Whether you are aware of it or not, almost every blogger, celebrity, website, and business on the internet today is an affiliate marketer. They all make money online every day from this largely passive source of additional income.
Major brands report that between 5% to 25% of their overall online sales come from affiliate marketing
The global affiliate marketing industry was valued at over $17 billion in 2023 and is expected to grow to approximately $27.78 billion by 2027.
This booming industry offers numerous opportunities for anyone looking to earn income by promoting products or services.
You can jump on the bandwagon and become an affiliate marketer!
In this article, we’ll give you an overview of affiliate marketing: how it works, how the internet plays a role, and how to get started.
Table of Contents
What is Affiliate Marketing?
Affiliate marketing is a type of performance-based marketing where a business rewards affiliates for each customer brought about by the affiliate’s own marketing efforts.
In other words, if someone purchases a product or service after following a link or recommendation from an affiliate, the affiliate earns a commission.
In affiliate marketing, three main parties are involved: the seller or product creator, the affiliate, and the consumer:
- The Merchant: Also known as the creator, seller, or brand, this party creates and owns the product or service that is being marketed.
- Affiliate: Sometimes referred to as the publisher or partner, the affiliate promotes the merchant’s products or services. They use their marketing skills and channels, such as a website, blog, or social media platforms, to attract and persuade potential customers. Affiliates earn a commission for the traffic or sales generated through their promotional efforts.
- Consumer: The end-user or buyer who purchases the product or service through the affiliate’s marketing efforts. The consumer’s purchase is tracked via affiliate links from one website to another.
Affiliate marketing is a popular business model as it allows merchants to expand their marketing efforts with the help of external parties (affiliates) who are only paid based on performance.
Types of Affiliate Marketing
Affiliate marketing can be categorized into different types based on the relationship between the affiliate and the product or service they are promoting:
- Unattached Affiliate Marketing: In this type, the affiliate has no connection to the product or service they are promoting. They simply advertise to drive traffic and earn commissions without personal endorsements.
- Related Affiliate Marketing: Affiliates have a more connected relationship with the product or service. They may not use the product themselves but have some expertise in the related field. This type of marketing relies on the affiliate’s credibility within their niche to influence consumers.
- Involved Affiliate Marketing: This form is characterized by affiliates who are deeply connected to the product they are promoting. They have personal experience and trust in the product, which they communicate to potential customers. This type involves a deeper commitment and can lead to more sustained earnings.
How Does Affiliate Marketing Work?
When you join an affiliate program in your chosen niche, you will be given an affiliate link. That link has your specific ID attached for tracking referrals from you.
You can then incorporate these links into your content on websites, blogs, social media, or email newsletters. When potential customers interact with this content and click on the affiliate links, they are directed to the merchant’s website.
If a consumer makes a purchase or completes a desired action (like signing up for a trial) after clicking an affiliate link, this conversion is recorded, you’ll (the affiliate) earn a commission based on the agreed-upon compensation model, which could be a percentage of the sale (pay per sale), a fixed amount for each lead generated (pay per lead), or other models.
The payment terms, such as the commission rate and payment schedule, are defined by the merchant’s affiliate program policies.
Learn more about how to promote affiliate links.
Types of Affiliate Payments
Not all affiliate income is the same. You can include different types of links or offers on your website, each corresponding to a different level of compensation. In other words, some promotions are more valuable to advertisers than others. Below is a list of the most common affiliate payment methods:
- CPA (cost per action): CPAs are determined by some sort of predetermined action a visitor takes in relation to the affiliate promotions you offer on your website, just like it sounds. To learn more, you can read our guide to CPA marketing.
- CPC (cost per click): This payment is calculated based on the traffic you send to the advertiser’s or merchant’s website after visitors click on a link on your website.
- CPL (cost per lead): You get paid when someone fills out a form and becomes a lead for the merchant, which is often associated with product testing. Leads are especially important for B2B (business-to-business) companies, and CPLs can have a high payout depending on the type of offer.
- CPS (cost per sale): When someone buys a product or service after clicking on a link or ad on your website, you get paid. CPS Payments are also usually higher because they result in a sale.
How To Become An Affiliate Marketer
To become an affiliate marketer, you only need to become a member of a good affiliate marketing program and start spreading the affiliate link. To make money consistently, however, you need to be smart in your approach in the business. Here are the things you will need to start with this business:
1. Build A Website
Most affiliate programs require that you have a website before you are accepted. Advertisers check the website to see what kind of content you have. Some advertisers are extremely selective when choosing their affiliates.
