Affiliate marketing is the process of earning money (commissions) every time you promote a company’s products or services and drive a sale. You only get paid every time you drive a sale, just like a commission-only sales representative.
Now before I dive into affiliate marketing, let me tell you why you should care.
Ever since the 4-Hour Workweek was released, everyone seems to have the same goal.
To wake up in the morning, open their laptop, and look at something like this:
(Image source: Top 5 SEO)
That’s the dream, right?
Make money while you sleep.
For 99% of people, affiliate marketing is how they get started.
The idea behind it is that you promote other people’s products, often through an affiliate network, earning a commission if people actually end up buying thanks to your marketing.
It’s based on revenue sharing. If you have a product and want to sell more, you can offer promoters a financial incentive through an affiliate program. If you have no product and want to make money, then you can promote a product that you feel has value and earn an income from it as an affiliate marketer.
I’ve talked a little about it before, but today I want to dive deeper into what affiliate marketing actually is, what sides there are to it, and how to get started. So, let’s dive into my affiliate marketing guide. Ready?
Here’s the definition of affiliate marketing:
Affiliate marketing is the process of earning money (commissions) every time you promote a company’s products or services and drive a sale. You only get paid every time you drive a sale, just like a commission-only sales representative.
However, Wikipedia talks about 4 different parties that are involved: the merchant, the network, the publisher, and the customer.
Other definitions talk about 3 parties instead of 4.
(Image source: CJ)
I will explain all 4 parties in a second. But, when it comes down to the actual marketing, there are 2 sides of an affiliate equation: the product creator and seller and the affiliate marketer.
Therefore, affiliate marketing can be seen as the process of spreading product creation and product marketing across different parties, where each party receives a share of the revenue according to their contribution.
It’s not just the promotion or just the product creation that defines who you are as an affiliate marketer.
You can be both the creator and the marketer and still profit from the underlying idea of sharing revenue.
Now let’s look at all of the parts of a successful affiliate marketing system.
The Merchant: Sometimes also known as the creator, the seller, the brand, the retailer, or the vendor. This is the party that creates the product. It can be a big company, like Dyson, who produces vacuum cleaners.
Or, it can be a single individual like Mariah Coz, who sells online courses to female entrepreneurs.
From solo entrepreneurs to startups to massive Fortune 500 companies, anyone could be the merchant behind an affiliate marketing program. They don’t even have to be actively involved. They just have to have a product to sell.
The Affiliate: This party is sometimes also known as the publisher. Affiliates can also range from single individuals to entire companies. An affiliate marketing business can produce a few hundred dollars in commissions each month or tens of millions of dollars.
It’s where the marketing happens. An affiliate promotes one or multiple affiliate products and tries to attract and convince potential customers of the value of the merchant’s product so that they actually end up buying it.
This can be achieved by running a review blog of the merchant’s products. For example:
It could also be an entire site that’s dedicated to finding cool products related to certain topic and promoting those affiliate products.
(This is why I’m broke is one of the most popular affiliate network sites)
The Consumer: The customer or consumer makes the affiliate system go ’round. Without sales, there aren’t any commissions to hand out and no revenue to be shared.
Whether the consumer knows that they are part of an affiliate marketing system or not is mostly up to the affiliate.
Some choose to let their consumers know and more and more affiliates tend to be transparent about their marketing being incentivized financially, but others don’t.
They let the tracking system work in the background, where the customer can follow the purchase process just as usual and the affiliate still ends up being paid a commission.
The consumer will not typically pay a higher price to the affiliate marketer, as the cost of the affiliate network is already included in the retail price.
The Network: Only some consider the network part of the affiliate marketing equation. But, I believe that an affiliate marketing guide needs to include networks, because, in many cases, a network works as an intermediary between the affiliate and the merchant.
While you could technically promote an online course someone has created and just arrange a direct revenue share with them, letting a network such as ClickBank or Commission Junction handle the payment and product delivery puts a more serious note on your affiliate marketing.
Sometimes, affiliates have to go through an affiliate network to even be able to promote the product. For example, this happens if the merchant only manages their affiliate program on that network.
