Without troubling you with the details of affiliate marketing, let’s spill out the money-making secret of it right now:
If you become a link between your audience and the products and services they need for their pain points, you can create a permanent income stream.
That’s what we all want. Generating passive income while we’re sleeping like a baby and dreaming of the ideal life we want. Then waking up to see an income chart like this:
Don’t lose heart. These results are not impossible to achieve.
It’s just that most humans are impatient. All we want is Aladdin’s Lamp to summon the Genie, and voila!
We want waves of cash to hit us in an everlasting manner without really willing to bear the burdens.
Never forget good things take time to happen.
Through affiliate marketing, you can live the dream.
But before enjoying the full range of benefits that come with it, you should ask yourself one game-changing question:
How can I solve the problems of my audience?
It really comes down to this critical question, because it’s all about garnering an online audience and serving them right.
In this blog post, we’ll help you find an answer to that question and also familiarize yourself with the foundations of affiliate marketing.
What is Affiliate Marketing?
Affiliate marketing is one of the available marketing methods.
It refers to promoting someone else’s products or services in exchange for a commission.
In today’s world, it is typically done online.
Put simply, if you help a brand or business sell more, you’ll get a cut of the revenues.
It is a performance-based marketing tactic, which means you only make money when people actually buy whatever it is that you’re promoting.
Here we can also refer to Pat Flynn’s definition of affiliate marketing:
“Affiliate marketing is the process of earning a commission by promoting another company’s product (or service). You find a product, promote it to others, and earn a piece of the profit for each sale that you make.”
Sounds like a walk in the park, right?
Affiliate marketing may seem straightforward and easy to execute.
Everyone thinks that all they have to do is pick a product, promote it, and get paid.
That’s how the surface of it appears.
But when you delve deeper into the subject, you find out that other moving parts are involved.
I’m not trying to discourage you; all I’m saying is that you need to pay attention to some critical details to make it work.
Failing to consider these details is why most people are unsuccessful at affiliate marketing.
We’ll discuss the common pitfalls of it later; for now, let’s take a moment to show you the parties involved in affiliate marketing.
Affiliate Marketing Wheel
Four major components help keep the affiliate marketing wheel spinning.
These elements are closely linked, and if the cycle is broken, there won’t be favorable results.
Merchant (Product creator)
Generally, merchants are product creators or service providers.
They are the ones offering commissions to third-party elements (affiliates) in return for successful sales.
A merchant doesn’t have to be a large company.
Any person, brand, or business could be a product owner or service provider and therefore a merchant.
Sometimes, being neither of these is also possible, as with the Amazon Associates Program.
Merchants are also responsible for customer support and managing order fulfillment.
You won’t have to deal with any of these yourself, as the product creators entirely handle them.
Affiliate (Product promoter)
Next in the cycle, we have the affiliate.
The affiliate promotes products or services, typically on their online platforms such as social media accounts.
This is likely to be you.
You’re responsible for doing the second part of affiliate marketing, which is marketing.
The merchant will give you either a link or a promo code to make sure it was you who actually represented a sale.
Your job is to get people to click on that link or use the promo code to purchase what you’re promoting.
Depending on your country of residence, you may also legally be required to inform your audience that you’re an affiliate, and you’ll be receiving commissions when someone completes a transaction.
In most countries, this is not a legal requirement.
However, it is highly ethical to be transparent about the affiliations you have.
Affiliate hubs, networks, or gateways, whatever you want to call them, serve as intermediary links between merchants and affiliates.
Typically, an affiliate network is a website that an affiliate visits to find various products for promotion and get in touch with different merchants for collaboration.
The benefit you get from working with affiliate hubs is not having to deal directly with brands, businesses, or companies.
In the most basic agreements, you as an affiliate collaborate with a merchant to promote single or multiple products.
This may happen in situations where merchants manage their affiliate programs only on specific networks.
Through affiliate hubs, you have the opportunity to earn more revenue from working with several brands and businesses at once.
Think of them as product databases where you can choose the ideal product for promotion.
These networks make your affiliate marketing plan easier to execute by managing the relationship between affiliates and merchants, handling the payment process and product delivery.
