Affiliate marketing is one of the most raved about mediums for earning money online. You may often see people online writing or talking about entering into the business of affiliate marketing to make 4 or 5 figure monthly earnings.

However, you will hardly come across someone who explains in detail how to make money online with affiliate marketing. 

So let’s dive into what affiliate marketing is all about so you can earn some real money.

The first thing you need to understand is that any income you earn by carrying out affiliate marketing is based on the earning of the actual product or service. Since your income is dependent on the income of the base brand it is termed as “passive income”.

Affiliate Marketing – Interest trend over time

Affiliate marketing is by no means a scam or an illegal means of earning money. It is currently one of the most lucrative sources of income online that is based on the model of revenue sharing.

You as an affiliate marketer will promote a product or service and if a sale is made based on your recommendation then you earn a commission from that sale.

Once you start promoting a particular product or service you can literally make money while you sleep. Your earnings are dependent on how helpful your content is and the size of your affiliate network.

The bigger the network is, the higher your revenue will be.

Affiliate marketing tends to offer money-making opportunities for the product or service owner as well as for the affiliate marketer.

If you are someone who owns a product then you can increase your earnings by offering commissions to affiliate marketers who will in turn promote it and consequently increase your sales.

However, if you are the affiliate marketer then you actually earn the commissions by enabling sales through your promotion of a product or service.

The current scale of this industry is so big that it contributes to 1% of the total GDP of the UK as per IAB UK. This level of contribution is greater than the entire agricultural sector of the country.

The IAB UK research also mentions that for every 1 pound spent, an affiliate marketer earns approximately 15 pounds of revenue. This massive return on investment (ROI) is the reason so many individuals want to get into affiliate marketing. There is no guaranteed success but if you execute the right strategy you have a high chance of becoming successful.

In this article, we will see how affiliate marketing works, what are the different elements of it, and how you can start selling or promoting products or services.

What Is Affiliate Marketing?

Affiliate Marketing is an approach to generating more sales by the process of performance-based marketing.

There is essentially a group of influencers or websites who are part of your affiliate marketing group and promote your product or service.

If you are the company selling the product, every time you make a sale because a particular website or influencer promoted it, they will receive a commission from the relevant sale as a reward for their affiliate marketing efforts.

If you are an affiliate though, one important thing to remember is that you don’t get paid if you increase the customer engagement or traffic to a retailer’s website.

The only situation in which you get paid is when an actual transaction occurs (or lead is generated) based on your recommendation.

The different parties included in affiliate marketing

The process of affiliate marketing seems to revolve around the product owner and the affiliate marketer.

However, there are not only two, rather four parties involved in the whole process of affiliate marketing.

These include the following:

1. Affiliate Marketing – The Merchant: 

The Merchant is the individual who is the retailer or the vendor of the brand that wants to have their product promoted.

This is the creator of the product or service. They can be small scale entrepreneurs or even large scale companies.

The merchant in the chain of affiliate marketing can be anyone from a single entrepreneur like Mariah Coz to an MNC or Fortune 500 company. The actual owner may not be directly involved in the affiliate marketing process since the only requirement on their behalf is to have a product or service to sell.

2. Affiliate Marketing – The Affiliate: 

The affiliate or affiliate marketer is perceived of being a single person but that is not the case at all times. The affiliate can be one person or a whole company that caters to the task of “publishing” on behalf of their clients who are products or service owners.

Based on the pool of clients and the scale of business, an affiliate marketer can earn commissions ranging from hundreds of dollars to even millions of dollars.

Affiliate marketing is the stage where the actual promotion of the product or service happens.

An affiliate’s main responsibility is to market and promote their client’s products or services and ensure that transactions occur due to their promotional activities.

Their target is to attract customers who can contribute significantly to their revenue stream of their client since that will increase the number of commissions they receive.

The promotion activity can either be a video tutorial illustrating the use of the client’s products and how it improved the quality of life or it can be a website that talks about the same niche or the product itself.

3. Affiliate Marketing – Consumer:

The Consumer is the motor of the whole affiliate marketing process.

Without the consumer there will be no need to hire an affiliate marketer and neither would the affiliate marketer earn any commissions.

