What is affiliate marketing? Complete definition, types, examples, and how to become an affiliate marketer
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Definition
Affiliate marketing is an advertising/marketing model in which a company or product owner pays (A commission) to third-party publishers/marketers to generate traffic, leads, or sales to the product owner or company’s products and services.
Affiliate marketing helps business owners increase sales by allowing external individuals to recommend their products in exchange for a commission, and mostly handled by an affiliate platform.
Now that you have known the basic definition of affiliate marketing, we will now dive deeper into this topic. We will walk you through all you need to know about affiliate marketing, some examples of affiliate marketing platforms, and also how you can become an affiliate marketer and start earning money online.
How does affiliate marketing work?
A complete affiliate marketing requires four parties: Product owner (Vendor or Merchant), Promoter (Affiliate marketer), Product buyer (Consumer), and Platform.
The product owner (Vendor): the owner of the product that is been marketed. He specializes in creating quality products and services, this could be an individual or a company.
The Promoter (Affiliate marketer): the person responsible for promoting the product that is owned by a known or unknown vendor/company. This party gains commission on any sale(s) they made on a particular product or service, therefore they require a way to promote those products, and if no way they may never make any money for themselves. The reason why some people seem to make money quickly in affiliate marketing is that some of them already have customers or audiences, and this will help them sell their products very quickly.
Product buyer: This is the customer who buys the product or service that is promoted by the affiliate marketer. This is the party that concludes the contract, basically, without this party, there will be no money to be shared.
The Platform is the place where the Product owner (Vendor), lists their product so that a Promoter (Affiliate marketer), can pick their product and promote it. This party handles the analysis, they organize the platform very well to benefit both the Promoter and Vendor. They keep track of the product owner, the product that is been sold, the price and the quantity, as well as the person that sold the product. Some vendors/product owners manage their affiliate network hereby excluding any external platform. Is always the best option to start your affiliate marketing through a platform, with this you may never get an unrecorded sale, and you will also be open to a wider audience, products, and marketers.
When you sign up for an affiliate site, there is always two option available: become a vendor or become a marketer. Some affiliate platforms are free for both parties, some free for only the marketer and not the vendor, while some may require you to pay a one-time fee or annual fee to become their partner. We recommend you check the platform very well before signing up as a partner, this will help lower the risk of losing your time, product, funds, audience, or effort. You also need to check their payment methods and if your country is supported or not.
All these four parties play a very important role in affiliate marketing, I will say that they would not be a successful in affiliate marketing without any of them. And is highly recommended that you always use a platform as an affiliate marketer.
Photo from Unsplash
Types of affiliate marketing
Affiliate marketing can be a little tricky, because most marketers only care about the money, and not the well-being of the buyer. You can see many people who are promoting products they don't know or have used, their only interest is just the money.
Thanks to Pat Flynn who in the year 2009 broke down the different types of affiliate marketers, and he grouped them into three.
- Related affiliate marketing
- Unattached affiliate marketing
- Involved affiliate marketing
Let's explain these three types of affiliate marketing, to enable you identify the category everyone falls and know the best one to choose if you want to venture into the business.
Related affiliate marketing
Related affiliate marketing is the affiliate model of promoting products you don't use or know how to use, but are related to your niche. An affiliate marketer in this case has an audience, whether it’s through blogging, YouTube, an email list, 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.
Even though related affiliate marketing can generate more affiliate income, it also comes with some risks. Since you are promoting something you’ve never tried before, It could be a bad product or service, which may compromise the trust your audience has for you. It only takes one bad recommendation to lose the trust of your audience. If you don’t have trust and transparency, it’ll be hard to build a long-term affiliate marketing business.
Unattached affiliate marketing
This type of affiliate marketing as the name implies, “unattached,” is when the promoter has no authority in the niche of a product. There is no connection between the promoter and the customer. Often he/she may be running pay-per-click advertising campaigns with their affiliate link and hoping customers will click it, buy the product, and they will earn a commission.
Involved affiliate marketing
Involved affiliate marketing refers to the model in which the promoter only recommends products and services their has used, knows how it works, and truly believes in.
In this type of marketing, an affiliate marketer uses his or her influence to promote products and services that followers may need. Instead of paying for promotion to any random person he or she takes more time to build an audience with a specific interest. This type of audience is likely going to respond or buy your products more easily.
What type of product do affiliate marketers sell?
I know you may be wondering what products are sold/promoted. Your answer is here.
In affiliate, there are two types of products to promote or make money with.