For promoting consumer products such as gadgets, tools, etc., Amazon’s Affiliate Program is, without doubt, the best, biggest gateway to begin your affiliate marketing journey.
Customers are people who use your affiliate links or promo codes to purchase the products you’re promoting.
All the aspects of affiliate marketing we discussed so far are of paramount importance for the entire process to work efficiently.
But most important of all is the customer who actually keeps the affiliate wheel turning.
If no one buys what someone is promoting, there will be no sales, no commissions, and no revenues.
Since the cost of a product’s affiliate marketing is calculated in the retail price, customers don’t have to pay a higher price than usual when purchasing a product through an affiliate’s link or promo code.
5 Benefits of Affiliate Marketing
Affiliate marketing benefits are many and not limited to the ones you see below. However, these are the major ones:
Once you start working as an affiliate marketer, you’ll create a passive income source from products you’ve promoted one or several times. For example, you’ll earn passively from a product that you promoted months ago.
Affiliate marketing also allows you to create permanent streams of income. This means that for promoting each product, there’s a chance that without dedicating additional effort, you’ll earn residual income.
No products are required
Another significant benefit to affiliate marketing is earning income without going through the painstaking process of creating a product. Merchants have already made the products or services, and all you need to do is marketing them.
As an affiliate marketer, you are not responsible for customer support or product delivery. Since you’re not the product owner, you don’t need to worry about such issues. All your focus should be on generating sales. Therefore, you won’t lose anything if customers don’t buy what you’re promoting.
Affiliate marketing is a relatively straightforward job to start. You don’t have to invest much money in it. Many affiliate programs are free to join. You bear no responsibility for a company’s business side since you don’t have to deal with design, production, shipping, etc.
How to Become an Affiliate Marketer
It’s true that affiliate marketing is the process of earning money through promoting a merchant’s products or services.
But there are several steps you should take to become an affiliate marketer:
1. Find a niche
As an affiliate, you need to find a niche that best suits your interests and is also profitable. When picking a niche, think deep and don’t pick one because you may be somehow interested in it. You should be precise about what you want and dedicate enough time to evaluate your skills and passions. Try to narrow it down as much as possible. For example, ‘Digital Marketing is a popular niche, but things will be a lot easier for you if you change it to a sub-niche like “Digital Marketing for small businesses in Los Angeles.”However, it’s not all about what you want, so don’t forget to also think about how you can solve some of your audience’s problems. When you have picked a niche, you start garnering influence, which is vital for building an audience.
2. Establish an audience
Next, you need to find a target audience who will probably be interested in what you do. Having a large audience who trusts you and your recommendations is key to effectively making your affiliate marketing work. Common ways of building an audience include websites, blogs, YouTube channels, and Instagram accounts. Regardless of the platform you choose, you need to make sure you’re comfortable using it because you need to establish authority on it. This process takes time, and you want to be using a user-friendly online platform. Once you define who you’re going to reach, you must begin bringing value to your audience through a detailed content marketing plan.
3. Sign up on an affiliate marketing website
the best way to start your affiliate marketing journey is by signing up for an affiliate program. We know we’ve referred to Amazon Associates a lot in this blog post, but it’s a great starting point for an affiliate. This is because Amazon is globally recognized and has a huge website with a wide range of products you can choose from for promotion. After signing up, they will provide you with an affiliate link containing a unique ID that you can use on your website or social media accounts. Joining an affiliate network is typically free of cost; however, the requirements for each hub vary.
4. Decide what you want to promote
This is another crucial step when starting out as an affiliate. Here you’re faced with two important aspects of affiliate marketing: your personal experience of a product and its resonance with your audience. You need to choose products that you’re familiar with and have experience using them. Never promote a product simply because you can earn high commissions for it. What you decide to promote should solve the problems your audience is facing.
5. Promote products through spellbinding content
Now that you know what you want to promote, it’s time to create eye-catching content to grab your audience’s attention. Through a content marketing strategy, you should plan, create, and publish content that your audience finds appealing and valuable. For this step, you can write blog posts, e-mail newsletters, share product review videos on YouTube or social media platforms, or anything that contains value and your personal recommendations. Use any of the available online channels for showcasing the products you plan to promote. But be careful not to be direct when recommending products to your fans. Instead, just try to explain the pros and cons of a product and add your own authentic reviews to it.
