Affiliate marketing is everywhere in 2019 and it doesn’t look to be going away anytime soon.
With the ability to work from anywhere, at any time, and build a passive income stream right from your laptop, it’s no wonder affiliate marketing is such a hot topic for those getting started in online business.
So in this article, we’re going to cover affiliate marketing for beginners, including what it is, how it works and how you can get started in 5 easy steps.
- What Is Affiliate Marketing?
- How Does Affiliate Marketing Work?
- The Pros & Cons of Affiliate Marketing
- How To Get Started With Affiliate Marketing In 5 Easy Steps
- Final Thoughts
What Is Affiliate Marketing?
Affiliate marketing is a form of revenue sharing, but for the internet.
In much the same way a car salesman gets commission on cars they don’t own, affiliate marketers sell other people’s products online, taking a cut from every sale they make.
Affiliates can deal in digital products such as ebooks and courses, as well as physical products such as electronics, clothing or even furniture. In fact, anything you could think of can probably be sold through an affiliate scheme.
All of this is dependent on the affiliate having an existing agreement with the person or company who owns the product, but more on that later.
How Does Affiliate Marketing Work?
Affiliate marketing has three core components to it and each component must exist for the system to work.
If you haven’t guessed it, these are:
- The Merchant
- The Affiliate
- The Consumer
1. The Merchant
The merchant is the person or company that has a product to sell, and owns distribution rights to that product. This could be anyone from a solo creator, a bootstrapped startup or even a large retailer.
While a merchant will almost always sell their own products, there are cases where they only sell through affiliates — such as a limited-time offer or a closed-group launch.
In any case, most merchants will be open to an affiliate relationship if you have a way to drive sales, but the terms of this relationship can vary from merchant to merchant.
These variations include:
- Commission structure
- Payout method
- Payout time-frames
- Affiliate link placement restrictions
- Affiliate software/network used
Again, we’ll go into more detail about each of these aspects later, but it’s important understand that a merchant holds all the keys when it comes to your affiliate agreement.
2. The Affiliate
If you’re reading this (and you are), you’re probably more interested in this part of equation; how to start with affiliate marketing as an affiliate.
The affiliate’s job is solely to generate more sales for the merchant, and in doing so, earn a slice of that sale for themselves as commission.
As an affiliate, the task of generating sales comes down to driving as much targeted traffic as possible to the merchants sales page, with the knowledge that a percentage of those people will become customers.
In order to get credit for the sale, it’s essential that affiliates send this traffic through their own affiliate link, allowing the merchant to automatically attribute new customers to individual referrals.
3. The Consumer
In its simplest form, a consumer is someone who buys stuff. We’re all consumers.
In regard to affiliate marketing, however, a consumer is someone who buys a product online and has found that particular product listing by going through an affiliate link.
As I said above, affiliate links are merely a tracking system used by merchants and affiliates, meaning they have no impact on the price, product or overall experience compared to a direct purchase.
If you’re a regular online shopper, chances are you’ve bought something through someone’s affiliate link at some point.
The Pros & Cons of Affiliate Marketing
Affiliate marketing is a business model, and like any business model it has benefits and drawbacks on both sides of the coin.
Whether you’re looking to promote other products as an affiliate, or you’re a merchant looking to use affiliates to increase sales, there are few things you should know first.
The Affiliate
Pros
- No product creation: As an affiliate, you can often pick from a large pool of existing products instead of having to spend the time, energy and resources creating your own.
- No customer support: Aside from potentially answering queries from prospects pre-sale, the affiliate is never responsible for ongoing customer support of a product post-sale.
- Recurring income: Some products will bill customers on a monthly or annual recurring basis, and those affiliate programs may offer recurring commission for the lifetime of the customer.
- Flexible hours: Being an affiliate marketer is unlike any other “job”. You’ll be able to work on your own terms and set your own hours. Of course, the more you put in upfront, the more money you’re likely to make.
- Scalability: Since affiliate income relies largely on driving traffic, increasing your traffic will inherently increase your income. Recurring commissions also stack up as every new customer grows your monthly recurring revenue.
