What is Affiliate Marketing and How Does It Work

Business Insider found that around 15% of the digital media industry’s revenue comes from affiliate marketing. But that was in 2016, and the topic of affiliate marketing has only become more popular. So if you’re a beginner to affiliate marketing and you want to learn what is Affiliate Marketing and how Does It Work then this article is for you.

To tap into this a billion-dollar industry, keep watching reading because I’m going to show you what it is affiliate marketing and how it works, and how to get started without the hype.

We have a lot of ground to cover today and I genuinely want you aspiring affiliate marketers to actually build a site that’s not only profitable but something you’re proud to create. So warm and fuzzies aside, let’s get to the tutorial.

What is affiliate marketing and how does it work?

Affiliate marketing is when you promote other people’s or companies’ products. When someone makes a purchase through your affiliate link, you’re compensated with a commission. Now, in order for the affiliate company to attribute sales to the right people, the merchant usually uses a unique link and when a visitor clicks that link from your blog, website, or wherever, a cookie is stored on their device.

An affiliate cookie does two main things

.Let’s run through an example, so everything is crystal clear. Let’s say a visitor comes to your post about gardening hoses and clicks on one of your affiliate links. This takes them to a product page on Amazon. But wait. They have to go and pick up their kids from soccer practice.

So they do that, they have dinner and then go back to Amazon.com in their web browser. They find the product again and then purchase it along with this PS4 controller. Since they clicked on your affiliate link, a cookie was stored on their device.

Because Amazon has a 24-hour cookie duration, you would still get compensated a percentage for both the garden hose and the PS4 controller, even though you weren’t promoting it. That’s why I like affiliate marketing and most people are doing this right now. Now, most people have a question.

How much money can you make as an affiliate marketer?

The simple answer to that is that there is no limit. It’s on so many factors. Like what is your niche? What’s the competition or what is the trend of your niche.

Make sure you check your niche trends on Google Trends to check that people are still searching this for or not. Alright, so let’s quickly go over the things you’ll need to get started with affiliate marketing.

You need a Platform

First, you’ll need a platform where you can use affiliate links. So the two places I recommend are through a blog or YouTube channel. Starting a blog is easier and cheaper than ever. There are plenty of tutorials around the web and it’ll cost anywhere from a dollar to ten dollars per month.

You’re then free to add your links in your content whenever and wherever. The other platform you can use is YouTube, where you can create content and to my best knowledge, include affiliate links within the description.

From my experience, you’ll get more clicks from a blog than a YouTube video. So for that reason, most of the examples going forward will be for a blog, but the principle still remains the same.

Alright, the next thing you need to do is choose a niche. When you’re choosing a niche, remember you’re choosing a niche, not an industry.

And for that reason, I recommend choosing a topic that focuses on a specific category. For example, rather than going after the topic of “food” as a whole, try starting with something a bit more specific like “grilling food.”

And as you cover this category and build traffic to these pages, you can start expanding out into other related categories like “Desserts” or “Vegetarian foods.”

Keeping your topics tight can help you build a more focused audience and rank higher in search engines. Now, if you’re going to be the one creating the content, choose something that you’re interested in. The reason being, I see so many affiliate sites die due to lack of consistency and on top of that, they spread false and inaccurate information.

Even if you’re not an expert in the field, documenting your learnings can make great content and build an audience. Now, if you’re outsourcing the content, then I recommend looking for writers that are seasoned experts in the niche.

This will help you create better-quality work, which can lead to more traffic, engaged visitors, and hopefully more affiliate sales. I’ll expand on the importance of content quality in a bit. The last thing you’ll need is affiliate programs to join.

Now, when it comes to choosing affiliate programs, there are generally two models I’ve seen and used. And both come with their own shares of pros and cons. Both are good but you have your own choice.

High Paying and Low Volume Keywords

The first is high-paying low-volume affiliate programs. The obvious pro is that they’ll pay you more for each sale, ranging anywhere from $50 to $500 to thousands of dollars per referral. The cons that come with these programs is that there’s generally more competition.

Meaning, it’ll be tough for newbies to make a meaningful amount of money since they’ll be competing with more skilled digital marketers with deep pockets.

