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How to Make Money in the Affiliate Marketing Business
Updated: Nov 05, 2020 / Article by: Jerry Low
Affiliate marketing can be an incredible business to get into. It’s a major part of the digital marketing ecosystem. In the United States alone, the affiliate market is expected to reach a value of $8.2 billion by 2022.
That’s a lot of money to go around.
Getting involved in affiliate marketing is easy – all you need to get started is basically just a blog.
However, there’s a big difference between getting involved and actually making money in the affiliate business. It’s a very competitive industry after all.
What is Affiliate Marketing?
Think of affiliate marketing in a similar light as being an independent salesperson for a brand. Your job is to attract people towards a product with an intention to sell it. However, the product isn’t produced by you.
Nor are you responsible for even storing, delivering, or even making the actual sale. Before we go deeper into that, let’s take a look at the ecosystem as a whole.
There are three key roles in affiliate marketing:
This is the role that as an affiliate marketer, you’re looking to fill. Your job is to try and convince people that a product is worth buying. Once someone swallows your pitch and buys the product, you get a commission from the merchant. You need to offer potential customers useful information that will help them evaluate products for purchase.
These are the guys that have a product they want people to buy. However, their interest is in building the best product they can and supporting their customers. To get more customers, they look towards affiliates who will pitch the products on their behalf.
Outside of affiliates and merchants, the rest of the population on the Internet are potential customers. As customers, they have needs or interests. When they try to find products to fill these needs, they want more information than sales brochures typically have to offer.
While the roles of merchant and customer are fairly straightforward, your job as an affiliate is a little more challenging. Part of this stems from the fact that there are lots of affiliate marketers.
Exactly how this is done is where the magic happens. There are various methods affiliate marketers can employ. For example, you may decide to have a simple blog with affiliate links embedded in it. Or perhaps build an e-book, do a live pitch via stream, or create podcasts and videos.
Aside from the form or medium of your communication you also need to decide what tone you want to adopt to your audience.
Are you going to shower them in unicorns and sunshine about the product? Will you give them ideas and gently nudge them towards what you’re selling? Any or all of these methods are possible, but there are a few models I’ve seen work pretty well.
Different Approaches to Affiliate Marketing Business
1. Influencer Model
Influences are people who are able to capture the attention of a wide audience. They build large groups of loyal followers and are able to sway them towards certain opinions or even products (hence the term ‘influencer’).
Who influencers are:
Social Media Users
Building on their popularity, influencers will try out products and introduce it to their audience in various ways. Some may offer unbiased opinions, while others may directly promote, showcase usage models, or leverage on any other means to increase audience awareness.
In these situations, they will provide affiliate links which their followers can use to buy the products. Each time a purchase is made, the influencer will receive a commission from the brand selling it.
Influencers come in a massive variety of flavors and you might be shocked at the possibilities. Let’s take a look at a few examples.
Felix Arvid Ulf Kjellberg a.k.a. PewDiePie
Platform of Choice: YouTube
PewDiePie has been around for so long that he most probably doesn’t need an introduction. With over ten years on YouTube, he’s created a following that could conquer most countries if numbers counted.
Ignoring the nature of his content, PewDiePie is the model influencer, leveraging not just his subscriber base, but also the media and hype to rise to the top. Because of this, everything he touches turns to gold and he’s bringing home not just the bacon, but the entire pig.
Platform of Choice: Blog
As the average Joe who through some tough times just like many of us do, Pat Flynn is the perfect icon that can harness an audience. This he has done to great effect though his blog: Smart Passive Income.
He shares his thoughts and experiences in affiliate marketing to help others, as the blog name says, build some income. Pat also leverages podcasts and holds workshops to share his wealth of knowledge.
Advantages of the Influencer Model
The beauty of influencers is that they don't necessarily have to really do anything special. People love (or hate) and follow them naturally and in large droves. As one might say, “you do you, chief.