Cons
- No control: The merchant is always in control of the sales copy, checkout process, pricing, availability, and everything else surrounding the product. If you don’t agree with something, that’s your problem.
- Dependency: When you build your business on the back of someone else’s, there’s always a chance it could change or simply disappear one day, potentially deleting your income stream along with it.
- No customer base: Sending customers to a merchant is great, but it also means you’ll struggle to collect customer information (and possible future sales) for your own business.
- Potential backlash: As an affiliate, you have to trust that the merchant is providing a quality product as well as a strong support channel to back it up. If not, the customer you referred may end up blaming you.
- Maintenance: If you’re managing multiple products across multiple affiliate programs, it’s important to stay on top of product pricing and availability. Regular checks on your affiliate recommendations is key.
The Merchant
Pros
- Low upfront cost: Affiliate promotion is one of the most cost-effective forms of online advertising on the planet, as you only pay out your affiliate after a sale has been made.
- Reach new audiences: No matter how good your marketing is, you’ll never reach everyone who may be interested in your product. Affiliates will be able to spread the word in places you didn’t even know existed.
- Brand awareness: It’s not all about direct affiliate conversions. Even just having your brand appear in more places online is inherently good for boosting brand awareness.
- Scalability: If affiliates can scale up their income through affiliate marketing, the same applies for the merchant too, since they can take on as many affiliates as they see fit.
Cons
- Implementing tech: Depending on whether you choose an internal system or a third-party network, there will be some level of technical setup involved for affiliate tracking and reporting.
- Finding affiliates: Using an affiliate network may drive some organic affiliate applications, but for the most part you’ll need to spread the word that you’re accepting affiliates.
- Monitoring affiliates: Where there’s a way to make money, there’s always someone who’s willing to abuse the system. As a merchant, you need to keep checks on your affiliates to ensure they’re not promoting your products using shady or unethical tactics.
- Cash-flow: Depending on your affiliate structure and business model, you may have to pay more to an affiliate than you initially received from a new customer, so you may need to keep a close eye on your cash-flow.
How To Get Started With Affiliate Marketing (In 5 Easy Steps)
By now you should have a good idea of what affiliate marketing is and how it works, but there’s still a lot to learn if you want to start leveraging affiliate marketing for your own business.
Once again, there are a few components to this and each one is dependent on the next for the entire model to work effectively.
These components are:
- A content channel
- An affiliate partnership
- Affiliate links
- A traffic source
- A tracking/reporting system
Step 1: Identify Your Content Platform
Before you do anything, you need to know how you’re going to get your affiliate
product recommendations in front of the right people.
Over 3 billion people use the internet, but how do you even begin grab their attention?
The answer is content.
Content drives traffic, and traffic drives affiliate referrals. There’s little you can do in the way of online marketing without content as your main value proposition.
The question is then, what content platforms should you consider?
There are a number of viable options ranging from popular to obscure, and each come with their own set of challenges.
Let’s go through each of them.
Your Website
A website is a dedicated platform that you (and only you) control, and it’s by far the most common content platform for affiliate marketers.
Not only will you have full autonomy over the type of content you produce, but you’ll also be able to freely promote your affiliate offers through your content as you see fit.
There are typically 2 ways to set this up:
- Hosted solutions such as BlogSpot, Weebly and Wix, which are often free and don’t provide you with full ownership rights to the content you produce. This is a not recommend approach.
- Self-hosted solutions such as Wordpress.org, Squarespace or even custom coded websites, which require that you pay a web host hosting company for server space but give you full ownership rights of your content.
In either case, you won’t start with an existing audience so you’ll need to learn how to drive consistent, targeted traffic to your website. This process can several months to well over a year in some cases.
Your Email List
An email list is a database of email addresses from people who have opted in to receive emails from you, and it’s another platform you own and control exclusively.
This one usually stems from having your own website, as you’ll use the traffic it generates to collect those emails. Alternatively, you can set up a single landing page to capture emails.
