What is Affiliate Marketing and Why Should I Be Interested?

What is Affiliate Marketing and How does it Work? Step by Step Guide

This post contains affiliate links. If you use these links to buy something I may earn a commission. Thanks.

It’s already an empowering thing to be a business owner with a thriving online presence—you get to be your own boss (a plus already), and you get to manage everything, from top to bottom, about your business. 

However, there’s always something more you can do to capitalize on your entrepreneurial spirit and make your business grow even more.

This could mean finding an alternative stream of income—not necessarily a second business, but a way to compliment your current business’ success, profiting off of the value you place in your customers and your online community.

This is essentially the core of affiliate marketing—and if you’re not on-board already, you should hop on before you miss the train!

According to Statista, business spending on affiliate marketing will hit $8.2 billion in the U.S by 2022. Wouldn’t you want to be a part of that?

What is Affiliate Marketing?

Let’s first understand exactly what affiliate marketing is so you can see what a simple, painless money-making method it can be.

Imagine you’re a business owner of homemade dog treats. You’ve got heavy traffic on your social media, and your business is skyrocketing.

You’re approached by another business owner—a virtual dog trainer who creates online learning videos, training manuals, etc. This trainer sends you their newest book on puppy caretaking—asking if you could give it a review on your social media account, and sends you a link and a personalized discount code to post as the caption, where your follows can go directly to buy the book. 

And, the purchases made through this link—you get a cut of the profits.

Easy, right?

Affiliate marketing, in broader terms, is the sales technique of teaming up with other businesses (i.e. “affiliates”) who target the same demographic audience as yours.

Together in mutually-beneficial splendor, you support each other by highlighting the other’s business on your online profiles.

This is often done as free advertising mutually—or, instead of exchanging mutual advertisements, other businesses may offer commission, free products, etc. The compensation varies depending on what you agree upon with your affiliates.

Often, an affiliate will give you a product to advertise on your social media account—like our puppy trainer friend—and an “affiliate link,” from which every order made, you get a percentage of commission. 

You’ve seen them all over the internet, from online businesses, to social media influencers, to the Kardashians—affiliate marketing is really the best way to supplement your business income.

Technically, as an affiliate, you’re a salesperson for the partner company—minus the big pearly smiles and pyramid schemes. 

You help them make a sale, you get rewarded. 

Another great perk of affiliate marketing is that you’re not forced to be loyal to only one company as traditional sales entitles—you can partner with a variety of businesses, and fatten your paycheck through all of them.

Affiliate marketing is all low risk—all you handle is the marketing side of the product, and the affiliate business handles everything else. Since there is no cost to join an affiliate program, there is no way for you to come out with a loss on the other side.

How Exactly Does Affiliate Marketing Work?

So, this affiliate link—it’s more than just an IP address.

This affiliate link has the capacity to track how many times it is clicked, who is clicking it, and from what site/account it was clicked from. 

In other words, when the link is clicked, a small file called a “cookie” is stored on their device, whether iPhone, Mac, or PC—cookies don’t discriminate.

This is called an affiliate cookie, and it serves two purposes:

  1. The affiliate cookie attributes the sale directly back to the person
  2. The affiliate cookie (normally) holds an expiration date, so you still get paid even if the buyer delays their purchase.

Going back to our puppy friends, let’s check out how exactly this works:

Dog Treat Seller posts the affiliate link for Dog Trainer’s book.

Sally clicks the link.

Sally forgot she had her own dog treats baking in the oven, and goes to the kitchen to work on them—leaving the link and her purchase open.

Sally comes back and decides she also wants to buy Dog Trainer’s 30-day virtual puppy course. 

Sally checks out and orders both the book and the online courses.

Normally, this would mean that Dog Treat Seller gets commission on both—even though DTS didn’t even advertise for the latter.

Pretty cool, right?

How Much Money Can I Make With Affiliate Marketing?

The easy answer is: the sky’s the limit.

Some of the most successful affiliate marketers make six or seven figures A MONTH—just on affiliate commission.

Keep in mind that these huge success stories are people who have worked long and hard building their brand before their affiliate marketing became successful.

If you’re just getting into affiliate marketing, you may have to be patient until you see a huge payout. Really, really patient. 

But the patience pays off!

Commission profit percentages vary greatly—sometimes from 5% on the low end, all the way up to 50% per sale.

Sometimes, you can even be offered a flat rate instead of a percentage—i.e. Dog Treat Seller will earn $500 for this affiliate partnership despite the sales profits, vs. Dog Treat Seller will earn 20% of all sales profits via the affiliate link.

How Do I Get Started With Affiliate Marketing?

I get it—after reading through the benefits of affiliate marketing, why wouldn’t you want to do it?

Here are some easy steps to get you launched on your affiliate marketing side hustle:

  1. Choose Your Social Media or other Platform

In theory, this decision is totally up to you and where your followers are most plentiful, loyal, and active.

However, the two most successful affiliate marketing platforms are personal blogs, and YouTube.

Starting a blog is so easy these days—and it’ll likely only cost you a few bucks a month for the link address name. You can look up tutorials for optimizing your blog on search engines so it’s ranked higher on searches. This is called SEO and there are so many online tutorials that’ll make you a pro in no time.

On YouTube, everything is completely free. You can upload anything you want at no cost. Again, SEO can help you out here too.