6. Keep track of your activities
When someone clicks on your affiliate link and visits the merchant’s website, a cookie is inserted in their browser for tracking their interactions. This is true for all our activities on the web. Whenever we enter a website, a cookie will start keeping track of our actions. Cookies are typically stored for a minimum of 30 days on a website’s servers. The webmaster can access these cookies to reach out to those who have left some of their information but didn’t make a purchase. With retargeting campaigns, the website owner can follow up on these leads, via e-mail for example, and encourage them to buy by giving them special offers. In case you use a website for affiliate marketing, you can do the same to turn potential leads into customers.
Types of Products You Can Promote
Two categories of products are available for an affiliate to promote: digital products and physical products.
The names already suggest what we mean by each type.
A. Digital Products
A digital product is what can be consumed online. Typical examples are E-books, computer software, mobile apps, or online courses.
Benefits of Promoting Digital Products
One major benefit you gain from promoting this product category is having higher payouts.
Due to their zero cost of reproduction, you can earn commissions up to 50% of their price.
Another benefit you may gain from promoting digital products is having a chance for recurring commissions.
In some cases, for example, a computer software you promoted months ago requires users to pay every month.
If this actually happens and customers don’t cancel, you may also receive a commission every time the merchant bills a customer.
Furthermore, lots of digital products offer free trial periods, making it a lot easier to get people to sign up on a platform.
The benefit starts when some of these require customers to provide their credit card information.
After the free trial expires, the user is billed, and in this process, you’ll receive a commission.
B. Physical Products
Physical products are products that customers physically use and typically receive via post.
Benefits of Promoting Physical Products
There are not many benefits that come with marketing physical products.
The commission payouts of these products are a lot lower than digital products.
Commission fees cap out at 15%, and it’s really impossible to expect a higher number.
You may even encounter commission rates as low as 1.5%.
This is due to the costs involved in producing, packaging, and distributing physical products.
However, the primary advantage of promoting physical products is the variety they have.
When you decide to promote these products, you get to choose a cluster of preferably relevant topics.
For example, let’s assume your target audience is swimmers.
You can promote a range of different products to this group, such as fins, swimsuits, goggles, bathing caps, etc.
It’s clear that when you’re promoting swimming-related products, you don’t have to limit yourself to single items, which in turn can benefit you by increasing the affiliate commissions you receive.
Expert Advice from Pat Flynn
Pat Flynn, the founder of SPI, believes that two factors are essential for affiliate marketing to be successful:
- Choosing the right products
- Developing effective strategies for promoting them
Suppose you have the best marketing strategies at your disposal.
If you’re not using them to promote the right products, chances are your affiliate marketing plan fails.
The opposite could also be true.
What’s even a more significant risk is that it can cost you the trust you’ve built with your audience, therefore losing them in the process.
Flynn puts a lot of stress on first thinking of what problems you as an affiliate can solve:
“Everything you promote to your audience, whether it’s created by you or by someone else, should solve the pains and problems your audience has. In other words, it should be relevant to what they need.”
Whatever you decide to promote, you need to make sure it’s relevant to your audience’s wants. Their pain points must be your priority.
Once you’ve found out what problems you can solve, earning revenue will follow as a byproduct.
Moreover, Flynn advises affiliate marketers to only promote products they have experience using since it makes the promotional efforts appear natural and not only financially motivated.
However, keep in mind you should couple this with having a precise understanding of your audience’s needs.
You can easily do this by conducting polls.
Just ask your audience simple questions related to products within your niche and review their responses to find out what you should promote to them.
You may hear that affiliate marketing is dead and no longer effective. Not true.
When affiliate marketing was first introduced around ten years ago, it was mostly a get-rich-quick method with a sole focus on earning commissions.
But the digital sphere has evolved, so has affiliate marketing.
In today’s saturated markets, success depends on building trust and offering authenticity.
There’s still room for success if you follow our guide step by step and also listen to professional opinions.
Then feeling the joy of having a passive stream of income will turn into a reality.