How does affiliate marketing work?

In this lesson you are going to learn how affiliate marketing works. You’ll also discover why it’s GREAT to be an affiliate, how much money you can make and how you can get started.

Let’s start with a basic definition of affiliate marketing, it is: 

"An Internet-based system where you (as an affiliate) get paid for referring sales or customers to another business."

It’s a bit like how a real estate agent doesn't own the houses they sell; instead they promote houses on behalf of their clients, and earn a cut of the sale price of any properties sold.

The image below shows a really basic affiliate website, with a banner that promotes the SaleHoo Wholesale Supplier Directory.

When someone, who’s keen to make money on eBay, clicks that banner, they are taken to the merchant’s website below.

The merchant is the person or company that creates and owns the product. Now it’s up to the merchant to work their magic and get that person to buy. If the person does decide to purchase, then the affiliate that sent them to the site earns a commission, which is a percentage of the product’s sale price. Easy, right? 

There are a lot of ways to place these commission-earning links on your website, so you don't even have to know how to make banners. One of the most popular ways to add links is to simply include them in your content. Here's an example of a product suggestion within an article, with a link to the relevant product where it's most useful in the content:

In a similar way, you can write (or have someone else write) content on a topic, and then link to a product that might be useful for the reader. So long as the link you use is an affiliate link, you'll be lined up to earn a commission, and you can learn more about that in the Affilorama lessons.

6 great reasons to become an affiliate

1. Start up costs are super low. To start a regular business where you rent retail space and stock inventory could easily set you back tens of thousands of dollars. As an affiliate, you can get started for the cost of a burger and fries.
2. You don’t need staff. No more office politics, and no messy payroll handling. When you get started as an affiliate you can do it all yourself, and when the time comes to grow your business it’s easy to outsource.
3. You don’t even need a product you simply have to promote products which are already for sale. Whether it’s an eBook about dog training your or a weight loss supplement – there is a product out there that you can sell as an affiliate.
4. You don’t need any expert knowledge on a subject to sell affiliate products either. If you want to be an affiliate for weight loss products, then you don’t need a PhD in nutrition or exercise. All you need is an eager-to-learn mindset and the ability to market the right affiliate products to the right people. 
5. Earn passive income. It’s a bit like the money you earn if you buy a house and then rent it out – for as long as you own that house and are renting it out, you earn money. In a normal job you only get paid once for the work that you do, but as an affiliate you can keep making money from the same work day in, day out. 
6. The opportunity to work your own hours. I’m not saying that you’ll be sitting on a beach drinking Pina Coladas and only working an hour a day after your first month as an affiliate. However, you do have the power to work when it suits you and have a more flexible life. You become your own boss – how cool is that? 

How much money can you actually make?

Like any real business it all depends on how much effort you put in and how seriously you take it. For example if you only work an hour a day, or you spend most of your time checking emails as opposed to doing the work, then you might not make much money at all. 

But if you are really dedicated and treat your affiliate marketing like a real business, and you put 100% in every time you sit down in from of your computer, then you can DEFINITELY make a full time income.

Let’s do some quick math on how much you can actually make as an affiliate. Imagine you’re promoting Singorama, a really popular learn-to-sing training course. 

Checking the affiliate statistics for Singorama tells us that the average sale earns you just over $106. 

If you could get just ONE sale per day of Singorama (and trust me when I say there are many affiliates who make far more than that), then you would be making an extra $840 per week. That’s an additional $3360 per month in your bank account, or over $40,000 per year.

What would you do with that kind of extra money?

How does affiliate marketing really work?

With affiliate marketing you typically have a website, like the World of Warcraft Black Book site you can see below. Now you don’t actually need a website – there are loads of different ways to do affiliate marketing and some of them don’t even involve owning a website – but most affiliates prefer to have their own digital real estate. It’s also the method we teach here at Affilorama, because there's so much more potential to build a brand, and grow an affiliate strategy that will profit you in the longer-term.

On your website you talk about different affiliate products – recommend them to readers, give detailed reviews, make comparisons and so on. For example Zygor's Leveling Guide is one of the affiliate products on WOW Black Book.

You’ll have a special link, known as an affiliate link, for every product that you’re promoting. Affiliate links have tracking in them to make sure that you get credited with every sale you make. When someone clicks your affiliate link, then the merchant knows it was you who sent the customer.

Let me stress that affiliate links don’t affect the customer at all… they don’t pay more, they don’t miss out on anything, and they will most likely never know that they purchased through an affiliate link.

All it means is that when a customer buys something within a certain time period after clicking on your affiliate link, you get the commission. 

So the big goal of affiliate marketing is to get as many people as possible clicking on your links and visiting merchant pages like the one below for Zygors Leveling Guide; the more people that click on your affiliate links, the more chances you have of a sale occurring and earning a commission. 

What this means is that affiliates talk a lot about getting “traffic” – which is basically the number of people coming to your site who can potentially click on your links.

The aim of the game is to get your traffic to climb… because the more traffic you get the more clicks and sales you will make.

In the Affilorama lessons, we cover loads of different ways of getting traffic! Some of these methods are paid, such as PPC (pay-per-click) advertising, and some are free, like SEO (search engine optimization) but take a little more time and effort on your part. You can find more information on both of these traffic methods in "introduction to PPC" and "introduction to SEO."

If this all seems a bit overwhelming, don’t panic. Getting started with affiliate marketing is actually really easy. Start by checking out the affiliate marketing for beginners lesson.

These exciting video lessons will get you started on the right foot, and teach you the basics of affiliate marketing.

Most importantly, you need to take action. The most successful affiliate marketers are those who do, rather than those who think about doing. Take what you learn from Affilorama and start working hard. You might not get it right the first time, but the experience is what really counts when you are learning affiliate marketing. You will hone your skills and abilities over time, so don’t sweat the fine points!

If you want to get it right the first time, then you need to try AffiloBlueprint. It’s our exclusive step-by-step blueprint for building profitable affiliate sites to a proven formula. 

Check out how AffiloBlueprint will help you start earning faster.

Thanks to Iffilorama for this article.. head to their website here to learn more