What is affiliate marketing?

January 30, 2019 • by John Doe • 5 min read

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John Doe

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Do you dream to get hundreds or even thousands of new customers without making efforts? Do you want to make money even while you sleep? It’s possible if you can convey the value of any product to the audience. Perhaps affiliate marketing was made just for you!

Any online business can bring great passive income. Many entrepreneurs are inspired by the opportunity to work with a laptop just 3-4 hours a day, sunbathing on some beach. But not all ways of Internet promotion bring passive income. Besides, the work is not always organized correctly.

So, what is affiliate marketing and how does it work?

Affiliate marketing is a way to promote a product with the distribution of income between different parties, depending on their contribution. Each partner (affiliate) is paid a certain money amount for the target action which is made due to their activity. Target actions can be different — visit, lead, purchase.

For example, you have a product and want to sell it more. Someone promotes your product through an affiliate network and earns a commission if people actually buy thanks to their marketing. Or vice versa — you promote someone else’s product by your marketing methods, earning your percentage of this income as an affiliate marketer.

Four parts of affiliate marketing

Merchant (creator, brand, or vendor, or seller, or retailer) is the party that creates the product. It could be a huge international brand, startup or solo entrepreneur (info businessman, for example).

Merchants don’t have to be actively involved to make affiliate marketing program. Their part is to have and sell the product. This product goes through the system to the next parties.

Affiliate (partner or publisher) can be one person who earns a few hundred dollars in commissions each month. But there are entire companies on the market that generate millions of dollars to promote products of different brands.

That’s where the affiliate marketing happens. When an affiliate promotes a merchant’s product, he tries to get potential customers interested in it and eventually buy it. We’ll tell about examples of excellent partners and their marketing tricks a little bit later.

Consumers (customers or clients) are those people who move the whole affiliate system. It’s clear: no sales — no earnings. Many channels can be used to attract the attention of potential customers.

Affiliate marketing online uses the next digital channels:

  • Google Adwords
  • Targeted ads on Facebook and Instagram
  • Advertising that is integrated into videos on YouTube
  • Content marketing on a blog (SEO)
  • Promotion with influencers and opinion leaders

Of course, we have listed not all possible promotion channels. Experienced affiliates use much more ways. Sometimes the consumer doesn’t even know that he has become a part of the affiliate marketing system.

Partner or affiliate networks are services that unite merchants (product creators) and affiliates (partners). Networks allow them even not to contact each other.

The main advantage of using an affiliate network is clear guarantees. Affiliates can be sure that they will receive their commissions and they will not be deceived.

The affiliate network also serves as a database of lots of products, out of which the affiliate marketer can choose which to promote. The biggest affiliate network, by far, is Amazon.

If you’re reading this article, then most likely you think about taking the path of the merchant or of the affiliate marketer. We’ll tell you about the basic steps you can take to get started on both sides of the affiliate marketing system.

How to become a merchant and increase your sales

Affiliates won’t replace your marketing and sales department, but they will definitely increase your profits significantly.

The tasks of the merchant are simple, but definitely not easy. To create your own product, you need experience and great enthusiasm. The result should interest not only end users, but also potential affiliates.

First of all, you need to find the idea for your future product. The idea should be built on market analysis and at the same time be original and unique. A quality product solves customer problems — consider this fact when developing the idea.

Before creating a product it’s important to test the idea in order not to waste time and money. During the testing process, you can even find affiliates.

Finally, the most important (but not the last) stage is product creation. The quality of your product will largely influence its demand in the market, the reputation of your company and affiliates.

At last, create your affiliate program and find partners to promote your product. If you have created a really high-quality and interesting product, then this stage will be rather technical and simple.

You will determine the commission for each affiliate sale. Usually, commission for physical goods is up to 10%, for the digital product — from 10 to 50%.

It is inconvenient to monitor and verify the sales of each affiliate. There are special online services for affiliate programs creation, like Digital Product Delivery or Gumroad.

How to become an affiliate and make money on someone’s products

Affiliate marketing is a great way to make money. Also, it allows you to practice and increase your experience to promote your own business effectively in the future. Because if you can succeed in selling someone else’s products, then you will surely easy with your own goods. And we all know that selling skills are one of the main qualities of an entrepreneur.

First, choose the niche and product for selling in it. Use the reviews on blogs and YouTube to facilitate your search. During the day you can choose one of the ready-made options, which you will be pleased to deal with. It’s important because people trust only those reviews and promotion that are useful. And such promotion looks good only if you know and like this product.

Email marketing is still one of the best marketing channels. So, collect email addresses from your website visitors (for example) and build an email list for sales.

The lead magnet will help you to collect emails. The lead magnet is a free info product which is valuable enough for users to give in return their contact details. It can be different guides, checklists, small lessons (maybe video) with tips on your topic. A separate landing page is usually created for the lead magnet. Also, popup forms are often used that appear when a person comes to the website or vice versa leaves the site. Many blogs have their sidebar widgets — one call to action with a useful offer in exchange for email addresses.

Don’t burden your email audience with sales letters only! Just let them know when you have a new review up, ideally once a week.

Then, make webinars and live streams on YouTube, Facebook and Instagram to increase audience loyalty.

There is a stereotype that webinars are the useful instrument only for info businesses. It’s completely wrong! Imagine you are choosing a new phone. What do you like more — read the manufacturer’s boring review or watch a live presentation in which the author shows the phone in action?

If you already have some experience, promote your offers with PPC advertising. You can use both Google ads and Facebook ads to check which one gives you more conversion. PPC ads help to meet the audience and involve them to webinars, grow the email list, make more sales. You will need a landing page for all these goals.

PPC (pay per click — going to some site by the link in the ad) is one of the parts of the CPA model which is the basis for most affiliate programs. CPA (cost per action) means different target actions (from simple to complex) – viewing ads by the audience, click to the merchant’s site, making a purchase, getting user contact details (leads).

Efficiency in affiliate marketing is measured by certain parameters. Have you ever heard about EPC in affiliate marketing? EPC helps you judge what overall you’re earning per click. This is a metric to measure the effectiveness of being able to turn a click into commissions. You can easily find EPC formula on the internet.

Affiliate marketing is a good opportunity for entrepreneurs to increase sales without high costs, and for affiliates, it’s a great way to make money. Today it’s impossible to control business alone and at the same time build an affiliate strategy. Therefore, it makes sense to create collaborations for entrepreneurs and experienced affiliate marketers who will create stable sources of traffic for the effective promotion of products.

Wish you high conversions and good sales!

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