They only accept those whose websites can bring in huge amounts of traffic. Don’t worry though, because there are also beginner-level affiliate marketing programs that will accept even publishers with new websites.
You can do affiliate marketing without a website, but it isn’t something you can do long-term.
2. Find A Profitable niche
You cannot just create any type of website if you want to become a successful affiliate marketer. In particular, you need to be careful in choosing the niche market. You can check out our list of the best affiliate marketing niches.
Remember that the type of affiliate marketing products you can sell depends on the market niche you want to operate in. For example, if you want to sell only high-priced products, make sure that your chosen niche market has high-priced affiliate marketing programs.
3. Generate Traffic
In general, paid traffic is not recommended for beginners because of the financial risks. The priority for beginners should be organic traffic. Generating organic traffic may sound easy, but it is a lot of hard work. However, work is often worth it.
- Organic Search (SEO Traffic): Search engine optimization allows you to appear at the top of search engine results. SEO takes into account the hundreds of variables on which your ranking depends. If you optimize your web content to meet the search engine algorithm, you can get lots of nice, (essentially) free, targeted traffic.
- Social Media: Your affiliate website can get more organic traffic if you’re active on Facebook, Instagram, Twitter, and other social media. The more impressive and engaging your content is, the more likely people are to click on your links. Social media campaigns can also increase your brand awareness.
- Email Marketing: Email marketing can be another useful free traffic source. You can get started by building an email list and send out weekly newsletters with integrated links to your affiliate website and other elements to promote your affiliate offers.
Learn more about the best traffic sources for affiliate marketing.
4. Choose Affiliate Marketing Programs
Not every affiliate program is the same, and not every affiliate program is appropriate for your customer base. When choosing an affiliate program, keep the following points in mind:
- Quality over money: You will most likely earn a higher commission if you sell an inferior product, but most people will not buy it because they know what to expect from cheap products. Besides, selling junk can seriously damage your reputation.
- Recurring commission: While promoting products or services that earn a one-time commission is acceptable, promoting products or services that earn a recurring monthly commission improves the predictability and stability of your affiliate business.
- Good landing page: You should reconsider your partnership if your landing pages have an outdated design, are full of advertisements, contain way too much text and spelling and grammatical errors, have too many calls to action or include a phone number (you probably will not get a commission if orders are placed by phone). Remember that a website that irritates you will also irritate your visitors.
- Established online vendors: Many branded names that are best known for delivering products through their Internet presence cater to affiliates. Topping the list are e-commerce giants Apple iTunes and Dell (computers).
- Pay-for-performance networks: In addition to searching independent sites, all-in-one sites can save you time. Pay-for-performance networks have assembled hundreds or thousands of affiliate-marketing programs under one roof.
Many traditional retailers have legitimate affiliate programs. Target, The Container Store, Nordstrom’s and Lowe’s are among the better-known retailers. Of course, each of them uses an affiliate program to drive sales to their online store, rather than their physical location.
One way to find stores with affiliate programs is to create a list of your favorites and research them. This takes time, but it’s worth it.
You can also search an affiliate network (which manages affiliate programs for many different companies) to find your favorite retailers. Since large retailers often manage their affiliate programs through networks, you have access to exclusive promotions that are only available to network partners.
A network usually allows you to sign up for multiple programs at once and manage an unlimited number of affiliate accounts in one place.
Networks are also useful for finding category-specific programs, such as security software or gardening supplies, as well as lesser-known products and services, such as e-books for small businesses or coupon offers for pregnant women.
The networks below offer affiliate programs for just about everything under the sun:
- ClickBooth
- CJ Affiliate
- Pepperjam
- Amazon Associates
- Rakuten Marketing
When you’re signing up as an affiliate, visit any community message boards set up for affiliates. Find out what tools other affiliates found successful. If you’re assigned to an affiliate-marketing manager, don’t hesitate to drop an email and ask for suggestions based on your site’s core audience.
Pros of Affiliate Marketing
Some of the main advantages of affiliate marketing are as follows:
1. Low-Cost Business
Affiliate marketing is a very simple and easy business to start, and there are no barriers to your success. To market your clients’ products, you should have your own affiliate website. However, you do not need a website to become an affiliate marketer. You just need to join an affiliate program and promote a product niche.
