Affiliate Marketing – The Basics

 

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You may have heard the term Affiliate Marketing before but may be unsure of exactly what it is. In this post I’ll cover the basics and how to get started the right way.

What is Affiliate Marketing?

Affiliate Marketing is a sales method whereby businesses that have a product to sell, whether physical, digital or a service, recruit third-party sellers to promote their product and then pay them a commission for sales that they make.

You’ve probably come across affiliate links while browsing online and didn’t even realize it! Here are some examples of popular affiliate programs out there:

• Physical products: Amazon, Sears, Walmart, Wayfair, Target, etc.  On physical products you can expect a small commission often under 10%. So as they say, you need to move a lot of merch!

• Digital Products: ClickBank, JVZoo, CJ Affiliate (physical, digital and services), and more…  Digital products usually pay out much higher commissions, often 50% or more. And you’ll likely get a commission on recurring payments if the product is an ongoing subscription.

• Services: FreshBooks, Virtual PBX VOIP, Booking.com Travel, etc. Commissions here vary widely from a small percentage to a significant dollar amount.

Getting Started In Affiliate Marketing The Right Way

Some programs like Amazon and Wayfair require that you have a website that is relevant and related to your theme and what they sell.

Other programs require approval before you can become an affiliate.  For example some programs want to know that you have a large list of subscribers, others will only deal with businesses that have a certain sales volume or will only deal with a certain type of business like a professional association.

Ideally you want your site to be a consumer or special interest niche site like camping or interior design for instance, that focuses on a particular topic to attract customers looking for products in those categories. It only makes sense to visitors to see products that go with the topic(s) of your site. If offered unrelated random products, you’ll annoy your visitors and quickly lose them.

You’ll also annoy Google which will then destroy any ranking you might have in search results. Google will reward you if you have a site with good content added regularly, that provides value to visitors and a good user experience. 

Having a broad general site will typically not give you great results because you can’t appeal to everyone and offer them everything at once. When people find a site it’s usually because they’re looking for something specific.

Becoming an Affiliate

When you do find a program you like, signing up is easy. The following applies to many programs out there.

• Free to join
• Fill in your name or business name and other contact info
• Tax ID if you’re signing up as a business
• Your PayPal account or other payment platform to deposit your commissions
• Other pertinent details they may need
• Get your affiliate link. The affiliate link is unique to the program and your account and is used to track leads and sales you send to the product page.

Making Sales

You’ll start promoting the program you’ve joined by inserting your affiliate link in appropriate places on your website. For example if you write an article about great campsites, you might include your links to the best tents sold at Bass Pro Shops.

It’s fairly straightforward. Create great content for your readers and in it promote, when relevant, good products and services from reputable companies.

Getting Paid

How does the affiliate program know you’ve made a sale?

When a visitor to your site clicks your affiliate link, i.e. http://mywebsite.com/?ref=123,  a bit of code called a “cookie” is stored in their browser. This cookie contains  your affiliate ID (123).

When they make a purchase, the sale will be attributed to that ID. However, cookies have a shelf-life (pun intended) that is determined by the affiliate program.

So, let’s say a visitor clicks the link on your website today Monday and the cookie is only good for 24 hours. They return to the site through your link on Wednesday and make the purchase. Too bad, so sad, you don’t get paid (grrrrr). 

The life of a cookie is something you might want to keep in mind when choosing a program. Some have short cookies as above, others can be weeks or months, and others yet have lifetime tracking.

Another thing you want to look for is frequency of payment or any hold-back conditions. For example some companies pay twice a month with no conditions. If they owe you a dollar, you’ll get a dollar. Some pay weekly or monthly.

Others have minimum payment thresholds. So until you’ve reached a minimum of $100 or $200 or whatever in commissions you won’t get paid. In some cases, you can set the threshold to minimize any transaction fees that might occur.  And then there are programs where they won’t pay you until the money-back guarantee has expired. That could be 30, 60, or more days…

You’ll have access to stats in the dashboard of your affiliate account to check activity on your link(s). At minimum you should be able to see unique visitors, unique buyers and commissions. Some dashboards also give you more data such as number of impressions, clicks, click-through rate (CTR), trends and the possibility to create reports.

There are several factors to consider, but one bit of advice I can offer is don’t sign up to a program just for the money. I talk about that in this post: Promote Affiliate Marketing Programs – Choosing Products Ethically

The Upside of Affiliate Marketing

• Low cost to start up.
• Tons of products & target (niche) markets from which to choose.
• High profit margins with digital products.
• No customer support on your part.
• Can become a passive income stream that runs 24/7.
• Flexible hours. Work as much or as little as you want.
• Vendors usually provide you with marketing materials.
• Some vendors provide extensive support.

The Downside of Affiliate Marketing

• You don’t control the program, its products or conditions.
• Vendors may discontinue products.
• Vendors may discontinue affiliate programs that have been doing well for you, thereby cutting off a source of income.
• You may get increasing competition from a growing base of affiliates.
• If the product becomes obsolete or falls out of favour without replacement, that income dies off.

Overall, I believe that Affiliate Marketing’s benefits outweigh the disadvantages and provides a great opportunity to building a long-term online business! 

Affiliate Marketing Programs Mentioned Above and Then Some:

Physical Products

Amazon Associates

Sears

Walmart

Wayfair

eBay

Target

Jet

Bass Pro Shops

 

Services/Software

FreshBooks

Virtual PBX

Booking.com – Travel

 

Affiliate Networks 

Digital Products

ClickBank

JVZoo 

 

Physical Products

ShareASale

Rakuten 

AWIN

 

Combination

CJ Affiliate

 

Affiliate Marketing Training

Affilorama by Mark Ling is where I recommend that you start to learn Affiliate Marketing for free. This is not a get rich quick website. It’s full of sound online business training. You can sign up and go through their free program of 120 lessons. They also have additional free and paid material available.

Affilorama has been around since 2006, so you can trust that this isn’t a fly-by-night outfit. Mark and his crew are based in New Zealand, so if you’re not from around there you might need to learn a bit of Kiwi lingo to get used to their accent in the training videos ;o)