What Is Affiliate Marketing And How Does It Work?

what is affiliate marketing infographic design

Introduction To A New World

Since I can think back, I wanted to earn money by doing something I enjoy or by using skills I’m good at.

Each job interview I went for, I had to mold my skills to match the ones required for the position I didn’t really want.

Besides doing that I would have to pretend to be highly enthusiastic about the boring tasks I would be given and even worse, sit through this day by day, if I were to be given that position.corporate lifestyle

Recently however, I asked myself what I’m good at or what do I actually really enjoy doing?

After all everyone keeps saying: “Do something you love, and you’ll never work another day in your life”

So when I stumbled across affiliate marketing, I knew something was there. But what is affiliate marketing and how does it actually work?

I think these two questions are the very first I get, when people ask me what my new “blog” is about and why I’m doing it.

So in this article I will try to make it simple and explain it as thoroughly as I can. Hopefully I can convince some of you to create your own website and maybe have a little side project after work!

If you want to skip reading and just join the affiliate world straight away, I encourage you to at least go through my Wealthy Affiliate review.

It is the community where I was taught and learned most of my knowledge and still am.

They will provide you with a short explanation in the first lesson on how the internet market can generate some income on the side.

Modern Day Salesman

When I try to explain to my friends and family what affiliate marketing is, they instantly jump to the conclusion that it’s a scam or a pyramid scheme type of thing and tell me to quit what I’m doing.

I never intended and never will want to make illegal money.

Robbing people from their money just wouldn’t feel as rewarding to me and besides, I don’t think my conscience could live with that.

What affiliate marketing really is, is a type of modern salesman. All you do is sell products and get a commission for it.

These products vary a lot because you are free to choose which product, program or service you want to promote.

What you do is, you decide on a specific subject, or niche you want to go into and look for an affiliate program related to that niche.

Usually, if you go on a website where you can buy things, they almost always have an affiliate program.

So if you’re worried about having a niche and thinking you can’t monetize it, don’t panic because there usually always is a way to find an affiliate program around it.

Once you have chosen a program to sign up for, get a unique affiliate link and you create a website based around that product which you are now trying to sell.

You add your affiliate link somewhere in your website and whenever someone clicks on that, it redirects or sends your customer to the actual website that sells the product.

The unique affiliate link you got by signing up, basically tells the store that you sent the customer to them.

This allows them to pay out your commission to the right person.what is affiliate marketing infographic design

Normally people choose a niche, that they have a passion for or are experts in.

This way you can write and review about the product without getting bored and your business will last longer (given that there’s a demand for it whatever you’re selling).

And that’s pretty much it. So let’s go through this again in simple steps to explain how exactly affiliate marketing works:

  1. You choose a niche/subject that you want to sell (e.g. Lamps)
  2. You look for an affiliate program, that produces and sells your product, to sign up for (e.g. Amazon) and receive your unique affiliate link.
  3. Now you create a website based around your niche and try to get as much traffic (visitors) on it as possible and wait for them to click on your affiliate link and buy the product they see on your site.

Pretty simple right? The next question I usually receive when I’ve explained this step is: “Why wouldn’t people buy it straight from Amazon?”

It is a valid question and I asked myself the same thing before, but firstly you should understand that, although Amazon sells millions of products, it doesn’t sell everything.

There are thousands of programs and courses that also offer affiliate programs.

If you go on Clickbank for instance you will see how many products there are that aren’t physical products.

But as for the physical products, people like to be sent in the right direction.

If you manage to get the customer on your site before they land on the retailer, like Amazon for example, and you manage to sell them the product before they leave your site, that commission goes to you.

We as humans are impatient and don’t like to have to choose from 1000 similar product.

And although you can filter out the cheapest, best rated and most popular product on Amazon, there are ways to gather people on your site before they land on the actual retailer.

These tricks and techniques are a long process and it takes a bit of practice and studying to get good at them.

Win-Win Situation For Both

A lot of people also ask me why huge retailers like Amazon would even bother with affiliates.

They could simply just let people land on their page and keep the commission to themselves. It is a pretty obvious answer if you think about it.

Giant firms like Amazon spend millions of dollars every year to advertise their brand and try to get as many customers as possible.

These methods of advertisement aren’t always as effective either. Bad press and failed campaigns cost a lot of money.

