Affiliate Marketing: The Definitive Guide

This guide has everything you need to know about Affiliate Marketing. 

In this comprehensive guide, you’ll learn. 

  • What is Affiliate Marketing?
  • How Does Affiliate Marketing Work?
  • How to get started with Affiliate Marketing (step by step)?
  • And Lore more.

So, if you want to learn and tap into the billion-dollar affiliate marketing industry. Then this guide is for you. 

Sound good? Let’s dive right in.

What is Affiliate Marketing?

Affiliate marketing is a promotion method in which when you promote companies’ products and you get a commission for the sale.

The commission you get depends on what product you are promoting. It can be $1 or $1000 or even more. 

But, the best part about Affiliate marketing? It is a scalable business. You can promote as many products as you want from different companies. That way, you can earn a commission from different companies. 

With affiliate marketing, companies get more sales and customers, and you get money. So, it is a win-win marketing game for the company and you. And if you promote good products then it is a win-win situation for all three: companies, you and the buyer who buys from your recommendation. 

How Does Affiliate Marketing Work?

To understand how affiliate marketing works, Let’s know the 3 key players in the affiliate marketing game. 

Merchant: You can call it a product creator, vendor, or company. This is the party that will give you a commission. 

Affiliate: It’s you. Anyone (a team or individual) who is promoting companies’ products and will receive the commission is known as an affiliate.

Buyer: The customer or the consumer who buys the product that an affiliate(you) is recommending. If there is no buyer then an affiliate will not get any commission.

The below image will illustrate the process of affiliate marketing.

Now, you got the idea of how affiliate marketing works. But this is just the theory. 

Let me explain it to you how it works in the digital world.

Every merchant who is involved in affiliate marketing runs an affiliate program, which is free to join. 

For example, Amazon runs its affiliate program called the Amazon Associates Programme.

Once you join the affiliate program, merchants will provide you a unique tracking link. Mostly the tracking link looks like this.

Now, whenever someone buys the products using your link then you’ll get a commission. This unique tracking link helps merchants to know who is driving the sales and customers to their site. 

Plus, if the buyer clicks your tracking link then it stores a cookie in the buyer’s device with an expiration date. So even if the buyer clicks your tracking link and buys the product later but within expiration date then you’ll get a commission for the sale. 

For Example, Amazon has a 24-hour cookie duration. So if anyone clicks your unique link and lands on the amazon product page. But they didn’t buy the product. After 5 hours, they decided to order the product. Now, even if they order the product without using your tracking link, you’ll get a commission because their PC or Laptop already stored the cookie and they bought it within the 24-hour duration.   

How to get started with affiliate marketing?

In this part, you’ll learn step by step how to start your affiliate marketing business. 

Quick Links

  1. Choose your niche.
  2. Find the right affiliate programs to join
  3. How to choose the affiliate program?
  4. Find the products you want to promote
  5. Decide the platform
  6. Create valuable content for that niche market
  7. Drive traffic to your affiliate platform

1. Choose your niche

Let’s first understand what is a niche?

In online marketing, a niche is a narrow market within a large market. You can say they are small numbers of people who have one common interest. 

For example, Boxing is a niche in the Sports topic.

If you want to be successful in affiliate marketing you need to start with a niche. 

Why? Because the internet is an overcrowded place with tons of competition. So, to stand in an overcrowded place you should be seen as an expert or knowledge person of a single topic. That’s why you should choose a niche. And you can expand later as you grow and build authority

So, instead of targeting a food or sports industry. Niche down and start with baking or basketball.

With that, How to choose the right niche?

Choosing a niche depends on who’s going to create the content.

If you’re going to create the content then pick something you have interest or knowledge. Otherwise, you’ll struggle to create good content and chances are you’ll quite early.

But, if you’re going to outsource the content creation then you can pick any topic. However, I would suggest picking a niche topic which is….

  • Low in competition
  • Profitable
  • And with Stable or upward market trend

2. Find affiliate programs to join

Once you decide the niche you want to target it’s time to find the affiliate programs to join. 

The easiest method to find the products and their affiliate program in your niche is with a google search. You can use a simple search string: best [your niche] affiliate programs.

3. How to choose the affiliate program?

This depends on your target audience and expertise. For example: if you are running a baking Youtube channel or blog and your audience is a housewife. In this case, you should join affiliate programs that sell baking equipment that a housewife can buy instead of commercial or expensive equipment like a freezer.

That’s why you should be aware of what kind of audience you’re targeting and attracting. 

Besides that, you should also check the commission rate, their product landing page, and cookie duration. 

In the commission rate, you should better avoid the affiliate programs with low commission and low audience. Take a look at the graph. 

In my opinion, as a beginner, you should be in the beginners spot. 

