The idea of affiliate marketing is simple. You recommend high-quality products or services, and if a person buys through your link, then you receive a commission. Usually, a percentage of the total purchase price, or a flat fee. Affiliate programs can be used as a marketing technique to raise brand awareness and increase revenue.
Recommending affiliate products is usually one of the first ways people will earn an income online. It’s a much simpler process than creating a course, selling services, or starting any other kind of online business.
Naturally, you probably have a lot of questions.
What is an affiliate program? How does affiliate marketing work? Was I born to be an affiliate marketer?
If you’ve been curious about earning income as an affiliate, or just want to know the intricacies of how affiliate programs work, then this post is for you.
Below we answer your most pressing questions related to affiliate partners and programs, so you can decide if you should join an affiliate program to promote products you love.
What is Affiliate Marketing?
Put simply, affiliate marketing describes the process of earning a commission for a sale of a product you recommend.
Affiliate marketing is one of the most common ways that people earn money online. Site owners find products and services they love, then recommend them to their visitors. Entire sites have been built on the back of affiliate marketing.
Plus, it’s a relatively passive way to earn money if you want to monetize your blog. For example, if you write blog posts reviewing certain affiliate products, then you’ll earn commissions whenever someone buys something through your link. Plus, all of this takes place without you having to do any additional work. It’s like having a salesman work for you around the clock.
Here’s a visual of how the process works with HostGator’s affiliate program:
At its core, affiliate marketing remains the same. You get paid a commission for recommending products to your website visitors. But, as you’ll learn below, there are a wide range of different products you can recommend, along with a ton of different affiliate networks you can sign up for.
How an Affiliate Program Works
Affiliate programs can be a great way for companies to expand their user base and add new customers and clients. People who recommend products get a piece of the commission and it’s a win-win situation—especially if it’s a product or service that you’re already a fan of and would recommend even if you weren’t getting a piece of the sale.
With an affiliate program, there are multiple different parties involved.
Here’s a quick breakdown of the different parties and their roles:
1. The Merchant Business
The first essential role is the merchant business. This is the retailer who actually sells the product or service. Beyond just offering a product or service there also needs to be an affiliate program created.
To use an example let’s look at Amazon. They’re one of the biggest retailers in the world and they have a very long-running affiliate program. You can sign up to be an affiliate for Amazon, and you’ll get a unique tracking link. You add that link to your site and whenever someone clicks that link and orders that product from Amazon you’ll receive affiliate commissions.
The mechanics will differ slightly depending on the merchant business, what they sell, and how they structure their program, but the core elements remain the same.
2. The Affiliate
It would be hard to have an affiliate program without the affiliates. Affiliates are the people who promote products in exchange for a commission. As an affiliate, you join the affiliate program or network, which gives you access to certain marketing materials, or a unique link that will track your commissions.
You can then promote a variety of products and services via your link. Some affiliates will build entire sites dedicated to affiliate marketing (which we highlight below). Others will simply promote a single product via email, or even share a unique link across social media.
As an affiliate, you’ll have plenty of options for earning an income around the products and services you recommend.
3. The Customer
You won’t earn an income as an affiliate without customers. To earn affiliate commissions you need people to click through your link and buy a product from the business you’re promoting.
With most links there will be tracking cookies in place, so the merchant will be able to see that the sale originated from your link. For some affiliate networks, this cookie will last between 24 to 72 hours. So if a customer clicks your link and then ends up making a purchase the next day, you’ll still get credited with the sale.
Some companies like Amazon will even give you a commission for any item that a customer orders, even if it isn’t the same item as the original link. For example, let’s say you’re promoting a fancy Vitamix blender. A customer clicks the link but ends up buying a new television. You’ll still get a commission, even though they didn’t buy the original item.
For some networks, your customer will have to buy the exact product or service you’re selling, but for others, the requirements are much looser.
4. The Merchant Network
The merchant network is usually integrated with the company running the affiliate program, or it can be managed by a third-party vendor.
Essentially, this network is how clicks are tracked and payments are taken care of. Nowadays this is usually done through software. At HostGator, we use ImpactRadius to manage our affiliate program.
You get a unique tracking link. That link is connected to your affiliate dashboard which will show you the number of clicks, sales, and your conversion rate.
The payments will also be processed by the merchant network. Your commission and frequency of payments depend upon what you’re selling and the affiliate network you’re using.
What to Know Before You Join an Affiliate Program
There are a myriad of different affiliate programs out there. You could probably find an affiliate program for virtually every niche on earth.
But, not all of them are of high quality. Some of them are basically scams. This isn’t said to scare you, but instead to highlight the need in finding a quality and reputable affiliate program.