Unsurprisingly, an email list comes with many of the same benefits a website offers, in that you’ll be able to produce content and promote affiliate products at your own leisure.
While it has many of the same benefits of a website, it also suffers from the same drawback; you’ll need to learn how to drive consistent, targeted traffic to your email capture page in order to build up a subscriber-base.
Your Podcast
A podcast is content in audio format, typically recorded in a conversational setting between an interviewer and interviewee. Again, this is a content platform you own and control, though it’s often marketed through a platform like iTunes or Spotify.
It’s similar to an email list in many ways as both rely on a subscriber-based approach, and both require a consistent flow of new content in order to maintain engagement.
In any case, you can also use this platform to promote affiliate products and offers by stating your affiliate URL where appropriate. Most podcasters will use a shortened URL that redirects to the actual affiliate page.
Once again, since a podcast is a self-built platform, you’ll need to find a way to build up your listener-base before you can expect your podcast promotions to generate any meaningful income.
Social Media
Now we get to the content platforms that are outside your control, meaning you will always be subject to their terms when it comes to the type of content you produce and whether or not it can contain affiliate promotion.
The first, and perhaps most obvious types of third-party content platforms are social media.
For example:
- Facebook allows you to publish content as ‘Facebook posts’ to business pages, community groups, your personal feed or story. Affiliate links are allowed.
- Twitter allows you to publish content as ‘tweets’ on your personal feed. Affiliate links are allowed.
- Instagram allows you to publish content as images or videos on your personal feed or ‘Instagram story’. Affiliate links are allowed.
- YouTube allows you to publish content in the form of video. Affiliate links in video descriptions are allowed.
- Pinterest allows you to publish content as Pinterest pins (which are custom images) to your personal account or group boards. Affiliate links are allowed.
Other Third Party Platforms
Other third-party content platforms revolve around established online communities, and some of them even allow for direct affiliate promotion.
For example:
- Reddit allows you to publish content in divided communities known as ‘subreddits’, either in the form of a post or direct link. Affiliate links are allowed, but are often taboo.
- Quora: allows you to publish content as either a question or an answer to a question. Affiliate links are allowed.
- Niche forums: allows you to publish content as a thread or a reply to a thread. Affiliate links are rarely allowed.
- Other blogs: allows you to publish content as a guest post with attribution. Affiliate links are rarely allowed.
Note: Many social media and third-party content platforms can also be used solely as a way to drive traffic to your own platforms. We’ll revisit these again when we talk about generating traffic.
Step 2: Secure An Affiliate Partnership
Promoting a product is one thing, but getting paid for that promotion requires that you have an agreement in place with a merchant.
Fortunately, securing such a partnership is easier today than it has ever been, so you should be able to find a number of opportunities regardless of your niche or industry.
Let’s talk about ways you can approach this, as well as the key differences in payouts and commission structures.
Finding Affiliate Opportunities
Finding lucrative affiliate opportunities in your niche can be challenging if you don’t know where to look.
There are ultimately three avenues you can take.
- Affiliate networks
- Dedicated affiliate programs
- Private affiliate partnerships
Affiliate networks are essentially a marketplace for merchants to list their products and commission rates, creating a library of affiliate opportunities to choose from.
Popular affiliate networks include:
(They all operate on fundamentally the same principles)
These offers can work well if you’re looking to get something up quickly, but they don’t always have the best quality products or commission structures. For that, you’ll want to consider…
Dedicated affiliate programs are set up by the merchant and managed through their own website or portal, and information can typically be found directly on their website.
You’ll want to look for a link in the navigation or footer that says something like:
- Affiliate program
- Become an affiliate
- Promote us
- Partner with us
In fact, if you can’t find any such link on their website, they either don’t have an affiliate program or they prefer keep it on the down low. And that brings us to…
Private affiliate partnerships are another form of dedicated program but they’re not publicly advertised, so you’ll need to connect with the right people or be invited to apply.
While these affiliate relationships can be much harder to join, they often offer the best commission rates in the industry. A good example of this is Chewy, though they have very recently opened it back up to the public.