These products include:
- Physical products
- Digital products
Physical products are those items you can touch or feel, it includes: Mobile phones, TV sets, Books, Shoes, Vehicles, working tools, and many more.
Digital products These are those items you can't touch which includes, services, online courses, pre-recorded tutorial videos, some services, and the like.
Some affiliate platform offers only "digital products" on their platform. This type of product is always easier for Vendors to make money with because most of them you can create it once and earn income from it for a lifetime.
Examples of Affiliate Marketing Platforms
There are thousands of affiliate marketing websites out there, with their requirements and mode of operation. Some operate in a specific country, while some have fewer regional restrictions. We will list few most popular affiliate marketing platforms.
- Amazon Associates
Amazon Associates is one of the biggest affiliate marketing platforms that deal mostly with physical products. This network is owned by Amazon, and is best for marketers who are interested in promoting physical products. - ShareASale is one of the most popular affiliate networks, this is because it houses other big and small Merchants, unlike Amazon Associate which only focuses on its goods.
- Awin (Formerly Affiliate Window) is another popular affiliate network that gives you access to thousands of different merchants and products.
- Avangate Affiliate Network is an affiliate network that’s focused on digital products, rather than physical products.
- CJ Affiliate (Formerly Commission Junction) is another big affiliate network that brings together buyers and sellers of different categories.
- ClickBank is another affiliate network that has tons of digital products, and it also offers physical products.
- Walmart Affiliates is another affiliate platform like Amazon Associate, it deals on physical products.
- eBay Partner Network is another physical product affiliate network, owned by Ebay. You can earn a commission for promoting eBay-listed products.
- FlexOffers is another popular affiliate platform that gives you access to thousands of different advertisers/merchants, this platform has been in the business for years.
As I said, we have thousands of affiliate marketing platforms, which may not even contain on this page if listed. But I just mention few of them as an example. We will cover this in another chapter, so we can also describe them very well.
Pros and cons of affiliate marketing
Affiliate marketing is worth trying, given its rapid growth in popularity and how it changed millions of people's life.
Statista (a company specializing in market and consumer data), estimates the affiliate marketing industry will be worth $8.2 billion by 2022, up from $5.4 billion as of 2017. Affiliate is also low- to a no-cost business venture, which means that you can start it right away, with little or no money. But before diving in, consider the advantages and disadvantages of entering the affiliate marketing field. As we all know, anything that has advantages also has disadvantages, so let's explore the advantages and disadvantages of affiliate marketing below.
Advantages of affiliate marketing
Let's list some of the advantages of affiliate marketing, and why you may consider giving it a try.
Easy to participate
Affiliate marketing is one of the easiest businesses to partake in, as a marketer or a vendor, your part simply involves picking, making, and marketing a product. You don’t have to worry about the harder tasks, like developing, supporting, or fulfilling the offer. And once you make a sale or your product is sold you receive your payment.
Low-risk business
Since there’s no cost to join many affiliate programs, you can start making money with an established affiliate product or service without any upfront investment or commitment. Affiliate marketing can generate relatively passive income through commission, the ideal money-making scenario. Though initially, you’ll have to invest time in creating traffic sources, your affiliate link can continue to deliver a steady and long-lasting paycheck.
Easy to scale
When you are already successful in the business, it is very easy to scale your income. Most of the time you may double your earnings by just tiring out other affiliate platforms, or by adding more traffic sources.
You can also introduce new products to your current audience and build campaigns for additional products without any extra charges, while your existing work continues to generate affiliate revenue in the background.
While there are always countless products to promote as an affiliate marketer, you must understand that great affiliate marketing is built on trust from your audience. It's always advised to always promote products you use or understand how it works, also know that it takes time and enough effort to become a great affiliate marketer.
Disadvantages of affiliate marketing
Before diving in, let’s explore the few challenges you may likely face on your journey to the affiliate marketing world. Yes, Affiliate marketing also has a few disadvantages or setbacks compared to other types of marketing campaigns.
It requires patience
As I have always mentioned, Affiliate marketing is not a get-rich-quick scheme. It requires time, effort, and patience before you can grow an audience, gain influence, and start making income.
So you may spend months or more than a year as an affiliate marketer without making any income. Many people have given up because of this, try the solution below.
You may need to test different channels and methods to see which one connects 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. Sometime after months of doing affiliate marketing, you may not make any sales, if you have chosen affiliate marketing, don't bother giving up. Sometimes you need a good product, while sometimes you just need more audience. But all the time you always need more effort and dedication.
