What is affiliate marketing?

I’d mentioned it as one of the ways to make a passive income online in a prior post, but what exactly is affiliate marketing?

I believe I’ll be right to surmise that you have searched online for a product or a service. Came across a review and read it through. At the end of the article, having been sold on the features, the pros and cons, clicked a link to purchase or subscribe. Then an affiliate marketing transaction has just taken place without your knowledge!

An affiliate marketer promotes someone else’s product by writing a review, which can be positive or negative. At the same time inserting links in the review to the merchant’s online shop.

If a prospective buyer, acting on the information presented in the product’s appraisal, goes ahead and purchases, then the affiliate marketer gets a commission based on this sale.

Steps in affiliate marketing

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All this is done via an affiliate program or network that manages all of the affiliates’ links and transactions.

Other channels like social media can also be utilized for promotion of affiliate products. Having your own blog though is preferred as you get complete freedom on how to present content. It also benefits from free traffic from search engines.

Examples of affiliate programs

The affiliate marketing business has been growing steadily over the years. Sources indicate the industry has a global worth of over $12 billion. Mark you, this is a 2018 statistic, with the US and EU leading the way in online trade.

Affiliate programs are many to list all with new ones, with minimal publicity, coming up ever so often. There are however known brand names that have been around for a while. See below graphic.

affiliate programs

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How many have you heard of?

Anyone can plug into and promote on any of these networks promoting the available products and services. Be aware though there are different terms and conditions for each to abide by. It pays knowing these before committing time to build content around.

Real life case studies

There are many successful affiliate marketers, some very high profile and I believe a majority very quiet working behind the scenes. Some do post their earnings as evidence that affiliate marketing is very profitable if done right.

My first foray some years back into earning online was meeting (in an online sense) one Pat Flynn of the smartpassiveincome.com blog. He’s an inspirational story on building online businesses from scratch that serve the needs of others.

pat flynn

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He used to give a detailed breakdown of his staggering earnings from his online activities. Amounts in the six figure region, all in a month! I’m guessing it’s even more now that he has a big team around him.

Another heavyweight who’s been around the game a long time and achieved stellar success is John Chow.

john chow

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He’s conducted trials on if it is possible to make a full time income online from blogging. Let’s just say he rocked the outcomes. He took his blog from zero to $40,000 per month in two years, surpassing $500,000 in 2009!

If you thought it’s a man’s game only then you are forgiven. Women also have the online marketing world by the scruff of the neck. One such being Rae Hoffman, her blog being sugarrae.com.

Rae Hoffman

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She has created a multi million dollar business and gone on to become a highly respected veteran marketer, speaker and entrepreneur. She has a very compelling story behind all these.

We can go on and on and never finish this listing of top affiliate marketers. So I’d rather take a pause and let your Google search skills uncover more should you feel the need to motivate yourself with more success stories.

How you can be part of this gravy train

By its nature of being a low cost activity to undertake, affiliate marketing does attract a large crowd. From students to retirees. But despite this, only a small percentage of the crowd does actually go on to make consistent income.

The reasons for this are many. One being most people go into it with a “get rich quick” mentality. It takes sometimes several months of consistent action to see your first income. But what is that compared to years of earning passive income down the line?

Make me rich

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A big portion of web traffic is organic user search traffic. Search engines like Google often update their algorithms. This can also have adverse effects on your income.

Given that now you know there are many obstacles along the way, how do you start? There are a number of concepts you have to grasp to have key actionable skills.

At the most basic, knowledge of niche selection, website creation, keyword research and content creation are needed to put together a functioning affiliate site.

Niche

A niche in other words is a sphere of knowledge or a target market for your website. Some examples are exercise and fitness, travel, cooking, motoring among endless more. A website can also be dedicated to a sub-niche.

There are also different approaches to selecting a niche;

– It can be something you have an in depth knowledge in e.g. a doctor and medicine or a cook and food etc.
– It can also be a topic you personally find interesting and would love to delve into it further.

A passion is necessary as you will be creating lots of content around these niches for a long time down the road.

Website creation

With tools like WordPress, a need for lots of technical expertise has been eased as compared to the earlier years of the Internet. Still some basic knowledge of how to structure pages and post, install and use plugins etc. are required.

The good news is that there are many sources on the web, a google away, where you can acquire information on this for free. You might have to pay though for advanced tactics.

Keyword research and content creation

The central part of your affiliate marketing business will be creating relevant content. Content that helps solve problems for the user. This can be in the form of a text blog post, a video walkthrough, a podcast or even an infographic. A hybrid or these is also an excellent choice.