Also, if you have the traffic numbers, you can always try approaching a company that doesn’t already have an affiliate program and ask for a private arrangement.
Commission Structures
Affiliate commissions and structures can vary from one program to the next, so it’s important to understand the nuances.
The most common scenario involves merchants paying affiliates a percentage of a sale, or sometimes even a fixed-fee per sale.
Other times, that fee will depend on the category or type of product you sell, which are typically based on the merchants profit margin.
For example, Amazon pays a percentage based on product category:
There’s also a sliding affiliate structure, which means your affiliate commissions increase as your volume of sales increase. Not only do you make more from the additional sales, but you also get a higher cut for each individual sale.
Finally, some affiliate programs will pay you recurring commissions for as long as your referral remains a customer, typically on a monthly schedule.
This is often used by software companies, such as Shopify:
Cookie Duration
No, I’m not talking about the expiry date of your favorite treats.
In the online world, a cookie is a little piece of code that’s stored in your web browser when you visit a site. Websites use it all the time to remember information about you.
It’s also incredibly useful for affiliate marketing purposes.
When someone clicks an affiliate link and visits a site, they may not make a purchase right away. Fortunately, a cookie is created to retain that referral information, allowing you to take full credit for the sale at a later time.
The technical side of this will be taken care of by the affiliate system and isn’t something you need to worry, but you should know that not all cookies are created equal.
Sometimes cookies will allow for a day, a week or even a month to see a conversion, other times it can last indefinitely. The duration is entirely up to the merchant (or affiliate network).
Not only will this factor into your marketing strategy, but it can also be a huge factor in deciding between multiple affiliate programs.
Step 3. Implement Your Affiliate Links
At this point you have your marketing channels at the ready, and you have an affiliate partnership with products to promote.
Now it’s time to implement your affiliate links so that any new customers you refer can be traced back to you.
Once again, there are a few things to consider here.
Getting Your Affiliate Links
Any good affiliate program will come with a dedicated dashboard containing affiliate-specific information.
For example, GeneratePress (a WordPress theme) provides this ‘Affiliate Area’ where I can generate my affiliate links:
Note: there are other useful things you can do here, but we’ll get to that later.
Instead of simply linking to GeneratePress.com when recommend their theme, I would use this affiliate URL in its place.
Even large companies such as Amazon use this system, though the backend can be a little more complicated to use since you’re dealing with a large number of products.
Here’s what it looks like:
In some cases you you’ll be able to generate links to specific products (as shown above), and in other cases you’ll be able to link to the merchant’s website as a whole.
This is out of your control as it all depends on the affiliate system the merchant decided to run with.
Link Placement
Plastering your affiliate links all over the internet might seem like a good idea at first, but targeted promotion with a value-driven approach will always be more effective in the long run.
Your strategy here will largely depend on the content channels you decide to use, but as a general rule:
- Your website: Promote affiliate products within blog content where contextually relevant. This can be a mix of text, image or banner links.
- Your email list: Affiliate links can be placed within email content or sometimes in the signature, typically in the form of text links or images.
- Your podcast: Generated affiliate links are often hard to type and awkward to promote in audio format, so you’ll need to shorten the link to something more memorable. We’ll cover that in the next section.
- Social media: Direct affiliate links can be used in Facebook pages, groups and personal feeds, as well as Twitter Tweets, Pinterest pins, and YouTube video descriptions.
- Other third-party platforms: Link placement will vary widely from one platform to the next. You’ll need to look into the best practice on a case-by-case basis.
Link Management
This aspect is often overlooked in affiliate marketing, but it’s one that will save you many hours of headache if applied early on.
Link management involves keeping an up-to-date database of any product you promote along with your associated affiliate links.
One way to do this is using a simple spreadsheet, like so:
But there’s a better way.
Instead, I recommend using a dedicated link management tool such as Pretty Links, ThirstyAffiliates if using WordPress, or even a free external solution such as Bitly.
These offer dedicated dashboards that are designed to handle this exact use-case in a much more effecient way.
