How Affiliate Marketing Works

How Affiliate Marketing Works

Are you interested in becoming an affiliate marketer? Or have you been considering working with affiliates, and you’re curious about how affiliate marketing works?

If you answered yes to either of those questions, and you have limited knowledge about how affiliate marketing works, then you’re in the right place. The concept isn’t hard to grasp. And by the end of this blog post, you should have a solid understanding. So let’s get going!

What Is Affiliate Marketing?

Affiliate marketing is form of internet marketing where companies (sometimes referred to as advertisers or merchants) pay people (affiliates) based on their performance promoting an offer via an affiliate link.

In a nutshell, if you’re an affiliate (also referred to as a publisher), you use your skills as a marketer to refer your audience to a product. When someone in your audience decides to buy a product or take an action based on your recommendation, you get a commission or kickback.

Who Are The Affiliates?

An affiliate can be an individual or a company. Most of the time, affiliates are bloggers or other content makers in industries that are the same or closely related to that of the company whose products they’re promoting.

Affiliates are people who help promote a product or service by writing posts, making videos, and conducting other marketing efforts. When an affiliate’s visitor makes a purchase or submits a lead form on the affiliate company’s website, the affiliate gets paid.

How much and for what (lead or purchase) the affiliate gets paid depends on the affiliate program terms.

Affiliates can also promote affiliate companies by publishing things like banner ads and text links. Whenever a lead is generated, the publisher gets paid a commission, which is often a percentage of the amount sold. It can also be another amount agreed upon by the advertiser and publisher.

Who Are The Companies?

An affiliate company (also known as a merchant, advertiser, retailer, or brand) is any company willing to pay commissions to affiliates who promote their products. These companies partner with affiliates to generate more leads and sales.

Affiliate companies pay their affiliates for helping them gain whatever it is they’re after. Payments are usually determined on a pay-per-click, pay-per-lead, or pay-per-sale basis. This structure is sometimes referred to as performance marketing.

Commission payouts usually occur on a monthly basis, but this varies depending on the terms of the affiliate program.

Affiliate marketing is considered much more advantageous to companies when compared to traditional pay-per-click advertising, where a ton of money can result in few or no leads or sales.

How Affiliate Marketing Works

As an affiliate, you’re paid for performance. Following are the three types of performance-based models common to affiliate marketing:

  • Pay Per Click or PPC – An affiliate gets paid for all the valid clicks generated regardless of whether these clicks resulted in sales or leads.
  • Pay Per Lead or PPL – Companies pay a fixed commission for every qualified action a click generated. This action might include things like installation of an app, online form submission, free trial sign-up, or completion of a short survey.
  • Pay Per Sale or PPS – Companies pay a percentage of all qualified sales. This percentage is agreed upon by the company and its affiliate. Among the most common PPS programs is Amazon Associates, where a publisher can earn up to 15% depending on the products sold.

Tip: Here’s a list of places where you can find products to promote.

What Are Affiliate Networks?

Affiliate Networks act as a middleman between companies and their affiliates by managing the relationship and providing third-party checks and balances.

These networks track, report, and manage payments to affiliates. When you sign up with an affiliate network, you usually gain access to all the affiliate companies managed within the network.

Some popular affiliate networks include ClickBank, Commission Junction, and ShareASale.

Affiliate Links

After signing up with an affiliate program, you’ll get an affiliate link, or a special URL that contains your affiliate username or ID. You use this link whenever you mention the advertiser’s product on your website or in other marketing efforts, such as on social media.

Whenever one of your audience members clicks on your affiliate link, a cookie is dropped into their browser to track them. If they become a customer, the company knows it received that customer from you and you get credit.

Does It Cost To Join An Affiliate Program?

There is no charge to join an affiliate program; however, some promotion strategies will incur a cost if you choose to use them. For example, while your blog won’t cost you anything but your time, pay-per-click marketing, email campaigns, and social media ads will require an investment.

