What is Affiliate Marketing and How to Get Started
Everyone is more serious about searching for new avenues to make money online. In 2022, it has become one of the most popular ways to generate income online. Post-COVID where the entire work culture has changed, people are looking for ways to make extra money.
It is one of the most convenient and hassle-free methods to generate money online by leveraging other people’s products. So, in this article, we will be discussing affiliate marketing, how it works, and how you can get started with it.
What is Affiliate Marketing?
Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate’s own marketing efforts. You must have seen in the footer of many websites saying ‘powered by (company name)’ or ‘trusted by (company name)’.
These are generally affiliate links that help the company in some way. For example, if you buy a product from the company’s website using that link, the company will pay the affiliate a certain percentage of the sale amount. Affiliate marketing is a popular monetization technique for bloggers and social media influencers.
The working of affiliate marketing can be explained with the help of an example. Let’s suppose company A is selling a product on its website and company B has a blog. Company B writes a blog post about company A’s product and includes an affiliate link to the product on its website.
Now, whenever a user clicks on that link and buys the product from company A’s website, company A will pay Company B a certain commission. The commission varies from product to product and company to company. It is generally a small percentage of the sale amount but can be higher for expensive products.
Affiliate marketing is a great way to make money online. You can be an affiliate for companies of your choice and promote their products on your blog, social media, or website. And, whenever a sale is made through your affiliate link, you earn a commission.
It is a simple process and doesn’t require any investment. You can start affiliate marketing with just a blog or social media account.
Parties involved in affiliate marketing:
Now that we know what affiliate marketing is, let’s understand the different parties involved in the process.
1. The Merchant:
The first party is the merchant and it is the company that creates and owns the product. The merchant can be an eCommerce website, a blog, or any other type of website that sells products. The merchant can be a single company like Amazon or a group of companies like Commission Junction.
2. The Network:
The second part is the network and which provides the platform for the affiliate program. The network manages all the affiliates, payments, and tracking of sales. It is generally a third-party company that works with the merchant to set up the affiliate program.
3. The Publisher:
The last part is the publisher or the affiliate. The affiliate promotes the merchant’s products on its website or blog and earns a commission on every sale made through the affiliate link.
4. Customers:
Of course, you will need customers to buy the product from the merchant’s website. These customers can come to the merchant’s website directly or can be redirected from the affiliate’s website
Types of Affiliate Programs:
Now that we know the different parties involved in affiliate marketing, let’s understand the different types of affiliate programs.
1. Pay-Per-Sale:
In this type of affiliate program, the affiliate is paid a commission on every sale made through its affiliate link. The commission varies from product to product and merchant to merchant. Generally, it is a small percentage of the sale amount but can be higher for expensive products. The best thing about this type of affiliate program is that it offers a high potential for earning.
Benefits of pay-per-sale model:
- The affiliate only gets paid when a sale is made, so there is no risk involved.
- This model offers a high earning potential as the affiliate can earn a commission on every sale.
- It is simple to understand and easy to set up.
- It is a popular affiliate program model as it benefits both the merchant and the affiliate.
2. Pay-Per-Lead:
In this type of affiliate program, the affiliate is paid a commission on every lead generated through its affiliate link. A lead can be defined as a user providing his contact information like name, email, phone number, etc. on the merchant’s website. This type of affiliate program is mostly used by insurance and loan companies.
Benefits of pay-per-lead model:
- The affiliate only gets paid when a lead is generated, so there is no risk involved.
- This model offers a high earning potential as the affiliate can earn a commission on every lead.
- It is simple to understand and easy to set up.
- It is a popular affiliate program model as it benefits both the merchant and the affiliate.
3. Pay-Per-Click:
In this type of affiliate program, the affiliate is paid a commission on every click made on its affiliate link. The commission is generally a small amount and is paid per click. This type of affiliate program is mostly used by advertising companies. Moreover, this type of affiliate program is also known as Cost Per Click or CPC.
Benefits of pay-per-click model:
- The affiliate only gets paid when a click is made, so there is no risk involved.
- This model offers a high earning potential as the affiliate can earn a commission on every click.
- It is simple to understand and easy to set up.
- It is a popular affiliate program model as it benefits both the merchant and the affiliate.
4. Pay-Per-Action:
In this type of affiliate program, the affiliate is paid a commission on every sale or lead generated through its affiliate link. The commission varies from product to product and merchant to merchant. Generally, it is a small percentage of the sale amount but can be higher for expensive products. The best thing about this type of affiliate program is that it offers a high potential for earning.