Be advised that if you decide to do affiliate marketing, you’re legally obligated to disclose to your audience what you’re doing. On a personal blog, you can make a small footer at the end of your page; on YouTube, you can leave a disclaimer in your video descriptions.

  1. Choose Your Target Demographic/Audience

I won’t lie and say that starting a blog or a YouTube channel will lead to direct success—you’re facing hoards of competition. 

However, finding a specific niche interest that you know you can be successful in, will lead to more success. What kind of blog would YOU want to read yourself, but you don’t see so much of? What videos do you wish existed on YouTube?

Choosing too broad of an audience could lead to a failure of capturing anyone’s interest—so focus in on something incredibly specific, that your audience has no choice but to go to your site to find, because your content doesn’t exist anywhere else.

As you gain a larger audience, you can then decide to branch out into wider scopes of interests.

  1. Find Affiliate Programs to Join

There’s a ton of different programs to join—so, to help you out, we’ve narrowed them down into three categories:

  1. High pay, low volume: Dog Treat Seller earns $500 for sending only 50 customers to Dog Trainer’s book.
    1. Typically niche products with a high payout
    2. Limited pool of buyers
    3. High competition
  2. Low pay, high volume: Dog Treat Seller earns a small percentage for any and all purchases made through the affiliate link.
    1. Products with mass appeal but a lower payout
    2. Usually offer a variety of products to sell
    3. Typically requires a lot of website traffic
  3. High pay, high volume: Dog Treat Seller decides not to work with Dog Trainer, and decides to work with a credit card company to appeal to a wider audience and gain fatter profits.
    1. Products with mass appeal and a high payout (win-win!)
    2. Typically loyal audience (like credit cards)
    3. Some use spam-like tactics
    4. Must have huge follower count and lots of website traffic

With all these types of affiliate marketing programs, how do you even begin to decide what to choose? 

It all depends on your target demographic and your expertise online. You’ll need to do the research to see what best fits your business model.

Here are some affiliate marketplaces/platforms that’ll help you find your perfect program:

  1. Do What You Do Best

Make great content. Be the successful blogger/YouTuber/Instagram Influencer/YOU that you are.

Because, in order to get big affiliate marketing returns, you have to have your audience hooked on your content. You need to build their trust, so that an affiliate link will fit in naturally.

Make sure that whatever it is that you decide to advertise, ends up being something that your fans would love anyways. It would be a little weird if Dog Treat Seller did decide to partner with a credit card company, wouldn’t it? Their followers aren’t there for that—they want great dog content.

That’s why Dog Trainer and DTS would make a great partnership.

  1. Divert Traffic To Your Affiliate Site

Alright, so you’ve got your content down. Your site is miraculously curated, niche, and now you’re ready for some more loyal followers to put trust in affiliate businesses.

You can pay to get more views at the beginning by running PPC ads. And, as soon as you start paying, traffic will flow. However, this eats into your profits and can be quite expensive. This would typically work if you’re already part of a high-paying affiliate marketing program. Otherwise, you could just end up losing money—and the traffic you were paying for, as soon as you stop paying.

If that’s not your style, why not gain followers the new old-fashioned way: SEO! Find some online tutorials about how to generate more followers by getting your site/blog/channel/content to show up higher on search engine lists. This is typically done by tapping into keyword searches for niche interests, and link building.

One last way to gain more traffic is by building an email list. If you’re able to get a list of the passionate followers of your site, where you can communicate with them at any time (hopefully not too often), then you can create an intimate, trusting community around your content. This will keep them coming back, because they feel personally invited to.

  1. Get Those Clicks

So, you’ve got amazing content, legions of followers—and now, your first affiliate marketing offer! Congratulations!

Now, you’ve got to work on link placement. As important as it is, it’s not enough to just have great content. The affiliate link has to be strategically placed, where everyone will see it, be tempted to click it, but not burdened by it. If it’s too high up, your content could look spammy. If it’s too far down, no one will ever see it. Find the balance.

Using hyperlinks could be a natural way to bring in the affiliate link. However, be strategic: hyperlink only where it naturally fits in, instead of making your content so black and blue, followers would think it just got beat up.

You can also try using what’s called a “Callout.” With the help of graphics or eye-catching colors, placing the link in the center of your content with a catchy title such as “Our Pick” or “What We’re Loving” could really get you some clean clicks.

  1. Turn Those Clicks Into Sales

As far as the click, you’ve got it in the bag. That’s something you have complete control over. However, as soon as the customer heads to the affiliate link, they are out of your hands—you can’t do anything about whether or not they make a purchase…

…Or can you?

This all begins before you even choose your affiliate program. You have to think of this before agreeing upon anything.

Is this the kind of company that someone would buy from—one of my followers especially? I know they’d like the product, but is the company really selling it as hard as I am?

You can also check on the company’s affiliate income reports by a basic Google search, to see what to expect based on other affiliates working with them.

In Conclusion

Affiliate marketing is really pretty simple. Take these steps and expect your income to slowly—very slowly—but surely rise.

It takes a bit of dedication and perseverance to see affiliate marketing come to its full fruition; but, with patience, it’ll be worth it.

Anyone can do it—well, anyone with great content, a niche audience, heavy online traffic, and a knack for discerning a good affiliate company.