If you’re asking yourself this question, "How does Affiliate Marketing work?", this article will give you a clear picture and understanding of how it works, and who knows, you may even be inspired to step into this wonderful world we call Affiliate Marketing.
Here's my super short story about my discovery of affiliate marketing…
When my real estate practice fell apart in 2007, I turned to the internet to replace my income. I wasn’t searching for “affiliate marketing” or “network marketing” or “mlm” or even “home based business ideas”. I was simply looking for a high ticket product to sell to replace my real estate commissions and landed inside a network marketing company.
When I first started my online entrepreneurship, I didn't even know what affiliate marketing was. However, it didn’t take long before I discovered that the tools and resources I needed to run my network marketing business on the internet were affiliate based products.
As I began to build my business, my new business partners needed the same tools and resources I was using and as such, I'd send them my affiliate link to buy. And they did. 'cha-ching'.
I remember how surprised and easy it was to simply refer a product or service to others that they needed anyway and I was the recipient of a commission check. Needless to say, I was hooked on affiliate marketing and today I generate multiple streams of income. And you can too.
AFFILIATE MARKETING IS SIMPLISTIC
I discovered the simplicity of the whole affiliate marketing process and began receiving commissions for referring MANY different products. I knew that this 'built-in" stream of income would be naturally integrated into the building of my primary online businesses and of course, my wealth portfolio.
Today, when people ask me how does affiliate marketing work, I’m always happy to share this form of income generation.
Affiliate Marketing is one of the fastest and easiest ways to make money online. (As an income disclaimer however, like anything else, there's never any guarantees of income as it's all based on your efforts to select the products and market them. Having said that, there are thousands of people creating a great to extraordinary lifestyle based on their affiliate marketing efforts.)
WHAT IS AFFILIATE MARKETING?
Simply, affiliate marketing is choosing a product or service you refer to others and when they buy, you generate a commission. The affiliate does not sell any product. He or she simply refers potential customers to the storefront on another site.
The vendor (supplier of the product and/or service) can be a person or a company, it doesn’t matter.
Here's Why Affiliate Marketing is Simple and a Good Solution for Many:
The biggest struggles people have who want to make money online is the situation where they have to create their own websites, ad copy, sales and closing scripts and have their own merchant account services, just to name a few.
That’s a lot of work, education and the "ole learning curve" before you can get started. While many new entrepreneurs don’t mind going through this learning curve, the majority don’t have the time, energy, effort or desire to go through that process. This makes affiliate marketing more appealing which is why it’s so popular.
Someone who wants to make money online through affiliate marketing doesn’t have to worry about any of the learning curve and set up. Each product already comes with the website, product write up and review with testimonies, benefits and features and even your payment gateway. You don't handle any money but rather the vendor takes care of all that.
The vendor also handles all customer support and refunds. So you are hands off 100% …. you just get to make money.
HOW DOES AFFILIATE MARKETING WORK REGARDING WHAT TO OFFER?
You can use the search engines to find affiliate programs. If you are open to any and all affiliate programs at this point, you can do a broad search and see what you find. However, if you’re interested in being an affiliate for a particular niche, then search that niche. For example:
- “Sporting and Outdoor Affiliate Programs”
- “Travel Affiliate Programs”
- “Pet Affiliate Programs”
- “Electronics Affiliate Programs”
To give you some places to look, you may want to explore some of the more popular affiliate resources such as Amazon.com, Clickbank.com and PayDot.com as well as network marketing and MLM type products.
Often, people don’t see network marketing and MLM reps as affiliates. However, at the end of the day, you are an affiliate for those products and services. Your title might be something a little more glamorous such as "representative", "distributor" and given new names as you make rank, however… you're an affiliate. When you fill out your distributor form, you will see the terms and conditions under which you are allowed to sell their products and receive a commission.
Having said that, let’s separate the straight up affiliate program from the network marketing or mlm business model for the purpose of this article.
HOW DOES AFFILIATE MARKETING WORK REGARDING COST?
Is there a cost? Yes and No.
Most of the time it’s free to sign up as an affiliate, but not always.
Then there will be some programs that require a small annual or monthly affiliate fee. This keeps the affiliate on the books, pays for the use of their websites, payment processors, overhead, and maybe some training, etc.
Other times vendors require a purchase before the affiliate is positioned to make the greatest commissions. They do that to keep integrity with the product. In other words, they want you to own the product, use it, and then you’re in a position to give a good recommendation based on your experience and first hand knowledge.
This answer will lie within each of the vendors’ terms and conditions.
HOW DOES AFFILIATE MARKETING WORK REGARDING EARNING COMMISSIONS?
