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What is affiliate marketing and how does it work?

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What is affiliate marketing and how does it work

What is affiliate marketing and how does it work?

Every once in a while you might come across the term Affiliate Marketing. What is it and how does it work? Can you really make money with it? Get all the basics right here and learn how to make money with affiliate marketing.

Affiliate Marketing is a marketing strategy used by businesses to promote their services or product. Whereby they use the middleman to do promotion and in return they pay them a commission for their marketing efforts.

Disclaimer: This post includes affiliate links that may provide a commission to me at no cost to you if you decide to purchase a paid plan. However, the links are for the best software and tools you need to start a successful blog and build a professional online presence.

How does affiliate marketing work?

The affiliate marketing strategy includes four major players to complete a sale:

  • The merchant
  • The affiliate network
  • The affiliate
  • The customer

The merchant

The merchant could be the business or the individual who wants their product to be sold. These are people who create the product and assign it to the affiliate network for a fee.

The affiliate network

This is like the third party in this type of business. This is a network that acts as the middleman. The affiliate network handles the technologies used to run the business. It makes the calculations and ensures that the payments are made to all members. The merchant will assign the affiliate network their product and pay a certain fee for placing their product on the network.

In some cases a company that produces the product which is the merchant can also handle its own affiliate network. In that instance the merchant is also the affiliate network meaning it handles the payments.

Related post: Best Affiliate Programs and affilitate networks of 2022

The affiliate

The affiliate is the person who does the marketing on behalf of the merchant and gets a commission for every sale made by the customer. 

For the affiliate to get the product, they have to be members of the affiliate network, that’s how they receive the product placed by the merchant.

All players make money since they are part of a network, the affiliate can earn as much commission as they want depending on their marketing efforts and skills.

In the make money online industry, affiliate marketing is one of the best ways to make money, even newbies can earn good amounts in their first attempts.

The customer

The customer is the last player in this network, the customer is brought in by the affiliate usually through a website. 

That’s where they might see the product being promoted by the affiliate if they decide to buy the product. 

They are taken to the affiliate network and the transaction will happen there. Then the affiliate(the one who was marketing the product) would get their commission from the affiliate network.

One would ask, How would the affiliate earn commission if the sale or the transaction happens over the network? How will they know I brought the customer to make the same?

When you register with the affiliate network you will be given a unique ID. That ID is the one that a user can be tracked with, that ID is placed with in the referral link, like so

http://affiliatenetworkdomainname.com/?reflink=affiliateID

In this case the affiliateID could be a number, letters or a combination of the two.

Online systems use cookies to track users from one page to another, a cookie ID can be signed to every user and it can be used to transfer data from one page to another.

When the potential customer clicks on your referral link your referral ID is transferred to another page. Where the customer will make the sale and payments, which will be happening on the affiliate network dashboard.

As an affiliate marketer though, you don’t have to worry about the tracking part. Because that is being handled by the system designed by the affiliate network on the backend programming. All you have to do is focus on your job as affiliate marketer and leave the programming to the experts.

As you can see in the diagram below, all the of the key players operate within the affiliate  network.

What is affiliate marketing and how does it work Diagram

Affiliate marketing is considered the number one type of online business to produce internet millionaires. So if you do your job you could be one of the best internet marketers or affiliate marketers and earn millions through your efforts.

Your responsibly as an affiliate

Your job as an affiliate is to do the marketing and sell the product and get your cut when a sale is made.

But first you have to know the types of affiliate programs that you can choose from. And select the products or services placed by the merchant.

Three types of affiliate networks

Affiliate Marketing has three types of affiliate networks. Knowing such information will allow you to make a decision based on your requirements.

  • CPA(Cost Per Acquisition),
  • CPS (Cost Per Sale) and
  • CPL (Cost Per Lead)

Cost Per Acquisition(CPA) – also known as CPS(Cost Per Sale), In CPA networks you get paid only if you refer a customer who makes a sale.

Cost Per Lead(CPL) – In CPL you could get paid if the customer leaves their name and email or telephone number, basically their contact details. A CPL might not pay as much as the CPA since there are no direct sales made.

Revenue Sharing – This is another type of affiliate network. They are also called rev shares. Usually used by subscription websites, payments could be recurring.

Make a decision on which type of program you would like to promote but you should know. Within some programs there are one or more of the above types of affiliate marketing programs.