Unless the consumer carries out transactions from the product owner there will be no initiation of the revenue stream.

It will be dependent on you as an affiliate marketer how you think the product or service should be promoted and on what platforms. 

Affiliates can consider anything from a promotional video on YouTube, marketing on their social media, to improving organic search results via SEO (improving content quality).

It is however necessary to disclose to the consumer that they are being made part of your affiliate marketing process. There are companies that have very high level of transparency while others let the customer follow the transaction process as per the minimum legal requirements.

The difference is that at the end of this transaction the affiliate receives a commission.

4. Affiliate Marketing – Network:

The affiliate network is often part of the whole affiliate marketing process. It is however integral enough to be discussed as the fourth component in this entire process.

The network tends to add a factor of legitimacy between the merchant and the affiliate. 

The network may not always be included in the affiliate marketing process and the affiliate may have a direct relationship with the merchant in order to receive their commissions.

However, when it’s included, it can be a service provider like ClickBank that tracks product transactions and delivers commissions.

There may be some merchants who ask that the affiliate goes through a network in order to promote their products.

This is because particular merchants may perform all their affiliate marketing tasks through a specific network.

Such networks tend to have additional benefits for the affiliate marketer.

The main thing is that they have a pool of products from which they can choose the ones they think they should promote.

One E-commerce giant that offers its own affiliate marketing is Amazon. They have a vast pool of products and anyone can sign up to be an affiliate marketer with them and promote Amazon’s products for a small commission.

Pick an affiliate marketing side

The process of affiliate marketing primarily has two sides; the merchant and the affiliate.

There are two more parties that are part of the process but they serve as intermediaries in the affiliate marketing equation.

You can choose whether you want to be the affiliate or the merchant in this equation. 

If you choose to be a merchant you should have a product or service that you would want the affiliate marketer to promote. Furthermore, you should also have cash flow handy to pay the required commissions to the affiliate marketer.

Alternatively, you can become an affiliate marketer.

If you choose this side you can decide to promote a single or group of products to promote on your platform (medium of promotion, e.g. YouTube or website).

If your marketing efforts are successful and an actual transaction on the product you are promoting is made you earn a commission.

The route to making money as an affiliate marketer is much easier as you won’t have to deal with sourcing the products, maintaining sufficient product stock, provide customer support etc.

However, objectively speaking, it takes time to generate income by doing affiliate marketing, and the returns are much lower in comparison to that of the merchant.

Let’s have a look at the necessary steps that can be followed by both parties to help you make a better decision.

The 4 steps needed to become a merchant

A merchant or product owner is someone who has a product or service that they want to get promoted via affiliate marketing or other mediums to boost their sales.

You will have to carry on the entire process from finalizing what you want to sell to the commission-based program you would want the affiliates to execute.

Step 1

The primary component to becoming a merchant is to come up with a product idea.

It is a common perception that generating a product idea is very difficult since it has to be a completely new product that has never been on the market before.

If you start off your product idea generation with this kind of thinking then it will indeed be tough.

Since you are already planning to use affiliate marketing as a medium of promoting your product to boost sales you cannot afford to get too hung up on coming up with an amazing idea or product.

You should review the products and services that are already other there and come up with ways of improving their delivery to the customer.

It is always easier to begin your search with an industry or product category that personally interests you – for example, make-up, sports technology etc.

This can really work if you already experiment with different products in this category and tend to form opinions about different brands.

The right starting point is to search for some products online and see the complaints the customers have about them.

You should pick on these drawbacks and use them to create products that address the issues highlighted by the customers. This site is a very good example on how to achieve this.

So, in the case of the makeup category, you may come across the issue of lack of shade variation in foundations that are produced by affordable brands. While high-end brands like Fenty Beauty and Huda Beauty have expanded their shade offerings in foundation this is still not present in more affordable drugstore brands.

Alternatively, you can use platforms like Buzzsumo to see product popularity based on the frequency of social shares.

You can have a product idea about something as basic as makeup wipes and this tool can still let you know about the keywords relevant to makeup wipes that come up on top.

You might come along a wide range of popular searches but not all will transform into money-making product ideas.

