Affiliate Marketing

Affiliate marketing is an advertising model where publishers earn a commission by promoting a product or service made by another retailer or advertiser. The  affiliate partner is rewarded a payout for providing a specific result to the retailer or advertiser. 

Explanation

Typically, the result is a sale. But some programs can reward you for leads, free-trial users, clicks to a website, or getting downloads for an app.

Affiliate programs are usually free to join, so you don’t have to worry about high startup costs. Done well, this performance-based opportunity can go from side hustle to profitable online business idea by netting you a healthy income.

Working Of Affiliate Marketing

Affiliate marketing involves referring a product or service by sharing it on a blog, social media platform, podcast, or website. The affiliate earns a commission each time someone makes a purchase through the unique link associated with their recommendation. 

Review Of Affiliate Marketing

To review:

1. 1. You show an ad or a link for Store Z on your website, blog, or social network.
2. 2. A customer clicks your unique link.
3. 3. The customer makes a purchase in Store Z. 
4. 4. The affiliate network records the transaction.
5. 5 .The purchase is confirmed by Store Z. 
6. 6. You get paid a monetary commission.

Commission rates vary depending on the company and the offer. On the low end, you’ll earn about 5% of the sale but, with some arrangements, you can earn as much as 50%, usually when promoting a class or event. There are also affiliate marketing programs that provide a flat rate per sale instead of a percentage.

Pros and cons of affiliate marketing

Pros

There’s no doubt affiliate marketing is worth it, given its growth in popularity. Statista estimates the affiliate marketing industry will be worth $8.2 billion by 2022, up from $5.4 billion in 2017. It’s also a low- to no-cost business venture you can profit from immensely. 

While industry growth is a good indication of success, entrepreneurs also take this referral marketing route for a few other reasons.

Easy to execute

Your side of the equation simply involves handling the digital marketing side of building and selling a product. You don’t have to worry about the harder tasks, like developing, supporting, or fulfilling the offer.

Low risk

Since there’s no cost to join affiliate programs, you can start making money with an established affiliate product or service without any upfront investment. Affiliate marketing also can generate relatively passive income through commission—the ideal money-making scenario. Though initially you’ll have to invest time creating traffic sources, your affiliate links can continue to deliver a steady paycheck.

Easy To Scale 

Successful affiliate marketing offers the potential to significantly scale your earnings without hiring extra help. You can introduce new products to your current audience and build campaigns for additional products while your existing work continues to generate revenue in the background.

Before you get too excited, know that great affiliate marketing is built on trust. While seemingly there is an endless number of products or services to promote, it’s best to only highlight those you personally use or would recommend. Even when a product interests you or fits within an existing hobby, becoming a great marketer for that product takes a lot of work.

Cons

Affiliate marketing also has a few disadvantages compared to other platforms. Before jumping in, let’s look at a few challenges you’ll face on your journey to success.

Requires patience

Affiliate marketing is not a get-rich-quick scheme. It requires time and patience to grow an audience and gain influence. 

You’ll want to test different channels to see which connect best with your audience. Research the most relevant and credible products to promote. And spend time blogging, publishing free content on social media, hosting virtual events, and doing other lead-generating activities. 

Commission-based 

There’s no boss handing you a weekly paycheck as an affiliate marketer. Affiliate programs work on a commission basis, whether you’re paid by lead, click, or sale. 

Companies use a temporary browser cookie to track peoples’ actions from your content. When a desired action is taken by someone, you receive the payout. 

No control over program

Affiliates must obey the rules set by a company for their program. You need to follow their guidelines for what you say and how you present their product or service. Competitors must follow the same recommendations, so you have to get creative to differentiate yourself from the crowd.

Affiliate Marketers 

Those guys or peoples which do an affiliate marketing and earn money are called affiliate marketers.

Ways Through Which Affiliate Marketers Earn Money

Affiliate marketing income spans a large spectrum. There are some marketers that’ll make a few hundred bucks per month and others that make six figures a year. The larger your following, the more money you can make. 

Compensation software company Pay scale reports that the average annual salary of an affiliate marketer is $52,130, based on over 7,000 salary profiles, with the highest tier making an annual salary of $72,000.

There are also marketers like blogger Ryan Robinson, who makes over $17,000 per month through affiliate income alone. This image below shows Ryan’s blog income for March 2021: 

But how do affiliates actually get paid? When you choose an affiliate program to promote, you’ll notice there are different payment models. Companies also call it a price model, payout model, conversion type, or another variation. 

Regardless of the name, the payment model tells you what goals you will get paid for. If you’re promoting a software product, the action could be a free trial signup. For marketers that promote physical products, the goal will likely be a purchase. 

Many programs run with last-click attribution, which means the affiliate who receives the last click before purchase gets 100% credit. However this is changing, as programs improve attribution models and reporting. For example, you could share equal credit for a sale if there were multiple affiliates in a buyer’s conversion funnel. 

Five common ways affiliates get paid include:

• Pay per sale, where you earn a commission for each sale you make. It’s a common payout model for ecommerce offers.

• Pay per action, which earns you a commission for a specific action. Many affiliate programs use this payout model because it’s broad and can be applied to different offers: a newsletter signup, a click, contact request, form submission, etc. 

• Pay per install, where you are paid for every install generated from your website traffic. The goal of your content would be to promote mobile apps and software so that people download or install them.

• Pay per lead, which pays you every time someone signs up for something. It’s a popular payout method because companies use it for sweepstakes, lead generation, and other types of offers. Cost per lead offers are common for beginners because it’s easier to generate leads than to sell products to an audience. 

• Pay per click, a rare payout system where you earn commission on every click on your affiliate link. Pay per click programs are used by big merchants with a goal to build brand awareness. Customers don’t need to sign up or buy anything, just to visit the merchant’s website. 

How much you make depends on your affiliate niche. For example, our research* found that the highest average commission rate ($70.99) was for business-related programs. While books and media and clothing categories earned just over $6 per commission. The maximum average commission we found was around $289.06 per sale.