Low Paying and High Volume Keywords

The second model is low-paying high-volume affiliate programs. The positive thing about these programs is that there are often lots of products to choose from. Think Amazon. And you’ll often get commissions on the entire value of the purchase rather than just the product you recommended.

As for cons, unless you’re actually generating a ton of traffic and affiliate sales, it’ll be tough to generate a decent income. There are tons of affiliate programs you can choose from. And the programs you join will likely come down to your niche and level of expertise.

If you’re targeting consumers, you’ll likely go with the second model of low commissions and higher sales volume. A couple of popular affiliate programs you might want to check out Amazon Associates and Commission Junction.

If you’re going after more of a B2B audience you’ll likely go with the first model, high-paying, low-sales volume programs. The most common programs I see here are for software and web hosting related products. Usually, I find that the best way to find affiliate programs is to just search for them on Google.

Now, there’s actually one more category of affiliate programs that I didn’t really touch on, but it’s important that you’re aware they exist. Those are the high-volume, high-paying affiliate programs. These will always be super-competitive and over-saturated with experienced marketers.

We’re talking about things like credit cards, loans, and gambling-related offers. I won’t go deeper into this since this is an affiliate marketing tutorial for beginners. Now, I’m sure you know you can’t just post links on your blog and expect people to click it.

You need to create high-quality content where your affiliate links will fit naturally. The information has never been so accessible in the history of the world. So the way people make buying decisions today is very different from 20 years ago.

For example, I was recently in the market for a smartwatch, but I didn’t know which one to get. So I did what everyone does, search for information. I went to Google and searched for “best smartwatches.” There is an affiliate website that is on top, so naturally, it was top of mind.

Now, the one commonality you’ll see in quality content is that the information helps users solve a problem. So rather than going to Amazon and finding the top 5 best sellers to promote, I highly recommend going the extra mile to make your content superb.

That might mean to purchase an item and give a hands-on review. Even if you don’t have the money to buy every product, start with what you have in your home.

For example, if I had a tech blog, I could create killer reviews on Apple Airpods, Bose QC35 headphones or an Amazon Echo. Since I’ve owned these products for a while now.

Bottomline, Make your content stand out because it’ll help build brand and trust over the long haul.

Alright, we’ve got the fundamentals of affiliate marketing down, let’s get into a basic formula to actually make money from your affiliate site. The formula looks something like this:

If any of these are missing, it’ll be impossible to get any kind of commission. So let’s dissect each part of the formula. You need these four things to create a successful amazon affiliate website. After that, we have something more that is also important.

Getting Free Website Traffic

First, let’s talk about getting traffic to your affiliate site. There are a ton of ways to get free website traffic but let’s talk about the three most popular ways.

The first is to buy ads through platforms like Google, Bing, and Facebook. Paid traffic is awesome because the moment you start playing, you’ll immediately get traffic to your site. But there are two huge downsides to this.

A) Running ads will dig into your profits.

In fact, it’s quite normal for advertisers to lose money before they make it…if they ever do. From my experience, this can work well if you’re part of a high-paying affiliate program. For lower-commission programs like Amazon Associates, I wouldn’t bother trying to run ads.

B). When you stop paying for ads, your traffic comes to a halt.I’m all for using ads to drive relevant traffic, but if you’re a beginner, I wouldn’t recommend trying it right away. The risk will usually be too high for the reward.

The next traffic source is organic social traffic. With most social networks, you need followers to actually get a decent amount of traffic. And even if you do have followers, what you’ll often find is that you’ll get traffic spikes But shortly after, the traffic fades to nothing. This is what some refer to as “the spike of hope” and “the flatline of nope.”

Since we’re talking about building sustainable affiliate sites, I wouldn’t recommend relying on social as a main source of traffic. This brings us to the final traffic source – SEO, which stands for search engine optimization.

SEO is the practice of optimizing pages to rank high in search engines, like Google. Best of all, it has the complete opposite effect of paid ads and social traffic. Free, consistent, and passive traffic that doesn’t fade over time.

On a basic level, SEO comes down to your content and other websites linking to it. Now, in order to find topics worth writing about for an affiliate site, you’ll need a keyword research tool. The one that I’m using here is Ahrefs Keywords Explorer.