The affiliate network then also serves as a database of lots of products, out of which the affiliate marketer can choose which to promote.
(Clickbank is an example of a network)
In the case of promoting consumer products, like tools, books, toys and household items, the biggest affiliate network, by far, is Amazon. Their Amazon Associates affiliate program lets you promote any item that is sold on their platform.
Anyone can sign up and then generate a custom affiliate link to Amazon products. If someone purchases through your link, you earn a small commission.
With the basic terms clarified, let’s get an overview of how you can best get started with building your affiliate marketing business.
As I said, there are basically two sides of the affiliate marketing equation that you can choose from, assuming that you’re not going to build an affiliate network such as Commission Junction.
You can become a merchant and have others promote your product, in exchange for giving them a commission from the sales that they make.
Or, you can become an affiliate marketer for one or several products that you’d like to promote and market those to consumers, in order to make money.
While most people start by taking the affiliate route and it definitely is the easier path to take, building enough traffic to make a meaningful income just from affiliate sales isn’t quick or easy.
That’s why I’ll walk you through the 4 basic steps that you can take to get started on both sides of the affiliate marketing industry.
How to become a merchant in 4 steps
If you want to become an affiliate program merchant and then make money by having affiliates sell your product, there are 4 simple, yet not easy, steps that you can take.
First, you need to have a product idea. I’ll show you a few ways that you can generate those ideas, based off what’s already popular, in the next section.
Second, you have to validate your idea. You could just go ahead and build your idea. But, what if people don’t even want it? An idea is only good if people actually want it to come to life.
Third, you have to actually create the product. Since creating a physical product usually comes with huge investment and risks, I’ll only show you ways to create digital products. These are the best place to get started since they typically only require your time and little or no money.
Also, once your product is created and released, you still need to find affiliates to promote your product and this is where affiliate networks can help.
Step 1: Coming up with a product idea
People always say it’s hard to come up with an idea. It’s not. Ideas are easy.
But, if you think that your idea has to be super original and born out of the pure genius of your brain, that’s hard.
If you want to make money with an affiliate marketing business, you can’t be romantically attached to your idea.
Instead, just look at what products and services are already out there. Consider how you can improve upon them, by delivering something that solves the problems with those products.
You can, of course, always, choose a topic that you’re interested or involved in.
Imagine that you’re a housewife or a stay-at-home Dad, for a second.
Maybe you want to create a product that makes household chores easier. For example, you could look for a vacuum robot to get some ideas.
This is the first Google result, a review site for robot vacuums:
Just by looking at the individual reviews, you can instantly see what’s bad about these robots and what you could potentially improve upon.
No virtual walls that tell the robot where to go and where not to go is a common problem, mentioned in 6 out of the 10 reviews of the top products!
Lack of a remote control was also a common ‘con.’
However, the virtual wall came up again and again and again.
Therefore, a great idea could be to develop a virtual wall that works for all vacuum robots.
I imagine that you could sell anyone who owns a vacuum robot a system that works as a virtual wall, so their robot only cleans a predefined space.
Now that’s a valid idea!
This works for anything, I’ll show you.
Another way that you can do research is to use a tool called Buzzsumo, which shows you what’s popular, based on social shares.
Even if you’re into building sandcastles, you can instantly see what content has been recently popular.
People really like cool sandcastles like this one:
(Image source: This is colossal)
If you go on YouTube and search for ‘build a sandcastle,’ you’ll find thousands of results.
Apparently, people really want to know how to build cool sandcastles. So, what could you do?
Record a series of videos where you show people, step-by-step, how to build 5 very specific, epic sandcastles.
Or, you can do a write-up of all of the tools that you need to build epic sandcastles.
You could even come up with some forms or stencils that people can use to make building epic sandcastles a whole lot easier.
The question is…will people pay for it?
Step 2: Validating your idea
In order to not end up doing a great series of sandcastle videos that no one wants to buy, you have to first validate your idea.
How do you do that?
Simple: You ask people to pay you for it.
How do you find these people? Easy.
