You're here because you either want to learn how to start affiliate marketing as an existing business owner and ramp up the sales of your existing product/service line (which would be a GREAT move) or you're more the individual/solopreneur who is looking to grow your online business with maximum flexibility.
In either case, you've come to the right place.
I have personally used the affiliate business model for 20 years and consulted many companies to use affiliate marketing in order to reach their sales goals.
Affiliate Marketing is an often misunderstood business model, usually due to the fact that most people have not been correctly educated on it. Some think either it's a shady business practice (a scam), or that's it's extraordinarily difficult and/or takes a lot of money.
Let's get this out of the way first: It's NEITHER.
Yes, you can spend a lot of money in advertising (especially as you gain experience and become more advanced but I do not recommend you do that as a beginner) but the beauty of an affiliate marketing business is you can start with next to nothing and build your business (or again, add it to your existing business line) as big as your budget allows.
Affiliate Marketing is also a legal, tried and true business model that's literally been around for decades. I'll go over this more in depth later but first I will cover all the important affiliate strategies and vital basics that you must learn in order to grow your business.
My following in-depth article is a great guide and reference for the serious marketer who is putting together their skillset for this agile business strategy.
Let's dig in...
What Is Affiliate Marketing?
Affiliate Marketing is a business structure or 'arrangement' whereby a company (typically called a 'vendor' or product creator) uses independent agents...called 'affiliates', to bring them customers for their products and/or services. When a customer makes a purchase through the affiliate both the vendor and the affiliate share in the profits.
Here's a popular definition:
'a marketing arrangement by which an online retailer pays commission to an external website for traffic or sales generated from its referrals.'
How Does Affiliate Marketing Work?
Here's another way to define it:
The affiliate gets paid a commission by a company (the vendor) when he/she refers someone to buy their product or service...which is typically achieved by using a special link in their promotion (called an affiliate link) unique to them so the affiliate gets credit for the sale.'
So the company gives the affiliate this link that has a tracking code that identifies them as the referrer and they, in turn, give this to their customer (or 'lead') who then makes the purchase using that link. The affiliate then receives whatever percentage commission the two parties agreed upon.
The benefit to the affiliate is they do not have to deliver the product or provide customer service. That falls on the vendor. The vendor benefits because the affiliate brought them a new customer (at no cost to the vendor) that they would not have otherwise obtained.
It's a win-win.
[Image Source: Lurn.com]
How Do Affiliate Marketers Get Paid?
Receiving a commission on the sale of a product or service is just one of the ways companies using affiliate marketing and affiliate marketers get paid for their efforts. There are a couple of other popular monetization options companies can use to pay the affiliate (and profit for themselves).
Here are the main ones and their key differences:
1. Pay Per Sale - As we've already covered above, the affiliate 'pay per sale' method is again, paying the affiliate only when a customer has bought a product/service through the unique referral link. This is one of the more popular methods for both the vendor and the affiliate marketer because an actual sale has been made (and money in turn changes hands).
Typically, the affiliate makes a larger affiliate commissions (because it was an actual sale) and the vendor gets their cut. The disadvantage with the 'pay per sale' model is that an actual sale, or conversion, has to take place for the affiliate to receive the commission.
2. Pay Per Click - 'Pay per click' pays a commission when a potential customer merely clicks on a link. No sale has to be made...only a click has to take place. A great example of this is Google Adsense. Google Adsense has been around for years and is the largest pay-per-click ad network on the internet.
An affiliate places some code on one of their webpages (as an example) and Google automatically displays an advertisement on the page. When a website visitor clicks on that link the affiliate gets paid a commission. It is, by most metrics, the easiest way to generate commissions online because the affiliate didn't have to convert them in to a sale.
The downside for the affiliate is the commission is MUCH lower than a commission on a sale and for the vendor/product owner there is no sale for them....'yet'. As a company you would employ this model usually to generate leads and brand awareness with an eye to generating a sale later in the future.
3. Pay Per Lead - This model pays the affiliate when they've generated a lead for the vendor. A very long-running, popular method of doing this is through the use of CPA networks, or 'Cost Per Action', which is a type of affiliate network.
An example would be a credit card application form on a website: The customer fills out the form and submits the form. If you're the vendor/product owner, you now possess a submitted application/lead to process in to a paying customer. If you're the affiliate, you would then receive a commission on the successful submission of the form.
On average, the commissions are greater than pay per click but still much lower that pay per sale because, again, no product has yet been sold.
One such popular network employing this model is Offer Vault.
4. Pay Per View or Pay Per Impression - You see variations of these all day, every day online. Whenever you see any type of online 'banner' advertisement an affiliate is often (but not always) earning a commission on the actual view, or impression of the ad.
