What if you could earn money at any time, from any location – even while you are asleep?
This is the concept behind affiliate marketing.
Affiliate marketing is a process where an affiliate earns a commission by marketing another person’s or company’s products. The affiliate searches for a product, promotes it, and earns a piece of the profit from each sale. The sales are tracked via affiliate links.
Affiliate marketing, where brands pay affiliates for referring customers, is a great way to generate revenue online. It is extremely beneficial to both brands and affiliate marketers. The new push toward less traditional marketing tactics has certainly paid off.
There is a lot of opportunity for those looking to get involved in affiliate marketing in the United States. This is because the amount of money that companies are spending on affiliate marketing is increasing rapidly. In 2017, companies spent $5.4 billion on affiliate marketing. However, by 2022, this figure is expected to increase to $8.2 billion.
This guide will show you how to launch your affiliate marketing business and what benefits you can expect.
How Does Affiliate Marketing Work?
Since affiliate marketing harnesses the talents of multiple people to create a more robust marketing plan, it can be more effective than traditional marketing techniques. This type of marketing also allows those involved to profit from their contributions. In order for this to work, three different groups must take part: the advertiser, the publisher, and the consumer.
Let’s delve into the complex relationship these three parties share to ensure affiliate marketing is a success:
Seller and Product Creators
Also known as the brand, the seller does not need to be actively involved in the marketing, but they may also be the advertiser and profit from the revenue sharing associated with affiliate marketing. The seller, whether they are a solo entrepreneur or a large enterprise, is a vendor, merchant, product creator, or retailer who has a product to market. The product can be a physical object, like household goods, or a service, like makeup tutorials. The seller does not need to be actively involved in the marketing of the product, but they may also be the advertiser and profit from the revenue sharing associated with affiliate marketing.
The seller is not required to be involved in the marketing of their product, but may choose to be the advertiser and receive a percentage of the profits from affiliate marketing.
For example, the seller could be an eCommerce merchant that started a drop-shipping business and is looking to reach a new audience by paying affiliate sites to promote their products. Or, the seller could be a SaaS company that leverages affiliates to help sell their marketing software.
The Affiliate or Publisher
The affiliate is the middleman between the seller and the potential consumer. They market the product to potential consumers in an appealing way to convince them to buy the product. If the consumer buys the product, the affiliate receives a portion of the revenue.
The people an affiliate markets to are usually those who are interested in what the affiliate has to say. This creates a personal brand for the affiliate that helps them attract people who are more likely to act upon what the affiliate is saying.
The Consumer
There need to be sales in order for the affiliate system to work and the consumer or customer is the one who makes them happen.
An affiliate will promote a product/service to consumers through an appropriate channel, such as social media, a blog, or a YouTube video. If the consumer believes the product is valuable or beneficial, they can follow the affiliate link to the merchant’s website. If the customer makes a purchase, the affiliate receives a portion of the revenue.
The customer must be aware that the affiliate is receiving a commission for the product.
An affiliate marketer is someone who promotes a retailer’s products in exchange for a commission on each sale. According to the Federal Trade Commission, an affiliate marketer must clearly and conspicuously disclose their relationship to the retailer, thus allowing the consumer to decide how much weight to give their endorsement.
Informing your viewers that the products you are using in your video were given to you by Company X allows them to make an informed decision about whether or not to purchase the products you are promoting.
Types of Affiliate Marketing
There is often confusion about whether an affiliate marketer has actually tried the product they are promoting or if they are only in it for the money. This may not matter to the customer either way.
The customer is more likely to trust an affiliate and purchase a product if the affiliate has tested and approved the product.
In 2009, Pat Flynn categorized affiliate marketing into three types to help differentiate between affiliate marketers who are closely tied to a product versus those who are not. The three types are unattached, related, and involved.
Here, we will explain each category in more detail to help you make a decision about which route to take.
Unattached
In the unattached business model, the affiliate marketer is not connected to the product or service they are promoting. They have no expertise or authority in the niche of the product, and cannot make claims about its use.
An affiliate who is not attached to a company will typically run PPC (pay-per-click) marketing campaigns, using an affiliate link in the hope that shoppers will click on it and make a purchase.
Although it may be more appealing to be an unattached affiliate because you don’t have to commit to anything, it’s usually only for people who just want to make money without investing in a product or customer relationship.
Related
This type of affiliate marketing is for those who are not necessarily attached to the product or service, but who are somehow related to the niche audience. These affiliates often have some sort of influence on the niche and an established following.
For example, a YouTuber with a fashion blog may promote a clothing brand they have never used before. In this case, they would be considered a related affiliate marketer.
