This is going to be the quickest affiliate marketing walk through you ever have had. The problem with the affiliate marketing world is part in parcel the result of so much misinformation about the industry being out there, companies pretending they are affiliate marketing (when they actually are not), and the fact that many companies try to over-complicate things in order to sell you their over complicated affiliate marketing product or service.
I am going to set the record straight and truly simplify things for you and help you comprehend the affiliate marketing space in the most concise way possible. In fact, if you bear with me for the next 5 minutes, you are not only going to understand affiliate marketing, you are going to be well versed and ready to use my article as a “spring board” to your affiliate marketing career.
Ready? Cool, let’s go!
The Affiliate Marketing Process, in a Nutshell
Affiliate marketing has three entities. You have an affiliate (you), you have an affiliate program (the company/product owner) and you have a customer (the person buying).
As an affiliate, you can join an affiliate program and this will give you the ability to promote a product/service or a subset of products and services. An affiliate program will give you a special and unique “affiliate link” when you join their program, which will give you the ability to promote their services, and for it to be tracked.
If, as an affiliate, you send someone to the product website and they make a purchase, you earn flat rate sale or percentage commission. These typically range from 1% – 75%, depending on the company or product/service.
Let’s look at a little chart breaking down the process.
As an example, let’s say I join to become an affiliate for Amazon (known as Amazon Associates). As an affiliate I can promote over 500 MILLION (yes, million) products as an affiliate. It is actually quite amazing when you consider the sheer size of the opportunity.
If I drive somebody from my website, my social media account, or from an email I send out to Amazon through my affiliate link and they purchase something, say as an example, a toaster, I earn 6% commission for that. If the toaster is $100, I get paid $6.
Although that may not sound like a lot, people are buying 100,000’s of toaster every day, and people are buying 100’s of millions of products from Amazon every month. What if you sold 30 toasters per day? You would be earning $180/day.
What if you were selling a more expensive item on Amazon that cost $1,000 and paid $60 in commissions with every sale? If you sold 30 of those, you would be earning $1,800 in commissions every day. That is the reality of affiliate marketing and this is just one very tiny example.
So now that you know how the affiliate marketing process work, let’s talk a bit more about YOU, the affiliate.
Who Can Become an Affiliate. At What Cost.
Generally speaking, affiliate programs are completely free to join. In some very rare cases, an affiliate program will charge a small, nominal fee to attempt to prevent fraudulent affiliates (and verify you are real), but that is quite unusual.
Affiliate programs should be free, they shouldn’t charge, and if one is charging you to be able to promote their products/services, chances are they are not an affiliate program (they are likely a scam, or something completely different).
So the awesome part about affiliate programs is that they are completely free to join and as an affiliate, you can promote pretty much every brand/product/service you can imagine and earn a commission for doing so. There are over 550 MILLION products and services that you can promote as an affiliate.
How Affiliate Programs Work
An affiliate program is in essence a piece of tracking software that allows affiliates (you) to promote merchants (the company) and earn a commission. The affiliate program will typically track all clicks, all sales transactions, and calculate all commissions. They also allow you to manage your payment details and personal details.
Here is an example of what an affiliate program stats look like, these are the stats from WealthyAffiliate.com’s affiliate program.
Affiliate program stats are automated and accurate. As affiliate tracking technology has advanced, so has the ability to get more sophisticated and granular with your affiliate tracking campaigns. Affiliates now have a great deal of control and can track conversions and the source of conversions quite easily.
Affiliate programs typically offer promotional materials such as banners, widgets, or even plugins that you can leverage on your website or social platforms. The more comprehensive the affiliate program is, the better equipped affiliates are to promote that given product/service, so it is advantageous for a company to offer a high quality experience for their affiliates.
What is an Affiliate Network?
An affiliate network is a grouping of affiliate programs under one company. For example, an affiliate network like Awin.com (the largest in the world), you can promote 6,000 different companies and their respective products from under one roof.
There are 100’s of affiliate networks out there, with 100,000’s of companies and brands within their networks. Joining an affiliate network can save you a lot of time and is a lot less management as an affiliate (to manage all of your passwords, links, payments, etc).