Nothing has to be clicked or otherwise acted upon other than the view, although most often vendors will pay more to the affiliate when the ad is clicked. These types of ads pay the least of all the formats due to no real action taking place on the part of the website visitor.
How to Start an Affiliate Marketing Business
This will be broken down in 2 sections depending on where you fit (click either of the links to jump to that section):
1. Affiliate Marketing for Your Existing Business to Grow Your Sales - You ALREADY have your own products and you want affiliates to market FOR YOU.
2. How to Become an Affiliate Marketer - You are an independent marketer/entrepreneur and you will be the one promoting affiliate offers.
Affiliate Marketing for Your Existing Business to Grow Your Sales
Once you know which of your products and/or services you want to promote via affiliate marketing, one of the first things you'll want to decide is what affiliate software platform you'll want to use to manage your affiliate program.
The affiliate software solution you'll use will manage all your affiliates, the tracking (who sells what for you as well as calculating your cash flow.
Think of your software as your central hub where everything regarding your affiliate part of your business & program will be run from.
There are a lot of options available so you'll want to do some research. There's a great review article at Digital.com on some of the best software. Check it out.
What Software I Recommend
- Affise (For Larger Publishers)
Affise is a very robust solution for established companies who really want to scale their affiliate efforts. Their platform has multiple features like deep filtering (sorting by demographics, geolocation, device) and very deep data sorting to dive in to almost any conceivable metric.
Total customization over the users affiliate program(s) is available, 24 hour a day customer service and it's a cloud-based platform (SaaS). It's not cheap as it starts at $499 a month but again...this is for larger companies.
- Voluum (For the Smaller Guy)
Voluum is a well-known smaller performer in the affiliate tracking software field. Their solution has many of the bells and whistles as the larger platforms like Affise while at a fraction of the cost. It has a solid reporting module and integrates with Google, Facebook and other traffic websites.
Their pricing starts at $69 a month and has a full demo. You can't go wrong with Voluum, especially if you don't need the complexity of a larger, more expensive platform.
How to Find Affiliates to Promote Your Products
Having an affiliate program doesn't do you any good if you don't have affiliates to promote your product and service offerings. So having an effective and efficient plan in place to recruit affiliates that actually bring you customers is key.
As a business, this would be my advice to you: I would not bother with affiliate prospecting...aka, using free methods to find your affiliates. The reason? It will take much more of your time and is simply not scalable. Having said that, there are those of you who are bootstrapping your business and don't mind getting your hands dirty.
In this case, I strongly recommend using the following Social Media: Facebook Groups, Twitter and Linkedin Groups.
The key here is to look around and find relevant groups in your niche that have activity. There are a ton of groups on Facebook, but some of them are dead and won't help you.
Find at least 5 (don't just concentrate on one....you need to get results faster!) and join the community. Don't jump in and start soliciting affiliates off the bat. That's a quick way to get thrown out. Join discussions and add value.
Remember, I said prospecting for affiliates will take some effort...so put in the effort. In many cases you'll find that once people find you as a contributor they will be much more open to doing business with you.
Also, after adding value try hitting up the admins and ask if they're open to you making some posts looking for affiliate partners. You'll be surprised how many will be because you didn't go in and spam their group.
Twitter is still a great place to find connections, but can pretty time-intensive. You need to get in and use Twitter search. You want to try a variety of terms to find relevancy. For example. If your business is cell-phone accessories, then you might try some terms such as 'cell phone case reviews' or simply 'cell phone cases'. You can use variants of these to find people who have written articles on the subject.
Believe me, everyone who has written an article online about ANYTHING has posted their link on Twitter. You just to need to go find them.
Linkedin Groups are great...if you are careful. There are the ultimate B2B resource, so the quality is going to be the best. There are also over 2 million Linkedin groups...it is HUGE.
However, most of the groups have strict rules to reduce spam...and they don't mess around. The same rules apply as above...get in, contribute and offer real value. Only then should you contact the admins and ask about doing any kind of soliciting. If you can find a group or two where you can....you're golden.
Most of the business owners I consult with these days are not in the 'Biz-op' or 'Make Money Online' niche. But for those who are, there are 2 forums that are great places to connect with potential affiliates:
The Digital Point Clickbank Forum - This is good message board to find biz-opp affiliates and they are higher quality than most other boards.
The Warrior Forum - They've been around for years and a ton of people frequent the forum. I don't think it's as high quality as DP, but worth digging in to nonetheless. A key here is to get a lot of responses when you post a topic. You have a better chance of a more accurate 'consensus' this way.
By far the best way to consistently bring in affiliates is through investing in paid advertising. Yes, it's another business expense, but think of it this way: Once you start building up a sizable group of affiliates you can scale back your budget. Good affiliates will keep promoting for you (especially if you treat them well) but you've only had to pay once to acquire them.