You have to make sure to choose an option that actually results in a steady enough revenue stream for you to be able to hire high affiliate marketers for promotion.

Step 2

The second step is the validation of your product idea.

The best way of validating an idea is to see how much people are willing to pay for it and how many people are willing to purchase it.

The question that arises here is how will you check this without actually launching the product.

Once you have done your research on Buzzsumo you can select the link that shows you the top-rated content related to your industry and then post that link in a search engine.

This can show you who posted that particular link as part of their tweets on social media.

You can visit the profiles of these individuals and reply to their tweets with a proposition to buy your product since it caters to their needs. The key here is to ensure they are communicated that you are selling a particular product or service.

You will also need to add a disclaimer that the real product will be created on receiving a minimum number of orders. Setting up a payment account like Paypal and asking people to pay via sharing its link doesn’t necessarily mean you will be charging them.

The number of people who actually click on the link will tell you the potential demand for the product you are planning to offer.

It is a way of testing the market without having to make a considerable financial investment.

Step 3

The third step involves analyzing the results from step 2 and actually working towards creating the product.

There are multiple ways in which a physical or digital product can be created. Since it is relatively easier and less capital intensive to create digital products, it’s always wise to consider this as a possible option.

Once you have successfully launched your digital product it is time to promote it via your network of affiliate marketers.

This requires you to research members or companies you think are the right fit to join your affiliate marketing network and get them onboard.

Step 4

The last step in this process is to shortlist and lock down your affiliate partners.

There are many service providers available that tend to smooth your transactions with your affiliate partners. Two highly rated platforms in this category are Gumroad and Digital Product delivery.

There are tons of affiliate marketers online who would be interested in partnering with you for promoting your products.

However, you shouldn’t choose the first affiliate who is interested in partnering with you. You have to do your research about how relevant the followers of a particular affiliate marketer are to your product.

One way of approaching relevant affiliate marketers is to search for other merchants offering similar products or services and then approaching them to do a joint sale of the product.

The interesting fact is that the more specific (niche) your product is the greater are your chances of finding sellers interested in a joint sale.

A good way could be by sending a politely drafted email that describes your business, its similarity with their product, and how the revenue split will be carried out for a joint sale.

If initially you even have to split the revenue 50:50 you should go for it since the key is to get started with that first affiliate partner after that it gets easier.

The main purpose of this process is to help you understand the journey to becoming a successful merchant and to assist you by providing some helpful links.

Alternatively, you can decide to be on the other side of this equation as the affiliate marketer.

The 4 steps needed to become an affiliate marketer

We have already discussed what an affiliate marketer is and what is their primary responsibility at length at the beginning of this article.

So, let’s dive right into the steps that will help you become one.

Step 1

The process of becoming an affiliate marketer begins with evaluating and reviewing the already present products in your niche market segment. 

This can be done by posting a video review on YouTube or creating a website that contains detailed blog posts.

The process for becoming an affiliate marketer is relatively less stressful than that for becoming a merchant since you do not have to think of a product idea and then materialize it.

The starting point for you as an affiliate marketer is fairly easy since you have to pick an industry sector that already personally interests you and then share your opinions about certain products with the public.

There is no perfect product that you can choose, you can pick anything you like and talk about it to start the process. You can review anything from Disney Toys to tech products for an average consumer and post about it in a video or written format.

The main thing that will help sell the product you promote is relatability. 

Sharing your own experiences and the issues faced while using a particular product helps viewers see it as legit.

Well researched and relatable content tends to rank better on search engines and also tends to be actually helpful for the viewers.

In case your reviews do not result in any benefit to the viewers you will be seen as a scammer and lose out on followers. 

This approach to affiliate marketing is called involved affiliate marketing by Pat Flynn and is seen as being the most lucrative approach to making your place in this industry.

This is because talking about a product you are familiar with is objectively a lot more convincing than something you have never used.

In your review video or blog, you can link the product for which you have posted content. To ensure that viewers are able to differentiate between the actual product link and an affiliate link you can add the “ref/…….” extension to the actual link. Amazon Associates is one of the best places you can sign up to get affiliate links.

You can visit any product on Amazon, click to get a short link, and get revenue every time people purchase that product using your link.

