What is Affiliate Marketing? – A Guide for Beginners

Affiliate Marketing

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So, what is affiliate marketing? It’s a way for bloggers and website owners to make money online. Sometimes passively, while they sleep!

Let’s start with a brief explanation of how affiliate marketing works.

In simple terms, you promote a product or service created by somebody else. It could be a person, a small business or a global brand.

You promote the product or service by placing a special link on your blog or website. You may also share the link on social media, via email or elsewhere. The link you use has a code attached to it. This code is unique to you and tracks the clicks on your links.

Now for the good bit.

When somebody clicks on your link and buys a product or signs up for a special offer, you earn a commission. Once your commission level reaches the payout threshold, you get paid.

That, in a nutshell, is how affiliate marketing works.

But don’t get too excited just yet. And definitely don’t hand in your notice at work!

It isn’t as easy as you might think to make money from affiliate marketing. It isn’t impossible. But it’s not as simple as placing links in your content or tweeting about some killer service and sitting back while the money rolls in.

For one, you need traffic or a social audience/following. For two, people have to take action after clicking your link. For three, might need a website or a blog too.

Can you make money promoting affiliate products without a website? Yes, you can. Here a few ways to do it:

  • Facebook pages or groups
  • YouTube
  • Twitter
  • Pinterest
  • Pay per click ads

The biggest issue with the methods listed above is your lack of control.

You don’t own any of these platforms. And could find yourself with a sudden and dramatic drop in income if the rules change or you get banned.

Using your own website or blog for affiliate marketing gives you a lot more security and control.

Outrageous affiliate marketing success stories

To show you it’s possible to make money from affiliate marketing, let’s look at a couple of outrageous success stories by everyday people like you and me.

There’s this guy called Pat Flynn. He runs a blog called Smart Passive Income. You might have heard of him?

Anyway, Pat’s blog makes more than $150,000 dollars every month. In his last income report in December 2017, Pat reported earning $105,619.13 in affiliate commissions during the previous month.

Smart Passive Income Affiliate Commissions

The rest of his income came from course sales, book sales, niche websites, podcast sponsorship, software and apps.

This isn’t all profit. Pat has a team of people working for him and office space. During the same period, his expenses were $39,647.21.

Here’s another example.

Michelle Schroeder-Gardner makes almost as much as Pat Flynn, but she doesn’t have a team supporting her. She works alone.

In her last income report, published on her Making Sense of Cents personal finance blog, Michelle posted that she earned $113,235.51 in July 2018, with $68, 675.51 of that coming from affiliate sales.

Making Sense of Cents earnings July 2018

The rest of it comes from her affiliate marketing course, sponsorship and advertising.

To reach these levels, Pat and Michelle worked hard for many years. Smart Passive Income started in October 2008 and Making Sense of Cents started in January 2012. I’m writing this article in July 2018.

Many people will never reach such giddy heights. But that doesn’t mean you can’t earn enough to create a comfortable lifestyle for yourself and your family. There are tons of bloggers and website owners making several thousand pounds/dollars every month.

What companies offer an affiliate program?

Many top brands run affiliate programs. In fact, you’ll be hard-pressed to find one that doesn’t.

The most famous online one is Amazon.

People build sites for the sole purpose of sending people to Amazon because they know there’s a good conversion rate.

One type of site that falls into this category is the ‘niche authority website.’

These sites focus on products such as garden equipment, hairdryers, drones, kettles, irons etc. They publish content that attracts visitors from search engines and send them to Amazon to buy the products they like.  The content is usually compiled by reading the manufacturers notes, product specifications and Amazon reviews.

One of the plus points of the Amazon program is that you get paid for whatever the person buys. They don’t have to buy the product you’re linking to. You earn a commission from all sales.

For example, you might link to a recipe book and the person who clicks your Amazon link ends up buying the recipe book and an awesome new TV and games console. In this situation, you get a commission for each of these items.

One of the downsides to Amazon is the short cookie time. It’s just 24 hours.

What’s a cookie?

In the world of affiliate marketing, a cookie is a piece of code placed in a web browser which contains your affiliate link. The 24 hour cookie at Amazon means the person who clicked your link must buy something within 24 hours for you to earn a commission. If they don’t, the cookie expires and you won’t earn a thing if they buy something two or three days later.