Instead of having to join 1,000’s of programs independently, you can join one affiliate network like Awin or Cj.com and promote 1,000’s of products under one management area and get paid through a single payment for all of them.
Some of the most popular affiliate networks in the world are:
- Awin.com
- Amazon Associates
- Ebay Partners
- CJ by Conversant
- Clickbank.com
- Rakuten
- MoreNiche.com
The Affiliate Opportunity & How to Get Paid.
All affiliate programs/networks pay different. They all have different pay schedules. Typically an affiliate company will offer multiple forms of payment.
It is also very typical for your payment to be centralized in US Dollars. It is becoming a standard within the online world to pay affiliates in US dollars, but some companies certainly will pay you in your own currency and many payment gateways will do the conversion for you from USD to your country currency (like PayPal)
These may include:
-
- Cheque Payment
- PayPal
- Bank Wire
- Payoneer
- Cryptocurrency
As an example, the Wealthy Affiliate affiliate program (which I manage) pays primarily through PayPal, but we also offer cheque payment in addition to those and if someone meets a certain payment threshold we can offer bank wire payments.
Affiliate programs don’t make it difficult to get paid, if they did, no affiliate in the right mind would promote the given program.
Where Do You Go to Run an Affiliate Business?
So you want to get started within the affiliate marketing world, but you are not sure where to go. It is tough these days with the influx of programs and education that are claiming to be best. The problem with many of the services out there is the fact that they are not actually even “affiliate marketing”.
Where do you start your research?
Well I am going to speed up your research drastically. There is an elite platform in the affiliate marketing space, which I happen to be very much involved with (and that I can coach you within) called Wealthy Affiliate. It is where the “who’s who” of the affiliate space not only hang out, but where they managed their respective businesses.
This is the one platform that you must have if you plan on learning affiliate marketing, but also if you want environment where you can get all the tools, websites, hosting, training, coaching and interact support to create and grow a business within the affiliate marketing world.
There are two membership options, a completely free Starter membership (free to try) and a cost-efficient, more advanced Premium option (as low as $29 per month). I recommend that you get rolling on the Starter membership, as I recommend that you always “try” a service before you consider every purchasing anything.
Within the first few lessons you are going to have your own affiliate coach, chosen a direction for your business, your own affiliate website (with hosting), and access to training that will truly take you from a beginner to an affiliate marketing expert.
I have also created a video on the process of affiliate marketing and how it REALLY works. I would recommend you check this out if you get the opportunity.
If you have any questions about ANY aspect affiliate marketing, I am more than happy to share my knowledge and help with you. Feel free to leave any questions below and I will be sure to get back to you right away.
A great walk-through of affiliate marketing. My biggest concern when I started out was whether or not there would be affiliate programs to promote in my niche.
I have been running a small ma and pop shop in the clothing industry, primarily designer clothes (trendy) and the affiliate marketing world not just opened my eyes to new opportunity, I can in essence promote any designer, brand, or product now.
It has all but replaced my offline income and I have never been more excited about the space. Just in the last year alone there have been companies that I have always wanted to promote, that are now offering affiliate programs.
A great breakdown of affiliate marketing here Kyle.
Amazing, I love hearing stories like this. The very problem with the offline world and why it is having a tough time competing these days with the online world is the fact that the product selection online is often times cheaper, it is much more vast, and shipping times in many places are “next day” now with free returns.
More people simply shop online and the fact that you are taking advantage of both affiliate marketing, your own offline store (and I imagine an online store) is a great idea.
Affiliate marketing opens doors to everyone, say I have always wanted to start a clothing store for men’s hipster clothes. I could quite easily create a website targeting this, I could create content and get rankings in Google, and I could promote from a subset of 100,000’s of products and earn 6-20% conversions (the typical affiliate commissions for clothing).
It is a brilliant business model and only more and more people are starting to realize the power of affiliate marketing. It levels the business playing field for everyone and there are literally MILLIONS of directions that one could head with their niche.
Kyle, this was an extremely informative piece of writing in helping an uneducated individual learn what is involved with affiliate marketing.
