Affiliate Marketing is everywhere. If you are in business in the online space, then you have probably heard the term ‘affiliate marketing’. But, what is affiliate marketing exactly? Read on to find out what affiliates are and how affiliate marketing works.

 

What is affiliate marketing?

At its core, the concept of affiliate marketing is very simple. It is an arrangement between an online retailer (the merchant) and another person or business (the publisher or affiliate). The merchant pays a commission to the publisher for referring customers to their site. Usually, this is based on sales from the merchant site, but can also be based on leads generated.

Publishers are usually granted a percentage of sales for their referral but it can also be a standard fee per sale or per lead. This fee is part of the merchant’s marketing budget and the consumer will not pay any more for the product or service.

It is common for a publisher to have a website (for example, a blog) where they refer customers from. But, there are other methods of reaching customers that are gaining popularity for example social media or email marketing. Another way some people use affiliate marketing is to pay for search engine ads, but this is more often referred to as search engine marketing or pay per click.

stakeholders in affiliate marketing

 

How long has affiliate marketing been around?

Affiliate marketing dates back to 1994 according to Wikipedia, which is a pretty long time in internet world. Affiliate marketing is not a pyramid scheme or multi-level marketing. If done properly, it can be beneficial to merchants, publishers and customers. As with all business models, some people have misused affiliate links and promoted in a spammy or dishonest manner. However, affiliate marketing is a valuable tool for both merchants and publishers when conducted in an ethical manner.

 

How does affiliate marketing work?

There are two main ways that a business can operate an affiliate program. Some will have individual, in house affiliate programs that they operate themselves and some will work through an affiliate network. Affiliate networks facilitate a connection between merchants and publishers. They also offer an extra layer of protection to make sure publishers get paid for their referrals.

Affiliate network

Affiliate marketing is often referred to as a form of ‘passive income’. However, this does not mean that there is no work involved. Affiliate marketing does require set up, promotion and maintenance.

Each affiliate program will have different rules, commission rates and cookie length. Read the guidelines and check how the affiliate program has been performing for other publishers. If the merchant is with an affiliate network, there will be some data that will show you how the affiliate has performed in the past. Below is an example of affiliate program statistics from an affiliate network. Don’t worry if they look confusing at first glance. Affiliate networks explain the data pretty well as it’s in their best interest.

affiliate marketing statistics

 

What types of companies have affiliate programs?

It’s surprising how many online retailers have an affiliate program. Affiliate programs are popular with businesses who sell online courses, programs or software. Many sellers of physical products will also have an affiliate program.

If you are looking to see if your favourite product or service has an affiliate program try looking in the footer of their website, search [brand name] affiliate program, or simply contact them and ask.

 

How do you do affiliate marketing?

Once you sign up for an affiliate program there should be an explanation of the individual rules for that program. Basically, when you are logged in you will have access to special links. Sometimes you also get access to exclusive promotional codes and pictures or graphics (called ‘banners’ you can use in your promotions.

The links you will have access to are customised specifically for you and your business. This way the company or affiliate network can track how many people are coming from your website or promotions.

Usually, a referral program will allow you to link to a specific product or page on a merchant’s site. This is referred to as deep linking. These links will also be customised and trackable.

 

For more information about how to get started in affiliate marketing check out our guide to Wealthy Affiliate for Aussies.

 How you insert the affiliate links into your website is up to you, and the affiliate guidelines. Often it is done with hyperlinked text mentioning the product or by inserting a graphic (banner) that links to the merchant site. Below are how these two examples would look in a blog post – these examples will not actually link to the merchant website as they are just for demonstration purposes.

types of affiliate links

 If you have anymore questions about how affiliate marketing works pop them in the comments below and I would be happy to help.

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14 Comments

  1. You provide a very easy to understand introduction to affiliate marketing.

    The material you provided is very comprehensive and a great beginning for a new affiliate marketer.

    What I also like is that you have provided Wealthy Affiliate as one of the programs available.

    There are affiliate programs available in virtually every niche you can think of, even some really obscure niches, but what I especially like about Wealthy Affiliate is the ability to earn from it.

    So whilst most programs will give you a commission for a sale, WA gives the affiliate the chance to make money even without selling a product.

    The WA community and support is also exceptional.

    Great job

    Tim

    1. Thanks Tim.  I appreciate you reading.  I also think Wealthy Affiliate is really the best platform for people wanted to get into affiliate marketing.