Do You Need Qualifications To Be An Affiliate Marketer?

The truth is anyone can become an affiliate marketer, and there are no standard qualifications.

However, knowing how to write a blog post, string a great review together, or do video are all a big plus because they mean you don’t have to pay for content in the beginning. Also, any existing marketing knowledge you have will be a great advantage to you.

Start Earning Today

There’s no limit to what you can earn with affiliate marketing. It’s up to you to see how far you can scale this incredible business model.

The amount you earn will depend on a number of factors:

  1. The program you’re promoting
  2. The conversion rate
  3. How many visitors you’re sending through your links
  4. The buyer’s motivation

But when you hit that sweet spot and everything aligns, it’s a great feeling.

Now that you know how affiliate marketing works, why not test the waters? After all, it could be your golden goose, but you’ll never know unless you try!

Affiliate Link Disclosure

13 thoughts on “How Affiliate Marketing Works

  1. Bloggers and internet marketers who have been working into online marketing for years are used to with an affiliate marketing, and also with the fact that it is the most productive way to make money online. In the quick words; an Affiliate Marketing is one of the popular practices of selling wherein you suggest someone to any online product and when that person purchases the product based on your suggestion, you receive a commission.

    Anyways, learned a lot here today, thanks for giving info on affiliate marketing. I have been an affiliate for few programs but failed to make a profit because I haven’t done it correctly. Also, web traffic on your site requires to be really good and targeted to get things work. Require to work on traffic first and then you can go for affiliate marketing. An Affiliate Marketing also depends on what niche are you blogging about. If you have a technology blog, you can join Amazon, Flipkart, Snapdeal. If you talking into web-hosting, then you can join the affiliated programs derived by Webhosting companies.

    Thank you for the clear to understand information and plain descriptions. This will be quite helpful for all bloggers and online publishers…

  2. Hi my name is Debabrata upadhaya I am a beginner of affiliate marketing although I know I have lots of traffic in my social media but still I think it would not so easy to earn only through traffic you need to do something creative so that people visit your network so I am still working on this.

  3. Yada yada yada….for those o f us who know absolutely NOTHING about marketing, how to manually create a webpage/blog, understand terms like SEO and MANY others that you and others use….not to mention we have no real knowledge of what it takes to write a successful blog or the tools you need to make a good YouTube video (yes, you need a video camera and a GOOD microphone among other things to make a GOOD video); those of us who don’t know that it it
    DOES, indeed, take money to start getting into affiliate marketing the RIGHT WAY….Your info was mediocre at best!
    I wish there was someone out there who is willing to tell the TRUTH about affiliate marketing and online business. It is HARD and you MUST KNOW WHAT YOU”RE DOING! Take some classes at least! THAT is the truth folks. This is NOT as easy as these people make it sound! At ALL!

    1. Sup Lisa, since you are commenting on a post that is aimed at folks who are looking up “how affiliate marketing works” it’s pretty introductory on purpose….

      Maybe you should check out some of our more advanced articles. It sounds like you’re all over this introductory stuff 😉

      Appreciate the comment!

  4. A great resource for the beginners, I really loved it.

    I started a blog which I plan to monetize only through affiliate marketing and my own products, no ads. I’ve been working on building an audience for my blog, for about 1 year and a half, many people think is maybe too much time, but I just want to make sure that I build enough trust with my readers before I start to try to make them buy something.

    Finally, I have decided to start monetizing my blog this year since I already have decent amounts of traffic, this type of articles helped me a lot on making sure I’m going towards the right direction.

    Thanks!!!

    1. I guess you can’t directly share affiliate links to FB. It(FB) will ban you. So, to be in safer side I think marketer prefer landing pages as a website or Blog.

  5. Hello, I am isaimini and I am Student can I start my affiliate marketing. I have a low budget can you please suggest some method to do affiliate marketing with low or zero budgets. Please this will really help me.

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