Is a commission-based marketing
No one is handing you a daily, weekly, or monthly paycheck as an affiliate marketer. Affiliate marketing programs work on a commission basis, whether you’re paid by lead, click, or sale. And without fulfilling any of this you may never get any payout.
Companies use a temporary browser cookie to track people’s actions from your content. When the specified action is taken by someone, you receive the payout, and without that, no payout will be received.
No guarantee and no control over program
Affiliate marketing comes with absolutely no guarantee that you must make money from it. So you may try the same platform, same product, and same strategies as other people have succeeded with, and in the end, you will have no sales. In this case consistency and dedication matter, and you have to sometimes play off the track and find your strategies, who know you may later turn out to be mentoring other people with the same issue.
Now you have seen some of the pros and cons of affiliate marketing, we hope it will help you to make the right decision on how to get started. Let's now take you through how to become an affiliate marketer.
How to become an affiliate marketer
Now you may be wondering how you can become an affiliate marketer. Or saying something like, "I need to start making money", "there is no time to waste", "I need to dive in right now", etc. I will walk you through how to become a good affiliate marketer or even a vendor.
I will write another article on this topic later to give you a complete guide on the best practices and how to become a successful marketer.
Before you go about becoming an affiliate marketer, you need to understand that this business is not a get-rich-quick scheme. So if you haven't made any sales as an affiliate marketer, you will never make any money, and it doesn't matter how long you have known or been in the business. And if you happen to choose the vendor side of it, without a trusted and good product you are not going anywhere either.
Here are a few steps to follow:
- Have a product idea: This may be an idea of what you already know, like your occupation or expertise.
- Pick your platform and method:
This is probably one of the most important parts of your marketing. Before choosing any platform, be sure you understand how it works so you will not lose your money. Check the available payment method, supported countries, and type of product they usually list on their platform. - Start your journey
Once you have made up your mind on affiliate marketing, never believe in failure. Always put more and more effort into it.
Note: becoming a successful affiliate marketer takes dedication, commitment, effort, and discipline. Use the following step-by-step guide to start your affiliate marketing business.
Some tips for success in affiliate marketing:
- Making a product tutorial:
While your success with affiliate marketing mostly depends on the overall size of your audience, another way to drive traffic is by providing a tutorial on the affiliate offer. With this strategy, users can come in as a student who is learning from them. After which most of them who choose the product will end up purchasing it through you. - Talk to a product expert
This option is interviewing others who have used the product or service you are marketing. Or even interviewing the person who creates or sells it. This can give your review a more detailed and appealing explanation to your reader. With this step, you can easily convert them to buyers. - Keep things legal
Don’t forget to let your followers know that your post contains affiliate links. For one thing, it’s required by the FTC(Federal Trade Commission). But explaining the reason for your affiliation also can help you connect with your audience like a family.
- Offering bonus to user
- Building an email list
- Set a distribution strategy
Share your promotional content on your blog website or social media platforms. If you have an email subscribers list. You can create an email marketing campaign. And be sure to have an affiliate marketing hub on your website with a resources page where you share a quick list of all of the tools you use and love. You can also run a pay-per-click advertising campaign to attract more sales this may only be applicable when you are already making money.
Find relevant search terms
This part is very relevant to people promoting an offer through a blog post and researching which keywords people might use in a search engine to find an answer to a related problem. Google Ads Keyword Planner is a great tool that can help.- Consider the price
Sometimes if not most of the time, you need to consider the price of the product you are marketing. We all know that high-priced products always come with higher commotion, but never be carried away by this, you may be sitting on one product while you may be able to sell multiple products at lower prices. And always check for the competitor of the product so you will know the price people expect the product to fall between. This can help you choose and even change products when needed.
Sometimes many marketers promote their affiliate programs by offering bonuses to any buyer who purchases the offer. For Example, you could give an extra product you own, a free eBook, etc. to any follower who purchases through you.
Is very important to build an email list, because it’s one of the best ways to connect with people outside of social media or blog posts. When it comes to purchases made as a result of receiving a marketing message, email has the highest conversion rate of about (66%) compared to social and other marketing channels..
Note: generally to create a good review, 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 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. Also know that you don't need to market every single product you come across, pick a few products that are more relevant to you and your audience.
Conclusion
Earning money with affiliate marketing programs can be a rewarding way to add a new revenue stream with little or no money. Affiliate marketing takes time, but by putting in the hours to find the right affiliate network and dial in your strategy, you can build an affiliate system that generates passive income for a very long term. We hope you enjoyed this article. if so please subscribe to our YouTube channel, and also our newsletter, so you can always get new content like this one.
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