What Is Affiliate Marketing and How to Make Money from It?

Affiliate marketing, often referred to as performance marketing, is one of the most important parts of advertising as a whole. It is marketing where products or services are sold using the intermediary – partner. Let me say that this is one of the easiest (at least to understand) and most interesting ways to make money on the Internet.  In this article or rather whole section, I want to focus on future affiliates (affiliate partners) – people who have blogs, Facebook groups, or various opportunities needed to mediate sales and want to make a profit.

Before explaining the principle of affiliate marketing in detail, I find it necessary to explain a few basic concepts that you will often encounter in this one and in the following articles on affiliate marketing.

Basic Concepts from the World of Affiliate Marketing

Affiliate marketing – or otherwise referred to as performance marketing – uses the third party – intermediary (affiliate partner) – to sell products or services. Thus, a third person enters between the classical relationship between the seller (trader) and the customer, whose job is to promote a trader’s business.

Affiliate Program – this is a system that allows you to receive, track, and record partner commissions. On the e-shop owner or merchant site you will often encounter also the term Partner Program or Referral Program.

Affiliate partner (publisher) – a person who publishes an ad on their website, blog, Facebook, or other social network. He does not sell or buy anything he just promotes merchant’s products and services.

Merchant or e-shop owner (advertiser) – a person who wants to increase the sale of their products or services. The merchant uses affiliate partner services. He pays a pre-agreed remuneration to the partner for the brokering. The renumeration can be either fixed or as a percentage of sales. Possible is also a combination of both.

Affiliate Manager – It is the person responsible for the overall functioning of the remuneration system. This means that he takes care of affiliate partners, announces various competitions, trains them motivates them and so on. In addition, he searches for and acquires new partners. The manager can also be the owner of the e-shop himself. Any partner may become an affiliate manager too. 

Referral link or unique affiliate link – link with referral code of partner. This is the unique code, based on which the affiliate program owner knows who to credit remuneration for brokering sales. This unique link will be assigned to you after signing in to the affiliate system.

Affiliate network – represents a network or a catalogue of affiliate programs (campaigns). It associates a number of merchants or e-shops owners (advertisers) and affiliates. The partner can choose from several different campaigns to promote. 

Affiliate campaign – it’s kind of ad banner, link, or other form of promotion. Campaigns are created by partners in the administration of the selected affiliate program or affiliate network.

The Essence and Principle of Affiliate Marketing

The whole essence of the business is that the affiliate partner mediates the sale to the merchant or the e-shop owner. He will do that by posting an ad on his website, blog, Facebook group, or via e-mail. This ad is in the form of a unique referral link on which if someone clicks and purchases a service or product, the partner automatically gets the renumeration that is agreed in advance. For you that, means that if a businessman earns, you will earn too.

Some affiliate system owners offer a small financial reward even for the fact that someone using your referral link got to their site. However, I have to point out that you cannot expect some huge sums. It’s just a few cents. You can track all your rewards for sales promotion in an affiliate program administered by an affiliate manager.

Who Can Become a Partner in Affiliate Marketing?

Essentially, anyone who owns a website, blog, portal, Facebook group, or any other means can be a partner. The important thing is to direct a prospective customer to an advertiser’s page. There are different portfolios of web solutions to do so. These are as follows: 

1. Thematic Websites, Personal Pages, Blogs

This is the most widespread option for using affiliate marketing. If you have an interesting page or a blog where you deal, for example, with electronics, you can choose partner programs for the sale of electrical appliances. Or, if you deal with household works, you can place ads on your site promoting a variety of household accessories, furniture, or other equipment.

Assuming you want to get the highest profit possible, the thematic focus of the website is very important. Logically, if I post articles about cooking on my blog, I will not look for a betting affiliate system for my site because I assume that my site will be visited by people who are interested in various recipes, not the betting.

In addition to the website’s thematic focus, other factors are important when selecting a suitable provisioning system too. If you want to know how to choose the best affiliate system and what factors you need to consider when choosing it, read the article – how to choose an ideal affiliate program.

2. Affiliate E-shops

In essence, this is a site that is filled with merchandise from partner programs. This site allows you to offer different kinds of merchandise, which opens up the possibility of higher earnings.