Benefits of pay-per-action model:
- The affiliate only gets paid when a sale or lead is generated, so there is no risk involved.
- This model offers a high earning potential as the affiliate can earn a commission on every sale or lead.
- It is simple to understand and easy to set up.
- It is a popular affiliate program model as it benefits both the merchant and the affiliate.
5. Pay-Per-Impression:
In this type of affiliate program, the affiliate is paid a commission on every 1000 impressions made on its affiliate link. An impression is defined as a user viewing the affiliate’s ad. This type of affiliate program is mostly used by advertising companies.
Benefits of pay-per-impression model:
- The affiliate only gets paid when an impression is made, so there is no risk involved.
- This model offers a high earning potential as the affiliate can earn a commission on every 1000 impressions.
- It is simple to understand and easy to set up.
- It is a popular affiliate program model as it benefits both the merchant and the affiliate.
- It is a good way to generate passive income as the affiliate can earn money even when he is not actively working.
How to become an affiliate merchant?
In order to become an affiliate merchant, you need to have a product or service to sell. Once you have a product or service, you need to sign up for an affiliate program. There are many affiliate programs available online. You can choose any one of them depending on your requirements.
Once you have signed up for an affiliate program, you will be given an affiliate link. This link will be used to promote your product or service on your website or blog. When a user clicks on this link and makes a purchase, they will earn a commission. Now, let’s look at each affiliate step in detail:
1. Coming with an affiliate product/service idea:
The first step is to come up with an affiliate product or service idea. This can be anything that you think people would be interested in buying. It can be a physical product, a digital product, or even a service. Once you have an idea, you need to do some research to see if there is a demand for it.
You can do this by searching for it on Google, Amazon, or other online platforms. If there is a demand for it, then you can move on to the next step. If not, then you need to come up with a different idea.
2. Creating the affiliate product/service:
Once you have finalized the idea, it’s time to create the affiliate product or service. If you are selling a physical product, then you need to create it or source it from a supplier. If you are selling a digital product, then you need to create it or get it from a reseller.
If you are selling a service, then you need to set up the infrastructure for it. This includes creating a website, designing the service, and setting up the payment system.
3. Signing up for an affiliate program:
The next step is to sign up for an affiliate program. There are many affiliate programs available online. You can choose any one of them depending on your requirements. Once you have signed up for an affiliate program, you will have your unique affiliate link.
This affiliate link is what you will use to promote your product or service on your website or blog. When a user clicks on this link and makes a purchase, they will earn a commission.
4. Promoting your affiliate product/service:
The next step is to start promoting your affiliate product or service on your website or blog. You can do this by writing articles, creating videos, or even creating ads. The important thing is to drive traffic to your affiliate link so that you can make sales.
You can also promote your affiliate product or service on social media platforms like Facebook, Twitter, and Instagram.
5. Making sales and earning commissions:
The final step is to make sales and earn commissions and this is where your affiliate link comes in. When a user clicks on your affiliate link and makes a purchase, you will earn a commission. The more sales you make, the more money you will earn.
Affiliate marketing is a great way to earn money online. It is simple to understand and easy to set up. It is a popular affiliate program model as it benefits both the merchant and the affiliate. It is a good way to generate passive income as the affiliate can earn money even when he is not actively working.
Wrapping up!
This is everything that you need to know about affiliate marketing. If you’re planning to get started with affiliate marketing, then this article will be helpful for you. Now that you know what affiliate marketing is and how it works, you can start looking for affiliate programs to join.
There are many affiliate programs available online and you can choose any one of them depending on your requirements.
FAQs
Q. What is affiliate marketing?
Ans. Affiliate marketing is performance-based marketing in which a company rewards an affiliate for each user who sells the product.
Q. Is affiliate marketing relevant in 2022 and beyond?
Ans. Yes, it is! Affiliate marketing has been around for many years and it is still going strong. It is a popular way of making money online and it is a good way to generate passive income.
Q. What are the benefits of affiliate marketing?
Ans. The benefits of affiliate marketing include the fact that it is performance-based marketing, it is easy to set up, and it is a good way to generate passive income.
Q. How do I get started with affiliate marketing?
Ans. The first step is to come up with an idea for a product or service that you can promote. Once you have an idea, you need to create the product or service. If you are selling a physical product, then you need to create it or source it from a supplier.
Q. Why is affiliate marketing a good way to make money online?
Ans. It is a popular way of making money online and it is a good way to generate passive income. Moreover, it’s a scalable model that can generate significant income.