Take the URL from one of the sandcastle posts on Buzzsumo and plug it into a tool called Topsy.
Topsy then shows you a list of all of the people who tweeted that link.
You can then directly tell them about your idea, by hitting the reply button…
Make sure that you ask them whether or not they would buy your idea — not just if they like it.
Anyone will say that they like something just to be nice.
If they respond with a yes, you need to directly follow up with an ask to buy.
Saying they will spend money is not the same as actually spending it.
When people are interested in your product, give them a chance to buy. You can simply use PayPal and say you’re going to build it if you get a certain amount of orders.
Once you cross your threshold and make sure that people actually want it, you can start creating the product.
Step 3: Creating the product
There are a ton of steps to follow for creating a product and this isn’t an entrepreneurship guide, but I want to point you to some good starters.
I’ll only give you resources for starting digital products, because I don’t want you to waste precious time and money on creating a physical product on your first try 🙂
- How to launch an online course and make $220,750 in 10 days
- How To Create & Sell Your Online Course The Right Way
- SPI 136: How to Build an Online Course that Sells with David Siteman Garland
- The Ultimate Guide to Publishing Your eBook on Amazon’s Kindle Platform
- How to (Really) Make $1,000,000 Selling E-Books – Real-World Case Studies
- How to Start to Write an eBook and Actually Finish it in 30 Days
- Podcasting for Beginners: The Complete Guide to Getting Started With Podcasts
- How to Start a Podcast – Pat’s Complete Step-By-Step Podcasting Tutorial
- How To Podcast: The Ultimate Guide to Podcasting
These are good starting points. Creating digital products is a lot easier, since it just takes time and sometimes a little financial investment, but usually not more than a service fee or a one-time price for software.
Once you have the product created and delivered to your initial buyers, it’s time to open up the affiliate network.
Step 4: Finding affiliate program partners
The tech part is the easy thing here.
(Image source: Gumroad)
The tough part is finding partners who actually have an audience that is interested in what you have to sell.
Let’s stick with the sandcastle guide example.
Do you think there’s anyone out there who sells something remotely related?
Actually, there is.
When you enter “learn to build sandcastles,” into a search engine, several sites pop up that sell educational material about it.
Like Sand Sculpt USA, which offers sandcastle building lessons…
or SandCastle Lessons, which offers a class on the same subject.
Contacting them and getting them to cooperate on a sale together would be an easy pitch because it’s a perfect fit.
The more niche your product is, the easier it will be to pitch to fellow merchants.
You can simply send them an email, introduce yourself and your product and ask them if they want to partner on a sale together, where you’ll share revenue.
Pro tip: Affiliate commissions of 50% or higher are very common with digital products because you have no cost of replication. Don’t be greedy here, split the pot evenly and everyone wins.
Googling “toy review blog” also gives plenty of results, where people write toy reviews.
What’s more, lots of YouTube channels review specific categories of toys. If you find one that reviews kids’ toys, they’d probably also be a good fit for your affiliate product.
Just try finding one person to partner up with and start your first affiliate promotion. You can adjust commissions and details later, the important part is to get started. Or if you need help, you can always work with an affiliate marketing agency that can help you kick start things.
However, you could also start the journey on the other side of the fence and just become an affiliate yourself.
4 steps to becoming an online affiliate marketer
Similarly to becoming a merchant, there are also 4 steps that you can take to start your journey as an affiliate marketer.
First, you need to start reviewing products in your niche. That can be done on a YouTube channel, on a blog or even just using live streams on Periscope.
Second, you have to collect emails, so that you can connect with your audience at any time you want and don’t have to hope for them to see your content.
Third, you can use joint venture webinars to make a lot of sales in a short period of time, while simultaneously growing your email list and creating new content.
Finally, once your affiliate marketing business starts making money, you can scale your growth with pay per click advertising.
Step 1: Review products in your niche
It’s easier to get started as an affiliate because you’re skipping the ‘have an idea’ and ‘creating an idea’ parts of becoming a merchant.
You already use and like plenty of products, so all that you have to do get started is to publicly talk about them.
