Beginners are often led to believe that affiliate marketing (AM) is some sort of a pyramid scheme. However, one thing they often miss out on is the fact that in affiliate marketing, someone has to buy a product or service so both the merchant (also called product owner, or advertiser), and the person promoting the product, the affiliate (a.k.a. publisher), can benefit.
This is fair business in a typical world scenario, right?
Well, pyramid schemes don’t have such an arrangement. Instead, top members are funded by junior members, and that’s it!
So if you’re reading this, chances are that you’re a newbie in affiliate marketing, and that you’re wondering how to start an internet business.
Therefore, in this affiliate marketing for beginners guide, we’ll explain affiliate marketing, how it works, the benefits, affiliate networks and some strategies to generate an affiliate income.
We will also shed some light on drop shipping vs affiliate marketing.
Here you find a great affiliate marketing course by affiliate marketer Adam Payne.
What is Affiliate Marketing and How does it work?
Affiliate marketing is probably one of the most popular, as well as one of the easiest ways of internet marketing and/or making a living using the internet.
Basically, affiliate marketing is all about promoting, other peoples’ products and services on the web, and when you make a sale, a percentage of revenue generated from that sale will go to your account.
But this is just the basic definition of AM since there are many more things involved in selling a product for a commission.
If you’re going to pick a few products to promote, you will first need to identify which products to pick and where to source them from. That brings us to the second point: affiliate networks and programs.
Affiliate Networks and Programs
You see, affiliate networks involve a host of e-commerce and other sites that sell products and services on the web. These sites bring merchants together so they can showcase and sell their products, and they often welcome anyone who may be interested in helping them sell their products for a commission.
Good examples are Amazon, Clickbank, CJ Affiliate by Conversant (formerly Commission Junction) and many other e-commerce / affiliate platforms. However, you don’t have to pick products to promote from these sites.
The reason being, there are plenty of other sites offering affiliate marketing opportunities to those willing to promote their products.
If you own a website that is about computer backup software, you could get ideas to monetize your niche by searching for software developers who are offering affiliate marketing opportunities in that particular niche market.
Links to affiliate programs oftentimes appear at the bottom of home pages; so check it out, read their terms of service and if you’re happy with their commission percentage, just sign up.
This way, you will be assigned an account with a dashboard. This is a central location where you can manage your account settings, monitor your earnings, monitor web traffic activities, and lots more.
You will receive a (tracking) link to a banner, text ad, and/or sales page. This must be placed in a strategic section of your site, where your visitors will easily notice it.
So when they click and buy this product using your link, the merchant will be able to track this purchase, linked to your account, through their website cookies, and credit your account for the commission you earned by selling this product for them.
When you sign up to sell Amazon products, you will receive a unique ID used for all tracking purposes. This unique ID somehow is tracked based on the information obtained from cookies sitting on visitors computers.
You see, whenever a visitor searches the web using any browser, their information is stored on their browser by default. This information can be collected to reveal their identity and what they are interested in, so when a visitor buys something online through your unique affiliate ID link, credit would be given to you, the affiliate.
Affiliate Products and Services
The products and services you promote could vary in nature. You could promote digital products like e-books, music, movies, video courses, hosting, etc.
Alternatively, you could promote physical products like laptops, exercise equipment, and high-end smart TVs because these offer attractive commission rates.
Cost Per Action Marketing is also an interesting business model with a broad range of products and services to promote.
Affiliate Commission Rates and Earnings
It wouldn’t be accurate to say that there is an average commission range (for instance between 3-25%). We’ve actually seen both ends of the spectrum, and big companies like Apple or Dell might pay as little as 1% but can also pay as high as 80% on the top end. If you want a 100% commission, look for companies like Chemistry.com which is a matchmaking site and Superb Internet (hosting).
The ClickBank marketplace commission rates are mostly between 50 – 75%. For Amazon you may earn up to 10% in advertising fees, here you can find the Advertising Fee Schedule.
It’s also possible to find partnerships which offer 100% commission on (low priced) front-end products, and for example 50% commission on (high priced, high quality) back-end products.
So why choose affiliate marketing as one of the ways to earn money from home or from whatever place you want 🙂 ? Next we will go over the benefits.
The Benefits of Affiliate Marketing
The benefits for affiliates as well as merchants are outlined below.
Benefits for the Affiliate:
- No need to worry about order processing and payments
The job of an affiliate marketer is to promote products/services for commission. Therefore, everything else will be handled by the merchant, including stock control, order processing, invoicing, payment processing and many more.