Because of their massive following, influencers are much loved by advertisers. THey are often versatile and can fill the needs of multiple brand profiles. Best of all, there is so much focus on them that anything they suggest or promote, instantly comes under the spotlight.
Challenges Influencers Face
Despite massive popularity, influencers are often threatened by the risk of a rapid fall. Their worst nightmare is to wake up one day and find that they’ve become a thing of the past and are no longer trending. Audiences are fickle, after all.
In addition to that, because of the massive following and scrutiny, small incidents can rapidly escalate into major ones. Promoting a ‘bad’ product can result in massive and immediate backlash from an angry audience.
2. Niche-Focused Model
Affiliate marketers with a more surgical strategy will look towards building a small but focused following in a particular niche. As with influencers, the platform of choice can vary. Typically though, their choice of content will not.
Niche-Focused Affiliate Marketers:
Experts in niche market
This is the most common affiliate marketing business model – you build a website, blog, or even YouTube channel around a niche. Your aim is to capture the attention of a very specific group of people.
While at a glance the numbers may seem low compared to the influencer model, the ones who are most interested in your niche are also likely to buy the things you recommend. Niche marketers aren’t necessarily separate from influencers though, especially among more popular niches such as food.
Platform of Choice: YouTube / Niche: Food and Travel
Mark Weins (Migrationology) is one of my own favorites since I love food of all kinds, especially spicy food. He’s an American-born guy who has moved to Thailand and simply immersed himself in the food culture there.
In his early days, Mark wandered the streets showcasing real-life examples of the local street food. As his fame expanded, he kept much of the focus on Thailand but included other areas in his scope as well, such as the US and even Africa.
Ryan Kaji of Ryan’s World
Platform of Choice: YouTube / Niche: Toys
The first thing you need to know about Ryan Kaji (Ryan’s World) is that he’s a kid. This eight year old boy has a subscribed audience of over 26 million from around the world. To put that into perspective, the entire population of Australia is lower than Ryan’s subscriber base.
On his YouTube channel, Ryan has a ton of fun by himself or sometimes with friends. His job: to share with the world all the great ways there are to have fun. Along the way, he takes a look at some toys, food, and other stuff that kids love.
While he’s having so much fun, Ryan also walked away with an estimated $25 million in earnings from 2019. This is one kid who’ll likely be wallowing in toys for the rest of his life.
David Janssen of VPN Overview
Platform of Choice: Website / Niche: Internet Privacy and Safety
David runs an affiliate site – VPN Overview, that’s highly focused on Internet privacy applications – Virtual Private Networks primarily. He imparts knowledge not just on how, but why users need to defend their digital rights.
This is a niche that builds value in a real world sense, especially given how intrusive even legitimate companies are becoming today. Of course, there’s lots of fun stuff you can do with the same applications as well.
Advantages of Niche Marketing
This segment of affiliate marketing is perhaps the easiest to get moving out the door. All you need is a suitable platform and to start creating content. Above all, it is important to be aware of the niche you’re in and to build content suitable for it.
The cost of entry can be immensely low and if you’re dedicated enough, content can be built up steadily. All you need is passion, a computer with Internet access, web hosting, and some research skills.
Challenges Niche Marketers Face
Because of the low cost of entry, niche marketers abound and everyone attempts to claim to be an expert. Within that group there are top niche marketers who have already captured a good chunk of market share and clawing any away can be like trying to scale Mount Everest.
Niche marketers also heavily depend on search engine and social media algorithms to help them drive traffic. This can be very fickle and what works today might simply disappear overnight and be gone for good by tomorrow.
3. Digital Megamall Concept
Over the past number of years the world has become even more highly digital. A combination of factors has led to a massive explosion in the digital retail space. Part of this has been due to increasing Internet penetration as well as borderless trade.
Getting a slice of this pie is a little more difficult though. Because of the scope needed for success in the digital megamall space, those seeking entry are typically the 800lb gorillas with the skills and money to back up their endeavors.