Of course thanks to the continued explosion of the Internet, it is possible for a motivated individual to eventually, through effort, desire, and time, to build up a financially profitable online business in affiliate marketing.
I did find one statement you made somewhat interesting. In explaining the costs in joining an affiliate program, on the rare occasion an individual might be charged a nominal fee just to have the privilege in joining. Conversely, you stated that should a program attempt to charge you to be a member, it usually is fraudulent and should be reported.
I assume that in the latter case, said affiliate program would be continously making an attempt to charge people by the week, month or year to retain membership. I’ve never heard of the former, but as you stated charging a one-time ONLY fee would be the affiliate program’s defense against a person who would treat it as a joke, (perhaps even later making an attempt to do something criminal which would fall back on that company).
Do you think it to be more important that you join an affiliate program that would pay a relatively high percentage rate on commissions, or conversetly get involved in a niche where there was less competition and the affiliate programs paid out a much lower percentage rate on commissions based on successful sales made to customers?
Jeff
There affiliate marketing space is definitely maturing, and the opportunity is continuing to evolve and grow. When I started out, way back in the dark ages (2002) there wasn’t a lot of affiliate programs to choose from, comparatively speaking, but at the time I couldn’t believe just how massive the affiliate marketing opportunity felt. It was significant and it is only that much bigger now with every major corp, and even small businesses operating affiliate programs either independently or through affiliate networks.
In respect to payment, some affiliate programs will have a nominal fee ($1-5) in place when you register so that they can attempt to use this measure to remove fraud within their network. This is fine, although this is going to be a huge determent for many wanting to join the program.
What I was referring to is some companies that are charging $50’s to $1,000’s in order to join their so called “affiliate program”. Those are often times MLM scams, and they should be avoided. You should never have to buy a product, in order to be able to promote that same product. That is a scary proposition and often those types programs usually end up being taken out by the FTC for being pyramid schemes.
Regarding, high ticket versus low ticket. Both can be effective, but you should based what you promote as an affiliate on your audience, who they are, and what will benefit them most. If something can help them for $50 and you are trying to push (knowingly) an item that is $500 for the sake of more commissions, they will see through that and you won’t build a brand as a result. Higher ticket items are more difficult to convert, and chargebacks tend to be much higher. I would always be careful about falling into the high ticket affiliate marketing trap.
Base what you promote on what will help your visitors to your website. If you do that, you will have a long and very lucrative career within the affiliate marketing world.
Affiliate Marketing is a minefield – you can literally be blown up if you don’t know what you are doing. After so many false starts and empty promises – I stumbled across Wealthy Affiliate. All I ever wanted was to design my website, have my own brand name and live a comfortable lifestyle with my business. Wealthy Affiliate has offered me the opportunity to achieve these goals.
Three years on I have designed my website, have a brand name and earning an income – it’s nothing to crazy yet but I can envision its growth in the near future. This business is so flexible I can work anywhere in the world. I am so proud to part of this caring internet business. The Co-Founders gave gone out of their way to ensure we have the proper training and the most amazing internet tools at our disposal .
The premium membership is unbelievable, its excellent value for money and the lessons are of such a high quality. My biggest reward is readers telling me that they have found comfort, support, and hope and inspiration in becoming better dads and husbands, the icing on the cake is I am learning and earning and providing a service.
It truly can be a minefield, and often times the biggest issues come down to misinformation. There are a lot of people being taught either out of date strategies or things that are completely hypothetical.
There is a set process for building a business online and over the past 16 years I have been affiliate marketing, this has hardly changed on bit. Technology has improved yes, but the fundamental model of affiliate marketing is very much the same. You have a person, you have a product. As the affiliate you are acting as the intermediate and if you can align a person and their problems, with an appropriate solution (help) and a product/service recommendation, you will build a very successful business in the process.
You are absolutely right, this is what Wealthy Affiliate teaches and you have access to all the training, tools, and support you need within the community at WA to build a business without any prior experience.
I agree with you that there are programs and schemers out there that have tried to make the affiliate marketing waters murky due to “too good to be true” systems and products that also cost the earth, etc.