Aside from keeping links all in one place, these platforms also provide other unique benefits.
For example:
- Link shortening: Otherwise known as “cloaking”, this turns your long, ugly affiliate links into short and memorable URLs. For example: www.website.com/product-name
- Redirects: This is tied to link cloaking, but it also allows you to update your affiliate link in one location without having to swap out every instance of that link on your marketing channels. This is a HUGE time-saver.
- Link statistics: Link managers also track clicks. Very useful for drilling down into popular products, but also if your affiliate partner doesn’t provide a reporting dashboard.
- Quick inserts: If you’re using a link manager on your own website, many will have ‘quick insert’ tools that allow you to plug affiliate links without having to remember individual URLs.
Link Placement Rules
Every affiliate partnership comes with its own set of rules and conditions in regard to where you’re allowed to place affiliate links.
It’s important to abide by these conditions in order to maintain a good relationship with your merchant and prevent yourself getting kicked off the program, especially since they may not let you back in.
For example, you may not be allowed to promote on platforms you don’t own, such as social media and other third-party platforms.
You also have to be wary of platform-specific rules. Even if the terms of your affiliate partnership allow you to promote their product in a certain way, it doesn’t necessarily mean the platform will allow it.
For example, some email services are picky about using affiliate links inside your emails, so using them may get your account suspended. MailChimp and ActiveCampaign are well known for this.
Step 4: Drive Traffic To Your Content
Traffic is now the final ingredient to start making money with affiliate marketing.
It’s simple. Traffic to your content drives clicks through your affiliate links, which eventually results in sales and commissions.
Traffic acquisition will vary greatly depending on the type of content you produce and the content platform in question.
In summary:
- Platforms you own such as your website, email list and podcast will not get any traffic until you actively promote your content.
- Third-party platforms such as social media, forums and other blogs will typically provide traffic when new content is published, regardless of active promotion.
For that reason, the following strategies will largely be focused on driving traffic back to your own content channels.
Search Engine Optimization (SEO)
Search engines are designed to help people find your content, and you can improve your odds of that happening by optimizing your content for search engines.
You could apply this to a number of search engines, but arguably the only one worth focusing on is Google.
This is a HUGE topic that could span multiple articles by itself, but it’s important to understand that Google is the holy grail of traffic acquisition for any online business, including those using the affiliate model.
If you want to learn more, I highly recommend the following resources:
- The Beginners Guide to SEO — Moz.com
- SEO Marketing Hub — Backlinko.com
- The Ultimate Guide to SEO — HubSpot.com
Social Media
We already covered social media as a potential content platform in step #1, but it also doubles up as a way to drive traffic back to your own content.
Here’s how:
- Facebook: Participating in Facebook groups is the best way to drive traffic to your own content, though you’ll need to be strategic when it comes to self-promotion or risk getting booted by admins.
- Twitter: Offers mixed results for driving traffic these days, so while you can automate tweets that link back to your content, don’t expect huge numbers in terms of clicks.
- Instagram: Only allows you to push traffic through your bio link until you reach a higher follower count, at which point you can start driving traffic from your Instagram Stories using the swipe-up feature.
- YouTube: Can drive traffic through video description links and video callouts, though click through-rates on YouTube tend be lower than other social media platforms.
- Pinterest: Regularly posting pins (custom images) that link directly to your other content is the name of the game. Fun fact: Pinterest is actually considered a search engine by many as it uses a rank-based algorithm.
Other Third Party Platforms
We covered third-party platforms for publishing content earlier in this guide, but like social media, it can also be used to drive traffic back to your own content.
Here’s how:
- Reddit: Can drive a TON of traffic by participating in relevant subreddits and offering up plenty of value before dropping a link. Careful though, Redditors can be very hostile about self-promotion.
- Quora: Is a ‘question and answer’ site that ranks answers based on community upvotes. Answers can also contain relevant links, sending a continuous stream of traffic to your other content.