Each vendor you're an affiliate for will have their percentage of commissions they offer listed in their terms and conditions. There’s no set commissions in the industry and the amounts vary greatly. I’ve seen everything from 4% to 100% and even more than 100% because of what's called "leverage".
Therefore, what you receive will be based on the following:
- The commission structure of your product.
- How many people buy your product which will be determined by your advertising and ability to connect your target audience to your offer.
- Whether the affiliate program is leveraged where you receive income based off the efforts of others.
Because of the variables, it’s virtually impossible to tell how much or how little you will make.
HOW DOES AFFILIATE MARKETING WORK REGARDING RECEIVING COMMISSIONS?
Each vendor will have their way of paying out commissions. Here’s a checklist of variables both in terms of when they pay and how they pay, in no particular order.
– Some will pay you regularly regardless of how little or much you earn.
– Others will hold your earned commissions until you’ve reached a minimum threshold, say $50 in commissions for example.
– Examples of payout intervals can be anywhere from:
- Instantly and a couple of days
- Once a week
– Type of payment and how your paid can range from:
- Sending you a check in the mail
- Direct deposit into your account
- Federal Express
- Paid to a debit card
HOW DOES AFFILIATE MARKETING WORK REGARDING TRACKING MY SALES?
When you sign up and are approved to be an affiliate for the product/service/company you want to represent, you will be given your own unique ID. This ID is built into your website URL. It’s this unique website URL that you will be sending your leads and customers to.
So let’s make up something. Pretend there’s a company called www.wildplantsandfunkydecks.com and you signed up to be an affiliate to market their products. And let's say when you signed up, they asked for a username and you choose “screech”, for example.
Many times the vendor will build your username into your URL. So in this example, your URL to advertise may look something like this:
Or, it may look like this:
Other times regardless of your username, the company will provide you with something other than that and look like a bunch of numbers, letters, characters and … well, they can get pretty long and crazy looking.
At any rate, THAT is the URL that you want to send your traffic and leads to. When someone clicks on your link and lands on your affiliate site and buys something, YOU make a commission.
All sales are tracked through your unique ID.
HOW DOES AFFILIATE MARKETING WORK REGARDING THE SIGN UP PROCESS?
After you've done your research and you know the products you want to be an affiliate for, visit their website and look for something like "Partners Program", or "Affiliates", or "Join Affiliate Program".
Read through each of their terms and conditions and take a look at the products they are offering. Make sure they align with what you were looking for.
If all looks good and you understand what you can and can’t do and the commissions you will earn are satisfactory, then go ahead and sign up. They usually have a form you fill out right online which they should direct you to. If you don’t see the affiliate application, call or email them and ask for it.
NOTE: When filling out your affiliate agreement application, don’t be surprised if they ask for your social security number as they will be sending you a 1099 at the end of the year. Sometimes they must have it at the time of application, other times they will hold any earned commissions until you provide it. You will have a limited amount of time to provide them with that or you will forfeit your earnings.
Other information they will require will be your name, address, phone, email, and how you want to be paid if they offer more than one option.
HOW DOES AFFILIATE MARKETING WORK REGARDING MARKETING?
There are unlimited ways you can market your product or service. Here's a fast run down of a few ways.
Blogging: Write a blog post about the benefit of the product and link to your affiliate website using your unique URL.
Videos: Make a video, either a headshot or screen capture describing the benefit of the product and link to your affiliate website using your unique URL.
Articles: Write articles and submit them to directories and include the benefit of the product and link to your affiliate website using your unique URL.
Forums: Participate and give value in forums but never say “hey, check this out” and spam your link. Rather, contribute to whatever conversation is in the thread and under your signature box, you can post your link. If you’re a true value giver, people will be interested to know what you’re up to and you’ll get a certain amount of people to click
Social Media: If you have a business page and what you’re offering aligns with your business model, you can post your link. But, rather than spam your own wall, write a blog or make a note as to why you’re recommending it and then post it.
Solo Ads: Depending on what your niche market is, find a list where your product or service will be a good fit and of interest.
Speaking of marketing your affiliate programs…..
Want to see behind the scenes of some of my affiliate logins?
Want to see how simple it is to copy and paste banner ads?
If you did, head over and read Affiliate Marketing for Beginners where I list my favorite affiliate marketing products and present a short video reveal.
So, How Does Affiliate Marking Work? Now you know. Be sure to leave me a comment about your affiliate marketing success, I'd love to hear about it.
Also let me know if there's still some lingering "how does affiliate marketing work" fog bouncing around in your head so we can clear it out.