On this website we talk a lot about affiliate marketing and how it is a great source of income for those thinking about how to fund their older age, top up their pensions or even retire early. The fact is that affiliate marketing is just a simple and easy way to make money online, whether that’s as a future retirement plan, a source of additional income or as a whole new career.
So in this guide we want to explain what affiliate marketing actually is, who is involved and the processes that underpin and drive it.
What is Affiliate Marketing?
Put simply, affiliate marketing is a process whereby one person (the affiliate) recommends a product or service on behalf of a third-party (the vendor). If this recommendation results in a sale for the vendor, a commission is paid to the affiliate for the referral. That is it!
The promotion and process of recommendation by the affiliate is usually done on the affiliates own website, which in itself is solely based around a specific market niche: for example, sports shoes, weight loss products, equestrian equipment, well-being products, etc., etc. I’m sure you can think of many more.
With a website, the transaction flow would be as follows:
The role of the affiliate marketer
As you will see the affiliate marketer plays a pivotal role in the transactional process. It is he or she that focuses their time and energy on a particular niche. Perhaps they have previous experience of it or would simply like to use the opportunity to learn more and play an active part in it. But they ‘own’ their niche… the whole customer acquisition and push towards the transaction is essentially their brand – from the website and its content, to the tone of voice and the way they choose to communicate and share it with the world. So essentially, they own the early relationship with the customer, though in most cases they don’t actually make the final sale – i.e. take payment for the product or service being sold.
Putting this into context, this is the process from the affiliate marketer’s perspective:
So the affiliate builds a niche website, creates its content in the form of product reviews, educational posts, and advice and best practice articles. They are also responsible for the promotion of their website and driving traffic to it. For the most part this is done through optimization of their web pages and testing to see what works and what doesn’t for their visitors. They will also promote their content via the usual social media channels, such as Facebook, Twitter, LinkedIn, Google+, Instagram and Pinterest, or sometimes through the use of emails sent to subscription lists. All of this, of course, costs them nothing or at worst very little. All that is required is their time and commitment.
However, they may also choose to promote their content using paid-for services like pay-per-click marketing (typically Google AdWords and/or Bing Ads), Facebook, LinkedIn or Twitter ads, Gmail ads or various website banner advertising opportunities, to name just a few. But these options are not required for the affiliate marketer to get their ‘business’ started. Paid-for promotion is usually done when the affiliate marketer can afford to start plowing some of their profits back into their business, thereby giving their whole proposition some forward momentum and growth.
Creating website content that converts
The affiliate marketer’s website or websites are his or her bread and butter. They are the linchpin behind the success of the ‘promote, sell and buy’ process. This means that the website has to be right. It has to appeal to search engines so traffic can be generated. It also needs to be functional and easy to navigate, ensuring that the buyer’s user journey is as intuitive and straightforward.
Now, you may think that such a website needs bespoke technical development, which in turn costs shed loads of cash. This couldn’t be further from the truth. Yes, many people, companies and other organizations choose this approach, often choosing licensed, subscription-based proprietary website content management software as it is bespokable and known in fine detail by the software provider. But it is extremely expensive – typically, $2,000 plus per year, without the hosting and support costs.
However, many more large companies do build their own website at no development cost to themselves, other than their own time and labor to create it. This, of course, eliminates any expensive annual license costs usually associated with such proprietary software. Yes, there are still hosting, domain and, if required, support costs, but these are minimal and in some cases absolutely free. These alternative content management systems operate under a license-free model and are maintained by a vast community of developers across the globe. Such systems include WordPress, Umbraco, Joomla and Drupal and all are freely available for you to download and install.
However, for those new to internet marketing or without a certain degree of developer or coding expertise, we’d always suggest joining an affiliate program as this will provide you with the required learning to get going and promote, and a community of other affiliates to help you with any questions or problems. What’s more, these networks and some hosting platforms will also install the basic website for you or enable you to do it with a few clicks of a mouse.
There are a number recommended affiliate networks on this website. At time of writing, the Wealthy Affiliate program, we felt, delivered the best value for money – check out our review here. They offer a university of learning, with a community of over 10,000 members all ready help you if you need them, as well as a 24/7 system support. What’s more, it’s free to get your new website launched with them, which includes two free domains and websites. And if you want to upgrade to access more tools and learning, then you can do so at any time. But it’s not compulsory and certainly won’t stop you getting your first two websites launched. All-in-all we think that’s pretty good!
How much are affiliate commissions?
Affiliate marketing commissions vary from program to program. For example, Amazon offers between 6 – 10%, Microsoft typically offer around 10% and AWeber up to 30%. But whilst some commissions can be from as low as 3%, others offer as much as 100% – yes, 100%! Programs that offer this amount do so for good reason. This is because the long-term value of the customer to the vendor is of greater value than the initial sale itself. So they are happy to give the affiliate the full initial sale in commission. This is common for sales of subscriptions to products for example. The average however, is anywhere between 10% and 30% of the final sale.
And commissions add up… here’s a screenshot from an AWeber affiliate account dashboard.
Time to start making money!
Now that you have become more familiar with the opportunity, you’re probably ready to take the next step to your new life as an affiliate marketer. Check out our reviews here, starting with our in-depth review of the Wealthy Affiliate program.
If you have any questions about affiliate marketing, please feel free to leave you comments below and I’ll get right back to you.