Affiliate Marketing Explained!

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Affiliate Marketing is one of the most affordable techniques for earning extra income for ordinary people. However, it is not a get rich quick solution as most of the internet shysters will have you believe. This post explains what affiliate marketing is all about.

Symbiotic Relationship between Clown Fish and sea anemone like the Affiliate Marketing relationship

Twoband anemonefish, Amphiprion bicinctus, in his colorful host sea anemone, heteractis magnifica.

Affiliate Marketing Explained

Affiliate marketing allows a marketer to promote a company’s product to an audience. An audience member purchases a product from the company. The company then pays a commission to the marketer for the referral.

Symbiotic Affiliate Marketing Relationships:

Affiliate marketing is a symbiotic relationship. Any person who can drive traffic to a company’s website can profit. Both parties benefit financially from the arrangement. Affiliates are in demand from companies. One of the fastest growing online business for the last decade. Affiliate marketing is not a new business and has being around since 1989.

This is a simple, straight-forward agreement between a merchant and an affiliate. The affiliate is a salesman for the company. Almost all major multi-channel marketers have an affiliate program of some kind. These programs come in all shapes and sizes.

The programs do require that the affiliates adhere to certain terms of service and rules. This form of marketing does not replace other forms of more expensive marketing. It is another marketing strain for the merchant.

Take Away:

  1. Easy to get started in affiliate marketing.
  2. Get paid for getting people to buy someone else’s product.

Scrabble Letters spelling out Benefits

Company or Merchant Benefit:

Why would a company wish to do this? It allows a company to market their products marketed without incurring a cost. The company may be reaching audiences its current marketing campaigns do not target. They can do it cost effectively by paying only a commission to the outside consultant.

Amazon has an affiliate program. It does not pay large commissions to its affiliates. It does not have to as it is widely marketed. Smaller companies may not have significant marketing budgets. They benefit by paying larger commissions and leveraging off others marketing abilities.

Outside Consultant or Affiliate Benefit:

The affiliate benefits from a commission they earn for referring a prospect. In most cases, the affiliate has a list of prospects they have sold to before. They leverage their list to earn an income. How did they build their list? The affiliate builds the list by offering digital content on the internet.

This content may take the form of a blog or newsletter. It is free and of interest to its audience. It may concern a niche subject. People who have an interest in that niche then join a mailing list to get more content. This is the affiliates great prize, a list of interested patrons.

Take Away:

  1. Affiliate Marketing outsources some (or all) of the marketing costs for a company.
  2. Build a list – the list is worth money.
  3. Start with a Niche Blog.

Bullseye - Single Dart hits the bullseye

Affiliate Marketing – The Perfect Business?

Anyone can become an affiliate marketer. It is the perfect business. You do not need to hold any inventory. No dealing with shipping or returns. No irate customers. It must be the perfect business and easy to start up. If, you listen to the “gurus” online then yes it is. Not only that, but you will be rolling in cash in a couple of weeks.

Affiliate marketing is a tough business. It is something that you must work at. You must work at it every day even if it is only to read an article or watch a video. It is comparable to other businesses, they grow with time. You will not launch your website, and immediately draw an audience of thousands. Whom you can then sell yours or other’s products to. It doesn’t work that way, wish it did.

Affiliate marketing uses a pay-for-performance model for delivering cost-effective sales. It is a performance-based portal advertising. For instance, cost per acquisition (CPA) searches or cost per click (CPC) searches. The business has evolved and become more sophisticated since 1989. Many marketers use chat bots and videos to push an audience to their partner’s product.

Take Away:

  1. Unrestricted entry to most affiliate programs.
  2. It is NOT a “get rich quick” scheme. Expect HARD WORK and it TAKES TIME to generate your first sale.
  3. Performance related Pay.

Starting your Affiliate Marketing business

Is there still opportunity in Affiliate Marketing or is it saturated?

There are numerous affiliate marketers in the business space. But, there are still opportunities to earn an income in the affiliate business. There are some marketers earning annual seven figure incomes. It is not a get-rich-quick scheme, it is a long grind to produce a successful business.

Newcomers balk at the “snake-oil” salesmen claims of easy instant wealth. These claims prohibit many people from entering the business. The business does continue to grow. Its landscape is littered with the carcasses of once hopeful newcomer businesses.

Starting Up Your Affiliate Marketing Business:

You have decided to continue with your marketing business. Fantastic, there are some things that you need to remember. We will use the metaphor of building a house to explain building a business. To do so, we must outline the process:

  • Site Survey.
  • Foundation preparation. 
  • Pour a foundation.
  • Start laying the blocks.
  • Roof it.
  • Decoration.

Take Away:

  1. Still a lot of Opportunity in Affiliate Marketing.
  2. Simple Blueprint to follow.

Site survey - surveying a building site

Site Survey (of your Affiliate Marketing business):

To build a house, you need to survey the land. You must do as much research as you can before putting any money into the business. There are many free avenues of education. YouT​​ube and sites such as Udemy are locations where you can receive that education. There are many to choose from. This is the same principle here, survey the available education.

