Affiliate marketing

What is affiliate marketing?

Affiliate marketing is a process where publishers earn a commission by promoting a product or service made by another retailer or advertiser using an affiliate link. The affiliate partner is rewarded a payout for providing a specific result to the retailer or advertiser.

Typically, the result is a sale. But some affiliate marketing programs can reward you for leads, free-trial users, clicks to a website, or getting downloads for an app.

Most affiliate programs are usually free to join, so you don’t have to worry about high startup costs. Done right, an effective affiliate marketing strategy can go from side hustle to profitable online business idea by netting you a healthy income.

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How affiliate marketing works

Affiliate marketing involves referring a product or service by sharing it on a blog, social media platform, podcast, or website. The affiliate earns a commission each time someone makes a purchase through the unique affiliate link associated with their recommendation.

Types of affiliate marketing

Affiliates always carry a bit of mystery—you never know if the person has ever really used the product or if they are just promoting it for the money. Both cases still exist today.

It wasn’t until 2009 when renowned affiliate marketer Pat Flynn broke down the different types of affiliate marketers into three groups. Understanding these types of affiliate marketing can show you the different ways people make money online in this space, regardless of your moral compass.

Unattached affiliate marketing

The first type of affiliate marketing is referred to as “unattached,” or when you have no authority in the niche of the product you’re advertising. There is no connection between you and the customer. Often you are running pay-per-click advertising campaigns with your affiliate link and hoping people will click it, buy the product, and earn a commission.

Unattached affiliate marketing is attractive because you don’t need to do any legwork. Affiliate marketing businesses rely on reputation and trust with a target audience online. Some affiliate marketers don’t have the time or desire to build those relationships, so this type of marketing is their best option.

today's affiliate marketing

Related affiliate marketing is the practice of promoting products and services you don’t use but that are related to your niche. An affiliate marketer in this case has an audience, whether it’s through blogging, YouTube, TikTok, or another channel. A related affiliate marketer also has influence, which makes them a trusted source for recommending products, even if they’ve never used them before.

While related affiliate marketing can generate more affiliate income, it comes with the risk of promoting something you’ve never tried before. It could be the worst product or service ever, and you wouldn’t even know.you don’t have trust and transparency, it’ll be hard to build a sustainable affiliate marketing business.

Involved affiliate marketing

Involved affiliate marketing refers to only recommending products and services the affiliate marketer has used and truly believes in. “Involved affiliate marketing is the way forward,” says Elise. “It’s rooted in trust and authenticity, which is best for your audience and business.”

In this type of marketing, an affiliate marketer uses his or her influence to promote products and services that followers may actually need, instead of paying to get clicks on a banner ad. It takes more time to build this type of credibility with an audience, but it’s necessary for building a sustainable business.

Pros and cons of affiliate marketing

Yes, affiliate marketing is worth it, given its growth in popularity. Statista estimates the affiliate marketing industry will be worth $8.2 billion by 2023, up from $5.4 billion in 2017. It’s also a low- to no-cost business venture you can profit from immensely. But before diving in, consider the pros and cons of entering the affiliate marketing world.

Easy to scale

Successful affiliate marketing offers the potential to significantly scale your earnings without hiring extra help. You can introduce new products to your current audience and build campaigns for additional products while your existing work continues to generate affiliate revenue in the background.

Before you get too excited, know that great affiliate marketing is built on trust. While seemingly there is an endless number of products or services to promote, it’s best to only highlight those you personally use or would recommend. Even when a product interests you or fits within an existing hobby, becoming a great affiliate marketer for that product takes a lot of work.

Requires patience

Affiliate marketing is not a get-rich-quick scheme. It requires time and patience to grow an audience and gain influence.

You’ll want to test different channels to see which connect best with your audience. Research the most relevant and credible products to promote. Spend time blogging, publishing free content on social media, hosting virtual events, and doing other lead-generating activities on your marketing channels.

Commission-based

There’s no boss handing you a weekly paycheck as an affiliate marketer. Affiliate programs work on a commission basis, whether you’re paid by lead, click, or sale.

Companies use a temporary browser cookie to track people’s actions from your content. When a desired action is taken by someone, you receive the payout.

No control over program

Affiliates must obey the rules set by a company for their program. You need to follow their guidelines for what you say and how you present their product or service. Competitors must follow the same recommendations, so you have to get creative to differentiate yourself from the crowd.

How do affiliate marketers make money?

Affiliate marketing income spans a large spectrum. There are some affiliate marketers that will make a few hundred bucks per month and others that make six figures a year. The larger your following, the more money you can make as an affiliate marketer.

