What is Affiliate Marketing

Affiliate marketing process

Affiliate marketing process flowchart

As described in Basic Training, affiliate marketing is defined as:

The affiliate marketer promotes the retailer’s products and services to consumers earning a commission by referring traffic and sales to a retailer’s website.

Basic affiliate marketing process – Once you sign up to be an affiliate of a retailer, (step 1) you promote the retailer’s products and services using the promotional material and links provided by the retailer. The consumer sees your promotional material and (step 2) buys the product or service from the retailer using your affiliate link. The retailer ships the product or provides the service to the customer. The retailer (step 3) pays you the commission for the sale to the consumer.

Affiliate marketing is an easy business to start. Typically, there is little risk and low entry costs when starting to promote a retailer’s products and services.

I am going to discuss how to become an affiliate marketer, the benefits and disadvantages of affiliate marketing, how to get traffic and sales as well as ways to promote products and services. I will also briefly discuss affiliate networks.

How to become an affiliate marketer

It is a two-step process to become an affiliate marketer. Find a niche of products and services you like or want and then sign up sign up with a company that has an affiliate program.

It is easy to find products and services with associated affiliate programs on Google.

Type the “product or service item” plus affiliate program. In the example below, I entered “antivirus software” + affiliate program. Google returned 20 pages of results.

Affiliate program search in Google

Affiliate program search using Google

Another way to find products and services to promote is to use one or more of the affiliate networks. Networks are aggregators of retailers. In other words, the networks list hundreds and thousands of retailer affiliate programs. So in essence, the network acts as a middleman between the retailer and the affiliate. The advantage of using an affiliate network is it makes it easier to find retailers and products to market. Some of the larger networks include:

 

Amazon affiliate program

Amazon affiliate program

Once you have found the retailer with which you wish to be affiliated, complete the application. The picture above shows the Amazon affiliate program page. Amazon has the world’s largest affiliate program and offers over 1 million products.

Benefits of affiliate marketing

There are a number of benefits to affiliate marketing. The benefits include:

  • Easy entry – It is a matter of identifying and applying to an affiliate program. Having a website is not required.
  • No skills necessary – The larger affiliate programs and networks provide training to get you started.
  • Low risk – It does not cost to join an affiliate program.
  • Focus on advertising – The retailer (merchant) is responsible for the sale and delivery of the product of services. Your responsibility is promoting the retailer’s products (via product links).
  • Back office support – The retailer provides the back office support, accounting, tax reporting and other administrative functions.

Disadvantages of affiliate marketing

Affiliate marketing is not easy for a number of reasons.

  • Commission rates vary – Commission rates can vary anywhere from a couple of percent to 70% (typically software products). Commission rates also vary from retailer to retailer. Depending on product competition, retailer profit margins are razor thin. Consequently, commission rates are low.
  • Competition – Because of easy entry and low risk, there are a lot of people competing in affiliate sales. And they are competing against experienced affiliate marketers.
  • Product reputation – Product and retailer reputation is important to success with affiliate marketing. Low quality may result in product returns and chargebacks. It is not uncommon for retailers to hold off paying commissions for 30 days or more. I recommend checking the retailer Better Business Bureau ratings and customer satisfaction reports or complaints. Look for retailer and product reviews via the search engines.
  • Product demand – If the demand for a product is not there, no sales occur. And no commissions are paid. Click here to read more about demand

How to get traffic and sales to the retailer’s website

With millions and billions of people online at any point in time, you would think it is easy to find customers. There has to be someone wanting to buy from you. Don’t you think?

Customer Profile

Creating a customer profile

The problem is they cannot find you.

You must identify your customers.  This is done by determining who and why would they want (demand) your product. Build a customer profile. What does a typical user of your product look like? What problem does your product solve for them?

Once you have a customer profile, you can build your promotion around the key characteristics of your customer. Think like your customer. When your customer is searching the internet for a solution to their wants or needs, what words do they use for their search terms?

You now have your target market. The next step is to start promoting to your target market.

Here are ways to promote to your target market:

  • Blogging – Create a personal or informal blog and write about problems your target market encounters and offer solutions.
  • Build an email list – Use an email marketing system and collect email addresses to send periodic emails discussing problems and offering solutions.
  • Use social media – Share the challenges of finding solutions to pressing problems. Share results you have achieved using products.
  • Write reviews – Write a quality review of products highlighting the benefits, results or problems with specific products.
  • Personal networking – Word-of-mouth is a great way to share solutions to problems with friends, family and acquaintances.
  • Paid advertising – Use paid advertising sources like Google Adwords or Facebook ads to promote specific solutions to your target market.
  • Banners – Use the banners provided by the retailer and post to your website or post to banner ad sites.
  • Create videos – Create videos using testimonials to review products and post to YouTube or other websites.

Once you have started driving visitors to the retailer’s website that buy the products, you will see your revenue grow.  Successful affiliate marketing is all about relationship building. Identifying problems people have and offering solutions. It is not a matter of convincing someone to buy. It is being helpful and helping fix their problem. 

6 thoughts on “What is Affiliate Marketing

  1. Great post. Nicely written.

    Affiliate marketing is easily the most popular way to make money online simply because you don’t need to create your own products. You simply have to get people to buy thru your affiliate links. It’s simple but not necessarily easy.

    I agree with you that affiliate marketers need to focus on how we can provide value to our readers.

  2. Great outline of information you’ve made here!

    I’ve just started to learn marketing and the way you’ve explained how to approach some of the more difficult areas has given me some ideas to try out.

    I especially liked the way you itemized ways to promote to your target market. Lays it all out in simple to follow steps.

    Good article,
    Bobby

    • Thanks, Bobby. I appreciate your review. Glad I was able to generate some ideas for you. I read a lot of blogs and articles looking for ideas myself.

  3. Like the detail to what I need to know about getting started with affiliate marketing. Knowing the major companies you can get a hold of for marketing their products does make it easier to figure out what is available and what goods or services would be nice to offer.

    This article makes part of the decisions much easier to find a niche to get involved in by knowing what is available.

    • Thanks. Travis. Glad I was able help you. I update on a regular basis. So please stop by again and check out the new stuff.

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