This type of affiliate marketing has the potential to generate traffic due to the affiliate’s expertise, but they may also recommend a bad product or service if they’ve never tried it before, which could cost them the trust of their audience.
Involved
This type of affiliate marketing is often seen as more trustworthy than other types, as the affiliate is directly invested in the product or service.
Affiliate marketers who are involved with the product use their personal experiences in their marketing efforts, rather than relying on pays per click. Customers can trust them as reliable sources of information.
This type of affiliate marketing may take more time to build credibility, but it could result in higher payoffs later.
Affiliate Marketing Tips & Strategies
Here are 16 tips to help you earn more money from affiliate marketing in 2021:
1. Find a niche that you’re passionate about
2. Do your research and find affiliate programs that fit your niche
3. Sign up for as many affiliate programs as you can
4. Promote products that you use and love
5. Write helpful and comprehensive product reviews
6. Create informative and engaging blog posts
7. Use social media to promote your blog posts and reviews
8. Make sure your affiliate links are displayed prominently
9. Use effective calls to action
10. Offer exclusive deals and discounts
11. Host a giveaway
12. Participate in forums and discussion groups
13. Collaborate with other bloggers in your niche
14. Create an ebook or course
15. Speak at events and conferences
16. Stay up to date with the latest affiliate marketing trends
Launch Your Affiliate Site With Existing Content
Even though affiliate marketing is a good way to start making money online, it would be stupid to launch a brand new website and expect immediate commission payments. People need to trust that the products you’re recommending are actually good products.
Stacey MacNaught says that the best performing affiliate websites are those that have 20 or more pieces of content before the website goes live.
Stacey stresses the importance of content over aesthetics, saying that it’s pointless to worry about how the site looks until there is a sufficient amount of good content. Her “golden rule” is to have a list of content pieces researched and written in advance of launching the site.
Diversify Your Affiliate Partners
Diversification is key when it comes to affiliate marketing. Having all your eggs in one basket can be risky, as a company can always close down its affiliate program, deny payouts, or slash commission rates.
An example of this would be Amazon Associates who infamously decreased commissions for all product categories. Another example would be home improvement items whose commissions were cut from 8% to 3% with little to no notice.
A wise strategy: Make sure no single affiliate partner contributes more than 50% to your revenue. If the worst occurs, you would still have some income, rather than none at all. It’s easier to lose half your revenue than all of it.
On the Relationship With Your Audience
You need a loyal, engaged audience to make money as an affiliate marketer. If your content marketing campaigns are struggling to reach them, it will be hard to do.
Social media and YouTube channels are often the first port of call for affiliate marketers looking to share their product recommendations. But relying on these online channels is risky for several reasons:
- Many algorithms deprioritize organic social media posts to push marketers into buying ads.
- You may have your account hacked, deleted, or reported and you lose your entire audience.
You can reduce the risk of losing control over your affiliate content and how and when it reaches your audience by having them sign up for an email list. This way, you can communicate directly with your audience and you won’t have to compete with other content for their attention.
This affiliate marketing tip involves adding a pop-up box to your website that gives people something in return for subscribing to your newsletter, like a free checklist or discount code (more on those later).
Become Affiliates for Audience-Recommended Products
An affiliate marketer needs a large audience to be successful. A great way to build both an audience and passive income is to become an affiliate for products that their target audience recommends.
Michael Keenan, the co-founder of Peak Freelance, recognized that members of his freelance writing community were looking for a new customer relationship management (CRM) tool. He tested a bunch of popular options and found that Bonsai came out on top. Michael joined Bonsai’s affiliate marketing program and got paid to recommend a tool that he already liked and that his audience was searching for.
Know the Ins and Outs of the Products You’re Recommending
Affiliate marketing is often associated with schemes that promise quick and easy money. This attracts people who are more interested in making a quick profit than in helping their audience, and these people usually end up failing.
“You can set yourself apart from your competitors by being more knowledgeable than they are,” says Mark Valderrama, CEO, and co-founder of Aquarium Store Depot. “To be successful as an affiliate, you need to establish yourself as an expert, or at the very least, a website where people can learn more about the things you are promoting.”
It’s sadly common for affiliates to choose a few providers they think will be of interest to their visitors, without investigating them further. Even if you’re only looking for information, you’ll want to know how and why people use them.
To increase your chances of success when signing up with a new service provider, Mark recommends that you complete your due diligence by research the provider and considering other people’s opinions before trying it out yourself, even if it’s just the demo version. Although this may take longer to generate sales for your affiliate products, people will be more likely to trust the products you recommend.