My two favorite sources to find good affiliates are Facebook and Linkedin. Yes, I've already mentioned them above but again, here you're running ads. With Facebook you can start by running an ad for $5 a day. Check out Ben Heath and his Youtube playlist on Facebook ads. Ben is super talented at what he does and you'll get a great baseline to start your ads.
Linkedin is another highly targeted place to find affiliates and unlike Facebook, you can run ads straight to Linkedin Groups. When you find the right Linkedin group, you have an extremely targeted audience. The downside to Linkedin is their ads tend to be expensive. So if you don't have the budget I would start with Facebook first.
We discussed Twitter about on the free prospecting side, but I would not do their ads at this point in time. I've tested them quite a few times over the past few years and they did not convert well (and they were expensive!). But, if you try them and get a different result, let me know. 🙂
Acceleration Partners is a managed affiliate solution. What this means is they are a full affiliate management agency that will handle pretty much all of your affiliate needs to free you up to run other aspects of your business. They are not cheap, but for companies with a good budget, this is a viable option to be considered.
How Much Should You Pay Your Affiliates?
There is no set formula here. However, doing some digging in to your market and finding out what other companies pay their affiliates will give you a solid baseline from which to proceed forward.
For example, Amazon pays really low percentages for most of the products on their site (in my opinion). It's definitely worth noting though that if you sell a high ticket item ($1,500 or more for example) and you pay a 10% commission your affiliate stands to earn $150...which is a great affiliate cut.
On digital products commission percentages tend to be much higher. For example, it's not uncommon to give affiliates a 50% commission on digital offerings, sometimes even more. Keep in mind that with digital products there is much less overhead (think delivery costs) hence the larger cut.
Again, dig in to your market to see what the trends are. And resist the temptation to be cheap...aka, you don't pay your affiliates very well. If you don't, they're likely to stop promoting you.
How To Start Affiliate Marketing for Beginners
Start With a SIMPLE Goal
Whenever I am coaching a beginner how to start affiliate marketing with their marketing journey, we sit down and map out some simple goals first. What is the end result that you want for your business?
I'm not talking about long-term...more like the next 6 months. Big, long-term goals are fine, but for newbies this can be very overwhelming. So make it simple and attainable. You can adjust the goals (and you will!) as you move forward.
I cannot stress how important this is. This will give you a roadmap and target to keep you on track.
Affiliate Marketing Review Sites
An affiliate marketing review site is not only a great beginner strategy but an advanced one as well. In fact, several of my sites use precisely this strategy. The huge benefit by using this model is it forces you to provide VALUE to the visitor...IF you're truthful (and you should be).
What I mean is you try a product and give your honest review. A review does not have to be anything fancy...it just has to be honest and have some depth to it. When visitors read your review they will be much more compelled to buy the product than if you simply said 'hey...look at this cool widget blah blah...it's on special go grab it.'
Do not do that.
Now, that strategy CAN work...but only if you have a very relationship with your lead. A good review always warms up a potential customer and installs trust in them...all in one go. Your goal is to become a trusted advisor...that's how to start affiliate marketing. This is how consistent income is made in the affiliate business.
I talk about this a lot in our Insiders Group, so make sure you join my Insiders Email list (a form will be somewhere on this page) and you can get further training. I highly recommend this.
2 Tools You Must Have for Your Beginner Affiliate Business
If you can invest in only 2 tools for your affiliate marketing business, then you should absolutely invest in these:
1. WordPress (Your Own Blog)
WordPress allows you to have your own website/blog on your own domain name, and therefore be able to start reviewing products right on your site. I cannot stress how important it is to have your own website. Starting a free one on another company's service will not brand you at all in the eyes of your prospects. Trust me on this.
When I first started out, installing and setting up was a bit of a pain, but the process is so easy now that most webhosts will install it for you. It is also open source, so it's free. You only have to pay for your webhost (you can start for 5 bucks a month) and you need to buy a domain name...which is about $15 a year. Bloggers, successful affiliate marketers and major websites the world over use WordPress. You should as well.
2. Email Autoresponder
You MUST have an email autoresponder. An autoresponder simply allows you to start collecting name on an email list so you can email them your sales messages. Again, you have to have this or you have no way to communicate with your leads continuously over time.
You also want to invest in a paid email tool because they will have good deliverability (your emails won't go in to the spam box) and you'll get customer service...which is a must.
You can start very cheaply and here are three I recommend you check out:
Aweber has been around forever, they are a solid company and they are great for the beginner. Veterans use them too, but they are easy to get started with.
ActiveCampaign is what I use and have for years. They are the best in my opinion...and I've used a lot of them. They have a lot more features and there is more of a learning curve...but if you're in the email/online business for the long-haul, then seriously consider them.