Also, if they click your link, then somebody else’s link before they buy, the latter click takes preference over yours.

All affiliates use cookies to track clicks. The average cookie duration is 30 days but some never expire. When you’re looking for new affiliates to promote, always check the cookie duration time.

So, we know Amazon offers an affiliate program, but what other famous brands run affiliate programs?

Here are a few examples you’ll have heard of:

And there are tons and tons more. Some you’ve heard of, many you haven’t.

How to find companies running affiliate programs?

The easiest way to find out if a company runs an affiliate program is to google its name and the word ‘affiliate’.

Another way is to visit their website and look for a link in the footer.

Screenshot showing ebay's affiliate link in the footer area of its website

Most large brands don’t deal with affiliate programs in-house. Instead, they use something called an ‘affiliate network.’

An affiliate network is a company that handles everything to do with affiliate marketing. They act as the hub for the brand and the person promoting the affiliate links; you, the publisher.

You sign up to the various affiliate networks and apply to join the programs that interest your audience. Once accepted, you’ll have access to the various link formats available to use on your website or blog.

They include:

  • Text links
  • Banner ads of various sizes
  • Flash ads
  • Pop-ups
  • Video ads
  • Data feeds (lists of products you can use to fill out a site)
  • Search boxes

Typically, text links inside blog posts or other content work best. They tend to have more trust and are more noticeable than banner ads or sidebar links.

It’s worth experimenting with other types of link and placement though. What doesn’t work on one site might work on another.

What is an affiliate network and how do you join one?

Think of an affiliate network as a marketplace where publishers (website owners and bloggers) look for suitable companies to work with (and vice versa).

When you apply to join the network, you aren’t added to each affiliate program the network operates. You must apply to join each program.

Once you make your application, you’ll either be approved and granted access to the codes you need to put ads on your site, or you will be told your application needs approving.

Sometimes a company takes hours to approve applications. Sometimes they take months. You can only place the ads on your site once your application gets approved.

A list of affiliate networks you can apply to join:

There are plenty more but these are good places for beginners.

The pros of affiliate marketing

A few of the benefits of affiliate marketing, that make it attractive to bloggers and digital marketers, include:

  • No interaction with customers – You’re the middle person. You send people to a business and the business handles the sale, delivery, refunds and everything else.
  • Low barrier to entry – You can get into affiliate marketing for little to no cost. If your blog is up and running, you already have a platform. If you don’t have a blog, you could still do affiliate marketing through Facebook, YouTube and similar platforms.
  • Passive income – One decent article that took a day or more to put together, could make you money for days, weeks or even months ahead. Multiply that by 10, 20 or 50 posts and you can see how you could make recurring income for a long time.
  • Work from home – A no-brainer for many of us!
  • No stock – You don’t need to hold stock of any kind as the company you’re promoting handles all the deliveries.
  • Align yourself with brands and companies you like – Some affiliate marketers promote the life out of anything that makes money. While others prefer to align themselves with brands and companies they like. Liking or using the stuff you promote makes you feel better about what you’re doing. It removes the sleazy aspect of affiliate marketing.
  • Unlimited earnings potential – Earlier on in this article, I mentioned Pat Flynn and Michelle Schroeder-Gardner. These folks make a lot of money from affiliate marketing, but their income pales into insignificance when you compare it to websites like The WireCutter. It generated $150 million in affiliate sales in 2015 – that’s not profit by the way, it sales, before selling for more than $30 million in 2016 to the New York Times.

The cons of affiliate marketing

What about the downside of affiliate marketing?