2. No Special Expertise
You do not need marketing knowledge to join affiliate programs. As you work with, test, and practice different AM techniques, you will gradually learn them. It is important to note that there are a number of ways to run affiliate marketing programs, and you can choose one that suits your marketing requirements and needs.
3. Performance-Based Salary
You can earn well based on your performance if you are good at promoting products/services and running marketing campaigns. People who work hard are more likely to succeed. Practice and perseverance are the keys to success, so you just have to keep working unceasingly.
4. Flexibility & Convenience
To promote the affiliate link you can run various campaigns on different websites. This will enable you to focus on the well-performing links and leave the rest. You can run affiliate programs on different product categories instead of sticking to one affiliate product.
Cons of Affiliate Marketing
Affiliate marketing has a number of disadvantages, including the following:
1. No Control
You don’t own an affiliate marketing program; you are only a participant in it. The regulations of a Retail Company must be followed, and you rely on them. Initially, it seems attractive, but it becomes less competitive after a while. The client must adjust the new rate and implement the changes before the changes can be implemented. You cannot do much other than communicate.
2. Intense Competition
Affiliate marketing is good for beginners in online business because they are easy to start, low cost and very profitable. However, it also means that anyone can join your affiliate programs and claim market share and you will not be able to control your competitors. You would face stiff competition in the market from established affiliate marketers and their growth would affect your business.
3. Unguaranteed Income
An income-based system can offer you benefits, but can also leave you with no income at all if your performance plummets. In order to maximize growth and profitability, you have to keep on working consistently with affiliate programs. No one knows how much income you’ll earn each month.
Learn more about the pros and cons of affiliate marketing.
How To Avoid Affiliate Marketing Scams
Participation in illegal affiliate programs is strictly prohibited by the laws of your home country. You must first understand the law and then follow it. Follow these safety precautions to avoid becoming an outlaw:
1. Always read the terms and conditions of the affiliate agreement
Affiliate programs may alert you to legal caveats in easily accessible warnings on their websites, but you are sure to find them in the fine print, too.
Read the contracts thoroughly to determine your potential liability for participation.
2. Look for clues to the country of origin
Affiliate programs that operate from abroad or are not based in the U.S. may indicate that activity is not permitted in the United States.
You may also be asked to provide your country of origin when you sign up for an affiliate program. After that, look for a message or special notice that serves as a disclaimer for doing business in certain countries.
3. Conduct a search
Although this tip isn’t foolproof, you can start verifying the legitimacy of a program by doing a simple search. Enter in a search engine the name of the company you want to do business with or the type of program (online games, for example). Especially if it’s a hot topic, you quickly find any red flags.
4. Investigate the company
Although certain products or topics may be prohibited, there are blacklisted companies. You could get charged with “aiding and abetting” if you participate in one of these affiliate programs.
If something seems suspicious, don’t be afraid to investigate the company further. Start by visiting the Better Business Bureau’s website at www.bbbonline.org.
5. Check with authorities
The U.S. Department of Justice has information on a handful of questionable Internet activities, including online gambling and selling prescription medication online.
Visit the site at www.justice.gov. The Federal Trade Commission is another source for validating illegal affiliate operations. You can access it at www.ftc.gov.
Learn more about how to recognize affiliate marketing scams.
Is Affiliate Marketing Worth It?
Yes, affiliate marketing is one of the best online business models for beginners. It doesn’t require you to source any products or build a brand; all you need is a dedicated audience who trust your recommendation.
This business model offers the potential for substantial earnings. Some successful affiliates make over $100,000 per month, and the top performers like Pat Flynn have even reported earnings of more than $3 million in affiliate income alone.
If you don’t own any website, you can try your hand at writing articles on Blogger or LinkedIn, or share your recommendations on YouTube. Just be sure to abide by the rules of different platforms.
After you’ve figured out the ins and outs, you can start your own affiliate site.
However, affiliate marketing is not a get-rich-quick scheme. It requires time, effort, and persistence to build up traffic and start earning significant income.
It can only be a worthwhile endeavor if you are prepared to invest the necessary time and effort, choose the right niche, create quality content, and engage with your audience effectively.
To learn more, check out my tips on affiliate marketing.
Jack Davis is an internet entrepreneur. He created the Affiliate Marketing Masterclass and offers personal coaching on affiliate marketing. He has been featured in major publications like Forbes, Entrepreneur, and CNBC for his achievements in online marketing. He owns more than 10 niche websites and has made millions of dollars from them. So, he’s the guy you can trust when it comes to building niche sites and SEO.