But it’s awesome to learn about affiliate marketing here and what really goes into the process for building a lucrative business on the web.
Once you learn the steps (without all the smoke and mirrors), it becomes easy and simple to understand.
One of the best parts I like about affiliate marketing is that affiliate programs don’t cost a cent to join (as you point out). Perhaps the MLM industry should take a leaf out of the AM book lol.
This “Wealthy Affiliate” platform you speak of is definitely intriguing, Kyle! 😀
Neil
Exactly. Once you wash out all of the ideas and information that doesn’t matter, you are left with a simple and straight forward process. At the end of the day, you have a customer, you have a product, and in between those two entities you have an affiliate.
As an affiliate, you are going to create a successful business if you can connect a customer with the most relevant product, one that will help them out and hopefully solve their problems. You are a problem solver and you can deliver your solutions through many forms of media, including content on your website, social media, video, email, etc.
It is wonderful to have you as part of the Wealthy Affiliate family and I know you have a bright future ahead of you within the affiliate space Neil.
Before coming to WA I was doing a lot searching on the internet about online marketing. I was reading some stories regarding online marketing scams. I almost got caught up in a few, but my gut kept saying don’t do it, don’t do it.
On one of the sites, I was on there was a link to Click Bank. I watched the Free webinar and was impressed.
However as I was about to purchase the first installment which was only $27.00, my gut started talking to me again. It said, check some reviews and then make a decision. Well, what I learned was very disturbing. There was one guy who started before he knew it, he’d spent over $700 dollars (Others have spent much more). He said Click Bank kept upselling him.
After that letdown, there was another link for WA. I don’t have to tell you I was beyond skeptical at this point. But my apprehension was quickly dissolved because you could join for a low price, there was no upsell, no pressure, and everything that’s promised to you is delivered. Kyle, your website is informative because you explain how to become an affiliate in terms a newbie can understand. You have no idea how important that is since it is so easy to become overwhelmed.
The illustration you have on your site demonstrates just how simple it is to get started. I would recommend WA to anyone whos willing to listen, and anyone looking to get into online marketing and don’t have a clue who to trust. Your website compliments what WA is all about, Success!!! Very nicely done Kyle.
There are definitely a lot of programs out there that will constantly upsell on further purchases as you mention, and that is something that you need to be careful about within the affiliate marketing training space. You should never have to spend $100’s or $1,000’s when getting rolling, in particular before you have access to the actual platform itself (which is why I am an advocate of free training or free to try programs, which there are a few of).
Clickbank definitely is one of the many affiliate networks out there and they have some good products within their network, but they are just ONE of many large networks that you can leverage as an affiliate marketers.
There are other really huge ones such as Awin, ShareASale.com, CJ.com, Rakuten, etc….that all have 1,000’s of companies and big brands that you can leverage on your website in exchange for affiliate commissions. Etsy, eBay, HP, etc…they all have affiliate programs these days.
That is a really clear overview of what an affiliate marketer is. You mention near the beginning of the post that there are companies pretending to be doing affiliate marketing when they arent. Can you talk about them a bit more so that I can identify them? I want to be sure to avoid them.
Most definitely, I will be explaining these companies in more detail in future content. Basically what is happening is there are ‘multi-level marketing’ companies simply stating they are affiliate marketing to try to legitimize their operation (which can often times be fraudulent or in the worst cases, not legal).
Affiliate programs are single level. They do not have multiple levels, you have a product, you have an affiliate, and sitting in the middle is the affiliate program that tracks all of the transactions. If you, as the affiliate, make the sale, you earn a commission. That is how the process works.
Any company that is not teaching this or not doing this, is not affiliate marketing and one of the surest signs that it is NOT affiliate related is if they are charging a high ticket (over $500) for their products or services. I recommend anyone that is interested in affiliate marketing that wants to work within the most legitimate platform, and one that is a safe haven from all of the other programs out there, then to check out Wealthy Affiliate. It will truly be a breath of fresh air.
The whole idea of affiliate marketing I was finding to be overwhelming to the point I was ready to completely give up on the business. Thank you for offering me some actual insight and help here, without me having to spend money on your courses, webinars, etc (which I am getting so sick of). Is nice to finally find someone that is actually out there to help people, and can deliver content in a way to actually make sense. It seems like you know what the heck you are talking about.