Take Away:

  1. Research
  2. More Research
  3. Even More Research

Laying the foundation by pouring cement

Foundation Preparation:

Pour a solid foundation of education before you build your “house”. Once educated we must find and develop a product. Usually, this is a subject you have an interest in or affects you from a personal basis. The great thing about affiliate marketing is that the subject does not need to be mainstream.

It can be a niche area, something like a hobby. One of the highest earning affiliate websites is a carpentry website. The important point here is, if you are passionate about the topic you will stay engaged in the process. Even when the process starts to grind, as it will, being passionate will keep you going.

Pouring the foundation:

The foundation of your business will be a simple yet attractive website. The website should be professional and credible looking. It should be welcoming to the user, easy-to-navigate, and enticing. The end goal is for the user to click on the product and buy it.

This can be the most expensive part of the process. It depends on whether you decide to build your own or have it designed by a professional. This is your brick-and-mortar store where you do business. It should look presentable and welcoming yet functional.

Take Away:

  1. Use something that you are interested and passionate about – this is your niche.
  2. Decide who will design your website.

Red Brick wall

Laying the blocks:

It is time to start laying the blocks that will be your structure. You have identified a niche or product and built your website. You may develop your own product or use a ready made one. Now we must start to build a loyal audience. A blog or helpful email series can accomplish this goal. You must provide value to the people interested in your product. To do this you must believe in your product, have a passion for it.

Roofer put tiles in place on a new roof

Roofing:

One of the most important aspects of the construction is the roof. A building is useless without one. This roof is your advertising. This must be effective since this is your bread-and-butter. You need to design advertising, discern whether it is working or failing. It is an evolving landscape. Like roofs, advertising campaigns need replacing. They wear out and can no longer be effective. Not only must it be effective but it must be cost-effective to you.

Take Away:

  1. Build a Loyal Audience by constantly Giving Value.

Pat the painter displaying his work

Decoration:

When you decorate the inside of your house you test different colors to see what works. This is the same for your business. You must test and fine-tune your approaches on a continuous basis. Accurate tracking of your costs, sales and profits are an important part of your business. You must stay on top of the numbers. You must adapt if those numbers move against you. Keep your business profitable by staying proactive.

Take Away:

  1. This is NOT a set it and forget it business. You need to work at it.

Moving forward:

Consider Wealthy Affiliate – an affiliate marketing giant!

The plan laid out above is not the be-all and end-all as a business plan for an affiliate marketing business. They are my opinions on the minimum steps required to start and run your business. There will be other steps that I may have left out or not used myself. Hence, it is important that you do your due diligence and educate yourself. 

When times get tough, as they will, it is important that you have a support base. If, you have a family, you will need their support. If, you are single, you should seek out an affiliate marketing support group. For instance, a forum or an affiliate marketing platform containing members. These members are similar to yourself, they will range from beginners to experts.

With that, I wish you all the best in your journey in the affiliate marketing world. If, you have any questions or comments, please feel free.

Sean

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  • Ben says:

    You’ve certainly started building your own foundation here! With great work and patience could come success.

    I like your analogies. I happen to have started my own affiliate marketing journey last year and it’s a long but fun process. One of the keys is to be passionate about your content and theme so you can stick with it over the long haul.

    I look forward to seeing your site flourish as you lay the blocks and put the roof on! 😀

    As I learned from Tom Bilyeu, “the struggle is guaranteed, the success is not”.
    Thanks!
    Ben

  • Sherry S. says:

    Good job pointing out that affiliate marketing is not a get-rich-quick scheme. There is potential for good business in affiliate marketing if you are prepared to put in the time, dedication and even money. It helps to have passion for whatever you are venturing into business-wise. Knowledge of the subject is preferable but not required. Lastly, I agree with needing support. It is always great to have a mentor and support of those with the same business pursuits to help you a long the way – this makes it easier and helps to motivate and inspire you to not give up!

  • Shyla says:

    What a great way to describe the process of affiliate marketing. You really nailed it. This post is highly informative and I will bookmark it for reference. Keep up the great work, you have wonderful information to share with the world.

    • Sean Murphy says:

      Hi Shyla,
      Thank you for your kind comment. I wasn’t sure if it would come across the right way to use the house building analogy. I am glad it resonated with you.
      Thanks
      Sean

      • Shyla says:

        I think it was an excellent and relatable way to explain it. It helps make it seem much more manageable by breaking it down that way. You are welcome!

  • Furkan says:

    I think there is good potential but how can I determine the potential of a certain subject? What do you recommend for it?

    • Sean Murphy says:

      Hi Furkan,
      A couple of methodologies you could use to determine the potential of a certain niche is to (1) look to see if they are people on sites like clickbank and other affiliate sites that are selling products in your niche, most of these affiliate market places tell you what commission they will pay and the marketplace will rank the product and the niche. Another way is to use a keyword search tool, like Jaaxy or Google Keyword Planner, these tools will tell you the number of searches for terms in your niche and thus display the popularity of the search term. Google will also tell you how much they are charging for the term. The higher the charge the more popular it is, so there is a lot of traffic. There are other ways to evaluate a certain subject these are just a couple. One of the most successful websites is a carpentry website. In the end, it should be a topic or niche that you have an interest in so that you could across as passionate when you write about it. Hope that helps.
      Cheers
      Sean

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