For Landing Page, you should better avoid affiliate programs that have bad design. The conversion rate of a bad landing page will be very low and your reader will not buy the product most of the time. So you’ll lose many sales because of bad conversion from the merchant site. Example:

It’s better to join the affiliate program of a company that is reputable, has a good number of happy customers, and with a good landing page design. Like Convertkit. 

Lastly, cookie duration, more is better but you should avoid zero cookie duration affiliate programs. 

To cut down a little hassle for you. Here are the popular Affiliate Networks you can join.

  • CJ Affiliate
  • Shareasale
  • eBay Partner Network
  • Clickbank

4. Find the products you want to promote

Usually, affiliate networks and affiliate programs will have many different products to promote in your niche. 

And, Ideally, you should pick the products that you have used and tested personally. So that you can give a genuine opinion on the product to your readers. 

But sometimes it’s not possible to buy every product and test it at least for those who are just starting.

In that case, you should look for products that have good reviews.

But again, finding the product with good reviews is not enough as wrong picks can affect your earnings.

That’s why you should do a simple calculation of how much you’re going to make if you promote a particular product or a category of products.

Here’s how you can do it. 

Formula: Product price * Commission = Your Payout.

Now let’s check how much you can earn on 100 visits. 

Formula: Average product price * commission % * affiliate link CTR * conversion rate * total visit = Your earnings.

Let’s take an example: 

Average product price = $21
Commission = 5%
CTR = 20.03%
CR = 6%
Visit: 100

Applying the above formula 21*5%*20.03%*6%*100 = $1.26189

Now, let’s take another example: 

Average product price = $100
Commission = 5%
CTR = 20.03%
CR = 3%
Visit: 100

Applying the formula again: 100*5%*20.03%*3%*100 = $3.0045 (Your Payout)

Comparing the two examples you see even with less conversion rate you earn 3 times more by promoting a $100 product.

This simple calculation can help you know which product is worth promoting. Also, it will save your time on creating content that doesn’t bring much money. 

5. Decide on a platform

Once you know which niche you want to enter and the affiliate program you want to join. It’s time to decide the platform you want to grow your audience. 

There are four platforms where you can do affiliate marketing.

  1. YouTube 
  2. Website 
  3. Podcast 
  4. Social Media Page/Profile

Although social media and podcasts are a good way to build an audience, it’s hard to effectively generate affiliate sales on these platforms compared to YouTube Channel or a Website. Why?

Let’s take the scenario of each platform one by one. 

Podcast: People usually listen to podcasts on iTunes, Spotify, etc. So, you won’t be able to insert your affiliate links. 

Social Media Page/Profile: People on social media are not in a state for buying anything. They want to connect and engage with people. Also, on social media, you won’t be able to give as much detail as you can around the product compared to an article on the website or a video on YouTube. Besides that, you need to consistently post on social media because new posts don’t keep showing up in the feed. 

Website/Blog: If you own a website. You can write a detailed article and insert affiliate links when you mention any product. And once your website ranks you can consistently get traffic and sales. 

YouTube: The best part about YouTube is that it is 100% free. On every video, you upload. You can insert the relevant affiliate links in the description. And videos are a great format to share the information. You make longer videos to add detail or even show the product to the readers. 

For example, My favorite men’s fashion channel TheModestMan share fashion advice, tips and insert affiliate links in the description 

My Recommendation

If you like to make videos, start a YouTube Channel or if you’re good at writing articles or prefer articles then start your website. 

6. Create valuable content for that niche market

Depending on the platform, you need to create high-quality valuable content for your audience. 

You should be sharing information that your reader needs or wants. Even when you promote any product, give your genuine opinion. And if possible try to test the product before recommending to your readers. Don’t blindly promote any product just for the sake of money. 

Over time good content will build trust in your audience and with that, you’ll be able to generate more sales. Because websites like wirecutter and nerdwallet share the genuine opinion of the product they have built a loyal audience and multi-million dollar brand. 

Besides the information you’ll put in the content there are other things you need to work on to look professional and authentic. 

If you’re making a video. Then… 

  • Edit the video properly.
  • Write a script and then make a video. 
  • Add annotation in the video.

A good example is MKBHD. His videos are great in quality, well scripted and edited videos.

If you’re writing an article. Then…

  • Write a better article. 
  • Add images
  • Structure your articles properly 
  • No Grammar mistakes.

7. Drive traffic to your affiliate platform

Once you start creating content for your audience. The next step is to promote your content as much as possible. That way, you’ll build your audience that will eventually give you sales. 

To attract the audience and promote your content you can use the below strategies. 

1. SEO

SEO is a marketing practice to optimize the content to rank higher in search engines like Google, Bing, or YouTube.

The best part of SEO? Once you rank on top position your content will get consistent traffic. 

If you’re running a blog you can optimize your blog article to rank higher when someone searches on Google or Bing. 