Compensation software company Payscale reports that the average annual salary of an affiliate marketer is over $53,000, based on over 7,000 salary profiles, with many affiliate marketers earning significantly more.

But how do affiliates actually get paid? When you choose an affiliate program to promote, you’ll notice there are different payment models. Companies also call it a price model, payout model, conversion type, or another variation.

Regardless of the name, the payment model tells you what goals you will get paid for. If you’re promoting a software product, the action could be a free trial signup. For an affiliate marketer who promotes physical products, the goal will likely be a purchase.

Many programs run with last-click attribution, which means the affiliate who receives the last click before purchase gets 100% credit. However this is changing, as programs improve attribution models and reporting. For example, you could share equal credit for a sale if there were multiple affiliates in a buyer’s conversion funnel.

Five common ways affiliates get paid include:

Pay per sale, where you earn a commission for each sale you make. It’s a common payout model for ecommerce offers.

Pay per action, which earns you a commission for a specific action. Many affiliate programs use this payout model because it’s broad and can be applied to different offers: a newsletter signup, a click, contact request, form submission, etc.

Pay per install, where you are paid for every install generated from your website traffic. The goal of your content would be to promote mobile apps and software so that people download or install them.

Pay per lead, which pays you every time someone signs up for something. It's a popular payout method because companies use it for sweepstakes, lead generation, and other types of offers. Cost per lead offers are common for beginners because it’s easier to generate leads than to sell products to an audience.

Pay per click, a rare payout system where you earn commission on every click on your affiliate link. Pay per click programs are used by big merchants with a goal to build brand awareness. Customers don’t need to sign up or buy anything, just to visit the merchant’s website.

How much you make depends on your affiliate niche. For example, research conducted by Shopify in 2021* found that the highest average commission rate ($70.99) was for business-related programs. While books and media and clothing categories earned just over $6 per commission. The maximum average commission we found was around $289.06 per sale.

Starting with a marketing platform you’re comfortable with helps you create high-quality content. This can result in a stronger, more engaged audience you can turn into sales.

Decide your niche and audience

When it comes to choosing a niche, aim for something you’re passionate and knowledgeable about. This helps you come across as authentic and as a trusted source of information for potential customers. It also helps you evaluate which products and brands you want to promote.

Say, for example, you started a blog about dogs. You own a sprocker spaniel and you’re passionate about helping other owners care for their sprockers.

You create a blog like Sprocker Lovers, and you regularly post and encourage people to subscribe to an email list and share your content. Sprocker spaniels are your niche, and you’re going to invest in content marketing and optimization to grow your audience of owners.

“The niche you choose for your affiliate site guides how much time or effort you’ll need to put into building it to a point where you begin to see SEO results,” says Elise.

“SERP"'s for software, marketing, and health care, for example, are all dominated by huge blogging sites with even bigger marketing budgets. The secret is finding untapped areas where competition isn’t as fierce—and getting in there before other people recognize it.”

As you post more, you can use affiliate marketing tools like social listening, website analytics, and social media insights to discover who your audience is and what they like.

It’s important you know your audience so well, that you understand why they follow you in the first place.

Remember, you’re not paid to post. Affiliate marketing is a performance-based online business. If you know what your audience likes, you can then refer the best products to them and earn more affiliate income.

Find your products

To earn revenue as an affiliate marketer, your audience needs to connect with what you’re saying. The items or services you promote need to be products they genuinely want. Getting this wrong can hinder your success and diminish your credibility—as well as your audience.

The best deals often are found when you’re the first to inquire and have a relevant distribution channel, such as approaching the seller of a new fitness product if you’re a health and wellness blogger.

Affiliate marketing programs will have terms of service you need to follow, so read the fine print. For example, your affiliate link usually will have a cookie with a specified timeframe, and some programs don’t allow you to purchase pay-per-click ads using the product or company’s name.

Choose your first affiliate program

As you brainstorm products or browse through affiliate platforms, the most important criteria to keep in mind is that the product should be aligned with your audience, or the audience you hope to build. Ask yourself, Is it something your target audience would find valuable? Does it fit with your area of expertise?

A food blogger probably wouldn’t promote beauty products, for example. A wide range of other products, such as cookware, meal kits, gourmet ingredients, or even aprons would make more sense.

Also make sure the product or service you’re promoting is a fit for the platform you’re promoting it on. For example, home décor and clothing are well suited to image-heavy platforms like Instagram. However, if you’re promoting more in-depth purchases, like software, your conversion rates may be higher on longer-form platforms, like a blog or YouTube.