Who enters this space:
Established, well-funded affiliates
As the digital marketing space increases in value, more players are entering this particular category. Part of this has been a build on successful affiliate marketing careers but other interests, such as venture capitalists, have also seen the potential.
Notable Digital Megamall Concept Players
TripAdvisor has become so much of a household name that not many realize it’s actually an affiliate site. Growing into the goliath of online travel, it has its fingers in almost all aspects of the business and earns money from hotels, airlines, other travel companies, and more.
They have a hold on approximately 10% of total global travel spend – that’s a staggering $546 billion at last estimate. Most of the money they earn is from click-based advertising, so their content can be as independent and user-driven as they want.
WireCutter is a prime example of two things. The first is the transition of a niche-based affiliate towards the megamall concept. The second is of investable funds taking control of a successful entity and moving it towards the megamall concept.
It’s a two-in-one demonstration of how much value and money there is in this scale of affiliate marketing. WireCutter when independent was focused on the technology and tech gear market, which has been retained even with the NY Times acquisition.
Affiliate Marketing Success is Not Just Individual Campaigns
With all this talk of success, it can be easy to get charmed by the lure of affiliate marketing. If this is really what you want, you need to know that despite the potential, success isn’t built overnight. This is especially true when it comes to making money in the affiliate marketing business.
It isn't something that you can put X hours in to, then leave to churn money for the rest of your life. Affiliate marketing is more than a full time job and to be really successful, be prepared to put in long hours of hard work.
Aside from that, you also need to take into consideration a few more things before you begin:
Making the Right Choices
Industry matching – While it's important to do something that you’re really passionate about, bear in mind that not every industry has the same potential.Ideally, enter one which has an established ecosystem of notable brands and demand – plus is still growing.
Partnership – By partner I mean brands and this is an area affiliate marketers need to approach with a bit of caution. Brands aren’t always your friends and sometimes, may try to cheat you of your fair share of earnings. Pick the right partners and work closely with those you choose.
Content approach – Decide front eh start which platform will be the one you live or die on. Do not attempt to get established on all of them or even multiple ones at the beginning. That’s a certain recipe for heartbreak. Not all platforms are suitable for different approaches, so consider yours well.
Marketing angle – Decide how you’re going to market your content. Will you go gold school and rely on your SEO skills to draw search engine traffic? Or are you willing to invest funds and dump cash into PPC and social media promos? I would recommend you consider a holistic approach.
Deliver Value to Your Users
No matter what platforms, models, or choices you make, always remember that you need followers, viewers, or readers. They are your key source of income and the only way to attract and retain them is by offering them real value.
This doesn’t mean you give them constant freebies or the like, but deliver something to them. If you’re an entertainer – make them entertained. If they want to see food culture – go explore and show them. If they run a business – show them how to simplify solutions or solve problems.
Take for example the case of TripAdvisor. A big part of the reason for their success is that they offer such a wealth of useful information like guides and tips from those who really have experienced the places. The value is unimaginable.
Places to Join Affiliate Programs
If you;’re ready to start earning money, there are two main types of places you can look towards. The first and most direct are the brands that run their own affiliate programmes. For example, a lot of software publishers will have affiliate programs like ManageNinja or even Microsoft Advertising.
For those who want to work with a bigger stable of brands, then it might be a better idea to look for affiliate networks. These include a lot of big names like CJ Affiliate, ShareASale, and more.
FAQs in Affiliate Marketing
Is Affiliate Marketing the same as Network Marketing?
When you participate in a network marketing program, you’re basically taking part in a franchise type of operation. As a network marketer, you would typically pay an upfront cost to market products/services via direct sales.
Affiliate marketing differs from network marketing specifically in this way: The company you sign up with rewards you for every customer you bring in as a result of your marketing efforts. You get paid every time you drive a customer or lead to the business you’re affiliated with – instead of waiting to get paid every time you sell a product.
Who Started the first online affiliate program?