  • It takes time – To become successful at affiliate marketing, to the point where it replaces your day job, takes time and hard work. Especially if you don’t know anything about building websites, creating valuable content, SEO and converting people into buyers.
  • Some companies take ages to payout – Bluehost, for example, take up to 120 days (four months) to make the first payment.
  • Some companies don’t pay out – It’s sad but true. Some companies just don’t pay you.
  • Loss of traffic – Google continually updates its algorithm to provide the best results to the searcher. If your sites is negatively affected by an update, it could slash or wipe out your affiliate income. If you’re 100% reliant on that income to pay the bills, your business is potentially over.
  • Lack of human interaction – Without a decent family or social life, working from home running affiliate websites is lonely. You might go days without speaking to anyone or stepping outside.
  • No control – You have no control over the affiliate programs you’re taking part in. One day, the program may suddenly shut down or, if you’re doing something dodgy, you may get kicked out for breaking rules.
  • It’s a shady business model – Affiliate marketing does have a shady image. Truth is, it doesn’t have to be like that. If you approach it the right way, by being helpful rather than salesy, you can break the stereotype.
  • Revenue fluctuates – It’s the nature of the game. One month you might make $1,000 from one program, then the next month you might make $250 from the same program. It’s up to you to plan for those fluctuations.
  • Seasonal revenue – If you’re promoting lawnmowers to people in the UK, you’ll find a drop-off in sales during the winter months. Just like you would for heaters during the summer months.
  • Competition – People like the idea of earning a “passive income” from affiliate marketing. And because it’s easy to get started, there are plenty of people selling courses and telling amazing success stories, for these reasons, you’ll find a ton of competition in most niches.
  • Some brands don’t allow PPC or bidding on brand names – This is something to consider if you wanted to use pay-per-click advertising to generate traffic.

What kinds of products and services should you promote on your blog?

You should definitely promote stuff that interests your audience. If you’re running a blog on crafting, you’ll want to promote everything people need to recreate the things you make.

You’d do this by creating a list of all the things you’ve used, finding the appropriate product on Amazon or a similar site, create the affiliate link and convert the item in the list to a link to Amazon (or wherever). Easy.

Now, if there are ten items in the list, there are ten ways to get people over to Amazon.

But hold on a minute.

Google may or not penalise you for having too many affiliate links on one page. There are no hard facts on this, just people blogging about their experience.

To be on the safe side, when you’re starting out or your blog is quite new, I recommend limiting the number of affiliate links per page to three or four at most. You can increase them over time as your blog gains trust and authority.

The most I have on one page is 20. These pages are usually “10 best whatever” and link to Amazon twice from each listing – one image and one text – contained in a table.

You don’t need to stick to using affiliate links on your blog, either.

Rosanna Pansino (net worth estimated to be $9 million) runs a successful food blog and YouTube channel.

If you check out the description on her YouTube videos, you’ll notice she lists some of the ingredients and accessories used in her videos and includes Amazon affiliate links for each item.

Amazon affiliate links in YouTube description

Interestingly, she doesn’t do the same on her blog. Possibly fearing a Google penalty?

At the time of writing, she has 9.5 million subscribers and her latest video was published less than 24 hours ago and has already received 300,000+ views. Potentially, that’s a lot of traffic going over to Amazon.

How to incorporate affiliate links into your website or blog

Let’s look at some the ways you can add affiliate links to your website or blog without annoying your readers.

  • Write an honest and unbiased review of a product or service. At the end of the review, add your affiliate link and an appropriate call to action.
  • Create a table of products (this is a good option for Amazon affiliates) and include it in a content-rich page, such as a buyers guide. A page with content is easier to rank than a page with nothing more than a table of products.
  • Place affiliate links in the footer area of your website (the area at the very bottom of the page).
  • Place affiliate links a sidebar or footer widget.
  • Create a resources or toolkit page and link out the the products and services you use and recommend.
  • Create a comparison page that compares the pros and cons of two similar products or services.
  • Create a deals page that links to special offers in your niche (be sure to keep it updated).

As you can see, there are plenty of ways to add affiliate links to your site.

Wrapping up

Before closing, I’d like to remind you about something I said at the start about this business model taking time to work.

Sometimes many months or years.

If you go into it with your eyes open and you know how to go from idea to profit, you’ll be okay. Go into it thinking you just have to build a website, throw in some affiliate links and kick back, you’re doomed to fail.

On the other hand, if you already have a successful website or blog and haven’t used any kind of affiliate marketing to generate income, you could see your bank balance increase very quickly.

Affiliate marketing has come a long way in the past few year and is now a legitimate way to make money online. Don’t be afraid to use it.