Or, if you’re running a YouTube channel you can start implementing YouTube SEO to rank your videos higher in YouTube search. 

That said, it takes effort to rank content at a top position and can take a while to show up in a higher position. So, to quickly get traffic you can leverage next strategy. 

2. Ads

If you got bucks to spend then you can start running ads to instantly bring traffic.

Paid Advertisements are the quickest way to get traffic. However, as long as you pay for ads you’ll get traffic but the minute you stop your ads your traffic will tank.

Besides that, you need to understand how much you’re earning after spending money on ads. You should calculate the ROI of ads.

As a beginner, I would suggest don’t spend heavily on paid ads. You can set aside a few bucks to increase the reach of your content but focus on getting traffic organically. 

3. Email List

For this strategy, you’ll need a blog or at least a landing page where readers can give their email address.

Once you have a list of email addresses of your audience then you can reach out to them anytime via their email. 

With the help of an email list, you can announce your new content, new product, or even send promotional emails. 

In fact, popular blogs like Backlinko, Iwillteachyoutoberich make big bucks every year by selling their products using their email list.  

But building an email list requires gaining the trust of the audience so that they will be willing to give their email addresses or convince them to sign up in exchange for something valuable to them. 

For example, Backlinko suggest Exclusive SEO Tips if you sign up

Or you can use some creativity to get an email address.

For example, Ramit Sethi offers a quiz to show the earning potential and sent the results in the email inbox. So readers have to enter an email address to get the results of the quiz. 

4. Social Media

You can use social media channels platform like Twitter, Facebook, Pinterest, etc. to attract readers to your blog or YouTube channel.

Through social media marketing, you can inform the people about your new content to those who spend most of their time on social media. 

Plus, you can increase the reach of your content if you build a decent following. One of my favorite examples is wirecutter with 101K followers on Twitter shares their posts which contains affiliate links. 

With that being said, there are many social media platforms so as a beginner I would suggest picking one social media channel and stick to it.

Frequently Asked Questions

How much money can I make as an affiliate marketer?

Sky is the limit. People in affiliate marketing make from 0 to 100K per month. Earnings in affiliate marketing depend on how much traffic you get and the sales you make per month. As you’ll gain experience and skills with time, you’ll make more and more money.  

Successful Affiliate Marketer Income

The Modest Man ($37,885 (2018 Q3)
Ryan Robinson ($43,942.96 (June 2020)
Adam Enfroy ($74,484 (April 2020)

Why Affiliate Marketing?

Unlike other businesses, affiliate marketing requires very low upfront or zero cost. For Example, You can start affiliate marketing with a blog that requires a Domain name($7) + Hosting($12) for a year. Or with YouTube, it is 100% free. 

Is it important to have a blog for affiliate promotion?

No. You can start affiliate marketing with YouTube channel which is free to create. Also, you can use social media for affiliate promotion. That said, a blog is still considered as the best way to do affiliate marketing 

What qualifications do I need to become an affiliate marketer?

You don’t need any degree or education qualification. If you know how to do affiliate marketing then you can do it. But skills are required to succeed in this field. 

Is affiliate marketing harmful or illegal?

No. Affiliate marketing is not harmful or illegal. But, some companies, platforms, and jurisdictions want you to disclose that you have added affiliate links to show the transparency in endorsement to the readers. 

Affiliate marketing and AdSense: Can we use both?

Yes. Adding affiliate links does not violate any AdSense TOS.

Essential Affiliate Marketing Glossary

ADVERTISER/Merchant: The person or a company selling a good or service. The advertiser pays you the commission. 

AFFILIATE/PUBLISHER: A person or a company that promotes the products of the advertiser and earns the commission. In other words, it’s YOU. 

AFFILIATE PROGRAM: Also called as Associate Program, Partner, Referral, or Revenue sharing program. Affiliate programs allow affiliates to get their affiliate links and receive commissions on sales. 

AFFILIATE NETWORK: A marketplace where affiliates can find and join multiple affiliate programs. Affiliate networks act as a middle man between affiliates and companies. 

CONVERSION: Number of clicks on affiliate links by readers that results in sale or lead (commissionable activity). 

CLICK-THROUGH RATE (CTR): Number of clicks on affiliate links divided by Number of impressions. 

CONVERSION RATE: Number of clicks on an affiliate link that results in sales divided by the total number of clicks on the affiliate link. 

TRACKING LINK: A unique link provided by affiliate programs to track the sales generated from your link. 

AFFILIATE MANAGER: A person who runs or manages the affiliate program of the companies. This includes promoting the affiliate program, paying affiliates, establishing commission structure, etc.

Over to You

There you have it: a complete guide on affiliate marketing. 

Now I’d like to hear from you…

Will you start your affiliate marketing journey?

Which platform you’re going to use for affiliate marketing?

Or, Do you have any questions?

Let me know by leaving a comment below.