How long have you actually been an affiliate and are you also into funnel building?
And if I were to join the WA program that you mentioned, what can the expected yearly costs be to run an affiliate marketing business? I am being pulled in so many directions that I just need a proper break down of what I need and what I don’t. Thanks.
I have been helping people for the last 12 years (full time) within the affiliate space, helping them learn the process, helping them to create businesses, and helping very successful affiliate marketers scale their respective businesses. It is what I love to do and it is something that will continue to carry on through the Wealthy Affiliate platform (which I will get to).
I have personally been an affiliate marketer for the last 16 years, I got my start way back in 2002. My original focus was PPC, but this evolved into many other facets of the online world like SEO, email marketing, social media/engagement, vidoe, etc…there truly are so many different directions that you can head in the online business world. It is an amazing, exciting and very opportunity rife space to be working in.
Funnel building, is simply building an email list. It can absolutely be something that has a profound and useful impact on your affiliate business, but it is also something that can be used by offline companies, and product/service owners online.
I have intimate knowledge of email marketing, but my recommendation is that you DO NOT consider it until you already have an established or growing website that is getting at least 100 unique clicks per day. Otherwise you are wasting your time and you definitely should not make this a starting point for your business (as many so called “gurus” are teaching these days). The only reason these folks are recommending doing this out of the gate is because they are likely pushing some funnel software or course that they can sell to you.
As for costs, you can create and run an online business with a great deal of efficiency. There are several components of an online business that you will want to have. This includes the appropriate tools, technology, education and support. You can get all of these within Wealthy Affiliate, from the hosting/websites, keyword and website research platforms, content platforms, training, live classes, expert coaching and support, as well as the ability to network with well over a million fellow internet entrepreneurs. This is completely free to get started at Wealthy Affiliate, and if you want access to EVERYTHING, there is a Premium membership that is $49 per month (or $359 yearly).
The only other potential expense on top of this would be a domain or two. They are less than $15 per year, so very inexpensive. So for under $400 total you can create, managed, and grow your business within any niche and get access to the most advanced and comprehensive online business platform in the world. There has never been a better or more cost efficient time to get involved in affiliate marketing.
I hope I have answered your questions here, but please don’t hesitate to ask if you have any further questions.
Great article Kyle, with so much misinformation on affiliate marketing and with so many fraudulent companies who claim to offer a legitimate program. It can be difficult for someone who’s genuinely interested in affiliate marketing to find the right path to success. Luckily there are legitimate programs such as Wealthy Affiliate which offers great training to anyone who’s genuinely interested in learning about the subject. The affiliate marketing industry is booming because more and more people are shopping online every day.
It can be difficult to know what’s coming from what’s going in the affiliate marketing space. That is why I wanted to break down the process in a clear manner that would allow people to understand the process and how it works in less than 5 minutes.
The affiliate world is certainly growing at a faster pace than I have ever seen as more companies are realizing that their businesses that conventionally thrived within the offline world, are required to have a strong online presence in order to thrive moving forward.
Thanks for your great article Kyle. Affiliate Marketing is a great online business option but as usual, there are people with negative tendencies. Most of the scams in affiliate marketing world happen with affiliate training programs.
While there are a lot of great affiliate marketing training programs like Wealthy Affiliate, there are lot other selling fake training programs. When people join those programs, they do not learn anything and start calling affiliate marketing a scam.
I would like to hear more about how a newbie can identify a scam before joining it. Simply every paid affiliate program cannot be categorized as a scam.
You have rightly said, “ try a service before buying”. Wealthy Affiliate starter program is free to join and verify the claims. I could not take the advantage of free starter program, as this facility is not available for some of the countries including India. I started with a monthly membership and upgraded to the annual membership later.
I wouldn’t say it is as much “fake training” as it is companies trying to conflate the idea that they are affiliate marketing when they are not. There are a whole new breed of programs out there calling themselves affiliate marketing, but they are not telling people WHAT they will actually be doing before they join. These have the tendency to be MLM programs, and worse, pyramid schemes (several of them have been taken out by the FTC recently).
