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:
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:
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.
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,
I'm the founder of ActiveGrowth and Thrive Themes and over the last years, I've created and marketed a dozen different software, information and SaaS products. Apart from running my business, I spend most of my time reading, learning, developing skills and helping other people develop theirs. On ActiveGrowth, I want to help you become a better marketer and product creator. Read more about my story here.