Start by looking at the partners in step 4 for becoming a merchant, because that’s what you’re trying to start in this step.
Any product works.
Take a look at this guy, who reviews Hot Wheels tracks and cars:
Over 300,000 subscribers for Hot Wheels? I’m sure whatever your niche is, it’s less specific.
If you like reading, review books:
Note: A special kind of review, that usually does really well, is the comparison with a direct competitor.
You’ll soon find plenty of people who are already doing this. Just search for “best hair straightener,” and have a look:
This blog reviews flat irons for straightening hair (for women). How specific of a blog is that?
She can relate to the product, as she needs to straighten her own hair. And, if she does her research well, the blog not only ranks highly in the search engines but also actually helps women to find the best tool for the job.
Whatever you’re reviewing, make sure that you do the same.
If your reviews aren’t genuinely helpful, people will sense immediately that you’re just trying to make a quick buck.
As Pat Flynn points out, in his affiliate marketing guide, involved affiliate marketing is by far the most profitable, because you can actually relate to the product, instead of just promoting something that might make you a lot of cash.
When you don’t even know the product, how can you credibly promote it?
Note: This is a little different for consumer products than it is for online courses or books created by individuals. If you’ve known a person for a long time and trust them and know their work is great, then that’s a different thing.
When you write reviews on your blog, you can use an affiliate link to link to the products that you promote.
You can recognize them on other blogs by the long “/ref…” tail, at the end of the regular link.
(how you know it’s an affiliate link)
This is usually the first step to start making commissions.
Simply sign up to Amazon Associates and you can then proceed to get your own affiliate link to any product on Amazon.
Just go to the product page and click on “Short link to this page.” You’ll get a link that’ll give you a commission if people purchase through it.
However, if you only rely on people using the affiliate links in your reviews, that means that you need lots of traffic to actually start making serious money.
But, if you find a way to contact your audience directly, you can market to them whenever you like, not just when they come to your website.
This is where step 2 comes in.
Step 2: Build an email list with your prospects on it
Email is still one of the best marketing channels today, so don’t miss out on it.
I’ll show you 3 super easy ways to collect email addresses from your website visitors.
Number 1: Hello Bar
Hello Bar puts a call to action on top of your website. Whenever someone visits your website, they’ll see this bar at the top.
You can offer them an ebook (maybe bundle together your 3 best product reviews) or a special review video.
Once they click on your Hello Bar, you can redirect people to the page where they can enter their email in exchange for the content.
Number 2: Exit Gate
You can also use Hello Bar to create an exit gate. This is a popup that will lay over the screen when visitors are about to leave your website.
It is triggered by their mouse moving to the top area of the browser.
But, you can also redirect people to your lead magnet and get their email address this way.
Number 3: Sidebar Widget
Many blogs completely clutter their sidebar.
(way too many things to do here)
Don’t do it.
If you give your visitors 20 things to do, it’s unlikely that they’ll do anything at all.
Just have one call to action in your sidebar. Again, it should offer people something in exchange for their email address.
On Quick Sprout, we’re giving away the “Double Your Traffic” course and it has worked well.
Since you’re collecting email addresses around a very specific topic, such as finding the best straightening iron, juice maker, mini-oven, etc., you don’t need a lot of them to make the email list worth your time.
Even with less than 500 people on your list, you can create significant sales.
Just make sure that you keep your audience engaged, by sending them regular updates, ideally once a week.
Don’t make it all sales. Just let them know when you have a new review up.
For example, I email out every single post that we do on Quick Sprout with a very simple description of what it’s about:
Every now and then, send them a specific call to action to buy a product. Perhaps you just found a new favorite in the latest review and think it’s really great.
You can update your audience on your change of mind, the reasons why and recommend that they switch to that product also.
But, there’s more. Once you have a few contacts on your email list, you can do this.
Step 3: Educate your audience with live webinars
Webinars are awesome.
Imagine that you want to buy a new fridge.
What makes you want to buy a fridge more:
- Reading a review on a blog
- Seeing a live presentation of a fridge in action
Number 2 of course!
Using a tool, like LeadPages, you can create a simple landing page where people can sign up for your webinar.