If affiliates target a certain group of people that are really passionate about one product.

Amazon doesn’t have to worry about creating a form of advertisement just for that specific group.

It might just be 5% of their main consumer but these 5% are still worth millions to them.

Affiliates can target their group while the retailer doesn’t have to worry about it.

The commission they pay out to their affiliates is a lot less than any campaign or ad would have been.

Additionally all the effort is scratched because their affiliates does the dirty work for them with pleasure as well.

On the other hand, we as affiliate marketers have it easy as well, because all we have to do is attract the consumers by creating a website and generating traffic.

We don’t have to:

  • Create and produce the product
  • Worry about manufacturing costs
  • Store the right amount somewhere
  • Deliver the good on time
  • Deal with customer service
  • Worry about refunds
  • Pay employees

… and everything else that comes along with owning a shop.good business

With affiliates, the retailers also have to do a lot less work to reach a lot more customers. If there is only their site, people might never hear of it.

But if there are millions of sites promoting their product, there is a much wider range of potential and consumers to be reached.

My favorite benefits of affiliate marketing are the following:

  • You can choose your working hours
  • You can choose your working place
  • You are your own boss
  • The money you earn is limited by the effort you put in
  • You can choose whatever you love as your product
  • All you need is a laptop and no money or very little money to get started.

There are still some and always will be some critics and skeptical people out there.

But I’m not lying that there are some highly successful people out there making more money than you can imagine.

I’ve previously written a post of some success stories, which you can go back to read on here if you like.

These are no exceptions either.

Another great thing about this business is, that once you’ve learned how this works, you can simply repeat it over and over again or improve your website.

So I hope that I could clear up some confusion about this business and that I managed to answer the question.

If you would ask me now “What is affiliate marketing” I would probably answer with, the best job someone could possibly have.

There is no stress involved in it and like I said earlier, profits are limitless. But don’t expect it to be easy.

It mostly takes months if not years to learn how to profit from this type of business.

This is why it’s important to get the right education and learn the fundamentals of this market.

If you are interested I would encourage you to check out some trustworthy programs such as Wealthy Affiliate.

Don’t get your hands on a program that promises millions within a few weeks.

Thanks for reading and I hope you enjoyed this!

Feel free to leave any comments, questions or thoughts behind. I will most definitely answer to them as always!

Esteban

 

16 Comments

  1. Great article on affiliate marketing. I am an affiliate marketer myself and honestly I wouldn’t have it any other way. I have the flexibility and freedom to work when I want and wherever I want. You have a good layout here that lets people know about the fundamentals of affiliate marketing and how they can be successful with it.

    • Hey,

      You describe exactly what I want to achieve with my affiliate marketing route. The flexibility is quite honestly priceless.

      I am glad you understand what I am trying to let people see and understand. I can’t believe that not everyone is getting on board with this. I just don’t see a better way to live freely.

      Thanks for your comment :),

      Esteban

  2. Hi there! Great article about what is affiliate marketing and I really understood how it works. Honestly I didn’t know that affiliate marketing exists. You are right with what you said that they are this marketers are kinda like modern day sales man. What i see that makes it better is that you dont have to go door to door to make a sale. Thanks for the information men! By the way, where have you learned all of this?

    John

    • Hey,

      Thanks for enjoying it so much. I always get asked by friends what exactly it is and how I am making money through it. That is why I tried to create an article explaining it all. Since you managed to understand the concept I guess I did an alright job 🙂 !

      It definitely is a lot better than going from door to door and you have so much more potential customers as well, since the internet has several billion users. I learned most of my knowledge on Wealthy Affiliate. You should check out my review on it. It’s my most rated product.

      Thanks,

      Esteban

  3. Great article. I keep trying to tell my parents the amount of money you can make via this route but like you said they’ve instantly jumped to the conclusion that I’m a snake Oil salesman and should have a proper job.

    Luckily I’m a fully grown man that can make my own decisions – otherwise I’d be losing out right now lol.

    Lovely informative article. Thank you 🙂

    • Hey Raymond,

      Tell me about trying to explain to parents of the potential there is here… I’ve been trying to calm down my mom for months now. She thinks I will end up on the streets haha.

      I’m in the same boat as you. I just want to prove everyone wrong though by succeeding here 😉

      Thanks for enjoying my article so much!

