Affiliate marketing is where you promote another company’s product or service in return for a commission on the sales you make. Commissions are typically a percentage of the sale price, but can occasionally be a fixed amount.
Here are two reasons why you should consider doing affiliate marketing:
1. Low-cost and low-risk- Starting a business means incurring upfront costs for products, employees, equipment, rent, and so on. This makes it risky and expensive. With affiliate marketing, all you need is a website. Even if it doesn’t work out, all you’ve wasted is time and a bit of money.
2. Easy to scale- A typical salesperson only sells products from one company. As an affiliate marketer, you can promote products from many companies and earn commissions from all of them.
How does affiliate marketing work?- The merchant gives each affiliate a unique link, so they can track who was responsible for a sale. When someone clicks that link, a small file called a cookie gets stored on their device. An affiliate cookie helps the merchant attribute the sale back to the right person. It usually holds an expiration date, so you get paid even if the buyer delays their purchase.
Let's have a look at the below example of how it works.
Imagine that a reader visits your post about the best shirts. They click on one of your affiliate links, leading them to a product on Amazon.
But they realized they have to pick up their kid from school. So they leave their house, pick up their daughter, have dinner, and then finally go back to Amazon where they find the product again.
Since they’re already shopping on Amazon, they decide to purchase some home appliances too.
Here’s the good news. Earlier, they clicked on your affiliate link and a cookie was stored on their device. Because Amazon has a 24-hour cookie duration, you get compensated for both the shirts and home appliances—even though you didn’t promote the latter.
How much money one can make as an affiliate marketer?. Well, there is no limit. It depends on your niche and the amount of work you put in. The most successful affiliate marketers make six or seven figures a month.
Pat Flynn from Smart Passive Income made over $100,000 in affiliate commissions in December 2017. Ryan Robinson, another affiliate marketer, reported over $19,000 in affiliate revenue in October 2019. Another successful affiliate website—The Wirecutter—made an estimated $10 million in revenue, and was eventually sold to the New York Times for $30 million.
Keep in mind though that these people have done an excellent job building their brand. It’s taken them years of hard work to reach this level. If you’re just starting out, you only make little. You need to manage your expectations. You won’t earn the big bucks right off the bat, but don’t let this discourage you.
The success of others tells you that with hard work, time, and the right knowledge, you too can potentially reach those levels.
Here are the two important steps to get started with affiliate marketing:
Step #1: Decide on a platform. Theoretically, you can do affiliate marketing on any platform. Even Instagram works.
However, it’s much easier to build an audience and increase your affiliate sales via one of two channels: a blog or YouTube channel.
Starting a blog today is relatively easy and cheap. There are plenty of tutorials online that teach you how to get started. The best part? It’ll likely only cost you a few dollars per month.
Once your site is up, optimize it for search engines, so you have a better chance of ranking. From there, you’re free to add affiliate links to your content. The other platform is YouTube. Creating and uploading content to YouTube is free, which makes it ideal for many people. Optimize your videos for SEO, and include affiliate links in your description. One of my favorite examples is on Book Tube, where various YouTubers review books. Note that you’ll need to disclose that you’re including affiliate links. The Federal Trade Commission (FTC) requires you to be transparent when receiving income from an endorsement.
Step #2: Choose your niche. Let’s be honest: if you’re starting a blog today, you face a lot of competition. Statista estimates that the number of bloggers in the U.S., will reach 31.7 million by next year.
To stand the best chance of success, niche down. Choose a topic that focuses on a specific category. For example, the topic of “food” is an enormous category. Rather than tackling that, try something more specific, like grilling food.
Keeping your topics tight can help you build a more focused audience and potentially help you rank higher in search engines.
No affiliate marketing wheels were reinvented here. These are the fundamentals, and applying them will get you off on the right foot. Just don’t expect life-changing income or the freedom to quit your 9-5 overnight. Affiliate marketing takes time. Focus first on making your first affiliate sale. As your site grows, set new goals, and continue experimenting. This is how to build up a site that eventually generates a decent income.
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