Promote your webinar on social media for a week in advance and get people to sign up.
Then, you can very easily host a Google hangout that is completely free, to stream your webinar live to your audience.
(Image source: Youtube)
Webinars are great to engage with your audience one on one, show them the product that you’re promoting live and answer any questions that they might have.
- present the product’s features
- show different use cases of the product
- talk about its benefits and drawbacks
- tell people your personal history with the product
- help your audience get the most out of it
and much more.
Tip: Learning how to host a webinar with a Google Hangout takes less than 10 minutes. Proof? This video explains it well.
Imagine how fired up your audience will get when they see all of the cool things that your product will enable them to do.
Pointing to your affiliate link and sharing it at the end of the webinar is a soft sell and comes naturally since you just spent an hour talking about the product.
It won’t feel forced and your consumers can still take all of the time that they want to make up their mind on whether they’ll actually purchase.
Pro tip: Can you get your merchant to give you a special deal for your audience? If you promise to get their product in front of a couple hundred people, they’ll often happily give you a discount or special bundle to further incentivize people to buy.
Step 4: Grow your business with PPC advertising
Once your affiliate marketing business starts to picks up steam, you can start thinking about paid advertising.
Conversions are all that matters here.
You can use PPC advertising to:
- get people to sign up for your webinar
- grow your email list
- make more sales
For example, if you Google “learn leadpages,” you can see that LeadPages themselves are advertising for this keyword, running Google ads, promoting their weekly live webinar.
So, keywords related to learning about your product or topic would be a good start.
You can also target your competition. For example, right under the LeadPages ad, there’s an ad from Unbounce.
These guys also provide a software for creating landing pages, so it’s an easy way for them to get in front of someone else’s audience.
Now, while you could try to target people who are just trying to find a review of your product, you’d probably be better off improving your SEO.
The percentage of people who buy straight through your link after reading a review is naturally low, so imagine paying for these reads. Depending on the product price, you only get a few dollars or even cents per sale, so the margin you can spend on ads is not very big.
In most cases, your best off promoting sign-ups to your email list.
As a matter of fact, getting people to sign up for a webinar with ads is the best way to go.
(what a webinar Facebook Ad can look like)
You will win in 3 ways:
- They’ll be on your email list and you can contact them again at any time
- There’s a chance that they’ll attend your live webinar and buy the product
- You can put them on an autoresponder email sequence that encourages them to buy
For example, John Lee Dumas, from Entrepreneur On Fire, often runs webinars and puts them right on his homepage.
As soon as you opt into the webinar, he also starts sending you a series of automated emails.
On those emails, he offers you other courses and free tools, like a webinar course, where you’ll learn how to do webinars to make sales.
If you opt into those, you’ll be sent 10 email lessons over several days. At the end, he invites you to buy a more extensive course on webinars.
After you’ve already learned a lot about webinars, you’re introduced to his more thorough and detailed course that’ll teach you even more.
He even shows a behind the scenes walk-through of the course, so you get a sneak peek.
Once he knows how many people will end up buying the full course from the autoresponder series, he can easily calculate how much he can spend on ads to get people to sign up for the webinar or webinar course.
So, with this strategy, you have several chances of getting your consumers to buy your product.
They have a chance to buy after the autoresponder series, on the webinar, and from future emails.
When your sales start coming in from that many sources and begin to grow, that’s when you can really blow up your business with paid advertising by just driving traffic to the sales mechanisms that already work.
Time to recap. So, there are two ways to get started with affiliate marketing.
You can become a merchant or an affiliate.
The 4 steps of becoming a merchant are:
- Coming up with a valid product idea.
- Validating that idea by getting people to pre-pay you for the product.
- Creating that product.
- Finding affiliates, likely through an affiliate network, to partner with who will promote your product.
The more common and slightly easier route is becoming an affiliate. There are also 4 steps that you can follow:
- Starting to review products in your niche
- Building an email list
- Using live webinars to educate your audience and make sales
- Growing your affiliate business with PPC advertising
Affiliate marketing is a good way to get started with online marketing.