According to Small Biz Trends, the first online affiliate marketing program was done through a company called PC Flowers & Gifts, in the mid-1990s. William J. Tobin founded the Prodigy Network as a means of starting a revenue-share program. Tobin was able to convince thousands of affiliates to promote his company’s products, and a new method of marketing online was born.
Who are affiliates?
In affiliate marketing, affiliates are the people who market products for a company. An affiliate (often referred to as a publisher) can be one person or an entire business. As an affiliate of a particular company, you would market the company’s products/services in order to make sales for the company. You would most likely promote the products on your own website or blog.
Where can I sign up with an affiliate program?
Affiliate opportunities are everywhere. One example is the Amazon affiliate program. Whether you sign up as an individual or a business, you would register, start advertising via your website and/or business, and start making money when others respond to your marketing efforts.
You can become an affiliate marketer in one of two ways. You can sign up with an existing company’s affiliate program (like Amazon and smaller merchants' in-house program). This would mean that you would promote the products Amazon needs advertised. Every time you promote the business and send leads that way, you would get paid.
The other option is to join an affiliate network (like Commission Junctions and ShareASale) and connect with merchants who are already in the network. We will talk more about this in FAQ #6 and #7.
What are some of the popular affiliate networks?
CJ Affiliate by Coversant – offers a variety of service levels and packages ShareASale – strong reputation for being honest and fair, and known for speedy technology Impact Radius – easy to use software-as-a-service (SaaS) platform Amazon Associates – over a million products available Clickbank – more than six million products, with an emphasis on digital information products Rakuten – one of the top eCommerce companies in the world
How do affiliates get paid?
As an affiliate, you can get paid in various ways; that will be determined by the company you’re affiliated with.
These are the basic options: Cost Per Sale (CPS) – You receive a flat fee per sale or a percentage of the basket value. Cost Per Lead (CPL) – You get paid for every validated, completed lead. Cost Per Click (CPC) – You are paid for driving traffic via ad clicks. Cost Per Action (CPA) – You get paid when people complete actions you advertise (such as quote forms or surveys).
What is an affiliate cookie?
An affiliate cookie is the same thing as an ordinary cookie (it tracks data). Instead of tracking login information as a regular cookie would, it tracks your affiliate account data – so you get credit if someone on the site being tracked makes a purchase based on your advertising referral.
How long does an affiliate cookie usually last?
The cookie duration depends on the merchant. Some affiliate programs allow cookies to store and transmit information for up to 90 days, while others only track the data for 24 hours (which is awful from affiliate's point of view).
Do I need a website to get started as an affiliate>
You don’t need to have a website as an affiliate – though having a website usually improves your chance of making more money. You can post your affiliate links on social media sites that allow that, for instance.
One way to market as an affiliate without a website is on YouTube. However, you will probably find it a lot easier to promote as a publisher if you do have a website. At the very least, you should have a blog where you can market as an affiliate.
Remember that the more places you advertise, the more response you’ll get – it’s a numbers game. Also remember to post links to all of your social media pages, blogs, and other websites across the board; if you advertise via a YouTube channel, for example, be sure to post links to your websites, channels, and social media pages there.
What is a product data feed?
A product data feed is a list of products and their attributes, organized and displayed in such a way that shoppers can make buying decisions based on the information provided. This type of streamlined information makes it easier for an affiliate to market products to site users. A product data feed can be converted into descriptions, image links, and clickable links that visitors can use to make informed purchasing decisions.
What does EPC mean?
EPC stands for earnings per click. This is an important metric for affiliates. It typically indicates how much an affiliate might expect to earn after every 100 clicks through to a link.
What does EPM mean?
EPM refers to the earnings per 1,000 impressions provided by a publisher or website.
Is there a cost in signing up for affiliate program?
No. If you join a program as an affiliate, you usually don't need to pay a fee.
About Jerry Low
Founder of WebHostingSecretRevealed.net (WHSR) - a hosting review trusted and used by 100,000's users. More than 15 years experience in web hosting, affiliate marketing, and SEO. Contributor to ProBlogger.net, Business.com, SocialMediaToday.com, and more.