- Niche forums: This one seems to be dying a slow death in many industries, but some community forums still harbor a large community. It works in much the same way as Reddit and Quora; give value, get traffic.
- Other blogs: Publishing content on other blogs (also known as ‘guest blogging’) is a tried-and-true method of driving traffic, and you can use this to send people back to your own affiliate content.
Paid Advertising
Running paid ads is the quickest and easiest way to drive traffic to affiliate content and even (sometimes) directly to affiliate offers.
It’s also the most unforgiving traffic method when it comes to affiliate marketing because you’ll need to spend below what you make in commission for each sale in order to stay profitable.
This can work well for high-ticket products with generous commission structures, but the numbers may not add up when marketing lower ticket items on a much tighter margin.
In any case, these are the most popular paid channels to experiment with:
Step 5: Track And Measure Conversions
Tracking is an important part of any online business, and it pays to be on the top of the numbers as an affiliate too.
This can be especially difficult when using multiple networks that all report through different interfaces, but that’s when it’s most important to track results. Don’t rely on your PayPal balance to tell you what’s working.
Measuring the effectiveness of your marketing comes down to:
- Tracking traffic to your content
- Tracking clicks on affiliate links
- Tracking sales on affiliate products
You know the drill by now…
Tracking Traffic
If you’re driving traffic to your own content channels, you better have a system in place to track how much traffic you’re getting to specific posts and pages.
Not only does this help you decide which pieces of content to double down on in terms of optimization, but it tells you how well your affiliate links are performing when combined with other data.
The best way to track traffic on your website is using Google Analytics, which is completely free and easy to install.
This platform will allow you to see how many people visit your site, how long they stay on specific pages, how often they return, which devices they’re using, and many other metrics.
As for third-party content platforms, you’ll have to rely on their platform to tell you the traffic numbers, and that often won’t be possible.
Tracking Clicks
With traffic monitoring in place, the next logical step is to track how many clicks you’re getting on specific affiliate links.
Clicks don’t necessarily convert to sales but it’s always a good idea to know what your website visitors are clicking, as this gives you an insight into what they’re ultimately looking for.
You’ll typically find that your highest traffic pages also get the most affiliate link clicks, but this helps identify anomalies such as:
- A low traffic page generating a high number of clicks
- A low high traffic page generating a low number of clicks
- A specific link placement generating a high number of clicks
This data then can be used to make adjustments to your pages or perhaps even your entire content strategy.
So how do you pull it off?
You can actually set this up using Google Analytics with the help of Google Tag Manager. This handy video shows you how.
You can also use more advance link trackers such as ThirstyAffiliates or ClickMagick, though they do come with a monthly subscription. (In case you’re interested, we did a dedicated review on ClickMagick.)
Finally, some affiliate programs come with a reporting interface that automatically tracks clicks for you, so that’s definitely worth checking.
For example, Amazon tracks clicks and conversions on all Amazon Associate links which can be seen from the Associates Dashboard.
Tracking Sales (Conversions)
Knowing your traffic and click numbers is important, but traffic and clicks don’t put dollars in the bank account. Conversions do.
Comparing clicks to completed sales will give you your conversion rate
While the average conversion rate in affiliate marketing can range anywhere from 1%-15%, most affiliates will agree that you should expect to see 5-10% in most cases.
So how do you track sales?
The truth is, if a merchant doesn’t provide you with a sales report, it’s very difficult to know when a conversion takes place as it happens on the merchant’s website, not your own.
Even advanced tracking tools like ClickMagick hit a roadblock here, primarily because it requires placing a tracking pixel on the merchant’s website which very few will accept.
Fortunately, most affiliate programs these days will have a system in place to tracks your sales figures, and it usually calculates your conversion rate from this data automatically.
Here’s what it look like in the Amazon Associates dashboard:
Final Thoughts
There we have it, a complete step-by-step guide to affiliate marketing.
Like any business, affiliate marketing requires work, but it remains one of the best business models for generating a consistent income online without any existing products under your belt.
All you really need is content, an affiliate partnership, and a way to drive targeted traffic through your affiliate links.