For the content to be found by a target group, e.g. people looking for information on vegetarian foods, keywords come into play. A keyword is essentially the search term a user inputs into a search engine.

For your content to show up under a user search term it must contain that particular keyword, or in one form or the other.

SEO keyword types

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Benefits and pitfalls of affiliate marketing

Pros

  • Passive income potential: The top reason most people go into affiliate marketing is the income generation potential. Furthermore there’s the passive income aspect – basically your site making money for you as you sleep. Due to this people give it a shot despite the knowledge of the hard work needed.
  • Work from anywhere: All it takes is a laptop, your brain, some research and an incentive to action. You no longer have to be tied to a desk at a single location to earn an income!
  • Product and service creation: With affiliate marketing your work starts and ends with promotion of the goods and services. The lack of dealing with the headache and intricacies of coming up with a product leaves a lot of head room – if you get what I mean!
  • Products stocking and shipping: As stated above, affiliate marketing efforts are only in promotion. Therefore activities of stocking, shipping, handling returns all lie with the merchant.
  • Also part of the reason lots of people find this field very easy to venture into as there are minimal upfront costs.

pros and cons of affiliate marketing

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Cons

  • Time consuming: Unless you already have an established, traffic heavy website, starting an affiliate website from scratch will consume time and energy. More so at the earlier stages to take it to a level where significant web traffic can support sales.
  • No control over merchants’ business ethics: Since an affiliate marketer only acts as a salesperson, they do not have a control over the businesses products or services. Some can be unscrupulous in any number of ways – product/service quality, commission payments etc.
  • It is best to partner with reputable, established brands initially. A negative review by a customer of your affiliate site can have adverse negative effects on your sales.
  • High competition: In most niches out there in the wild wide web, there are older, authoritative sites that will be hard to dispatch from search engine rankings. That is why as laid out earlier, enormous effort is required. Hard but doable.
  • Consumers belong to merchants: Customers only develop a relationship with the affiliate at the website level through content. On the other hand, the merchant collects identity, address and credit card information which is used to develop repeat sales in the future.

While not an exhaustive piece, it at least gives you an overview of what affiliate marketing is. Progressively I will try my best to break down this subject. Expounding on its components and how you can benefit from it. At the least in extra income if not in total financial freedom.

10 thoughts on “What is affiliate marketing?”

  1. Hi, Kip!
    As a newbie at WA, I’m always interested in posts such as yours, so clear and thorough! The fact it includes real-life case studies helps a lot in keeping focus. A niche is undoubtedly one of the secrets to success.
    Your post is an excellent overview and a great help!
    Thanks for sharing and keep up the good work!

    Reply
  2. Hello Kip. The main reason I like the idea of affiliate marketing is that I can start out my business at a low cost. This is the most important part for me. The other thing I like is, that I can write about the things I enjoy doing and interact with like-minded people. It`s a great privilege to earn for living by doing something you enjoy, as opposed to working hard in a factory 48 hours a week.
    Regards,
    Debora

    Reply
    • Hi Debora, sure is a beautiful thing once you overcome the initial threshold as you have to also work on it for some period of time.

      Reply
  3. This is a great example of affiliate marketing. It is tough for the first 6 months and if you can get past that time period you can make it for the long haul. Having a big goal to achieve also helps you to stay the course. The freedom that it affords you to work anywhere is worth its weight in gold.

    Reply
  4. hi,

    I just read your website and I found it very interesting!

    I like the way you exposed the topic and how simple and easy to understand it was! in my opinion at the beginning I found very difficult to find website regarding this topic so I think that its nice that you write about this and help other to find information. 

    how did you find writing about this topic? it was difficult? 

    congrats for your website, 

    ellen. 

    Reply
  5. Hi Kip. Thank you for very interesting article. Im just starting my adventure with digital marketing and I already learnt that its not so easy begin. Your post is extremely helpful and I couldn’t agree more that key is to choose proper niche. Only when doing what we like we can be reliable to our clients and achieve success. Looking forward to use your recommendations in practice.

    Reply
  6. Hi, mine are questions: What would be your advice to someone who is living in a country where the affiliate programs don’t operate?

    secondly, what can someone do when they apply to affiliate programs operating in these countries and keep getting their application rejected without giving a clear reason?

    Do all or most of the affiliate programs work on the same principle or one needs to get different trainings for each particular one they want to venture in?

    Reply
    • Hi, the entities behind the affiliate programs do not have to operate in your locality to use them. Unless they clearly express so in their terms.
      High chances for rejection is using a website that is new with minimal content that does not generate any real traffic yet. There could be other reasons but traffic is usually the major one.
      All affiliate programs work in the same manner with only slight differences in terms and conditions.

      Reply

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