Most big companies will offer their own affiliate programs. Usually, you can find this via a link or page on their site. For example, here at HostGator, you can sign up for our web hosting affiliate program. Then, whenever you recommend HostGator web hosting to a friend you’ll earn commissions.
There are also other big affiliate networks that have a multitude of different products and services you can promote.
Keep in mind that the quality of the company’s website whose products you’re promoting will have an influence on how much you’re able to make as an affiliate. Send your customers to a low-quality website and it’ll decrease the chances that they’ll buy.
This is another reason why you want to only sign up for affiliate programs with reputable companies.
Affiliate Program Payment Breakdown
The affiliate program you sign up for will dictate the payment options and level of commission you’ll receive.
Often the price of the product will influence how much you make per sale. Generally, you’ll get paid more when a customer purchases a higher ticket item, or if it’s a subscription service since that kind of customer is very valuable to a company.
There are typically two types of ways an affiliate commission can be recorded.
- The first is pay-per-click. This is where you’ll get paid the moment a person clicks a link that takes them to the merchant’s site. This type of payment is usually much lower, but it can pay well if you can send a high volume of clicks.
- The second is pay-per-action. This is where you’ll get paid when a customer completes a desired action. This can either be buying a product, signing up for a service, or even something like completing a customer interest form or placing a phone call.
Payments for affiliate programs can be a little slow as all sales and commissions have to be verified. But, it can still be a nice additional income. As you’ll learn below extremely profitable sites can be built on the back of affiliate marketing.
What Do Affiliate Sites Look Like?
Affiliate sites come in all shapes and sizes. Find any niche of products selling online or off, and you can bet that there’s an affiliate site dedicated to that style of product.
You don’t have to build an entire site around the affiliate products you’re promoting. Some website owners will have dedicated blog posts that promote certain products, affiliate links placed throughout their website, or resource pages contain affiliate links to all the tools, products, and services they can’t live without.
Some people will simply use affiliate links throughout their emails to subscribers. This is a very common way to promote different products, courses, and services. Chances are you’ve gotten a few emails today that are recommending or selling certain affiliate products.
Overall, it’s up to you to produce creative content as an affiliate marketer.
Here are a few examples of different ways affiliate marketing can be done:
1. This Is Why I’m Broke
This is Why I’m Broke is a very interesting example. Essentially, the site shows interesting and intriguing products from Amazon. If someone clicks on the link and buys something from Amazon, then the site gets a commission.
2. Smart Passive Income
Smart Passive Income makes great use of a ‘Resource’ page to highlight affiliate products and services. If you’re a fan of their website, then chances are you’ll find value in the products and services they recommend.
3. The Best VPN
The Best VPN is an entire site that’s built upon reviews. They review different VPNs and privacy tools and feature those that will provide the most value to their visitors. Affiliate review sites are incredibly common and can be very successful.
4. The WireCutter
The WireCutter is another technology and product review site that focuses mostly on physical products. They review different products across a variety of niches and recommend those that pass the bar to their visitors. You’ll notice links to different retailers across their site.
5. Brain Pickings
Brain Pickings is an interesting example. The site is built upon sharing the wisdom from different writers, thinkers, and other visionaries. You’ll notice that there are links throughout the content which take you to Amazon to check out the book currently being discussed.
As you can see there are a ton of different ways to not only make money as an affiliate but even create an entirely new website. Hopefully, the sites above can act as inspiration and get you thinking about the direction you’ll take with your affiliate recommendations.
Is an Affiliate Program Right for You?
Chances are you won’t need to join an affiliate program the moment you build your first website. You’ll probably want to have solid traffic coming in, or an existing channel where you can make money promoting products.
If you’re ready to sign up for an affiliate program, then make sure you do your research. If there’s a product or tool you love, then chances are you can sign up for an affiliate program through the original retailer. If not, there are reputable and large-scale affiliate networks like Amazon Associates, or even ClickBank for digital products.
If your goal is to build a site like one of those featured above, then make sure there are products or online services you can promote that are in alignment with the niche you’ve chosen.
Making money as an affiliate isn’t as simple as throwing up a couple of links and waiting for the money to start pouring in. It takes careful planning, finding high-quality affiliate programs, and recommending products and services that are in alignment with the needs of your audience.
In time, you’ll get a feel for the types of affiliate products that convert well and that your audience actually loves.
Hopefully, you have a better understanding of what affiliate programs are, how they work, and know if it’s time for you to sign up for an affiliate program.
Ready to get started? Join the HostGator affiliate program today, and build out your affiliate marketing toolkit.