Tips for affiliate marketing success

As we mentioned earlier, affiliate marketing revenue eventually can become a form of passive income, but you still have to do some heavy lifting upfront. The success of your program will depend on the quality of your review.

To create a good review, it’s best to get personal. Share your experience in your blog, social media post, Instagram Story, or YouTube video. If you’re writing a personal review, give a candid opinion based on your experience with and knowledge of the product. The more open you are, the more authentic you will be. People will be more comfortable following your advice if they feel they can trust you.

Trust is a key factor in your affiliate marketing efforts, because people need to trust you enough to act on your recommendations. The level of trust you’ll need to make affiliate sales depends on your industry and the products you’re recommending—for example, it takes more trust to be an effective affiliate for a $1,000 course than it does for a $20 t-shirt.

Beyond just sharing your experiences, you can build trust by limiting the number of affiliates you promote, or by only becoming an affiliate for products you personally use and sticking to your area of expertise. For example, people trust my recommendations for Canadian financial apps, but that doesn’t mean I’m going to have much luck as a Sephora affiliate.

Talk to a product expert

Another option is interviewing others who use the product or service, or even interviewing the person who makes or sells it. This can give your review more depth, creating a narrative for the reader.

Create a product tutorial

While your success with affiliate marketing can depend on the overall size of your following, another way to drive traffic is by providing a tutorial on the offer.

People often perform “how to” Google searches, such as “how to save money for college” or “how to decorate a laundry room.” If you offer a tutorial that solves a searcher’s problem and clearly showcases the value of the product, your referrals will make more sense in context, and you’ll provide the customer with a stronger incentive to purchase the product you’re recommending.

Consider your angle

Depending on your offer, figure out how much energy you should invest in instructional or tutorial content, which is often a natural lead-in to someone trying a product for themselves.

For example, you could record a video of yourself using and getting the most out of a physical product or showing off the benefits of a digital product, like software. Unboxing posts are popular, so if you receive the product in the mail, document your experience opening it up.

Keep things legal and above board

Don’t forget to disclose to followers that your post contains affiliate links. For one thing, it’s required by the FTC. But explaining the reason for your affiliation also can help you connect with your audience.

For example, the financial independence bloggers at Frugal"woods offer this disclosure: “Frugalwoods"sometimes publishes affiliate endorsements and advertisements, which means that if you click on a link and buy something, Frugalwoods might receive a percentage of the sale, at no extra cost to you. We only write about and promote products that we believe in. We promise not to tell you about stuff that’s dumb.”

If you need help figuring out what language to use in a disclaimer, it’s worth taking time to consult a lawyer.

Read more: 16 Affiliate Marketing Tips & Strategies to Earn More Money

Affiliate marketing program examples

Looking at some of the companies that participate in affiliate marketing will provide you with inspiration—as well as proof that this is a legit and high-paying revenue stream.

Amazon

One of the most common examples is Amazon’s affiliate marketing program, known as Amazon Affiliates. In fact, Amazon Affiliates currently has the biggest market share of affiliate networks (45.81%), followed by CJ Affiliate (8.14%), and Rakuten Affiliate Network (7.85%).

Amazon associates affiliate program

Amazon associates affiliate program website

Amazon Affiliates offers different products across many different categories. It’s a great way to get into affiliate marketing as a beginner. Creators, publishers, and bloggers can use an Amazon affiliate link to direct their audience to product recommendations. From the link referral, you can earn money on qualifying purchases.

Take Sprocker Lovers, for example. Site owner Elise Dopson wrote a blog post titled Are Spaniels Good Running Partners? & 6 Tips for Safe Running. In the article, she recommends a tip about how spaniels should wear a high-vis dog jacket when running at night.

sprocker spaniels affiliate program

affiliate marketing mean?

Affiliate marketing means you earn a monetary commission by promoting a company’s product or service. An affiliate partner, which is you, is rewarded a commission for providing a specific result to a merchant or advertiser, be it sales, leads, downloads, etc. Start your affiliate marketing with Shopify

Is affiliate marketing worth it?

Yes, affiliate marketing is worth it. The affiliate marketing industry is estimated to grow from $5.4 billion in 2017 to $8.2 billion by 2023, according to statista. Affiliate marketing is inexpensive to start and carries low risk compared to other online business models.

What is an example of affiliate marketing?

shopify offers an affiliate program where entrepreneurs can refer merchants to the platform. It’s free to sign up. After a partner applies and gets approved, they receive a referral link. The partner goes and shares that link with their audiences. When someone signs up through the link for a paid Shopify plan, the affiliate partner earns a commission.