Another thing that you should consider doing is to contact the affiliate network manager and the merchant. If you do get their contacts just get a more understanding of their offers and expectations and what you as the affiliate can offer.

See if you can meet their expectations. You can contact them via email or phone if it is provided. Build a relationship with them since you will be doing business with them by promoting their products. 

Not everyone likes doing that though if you believe you can do it without contacting them then just sign up and pick the product you want to promote.

Here are some of the major online affiliate networks:

  • Amazon.com
  • Clickbank.com
  • JVZoo.com
  • CJ.com
  • LinkShare.com
  • ShareSale

If you are in South Africa you might also consider looking at this affiliate networks:

  • Affiliate.co.za

How do you make money online with affiliate marketing?

You find an affiliate network online , do your research about it, sign up when you are happy with it and get a referral link. You then choose the type of a product or service you want to promote then send traffic to your referral link which will also be linked to that product.

How to Get Traffic to your affiliate marketing product or how to promote affiliate products.

This is a common question but if you master this step of getting traffic you are good to go and stand a very good chance of making money online through affiliate marketing.

Start a blog

The number one recommended marketing strategy is to start a blog or website. Even though you can still promote products on the internet without a blog, a blog makes it easy for you to promote almost anything online. I have already covered the topic on how to start a blog if you don’t know how.

Build a List

Building a list involves email marketing, you can use either the free versions of email tools or the paid versions. Depending on your budget you should go for what you can afford. An email list will allow you to have lots of subscribers you can turn into customers in the future. Even after you have changed a product, someone who has bought from you can still buy again.

Design a landing page/funnel/capture page/Squeeze Page

When building an email list you should do so with a capture page. A capture page makes your marketing style look professional and well organized. Have a brief description and an image about the product. If you are promoting an ebook, have a front cover image on your landing page and explain a little about it.

Next to that you can place your email textbox and a submit button, this will let your visitors enter their email address and submit by clicking on the submit button. That will turn them into your subscribers for life and you can send them emails whenever you have another product.

Building an email list is part of the email marketing strategy, so you have to learn more about it. With email marketing you stand a good chance in affiliate marketing.

As a begginer you might need a few tools to help you build an email list the proper way. For a free email tool try MailChimp and for a premium  email martketing tool  you can use Aweber as a beginner.Those tools will also help you build a capture page. If you want complete list email marketing tools visit 15 email marketing tools to help  you decide.

Social Media

You can also build your social media presence to gain followers. This is a part where you have to apply your social media marketing. Social media is the way to go if you want to make money through affiliate marketing. Build a following on Facebook, Tweeter, Instagram, Google+ and other major social media sites while sharing your post content from your blog which leads to your capture page as well.

You should consider applying social  media optimimization for on all your socials to get maximum traffic to your affiliate links.

YouTube

This part of the video marketing strategy which can be done through video hosting channels. Take videos and upload them one youtube while doing a review about the product you are marketing. You Build a huge subscriber list on youtube, learn how to rank your youtube video and dominate your niche.

Don’t place your referral link directly on your Youtube description, place your blog and your landing page. Doing affiliate marketing needs you to be strategic in your advertising. The video marketing strategy always plays in most internet marketing including affiliate marketing.

Forums

There’s a forum for almost any topic online, find a list of forums that are related to your niche and participate in them and be a regular member. Share some of your links whenever possible, learn how to market using forums.

Comment on Other Blogs

Commenting on other people’s blogs can give you a good name in the long run. Find a few blogs that are related to your niche and be a regular reader and start leaving comments.

Word will eventually go around on the internet about your name and you will start receiving traffic to your blog. This might take time but is worth doing.

Use Paid Traffic

I’m not a big fan of paid traffic since it costs money, but it is the best way of getting targeted traffic. But it is good for affiliate marketing since it makes it easy to get targeted traffic. You can buy ads on Google and other sites to promote your affiliate marketing stuff there. This could work if you have a reasonable budget.

SEO

Get organic traffic to your blog through search engine optimization. This is the best free natural traffic method. Learn how to optimize your content and let search engines find you and build a powerful business online while making money through your affiliate marketing.

Conclusion

Should one implement their internet marketing strategy by following this post they might succeed. I hope you liked this blog post and learned something from it. If you feel there’s something that is not included in this article please share. I know we might be doing things differently. And also if you have questions regarding this post, you are welcome to ask. I would be happy to assist you.


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