So assuming my niche site was gardening, I’ll start off by adding a couple of broad keywords related to my niche, like “gardening,” “garden,” “plants,” and “flowers.” Next, I’ll go to the Phrase match report, which gives us around 7 million keyword ideas that contain any of these words.

Now again, with affiliate content, you want to look for topics where you can organically insert different product recommendations.

For example, “what do garden snakes eat” might be a good topic to cover to get traffic, but it’s unlikely you’ll be able to include any product recommendations. So we need to filter these results down using keyword modifiers. A modifier is an add-on to a base keyword. Select Keyword difficulty to maximum 5.

So a few common ones that work well for affiliate sites might be best, reviews, vs, top. So I’m back in the Keyword ideas report and I’ll click on the Include search box. Next, I’ll click on the Any word tab, then add a few so-called “affiliate modifiers” here.

And now we have a lot of great topics to cover like “ramona flowers, bamboo gardens, jade garden, Walmart garden center, Costco flowers, olive garden delivery and more.

Based on Ahrefs’ Keyword Difficulty score, most of these should be pretty easy to rank for. Now, I won’t go any further into keyword research because we have a bunch of tutorials that go a lot deeper into this process. Now, assuming you’ve created some epic content, the second part of SEO, is to get other websites to link to your page.

The main way SEOs do this is through something called link building. But most people don’t know what are backlinks and why they are important. This usually requires reaching out to other bloggers and website owners and asking them to link to your page for a good reason.

There are a lot of ways to create high-quality backlinks and natural backlinks that will help you to rank higher on Google. Some of them are listed below.

1 – Reciprocal Link Building
2 – Guest Posting
3 – Web Directory Links
4 – Comments On Blogs And Forums
5 – Get Indirect Backlinks From Your Competition (Read Full Guide)
6 – Take Advantage Of Broken Links
7 – Infographics
8 – Social Bookmarking Websites
9 – Profile Backlinks
10 – Private Blog Network PBN Backlinks

If you want to know how to create all backlinks check this out. (How to Create Quality Backlinks).

Let’s move onto the second part of the formula, which is to drive clicks to your affiliate links. There are a few things to consider.

1) First is linked placement, meaning the position of links on your page. If they’re all buried at the bottom of the page where only 10% of your visitors might go, then they probably won’t get clicked. Go the other extreme and make every other word a link in your introduction, and your contents can look spammy.

So you’ll want to balance link placement with the next consideration, which is context. You want to link to product pages contextually. Use this pattern:

Title: Best Chef Knives under $50

Content: Today I’m going to show you some of the best chef knives that are under $50 and available on Amazon.

Product no 1
Product no 2
Product no 2
Product no 4

Lastly, are using callouts like buttons, tables, and boxes. These kinds of things attract your readers’ attention and make the post more skimmable. The last ingredient in our formula is conversion. With affiliate marketing, two conversions need to take place in order for you to make money.

The first is the click. You’re in control and responsible for this action. And the second conversion is the visitor actually purchasing a product on the affiliate partner’s site. In this case, the merchant controls the checkout and should be committed to high conversion rates. We’ve already gone through a few tips to increase clicks, so it comes down to finding affiliate programs that convert decently well.

The first way to know whether an affiliate program converts is to look for public income reports. If people are making good money from an affiliate program, then chances are, the products convert or there’s at least enough sales volume to make a decent income. There are three more ways to do this.

If the program or product you’re promoting feels “off” and you would never recommend that product to an interested friend or family member, run. It’s clear that a lot of affiliate sites lack authenticity. In my opinion, referring people to products that they’ll actually love is a lot more value from a personal and brand perspective.

The final piece of advice that I have is to actually go and experiment. Don’t expect perfection or a life-changing income that happens overnight. It doesn’t happen that way, otherwise, we’d all be billionaires. Focus on making that first affiliate sale.

As your site grows, set new reachable goals rather than settling for a one-off hustle. Now, I have a question for you. Would it be helpful if I built an affiliate site from scratch and documented everything? Let me know in the comments and use the hashtag “affiliate marketing.

Now I hope you know what is Affiliate Marketing and how Does It Work. If you enjoy this guide so make sure don’t forget to share with others and subscriber the bell notification for more actionable marketing guides or tutorials. So keep grinding away, get that affiliate site up and running, and I’ll see you in the next blog post.