Truth to be told, if you base your entire affiliate marketing strategy on people visiting your website via affiliate links it could be a while before you actually made some money.

The alternative and more productive approach would be to market your medium of choice (e.g. website/video) to get more traffic on it and increase your chances of earning some revenue. 

Step 2

The second step in this process is to do with more direct interaction with your audience.

This involves developing your customized emailing list that comprises of your potential target market. In order to develop a mailing list, you will have to collect email addresses via a plugin like ThriveLeads.

There are multiple ways of collecting email addresses from your potential clients. For example, while using ThriveLeads, you can place a banner at the top of your website with a message that asks the visitor to mention their email address.

This could be promos like a bundle offer or a free guide.

ThriveLeads: Example top banner

ThriveLeads also has the option of asking people for their email addresses when they are leaving the website with a message like “enter your email to hear about the latest offers”.

This is called the exit-intent approach and is almost as effective as the banner placed on top of the website.

ThriveLeads: Example exit-intent popup window

The third way of doing this is by placing the call to action for email addresses in the sidebar.

However, if you want to ensure that this actually works then you will have to keep your sidebar clean and organized.

If it is cluttered with a lot of widgets and information, your efforts will go to waste and it won’t get the attention of the people who visit your website.

If you are promoting a niche market product you will not need a lot of email addresses.

Even a few hundred emails will be enough to help you generate sales and earn a decent commission. You should keep your mailing list subscribers engaged by periodically sending an email.

At times, these emails can contain a sales pitch where others, it can inform your subscribers about the upcoming product reviews on your website.

Based on how your marketing strategy progresses or the products you review, you can increase or decrease the number of emails you send out.

Step 3

The third step focuses on a live two-way interaction with your audience.

It is a fact that passive viewing of YouTube videos or reading a product review on a website tends to have a lesser concentration span when compared to a webinar which allows viewers to interact with you.

You can use tools like LeadPages (landing page approach) to invite people to sign up for your webinar.

If you want to know how you can use the platform to create your webinar funnels, check out my detailed Leadpages Review.

These two-way interactions have a higher chance of convincing a viewer to purchase a product as compared to a written review or a recorded video.

You can even use Google Hangouts to live stream your product review video. When doing the video review, you can answer your viewers’ questions, you can give a tutorial of the product, you can talk about its pros and cons and most importantly you can share your own experience with the product.

This level of interaction makes the audience feel important and intrigued to try out your products. 

During the video, you can casually state about the mentioned product being linked at the end of the video. This is called the soft-sell approach to promoting a product via affiliate marketing.

You can try to help your audience even more by getting the viewers of your webinars special promotional offers by discussing them with your merchant.

This is an additional encouragement for your viewers to purchase the promoted product which will increase your commissions.

Step 4

The last step in this process will help boost your revenue stream.

Once you have some consistent viewers and your affiliate marketing business has attained a certain level of stability, you can consider spending money on paid advertisements in order to promote your platform.

Paid advertisements help increase customer traffic on the website, result in greater sign-ups for your webinar and a higher level of sales of the promoted product. You can use Google Ads or Facebook Ads, or both as your chosen medium of paid advertisement.

If you get people to sign up for your webinar, you will automatically get their email address and you can add them to a list of automated emails informing them of promotions or new content on your website.

In addition to paid advertisements, you can do a keyword search that is relevant to your niche product and then add them to your content to improve your SEO.

This is a much better way of improving organic search results and increasing visits to your website.

It is always better to execute paid advertisements when you start getting some sales or when you have extra budget to spare and experiment with.

What should you do?

Affiliate marketing is one of the most well-known ways for earning income online.

However, it isn’t a genie in a lamp, it requires effort to be able to earn money from this industry.

This article is aimed at guiding you about the process on the merchant side and on the affiliate marketing side.

It’s up to you which side you choose and then follow the steps to earn stable revenue.

If you want to know more about this, feel free to read this complete beginners’ guide on how to make money online with affiliate marketing.

Alternatively, I wrote an article on the best (paid) affiliate marketing programs that will give you a knowledge boost straight away.

The choice is always yours :).

If you liked this article please share and leave your queries in the comments section. I will answer them as soon as possible.