3. General Magazines, News Portals

If you own a magazine focused on general information, you will have the problem of finding suitable affiliate programs.

4. Facebook Group

Have you created a group on Facebook that has enough visitors and members? This is also an opportunity to place your ad and earn a reward for selling.

5. E-mail

If you do not have your own website, nothing wrong happens. You can also promote your merchandise by email. You need only an extensive e-mail address database. In this case, however, it is questionable how many people actually open and read your email.

Other options include, for example, search engines for goods or comparison portals or discount portals.

However, each of the above promotion options has some rules. Websites and blogs should not contain inappropriately or intrusively placed ads or various pop-ups. When promoting a campaign affiliate via email, the person should not distribute bulk and, in particular, unsolicited emails. Such activity is considered as spam.

Any company that has decided to sell through affiliate marketing should have a code of conduct for affiliates on their site. To learn more about what is allowed and, on the contrary, what smells like spamming, read the article on how to properly promote campaigns. 

Payment Models

For affiliate marketing, the PPA abbreviation, which comes from the word PAY PER ACTION, is often used. Thus, that means payment for some action, performance. The PPA is then divided into other models because the payment for some action is a fairly broad concept. The registration in any e-shop (or online games), obtaining a visitor’s e-mail address, or filling in a form (such as for loans) on the merchant’s site can be considered as an action. In this case, this is a PPL – PAY PER LEAD model.

However, most affiliate systems (more than 80%) use PPS – PAY PER SALE, which means payment for the sale. An affiliate partner is entitled to commission only when a visitor becomes a customer who purchases a product or service.

Benefits of Affiliate Marketing

There are multiple benefits of affiliate marketing. The basic and, of course, the most important benefit is that you can earn money by publishing an ad link on your site. Your commission is based on actual sales (or other actions such as registration in e-shop, filling in the form, etc.). This means, you only get commissions if customers actually buy something (or sign up, fill in the form, etc.).

Another benefit is that you have no cost associated with earnings. No entry or monthly fees. You just simply publish a referral link on your site and wait for someone to click through this unique code to buy goods and services. And what is another and really important advantage – you can do your work from the comfort of your home.

Commissions – How Much Can You Earn?

If you like this earnings possibility, you will certainly be interested about height of commission. However, this is different for each affiliate program owner. It also depends on what affiliate systems you are promoting and what pay model the merchant prefers. For example, if you promote online games, the reward is already paid for registration, with a fixed amount of $ 0.20 to $ 10. When promoting various loan products, you will receive a reward only when a visitor enters the form on the merchant’s site to request a loan. It can also be a fixed reward ranging from $ 3 to $ 200 or more. At e-shops, this is a percentage of the total value of the goods sold. Typically, they range from 2-10%, depending on the e-shop and the type of goods offered. So, if an e-shop with electronics sells a laptop worth $ 1,000 thanks to you, you have a reward of 20 to 100 dollars.

The most advantageous, at least in terms of commissions, is the promotion of various info-products. For intermediating of sale of online courses, webinars, seminars, e-books and other info-products, info-entrepreneurs often offer up to 50% commissions. All the details can be found on the sites of merchants who operate an affiliate system.

Conclusion

Affiliate marketing opens up new possibilities how to make money from home. It is an undemanding job that requires a minimum of time and effort. Of course, only if you want to make some dollars extra. If you would like to make it a full-time job in the future, it will be necessary, as with any other business, to invest not only money (e.g. to increase site traffic – SEO, PPC, etc.), but also a lot of time and effort. 

If you did not find what you were looking for in the article, try reading the discussion forum, you can find some interesting information on the topic.

Have you ever got in touch with affiliate marketing? If so, what do you think about this way of earnings on the Internet? I will be happy if you engage in a discussion and write your own experiences. I appreciate any opinion it can be inspiration or motivation for other readers.

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George H.

My name is George and I currently work from home as a freelancer for a PR agency selling advertising. I also freelance as an online marketer for an e-shop, and I am actively involved in creating this website. I am always looking for interesting opportunities on how to make money online. I share my findings with my readers on this website. I consider this to be my hobby. I hope, that you can find some legitimate work from home, or perhaps you might be able to earn a little extra money.