Affiliate marketing, the concept is very simple. You have a customer. You have a product. You as the affiliate, is to align these and affiliate programs (the software in between) allows you to accomplish this.
If someone is interested in a Vitamix Blender, then you can send them to Vitamix.com through your affiliate link and earn a commission (I think it is around 10%). You can do this over and over again and your audience is 4 BILLION people. You can earn a full time income just selling Vitamix blenders online, that is the reality of the opportunity within the affiliate marketing space.
That is what Wealthy Affiliate teaches and that is WHAT affiliate marketing is.
Affiliate marketing has been a very confusing aspect for me, until I read your post and understood better, I am making steps to join Wealthy Affiliate as a beginner and I think I understand the basics.
One thing is still weird though and I cannot seem to keep up, what is in for the companies with affiliate programs since they seem like big companies that can advertise themselves?
There are many reasons a company would want to offer an affiliate program and many reasons affiliates are hugely beneficially to online businesses. I would break them down for you here.
(1) An internal marketing team is expensive. Hiring marketing managers or a team to market your products and services can easily cost $100,000’s per year. There is also no guaranteed results, and the “marketing team” is more than likely going to blow through advertising expenditure. Affiliates join for free and they already have reach in a given niche.
(2) They only pay when they make money. Affiliate marketing is performance based. An affiliate gets paid when they drive “sales” to a company. Because of this, there is no inherent risk for the company that offers the affiliate program, all the risk is put on the affiliate and they can scale their income in a very predictable way;
(3) They can have a massive marketing team. There are companies like amazon that have literally built their reach within the online world as a result of having MILLIONS of affiliates. Imagine how expensive it would be to hire millions of employees, it simply wouldn’t happen. Affiliate marketing is the MOST effective model for online companies to build their revenue and grow their businesses.
I hope this offers you a lot of clarity here.
Haha, the whole concept of affiliate marketing is definitely not too hard to understand and you can learn about it in 5 minutes. But obviously, to be successful at affiliate marketing it takes some time and consistency to pull it off. But it’s not the hardest thing to do since wealthy affiliate is a great platform that can help achieve this by providing tools, help and an awesome community to share experiences, tips and tricks!
As with any business, affiliate marketing should not be treated any different in terms of the time and dedicated. Unlike the “offline” world, the costs to get started or next to nothing, the audience is much more vast (4 billion people online), and the subset of products/services that you can promote on your website is nothing short of massive with over 550 MILLION.
My suggestion to anyone getting started within the online world with no experience is to be REAL with yourself and real about the process it takes to create a business. If you can do this before you get rolling, your chances of success will go up ten old. If you give yourself a week or a month to build a business, you probably won’t. If you give yourself a year, you could absolutely be in a position where you could have a full time and scalable affiliate marketing business during this time.
Little bit misleading title, more appropriate would be to say “how to learn what affiliate marketing is all about in 5 minutes.
Other than that I thought it gave me a nice recap of what affiliate marketing is and isn’t about.
My question is about the different levels which could be attained inside of a program if you exceeded expectations. Amazon advertises special offers for those people who bring in so many leads in a period of time.
Could you go over how those would apply?
Very true. You cannot learn how to become an affiliate marketer in 5 minutes, but you can certainly learn what affiliate marketing is and how the core processes work in this amount of time. That was my goal with this post as there is just so much misinformation out there in the affiliate space that sends aspiring marketers running in circles.
In respect to your questions, a lot of the time affiliate programs will have dedicated “bonuses” or ways you can earn more commissions if you are a high achiever. Amazon has this and many high volume affiliates are able to negotiate a higher commission rate. You will see something similar within many affiliate programs.
In the case of the affiliate program at WA, we have a fully-paid Super Affiliate Conference in Vegas we invite our top affiliates to every year if they achieve over a certain threshold of sales. This is a really exciting event, and is very motivating for affiliates.
Any good affiliate program will understand the importance of affiliates and if you are a high volume sales affiliate, there will be some form of incentives available to you.