Do you want to work small hours and spend the rest of your time relaxing and pursuing hobbies? Who doesn’t? One dreams of having a steady income chart as an online entrepreneur, making money in the background, and earning a passive income.
From marketers seeking to increase their web traffic to entrepreneurs building an online business, affiliate marketing is the starting point at which they start generating income. Affiliate marketing must be one of the most widespread methods to generate a passive income online, and the market keeps growing. Here is a guide to help you know how to promote products by being an affiliate and making good money from it.
Affiliate marketing: what is it exactly?
Affiliate marketing is a marketing technique where a retailer, most often an online one, rewards a website or an individual for the amount of traffic generated by that website/individual for their business, commissioned per customer. The website/individual given commission to promote is called the affiliate. Affiliates get paid when the traffic they generate using a platform results in transactions.
Most of the time, there are four members involved in affiliate marketing:
- Producers: the ones who created the product
- Affiliates: the ones who promote the product
- Network: the ones who manage affiliates
- Consumers: the ones who buy the product
Networks are not necessary for this process. The other three (producers, affiliates, and consumers) are crucial.
Who is an affiliate?
An affiliate is an individual or a company, also referred to as a publisher. They can be other bloggers or promoters in the same industry as the product they’re promoting. There are many affiliates offers online. Affiliates promote products using blog posts, videos, and other forms of media about the product or service they’re promoting. They use different tools to promote their content to get transactions, such as paid advertisements, SEO tools to help optimize the search engine, emailing, etc.
The commission per transaction depends on different commission structures. But generally, when an affiliate’s promotion generates a lead or conversion, the affiliate earns a commission.
Who is the producer?
A producer, also known as a merchant, is the one who creates the product or service or is responsible for its advertisement. They share a revenue percentage or give commissions to affiliates for promoting their product/service only if they have a significant reach with the consumers.
Merchants are companies that offer commission for every customer brought in by an affiliate or even an individual like Pat Flynn, who offers affiliate programs with its podcasts. The merchants can be sole proprietors or big companies, just as long as they are willing to pay affiliates for promotion. The merchant doesn’t necessarily have to be the product creator, much like merchants on Amazon that are only liable for the selling, promotion, and finding affiliates for a company’s products.
What is the network?
Affiliate networks connect affiliates with merchants and vice versa. Networks are not always necessary in such a situation, but are preferred to ensure reliability on both ends.
The network is responsible for managing the relationship and offering third-party checkups. Third-party checks are important to avoid scams. Affiliates choose to work with well-known networks because they connect them to some of the best merchants in the industry. Merchants choose to work with networks because they don’t have the time or resources to do a background check on every affiliate and handle all the checks and payment balances, especially if they’re working with several affiliates at a time.
Consumers, customers, and buyers- call them what you want, but they are the end target to reach by all three of the rest. Consumers are the ones that get influenced by affiliates and make the transaction.
Affiliate marketing: how does it work?
As mentioned earlier, affiliate marketing works simply by successfully promoting something. When a transaction occurs, the customer fills a lead form or clicks a link that leads from a web page to the producer’s website.
There are three different types of affiliate marketing models:
- Pay-Per-Lead (PPL): The affiliate gets paid for every lead they can drive from their advertisements. It could be a form submission, pre-purchase, or trial creation. The risk is shared between the affiliate and the producer.
- Pay-Per-Click (PPC): The affiliate gets paid for every click driven by their advertisement on the website or product links regardless of whether the customer purchases the product or not. This is highly risky for the producer with no risk for the affiliate.
- Pay-Per-Sale (PPS): The affiliate is paid on every sale driven by their promotion. From the moment of seeing the advertisement to making a purchase, the entire process is considered. PPS is the most commonly used method since the affiliate undertakes all the risk.
Steps to start affiliate marketing:
- You need to choose a marketing platform that suits you and your niche.
- Slowly start to gain followers through engagement.
- Sign up for any affiliate program or join a Network.
- Promote your affiliated products successfully to the consumers to get more programs.
- Improve, develop, and track your progress.
- Get paid. (You can set your payment terms once you have a good number of following).
How much can you earn from affiliate programs?
Depending on the content you create and your platform’s popularity, you can earn upwards of $100,000 a month once you are good at what you do. It is more about maximizing profit than the revenue you make. There is no use in making $5000 a day if your cash outflow is even more than that to produce the content you make.
Affiliate marketing has its pros and cons, just like everything, but in this time and age, it is a lucrative opportunity you can cash in on if you have the knack for it. It may sound easy, but there is A LOT that goes into affiliate marketing. There’s intense competition and plenty of scams, haters, backlash, losses, and constantly updating your content to stay relevant in the market. However, it is easy money, one you can earn by staying home or doing what you enjoy the most if you’re willing to put in the effort.