What Is Affiliate Marketing?
Affiliate marketing is probably the number one thing that most internet marketers do to make money. As you might have already read in the RQR Glossary, affiliate marketing comes down to promoting and selling someone else’s products in exchange for commissions for every sale made. In this RQR Basics article, you’ll find a more in-depth explanation of what affiliate marketing is and how to get into it.
It’s often easiest to understand a process by just looking at a concrete example, so here’s an example of what an affiliate sale constitutes:
- You sign up with an affiliate network (more on those below) or sign an affiliate contract with a manufacturer.
- You choose a product to promote. Let’s say you choose an ebook that teaches people how to improve their golf swing. (There are thousands of products in hundreds of categories to choose from, out there – I’m just picking a random example out of the air here). Let’s also assume that the ebook costs $25.
- You receive a “personal” link. When someone clicks this link, they will arrive at the sales-page for the golf ebook.
- You place this link on your blog, in an article, on a website, in a forum or where ever else one can place links. As a concrete example, let’s say you write a post about golfing on your blog and add the link and a recommendation for the ebook.
- Someone reads your blog-post and is interested in the book you recommend, so they click on the link.
- They see the sales-page of the golf swing ebook and decide to buy it.
- Since they arrived at the sales-page through your personal affiliate link, you get paid a commission for the sale. In the case of a $25 ebook, you would probably get around $15 for this sale.
That’s basically how one affiliate sale could happen. It’s actually quite difficult to make a good example of an affiliate sale because there are so many different products that you can promote and there are just as many different ways of promoting them. Let’s take a step back from this and look at the abstract of affiliate marketing.
Affiliate marketing always involves a manufacturer (buildings to the left) with products on offer. The affiliate (A) promotes these products to potential customers (guy on the right). The customer buys the products and pays the manufacturer. The manufacturer in turn passes part of the proceeds on to the affiliate.
Affiliate marketing is a true win-win situation between you and the manufacturer of the product you are promoting. You get paid without having to manufacture and ship products yourself. The manufacturer benefits from your marketing efforts, without taking a risk. Since he only pays part of the money he makes from each sale you refer, this is basically risk-free marketing. Compare that to more traditional marketing methods, where you might spend thousands or even millions for large billboard, TV or newspaper ads and not get a buying response from the customers at all, and you quickly see why manufacturers like to offer affiliate deals.
As I mentioned briefly above, you need some place to put your affiliate link, so that people can find it and click through to the manufacturer’s sales-page or shop. There are many options for link-placement, the most popular being:
- In an article.
You can publish an article (e.g. “How to Improve Your Golf Handicap”) and publish it on an article directory. In this article, you can endorse a product and place an affiliate link (see Article Marketing for more details).
- On a blog.
Maybe you blog about golfing or you start a blog about golf specifically to affiliate-sell golf products. On your own blog, you can basically place the affiliate links wherever you want. In posts related to the product makes most sense, of course.
- On a mini-site.
A mini-site is a small web-page built around your affiliate link. In the case of our example it could be a mini-site focused completely around improving your golf-swing. It could be just one page, promoting the affiliate product or it could include a handful of pages, including some free tips, maybe a survey or some other content to keep visitors interested.
- On a forum.
Most forums won’t allow you to place affiliate links directly in your posts. You can use a forum as a stepping-stone, though. If you post relevant and interesting content in a golf-forum and link to your golf-blog in the signature, you can increase the visitors to your blog. These visitors will then find the affiliate links on your blog.
Affiliate marketing is a numbers game. Any potential customer will need to pass through several “gates” before they make an actual purchase. It begins with the potential customer being somewhere “out there”, with a general interest in the product you’re promoting or perhaps with a certain problem they need a solution for.
The first gate they need to pass is that they need to find you and your site or article somehow. Usually, this happens via search engines. One of your articles, forum-posts or blog entries could show up in the search engine results when someone enters a golf-related keyword.
The second gate is that they need to visit your site/article/blog. After all, the search engine serves up multiple choices and even if yours is among the first to be listed, they might not decide to click on your particular entry.
The third gate is when they see the affiliate link on your website and decide whether to follow it or not. You have to get them interested enough to actually want to click on that link.
Once they’ve done this, it’s up to the manufacturer to get them through the fourth gate: Actually deciding to buy the product.
As you can imagine, there will always be countless visitors who jump off and don’t pass one of these gates. Out of a thousand people who search for a solution for improving their Golf handicap, maybe 400 will find one of your articles. Out of those, maybe 100 will follow through to your blog. Out of those 100, maybe 30 will decide to click on your affiliate link and of those 30 people left, maybe one person will actually buy the product. These numbers are hypothetical, of course. Depending on your market and how well your websites and articles are written and designed, these numbers can vary greatly.
The number of “gates” customers must pass through can vary. It is worth noting that fewer “gates” doesn’t necessarily mean more sales. Often, the opposite is true: Some customers need a lot of convincing and won’t buy if they get directed to the sales-page too quickly. If they get to read up on the subject first, see a couple of pages and many different arguments, they might be much more willing to buy, once they arrive at the sales-page.
Bottom line is: You need to get a lot of people to see your affiliate sites. This is why most internet marketers are also very interested in SEO (search engine optimization) and other techniques for maximizing visitors to websites.
- It can be free.
You can use paid methods for promoting products and increasing traffic, but it’s absolutely possible to rely completely on free methods.
- Saves you a lot of hassle.
You don’t have to make products yourself. Especially for material goods, this saves you a ton of effort that otherwise goes into production, storage, shipping etc.
- It’s very scalable.
See my post titled The Nr. 1 Reason to Get Into Affiliate Marketing for more on this.
- It can be risk-free.
Since you can promote products without spending any money (or with spending only very little), affiliate marketing can be practically risk-free. If your campaign fails and no one buys the products you’re promoting, you don’t lose any money.
- No guarantee.
The flipside of the “no risk” factor is that there is no guarantee any of your campaigns will be successful. You might try to promote the hell out of something but never see any good conversions.
- Time consuming.
Setting up affiliate sites, filling them with relevant content, writing good sales-copy, optimizing your pages for search engines, publishing articles… These are all things you need to do to a certain extent, as an affiliate marketer. They are all more or less time-consuming and it can take a while before you see any pay-off. Expect to put in many, many hours before seeing your first sales.
Where to Find Affiliate Deals
There are so many affiliate networks out there, I doubt I’ve seen even half of them. And apart from the networks, many companies offer affiliate deals individually, if you just look for them. Finally, you can strike your own affiliate deals with practically anyone if you know how to implement them and can negotiate.
Let’s begin with affiliate networks. These are marketplaces where manufacturers/authors can list their products and affiliates can choose which ones to promote. Clickbank is one of the most popular affiliate networks. Further popular choices are Commission Junction, Paydotcom and Shareasale.
Some companies offer their own affiliate programs. A good example of this is amazon’s “Associates”, which offers affiliate deals on all their products. Not so great for books (they’ll net you a few cents per sale, at best) but pretty good for some of the other, higher-priced products that amazon offers. To find more affiliate deals, simply look for manufacturers and online stores in your targeted product niche and search their websites for affiliate pages. Or write them an e-mail and ask them about it. If they have an affiliate program, they’ll be more than glad to help you sign up and get started (remember: More affiliates means more money for them).
I will be posting mini-reviews of different affiliate networks and programs in the near future, so stay tuned.
Okay, I think that about covers it. If you have any further questions, let me know down in the comments.
That’s it for now,