  2. Affiliate Marketing is one of the great ways to earn income online. It is not as hard as others might think. Wealthy Affiliate is a great platform to learn more about affiliate marketing and thank you for sharing about it. I started using it and it seems very promising. One question, in your expertise opinion, is having a website the best way to do affiliate marketing?

    1. I’m excited to hear you like Wealthy Affiliate.  I love it too.  If you have any questions I am happy to help.

      In regards to your question about websites.  Personally, I still think it is the best way.  I have read a lot of new stuff about not need a website anymore and just using social media, email marketing and PPC.  I might be old school but I am not convinced yet.  You will find that social media will often not let you post affiliate links (depends on the link and the type of social media).  So having your own website you can funnel people to is the best way I think.  This could definitely change in the future though.  I am interested to see where affiliate marketing goes in the future.

  3. Hey there,

    Excellent write-up on affiliate marketing! I have been in the online business space for a couple years now and have built multiple affiliate sites and an e-commerce site. Although, I have not had massive success with affiliate marketing it is more so to do with my own particular skills rather than the model itself. If you can find a niche and create A LOT of content around it you can most definitely be successful in this space. Your introduction to affiliate marketing is great for anyone considering it. And I would highly recommend them to give it a shot as it has a very low cost to enter and high potential to earn if successful. But most importantly, affiliate marketing taught me many of the skills necessary for an online entrepreneur and has allowed me to venture off into the e-commerce space with some success.

    Anyways thanks again for this write up, I hope it helps interest some more “Aussies” into this space.

    Cheers,

    David

    1. Thanks David, I agree that it’s not for everyone.  Although, I have to admit I love it myself.  I also have a true love for writing content which helps a lot.  

      I think affiliate marketing is often a starting place for people looking to get into the online business world.  Once you get the feel for it you can branch into other thing like you have done.  I wish you all the success in the future.

  4. I have heard a friend of mine doing well in affiliate marketing, making 4 figures every month. I was so convinced that I can at any time start affiliate marketing. Thank you for suggesting Wealthy Affiliate. I have sign up for the free membership and I will be looking at how it works in the next few days, if everything goes well, I will subscribe for the Premium membership.

    Thank you so much, for the great article

    1. Thanks so much for reading.  I’m glad you liked it.  If you need any guidance or help with Wealthy Affiliate I am happy to help.

  5. Hey i really enjoyed this article, it was very informative.  I do really enjoy affiliate marketing but i need to get the motivation back to start pumping out a lot more content.  My main website promotes WA and i had a second site for my actual niche but i keep getting kicked from Amazon.  The first time i didnt make 3 sales like i was suppose to and the second time i did make 3 sales but then i had returns so i got kicked out again.  I am just going to focus on my main site and work on building up traffic!

    1. Hi Justin, thanks for reading.  Yes the Amazon program has done that to me for not having enough sales as well.  I persevered though and second time around I got my 3 sales and got accepted.  There is no doubt that affiliate marketing takes time.  It is not a get rich quick scheme, as nothing worthwhile ever is.  If you are using a blog as your way to promote affiliate links then traffic is very important.  Try using SEO to get ranked higher in searches.   

  6. Affiliate Marketing is one of the most rewarding skills that I have ever learned. It is pretty cool to know that I have control over my income stream and that no one can take it away from me with two words.  I have just started making around $30 per month. While it isn’t enough to live off yet, I am slowly building it and setting small milestones for myself.

    1. Hi Jessie, I love it too.  Its actually very interesting and a lot of fun.  All good things take time.  I wish you so much success on your affiliate journey.

  7. Thanks for your useful and informative post on affiliate marketing. It’s truly something that benefits all parties – marketers help connect customers to sellers and make sales that might otherwise not happen. 

    Looking at some of the other comments below, it sounds like Wealthy Affiliate is the top program you recommend. Are there any other affiliate programs you’ve found success with?

    Thanks again for the post.

    Best,

    Nick

    1. Hi Nick, thanks for taking a look at my article.  

      Wealthy Affiliate is fantastic because it gives you all the info on how to be a great affiliate and even how to set up a website.

      There are many other affiliate programs I have had success with in other niches though.  For Australians I love Commission Factory.  On a larger scale Share a sale is also great.  But, it really depends on your niche and your goals.

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