- You become your own boss with very little investment
The great thing about affiliate marketing is that it’s possible to achieve results quickly, without the need of significant investments.
Becoming your own boss by joining an AM network is easy and free. What you have to do is identify the right opportunity and sign up to start promoting the merchant’s products. This is a process that often takes only a few minutes, and you’ll be on your way to becoming an online business owner.
- Affiliates don’t handle customer support or complaints
As an affiliate, you won’t be burdened with the task of handling customer support or complaints. This is the job of the merchant, and they have a special department dealing with customer support issues.
Tip: Always check out the merchants’ customer support, before promoting any product. Just use the provided email address for support to get an idea about the response times.
- You get tools for free
Merchants usually provide excellent support to all their affiliates. They do this through updating their ads and promotion tools to help maximize earnings for their affiliates. If they can make your work easier, you will bring more sales to them.
- You don’t have to create your own product
Product creation could be a costly endeavor. However, if you can find nice products to promote on commission, then it takes away the task of having to come up with your own product, and this will save you time as you’ll only need to sign up and start promoting the merchant’s products.
- No distribution
Lastly, product distribution is done by the merchant, not their affiliates. Therefore, your job is to focus on promoting their products alone. Again, this makes your work easier.
Benefits for the Merchant
Of course the merchant gains more exposure of his products when he has many affiliates promoting his products on the web. This kind of exposure sends leads their way, ultimately converting to customers.
They also benefit from traffic they’ve not worked and/or paid for. This traffic is as a result of the hard work put in by their affiliates. If the traffic is targeted well, sales and revenue will increase.
And lastly, a merchant only commits his budget when a sale is made (low risk). Rather than paying so their products can be marketed, they pay based on performance, and this cuts on costs associated with marketing.
Affiliate Marketing Strategies
Next, you find ways to generate revenue through AM with or without a website…
Affiliate Marketing with a Website
With a website / blog, you will make your work easier, especially if it’s a site where readers will trust you over time.
If you have a website, it means you’re going to do research on your keywords and everything else that a website owner is supposed to do. Then you’re also going to research the hottest and most sustainable niches to earn in both short term and long term.
There are also many online tools that can help you research the best niches.
Here you can read about an interesting niche strategy to find niche markets for affiliate marketing using Google’s Keyword Planner tool. A great approach for creating niche websites / blogs.
Also, choose the best affiliate program. The best program will pay well in commission in addition to offering the best tools for marketing/promotion. Their support should also be efficient and fast in responding to questions.
If you are wondering what to sell online: Here you can find All kinds of Products and Services to promote.
Finally, create quality content with researched keywords on your site / blog. This content could be a blog about your passion / experiences, or “How-to” based, or dedicated to review and/or compare products. Your efforts will pay off. Free web traffic resources you could use are forums, YouTube, Facebook, etc.
Affiliate Marketing without a Website
If you don’t have a website, you can take advantage of social media platforms like Facebook, Twitter, and even YouTube. You can still do well, for example when you start your own Facebook page and/or YouTube Channel for product promotions. Banner advertising, such as placing (affiliate) banners on other peoples’ blogs/sites is another opportunity to earn online with affiliate marketing.
Whether you have a site or not, other ways to make money as an affiliate marketer are:
- Advertising (YouTube, Facebook, Google, Bing, etc.);
- Email marketing to build a list and a long term relationship with (potential) customers. This is one of the most effective marketing methods.
Drop Shipping vs Affiliate Marketing
In drop shipping, you don’t have to own products or deliver them. You also don’t need to keep an inventory.
All you have to do is set up an online storefront / web shop so customers can order from you. Your job is forwarding the orders to the product owner (supplier, wholesaler) and to collect payments so you can source products on their behalf.
Basically, you buy products individually from the product owner, who ships them directly to your customer, and eventually you will be charged for the price of the shipped item.
Drop shipping and affiliate marketing are quite similar in many ways, only with drop shipping you have your own customers. With AM oftentimes is chosen to just send web traffic (potential customers) to the product owners’ website.
Some people report massive success with drop shipping while others do better with AM. Both methods are a great way to start an online business, without having to create your own product.
Some additional sources which may improve your affiliate skills to help you succeed online, include:
- Niche research explained,
- Read more about the 8 Biggest Mistakes To Avoid For Affiliate Marketing Beginners here,
- Find Adam Payne’s Affiliate Oracle course,
- and our own affiliate product finder.
Then you’ll be all set.
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