Affiliate Marketing 101: A Semi-Passive Income That Works

What is affiliate marketing? Have you heard of Avon? No? Tupperware? Sure, you have.

The business model of these giants is simple: they manufacture the products and look for people who will help sell their products. In return, the person who sold the item gets a commission. Affiliate marketing works similarly, but online.

How Does Affiliate Marketing Work?

Advertising is costly and can yield little results. Apart from advertising costs, a businessperson must pay a specialist or a firm to design or manage the advertisement. To cut this cost, a merchant may offer a commission for a product an affiliate sells.

Let us say that the merchant’s business is vitamin supplements. Typically, this merchant must reach many people and, most importantly, convince them to buy.

This is time-consuming, costly, and can pull the company’s profits down due to the high advertising costs. Any businessman knows that to make his business grow; he has to focus on his core competency, which is to develop products that add value to a person’s life.

Advertising has to be outsourced to somebody.

If the merchant, who we will call John, chooses to advertise, he has to pay an ad company to do the ad, and then he has to pay Facebook or Google to run the ads.

If he chooses to hire employees to do the marketing for him, it also entails cost. Is there a way for John to market his product without spending too much?

This is where the affiliate comes in. John, with the aid of a technology expert, sets up an affiliate marketing program. John encourages marketers to sell his product in exchange for a commission in this program. These marketers are called affiliates.

You are the affiliate.

John gives a personal link or code to each affiliate. This code is a private code that identifies each affiliate marketer. This code is how John keeps track of who sold what and how much was sold.

The affiliate—the person who sells the product—has to find people who will buy John’s product. Below are two examples of how to do this:

Blogging – most affiliates go this route. Affiliates know that thousands of online merchants, like John, are willing to pay a hefty commission for each sale. The affiliate has to choose a product that he understands. In our example, vitamins.

The affiliate now has to put up a blog that specializes in vitamins. Everything about this blog is related to vitamins, specifically those John sells. The blog will have visitors, especially if its contents add value to readers.

To put up a blog, you need a web host provider. You need a website that will run smoothly, and you can do this with a web host like Blue Host, a company that offers reliable and affordable hosting services. You can also build a website with Blue Host through its partnership with WordPress.

This website runs on WordPress. WordPress is the world’s largest web builder and content management system (CMS). You do not need to code to learn how to build a website, as it has thousands of templates and plug-ins that you can use.

Now, the affiliate can post a banner or a link to John’s products in his blog. If a reader clicks this link and decides to buy, the affiliate receives a commission from John.

Commenting – some affiliate marketers do not launch blog sites. Instead, they scour the internet for forum sites or social media groups related to what they are selling.

If one of John’s products is an iron supplement for bodybuilders, the affiliate marketer would likely be looking for social media groups whose members are interested in bodybuilding.

The affiliate marketer will comment and respond to these bodybuilders’ inquiries. He will attempt to add value by being a bodybuilding expert.

He will give advice and provide his insights. And in that comment, he will insert his link (the code John gave him). The affiliate receives a commission if readers click this link and buy John’s iron supplement.

Experts in the affiliate marketing niche also use forums like Quora, and they also use paid ads sometimes. You will also see them on YouTube doing product reviews.

YouTube is an effective way to market someone else’s product. You can do tutorials and show the product in action. It is a platform where you can reach a market or audience that does not want to read but instead prefers to watch.

Before starting affiliate marketing on YouTube, you need a video editor or maker. The one I recommend is Camtasia.

Here is a screenshot of Camtasia:

Camtasia is best used if you do a screencast. A screencast is a kind of video where the content of your computer screen is recorded while you are talking. You can also put a small video at the bottom right that shows your face while the video is being recorded.

A screencast is what many gamers use to stream their games. It is also the favorite of YouTubers who offer online video tutorials.

Benefits of Affiliate Marketing

Two people will benefit from this process: the merchant and the affiliate. The merchant will save on the cost of advertising and labor costs.

John does not have to pay anybody hourly to look for customers. The affiliates do this for him for free. It’s just that he has to pay a commission for every sale.

This is not a bad setup. If John hired an employee, this employee has to get paid whether or not he made a sale. With affiliate marketers, John only has to shell out money if a product is sold.

And since John is wise enough, he has already baked this commission percentage in his pricing model, so he is not losing money.

Besides the financial benefits, John saves himself from the enormous marketing headache. If he has 100 affiliate marketers representing him, this is equivalent to having 100 versions of himself selling his product.

To the affiliate marketer, the benefit is straightforward: money. An affiliate marketer can easily set up a business to sell products he did not make. He does not have to keep an inventory.

John has the inventory. The affiliate marketer can also have dozens of products to sell. He has the whole world as his marketplace, and there is no limit to the number of products he can sell.

The Caveats of Affiliate Marketing

Every business has its share of horrors. And affiliate marketing is not spared. Here are a few things that one should consider before getting into it.

Traffic – despite 7 billion potential customers, getting online traffic is not a walk in the park. An affiliate marketer cannot just post a blog and expect the whole world to flock to his website and buy. Marketing online takes expertise. You must understand SEO, create valuable content, understand social media trends, and be relevant.

Scrupulous Marketers – snake oil salespeople are very much alive today. If you were John, there is no way you could verify the integrity of all affiliate marketers. Some might make false promises about your product to make a sale.

The bad thing about this is that you get all the blame since your business is attached to your brand name. Customer reviews and feedback will show on your website, not the affiliate’s website.

Affiliate marketing is hard work. It is unlike gambling online, where you can win a quick buck if you are lucky.

Conclusion

Now that the internet is at your disposal, earning money through affiliate marketing is much easier than selling someone else’s product over the phone. If you have properly set up your affiliate marketing program, along with your blog and squeeze pages, your typical day will be like this:

You wake up in the morning and eat breakfast.
You check your computer to see if new developments exist in the products you sell.
You make appropriate changes as deemed necessary.

Finally, you just sit back and wait for sales to come in. If you want to learn more about affiliate marketing, I recommend taking the Affiliate Bootcamp by ClickFunnels. It is a free online course.

SUGGESTED READING: