Affiliate Products and Services to Promote:

With your email list and the list of people who have consumed your content, Now it is the best time to start promoting your products.

The best affiliate products or services to promote vary from individual. We must consider these factors below. You do not have to apply all these factors but refer as many as you can in selecting the affiliate product you want to promote.

a) You can affiliate the products that you already use:

You already know all the goods and bads of the products you have used. And It is also easy to write reviews and convince others to use products you have already used or use.

Your reviews will be truthful, and automatically, people will see realism in your words. Products you have used are natural to sell.

b) You can affiliate the products in which you are interested: 

Market products in which you have some interest. The benefit of marketing products you have interest in is you will be up to date with your niche.

c) You can also affiliate the products others are recommending:

The purpose of marketing is to sell. Sometimes you may not like a product, but others love it. Don’t sell what you think is a good product but rather what others want and think is right.

Sometimes, marketing products you have no interest in becoming a burden when you are researching reviews. However, you can market what you have no interest in if you will be outsourcing content.

d) You can choose a price range for your products:

Cheap products sell quickly, and their reviews don’t require many details. People buy them on impulse. Impatient marketers will enjoy selling these products.

Other products or we can say expensive require valid reviewing, and their buyers think a lot before deciding to buy. If you have the patience and skills of persuasion, go for these expensive products.

e) Evergreen Products:

Sell affiliate products that do not vanish or become outdated after a short period. Imagine you write a review about any phone, and by the time your article starts getting traffic, as the new phone with new features is out. Marketing products, like cooking pans, is easy. A review you wrote ten years ago will still make you money today.

Here I have also shared a few most popular affiliate networks from where you can find tons of products in your niche. But there is so many more than this on the Internet:

i) CJ Affiliate:

CJ is short from Commission Junction. It is merely a platform where you can find all kinds of affiliate programs from many different companies. They have a vast number of companies organized adequately in categories. Famous Companies like Hostgator, Bluehost, Grammarly, and many others use CJ.

ii) ShareASale:

ShareASale is an outstanding platform for Affiliate marketers. It is one of the oldest affiliate marketing platforms with 4000+ vendors.

ShareASale affiliate policy is excellent for any advertiser. They have many high-paying affiliate products for almost every category we can imagine. Some of the products here even offer commission up to 80%.

Here you can also find some famous vendors like Reebok, Nike, etc. Popular WordPress Hosting company WPEngine also uses ShareASale to manage its Affiliates.

iii) ClickBank:

ClickBank is famous for selling lifestyle products created by passionate entrepreneurs. It gives owners a chance to sell a variety of digital products such as softwares, videos, and ebooks.

Clickbank is also a payment processor. It bridges the gap between the merchants(Product creators) and affiliates, as both need each other to make money.

iv) Amazon Associates:

Everyone knows Amazon. It is the world's largest online e-commerce platform. But it is also famous for its affiliate program that we say Amazon Associates.

Most of the products here are physical products. It sells anything from balloons for your kid’s birthday party to a complete security system.

Many people are doing Affiliate marketing with Amazon. If you are looking for some physical products to promote, then Amazon can be the best place.

v) JVZoo:

JVZOO is a marketplace to sell digital products and services. Every Seller shares their launching date on mucheye.com before they launch the products. It will help you to contact sellers to promote their products during the launch.

JVZoo has many categories where you can choose the perfect product to promote. Most of the advertised products are in the internet marketing niche, and the quality of the products is quite good.

The commission rate is as high as 50%, which is a very good range. But for new affiliates, they don’t get an instant payout.

So these are some of the best affiliate platforms I prefer. Read more about affiliate platforms here:

21 Of The Best Affiliate Programs To Find High-Quality Products For Your Website

One tip: There can be any product or service you might not find the affiliate program for. Here you can reach out to the company directly and ask for any partnership program.

7. Educate your customers about the products

It is very well said by the Co-Founder of WebFX – William Craig.

Don’t Market To Your Customers; Educate Them Instead.

In today’s competitive world, Consumers demand comprehensive information and timely services from Enterprises. They want to know all about the product or service and which problem that product will solve. That is why it is so important to educate your customers about your product before selling it.

Awareness about the product is the first step in gaining a new customer.  If you are unable to aware your audience, of what does that product does and how it will help them. How can you expect them to buy it?

You, as an Affiliate Marketer, have to target your customer’s pain points. Understand their problems and build their trust. Guide them in finding out the strategies and solutions for their problems, and represent your right products as their solution.

Now, as you have understood how important it is to educate your customers. Here are 3 best methods you can adopt in educating your potential customers –

a) Create Product Review:

Product Review is one of the best ways to educate your potential customers. Your honest review can literally give a huge boost to your number of followers and buyers.

More than 80% of the consumers buy anything after checking their online reviews. And this rating should not only be in text or video, but you should also include start ratings. Star rating is the most crucial factor that can change your consumer's mind.

You can also include testimonials/Reviews of your product users. Their positive reviews will be the best compliment to your work.

b) Create a Video Tutorial: 

Videos are the most consuming content these days. Video Tutorials can be the best way to give practical knowledge of your product if required.

While making a video, you must notice a few things:

  • Try to keep your video short and simple.
  • The video quality must be high.
  • Your video must be audience-centric.
  • Don’t use complicated words in your video. Use easy to understand words.
  • If necessary high a professional voice.
  • Write a Thoughtful Text Description.

c) Conduct a webinar:

As I have already shared, a webinar can be a direct sales funnel, and it can be even covert up to 40% of your audience just because of that webinar.

The main reason behind this high rate conversion is direct interaction. People can connect better with your direct communication. It generates more trust, and people can easily ask their queries.

8. Track Your Results:-   

Testing and tracking are the keys to success in affiliate marketing. Tracking your affiliate links can help you to understand which product performs better with your audience. You can also discover what changes you must do to get more clicks.

With this knowledge, you can understand what kind of products you should provide to your audience. And you can present better content as per your audience's interest, so they keep coming back.

You can easily track your products with the MonsterInsights in your WordPress site. You can also use Google Analytics to track your affiliate link, but it doesn't track clicks on links within the pages. Here you can learn how to Track Affiliate Links With Google Analytics.

Some Affiliate Marketing Tips to Increase Earnings

Now, as we have covered the basics, I am going to share some more tips with you on how actually you can make good money with affiliate marketing.

1. Create an in-between

One biggest mistake that most affiliates do they only focus on sending the traffics to the merchant’s website. All the Affiliates do the same out there, what is different in you?

What you need to do when you create a blog, an article or a video, try to answer your audience questions, solve their problems, be interactive, and provide some useful value. Tell them why they should go for it and take the next step. You should make the bridge for them.

You should not rely on the merchant. They are already doing all the heavy lifting - creating the product, taking care of the legal problems, money refunds, delivery processes, take care of money handling, customer service, and more.

Therefore, you could do more rather than just sending traffic to their website to increase your sales.

2. Keep your audience in mind

While choosing any product, keep in mind what your audience is looking for and their interest. You might have an audience of specific age group, gender, and education. Your product must fulfill their needs, not yours.

For Example, You are writing a fitness blog for gym people, so your target will be who wants to build muscle or become slimmer and stay fit. Your products will be gym products like Gym Gloves, Protein Powder, Cardio Equipments, gym bags, etc. and similar products that your customers would buy.

You must also keep in mind that the products you are promoting must be good and reliable. If any audience buys a product on your recommendation and it didn’t work well, they will never trust you again.

3. Don’t Hard Sell, Ever!

The hard sell is an aggressive method of selling in which a person who is selling tries very hard to persuade the customer to buy something.

Never Hard Sell. If you think you can sell more by selling hard, trust me, you are never going to be successful in affiliate marketing.