      Esteban

  4. Hey Esteban,
    I love your website. It is very well written and this article specifically is very informative. I myself am a new Affiliate Marketer and I am glad I am following this path now. I have always wondered how people succeed online and you have shown the simple and straightforward way to do it. The diagram you’ve have is key!
    Long gone is the door to door selling, begging your friends and family to try your new product. Affiliate marketing is awesome. I have no doubt in my mind that with this article, you will convert a lot of your readers.
    Kudos on an awesome site.
    Ann

    • Hey Ann,

      What a kind comment you left behind 🙂

      I have to say congratulations on making the leap towards affiliate marketing. Just today I was thinking how great of a job this actually is. In the last 3 days I was very ill and caught a bad cold. I couldn’t do much but lie in bed and eat soup. However I was still making money because of the hard work I put in the previous days.

      That’s just one great reason why I love affiliate marketing so much. Might write a post about that actually!

      Again thanks for your lovely comment and don’t shy back to ask me questions if you ever get stuck with anything! Always happy to help out!

      Esteban

  5. You have managed to express the true value of affiliate marketing as well as the definition. I never thought about the angle concerning Amazon’s point of view in all of this…it makes a lot of sense.
    The fact that people can use their passions to drive income has to be the best feature in my mind. Who doesn’t want to make money and talk about things they love while they do it?
    I can foresee a new revolution of online entrepreneurs coming in the future. This is exciting.
    Great post.

    • Hey Ket,

      Thanks for your comment firstly!

      Yea the person handing out affiliate commissions obviously has a great advantage in using affiliates. Although they may be handing out a lot of money, they are making a lot more through these sources instead of investing millions in employees promoting products and commercial uses which also cost tons!

      The passion aspect is of course incredibly beneficial for anyone that joins in. I still get mad thinking about how I would love to have known all this 5 or 10 years ago. I could have skipped the evils of the 9-5 and be a super affiliate by now.

      It would be interesting to see a revolution 😉 let’s see what happens!

      Thanks,

      Esteban

  6. Great article! If you are new to affiliate marketing you may encounter a couple of obstacles. Most of mine were picking a great affiliate program worth my time. I suggest if you are new to check out Avantlink They have a ton of products, don’t email you to warn you that you account is being closed, and have great percentages earned when you sell something. As an entrepreneur your time is very important. Affiliate marketing lets you free that time up alot. Instead of dealing with customer service you free that time to do other things like focusing on traffic and content. It’s very easy to get distracted. Stick to one website and focus on your readers!

    • Hey Alex,

      Thanks for your comment. I haven’t heard of Avantlink before but I just had a look and it does look quite amazing. Huge choice of affiliate programs in all niches really!

      Affiliate marketing does give you a handful of free time which is always a good thing since it’s the only thing we can’t buy back. One of the many reasons I love it so much 😀

      Esteban

  7. As a beginner affiliate marketer, I found your article and insights into the way of making money on the web very useful . 🙂

    I know exactly what you mean when it comes to job interviews and mundane jobs because we shouldn’t have to fake it in this world. I think regardless of skills, if we have a passion for any particular job, then we are the ideal candidate because then we’ll be more passionate about learning the skills too!

    But because things don’t always go our way, we are forced into boring jobs that suck!

    Rant Over! LOL.

    Thanks for sharing your own story as an affiliate marketer and I too have family/friends who label my new online business as a scam but people always attack what they don’t understand. I think maybe we should show them our blogs. 😉

    Neil

    • Hey,

      I always thought you were already quite settled in the affiliate marketing world!

      As for the job interviews and dull jobs we get sucked into, I guess we have to somehow consider ourselves lucky enough that we even have the option of getting a job! But if we have that privilege we also have the privilege to do something better with our lives and something we enjoy doing.

      Very true about what you say when people attack, however a lot of times even when you try to show the blogs, the results or explain a bit, they find negatives and shut down because they have their minds set. That’s just my experience.

      Only a few actually try to learn about it and copy the small success we gradually see!

      Thanks for your comment 🙂

      Esteban

    • The great thing about domains and affiliate marketing in general is that it doesn’t run away. You can work at it 30 mins a day or 2 hours a week whatever suits you. As long as you put consistent work into it and stay updated you should see results. LEt me know if there’s anything I can help you with.

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