If you don't remember anything else from this guide, you must understand that your email list will be THE most important asset you have in your business...bar none.
Your ability to email them consistently will become THE difference in whether you create success in this (or ANY online) business, or if you fail.
It's that important.
How Much Does it Cost to Start Affiliate Marketing?
To START this business you need 3 things:
- WordPress (free)
- Domain Name ($15 a year)
- Webhosting ($5 a month to start)
- $10 - $20 a month (depending on the provider)
- Facebook Ads (best place to start
- Cost: ???
These three things are not negotiable (in my 20 years experience). You can get going with without #3 (ads) but understand it will take much longer to build your business and at some point you will need to advertise.
As you can see, the barrier of entry is very, very easy and inexpensive.
How Can I Start Affiliate Marketing With No Money?
I'm going to be as blunt here: If you have absolutely no money and want to know how to make the affiliate business model work then you are going be very disappointed and very frustrated. At the very least you need some basic tools (outlined in this guide above) to give yourself a realistic chance at some level of success.
But, for the purposes of this section, this is what I would do if I had no money:
1. Sign Up to a Few Quality Affiliate Networks in Your Chosen Niche - Make sure they are quality offers.
2. Create a Facebook Group Centered Around Your Niche - Creating a Facebook Group is easy...there are tutorials all over the web to show you how.
3. Create Some Valuable Content on the Group - FB lives, text posts...etc.... then start inviting people to the group (a great way to do this is to invite them from your personal profile). Use the content to 'pre-sell' them to your affiliate offers.
4. Start a Youtube Channel and Do The Same as Above - Grab your phone (the one you used for all the Facebook videos you've done in the group) and start uploading videos to your channel and invite them to your group so you can continue the relationship and nurture it.
This is probably THE most effective way to start your affiliate marketing business for free.
And by the way, anyone who tells you that you don't need to do any of this and that you can make tons of money in affiliate marketing (or any business) with no money and no work is LYING TO YOU.
What is The Best Niche to Make Money in Affiliate Marketing?['niche' needs to be sep article but talk about niche in this post....I MAY NOT make a header for this here....i may talk and then link to my niche page]
Pros and Cons of Affiliate Marketing
This is not the perfect business...as there is no perfect business model. Like any other endeavor, you should be well versed in the pros and cons of affiliate marketing. It's a great business model, but it is not for everyone.
1. Low Start-Up Costs
Affiliate marketing may have the lowest start up costs of any business model, period. Technically, you can start for free (although I would not recommend it as I've already covered) and add to your expenses as you grow. It can also be done part-time and generate results, which you cannot say with a lot of businesses.
2. You Don't Deal with the Products and Delivery
By far the biggest advantage is you don't handle the products/services and you don't handle fulfillment. Since you are working with a vendor who owns the product(s) you'll be promoting, you can be much more nimble. You really can work from anywhere and not have to deal with customer headaches.
3. It's Performance-Based (for Business Owners)
Utilizing affiliates to sell your products and services means you're not paying them until they make a sale. This keeps your overhead and cash flow lower and makes your business more efficient.
1. You Do Not Control the Product(s)
By nature of being an affiliate, you are selling someone else's product and/or service, and therefore do not control the pricing, the delivery or really any aspect of the product. This can be problematic if the vendor gives bad customer service, changes the price, or even stops selling the product altogether. To mitigate this, your job is to find trustworthy partners to sell for and do your homework.
2. You Are Providing Customers to the Vendor
When you bring a new customer to a vendor as an affiliate, they now have a new customer that they can continue to sell to. You want to make sure that you can earn commissions on future purchases (a software service with a monthly charge is a good example) but understand this may not always be possible. Also, it's vital that you get any lead on to your email list first before selling any affiliate offer to them so you have the lead as well.
3. You Are Not Earning the Full Commission on the Sale(s)
This should already be understood, but it's nevertheless important to cover: You are splitting revenue with the product owner (at whatever rate the two of you agreed on) so you will never get all the money from a sale. But, they created the product...not you.
Affiliate marketing is a phenomenal business with an ultra-low barrier of entry, a lot of flexibility (you can truly run this business from anywhere) and an endless supply of quality products and services to promote.
However, don't get sucked in to the hype that lies all over the internet that suggests that this is a get-rich-quick scheme. It certainly is not (those 'schemes' do not exist anyway) and takes dedicated effort to become a skilled affiliate marketer.
Take time to learn the fundamentals...and be consistent. Do those two things, and you can do well in this business.
Make sure you read my other guides on affiliate marketing by going to the 'Guides' section at the top of any page on the site. If you want more training make sure to join my free Email Insiders newsletter.