People first want to know all about the product, visit your website, or watch your video to see interesting content, and then they decide whether they should buy it or not.

Making money by selling products is an art. You should focus on finding out the ways to provide values through your content and the products you recommend. That’s the best and fastest way to grow any online business.

4. Select good brands and quality products

As an Affiliate, You have no control over the product creation, its quality, and maintenance. You cannot guarantee that the product will perform well in the future. Therefore, it is so important for you to recommend products from good brands and reputable companies.

The best way is to recommend the products and services that you personally used and tested. If you feel any product is worth recommending, share it with your prospects with your experience about that.

Also, if you want to review a product that you have not used, you can nicely ask the companies. Most companies don’t mind and will gladly give you free access or a trial of their products and services.

5. Give your own bonuses:

This is the most important and my all-time favorite piece of advice to affiliate marketers. You could give your audience some bonuses to boost your sales. Your bonuses will also make you stand out among your competitors.

This bonus can be a 30 minutes meeting or webinar with you. Or your free advance course on that product, your e-book, or any other software to compliment the product.

Just keep in mind your bonus must give your audience some value. It will be a great proposal for them if you give any of your premium courses for free in bonuses.

So far, it was terrific, Right?

But there is one more thing left. Let’s also hear now what Neil Patel has said about Affiliate Marketing:

Affiliate Marketing FAQs:

Now, as you know, What is affiliate marketing? And How does it work? It is the right time for me to answer you. Some frequently asked questions that many marketers and beginners ask.

How can you become an affiliate marketer?

To start our Affiliate marketing journey, we have focused on seven easy steps to launch our own profitable affiliate marketing site and promote other's products as an affiliate.

  • Find your Niche
  • Build a Website or platform
  • Create Quality Content.
  • Grow your Email List
  • Find the Affiliate Products and Services to Promote at this right time.
  • Educate your customers more about the products.
  • Track Your Results

How much money is required to start affiliate marketing?

If you are going with the paid traffic, I recommend it would be $1000. If you don’t have that much amount of money, you should start with organic traffic. You need to build the budget first, elsewhere, and then you can run ads and grow your business.

I started my affiliate marketing journey by just spending $100 from Jeenee.

How much money can you make as an affiliate marketer?

The right answer is - As much as you want! And Pat Flynn is a perfect example of that. He easily makes at least $100k PER MONTH.

Also, A decent affiliate marketer can make anywhere from $10,000 to $30,000 a month.

What are some of the most popular affiliate networks?

ClickBank, ShareASale, Avangate Affiliate Network, Awin, Commission Junction, Amazon Associates, JVzoo, Peerfly, and eBay Partners Program.

Should I promote/sell products that I've never tried before?

Yes, you can.

You can promote any product which others are recommending, and which is beneficial to your audience.  But you need to do a lot of research and be completely honest about it.

The key to success in any online business is to be completely transparent and honest!

Conclusion:

If you are interested to know "What is Affiliate Marketing" - Affiliate marketing is one of the best online businesses that changing many people’s life. You can make passive income from it just by working from home.

Although it is easy to start and becoming an Affiliate, but it needs a proper mindset and strategy to sustain.

If you want to become successful, you need to focus on these things:

i. Choose the right niche.

ii. Create Quality Content.

iii. Grow your email list.

iv. Choose the right products to promote.

v. Give so much value to your audience and be honest.

vi. Give bonuses to your audience to motivate them to buy.

vi. Keep track your affiliate links and performance.

vii. Keep updating as per your audience’s interest.

With Affiliate marketing, you can transform your life to a whole new level.

I would also love to hear your thoughts on this. What do you think about it, please share your thoughts in the comment below.

Also, if you find this article helpful, don't forget to share it, because your one share can change someone's life.

Disclosure: This post contains some affiliate links, which means if you click and go through my product links, I’ll receive a small commission for my efforts with no additional cost incurred to you 😊

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