Let’s introduce you to the world of affiliate marketing.
If you’ve landed on this page, chances are you’ve heard about affiliate marketing but you’re not quite sure how it works.
With this article, I’ll give you a good idea of what is affiliate marketing about, the myths surrounding it, and how you can get started in the lucrative world of affiliate marketing yourself.
Table of Contents:
Most of you, and perhaps some of the 90s kids can recall the rise of pop stars like Britney Spears and Christina Aguilera.
But most people will tell you that the 90s was also an important era where the World Wide Web (aka The Internet) becomes a reality.
With this new technology, many companies realized that they now have access to not only the local customers, but customers from all around the world.
And what better way to expand your business than to have other people promote your business for you?
At the same time, many website owners were creating contents that were very helpful and valuable to the internet users.
Soon, companies partnered up with these website owners to market their products and services, and promised to give a commission when the website owners generate sales for them.
Thus, affiliate marketing was born.
So, What is Affiliate Marketing?
At its core, affiliate marketing is all about helping customers find what they need. There are 4 main components when it comes to affiliate marketing:
In affiliate marketing, an advertiser can be a company selling their products, such as electronics, clothing, weight loss pills, car parts, basketball shoes, you name it.
An advertiser can also be some insurance companies trying to market their insurance policies and bring in new customers/policy holders.
In short, an advertiser is someone who is ready to pay other people to help them promote their business.
It can either be huge multinational companies such as Nike and Coca Cola, or new startups that are trying to get some exposure through the publishers.
Publishers / Affiliate Marketers
A publisher / affiliate marketer is an individual or a company that promotes an advertiser’s products and services.
In exchange for their advertising efforts, publishers get a commission from the advertisers when a new sale or desired action has been performed by a consumer.
Traditionally, the publishers are often website owners that contractually agree to work with an advertiser to promote their products.
In turn, the advertisers provide the publishers with creatives – links, banner ads or text ads that the publishers can display on their websites.
When we talk about starting an online business, many aspiring entrepreneurs choose to become a publisher due to the low entry barrier.
All they need to do is to have a website and put up valuable contents for their readers (who are also consumers).
They can then choose to work with their trusted advertisers and earn commissions when the readers/consumers purchase an item or sign up for a service that they advertise.
Advertisers often submit their offers to affiliate marketing networks, who aggregate a huge amount of offers from different advertisers.
You can think of affiliate networks as the middle-man between Advertisers and Publishers, where Advertisers display their offers and Publishers/Affiliate Marketers choose which offers to promote.
Affiliate Networks also tracks affiliate sales generated by Publishers and handle payments from Advertisers to Publishers for valid leads and sales.
The last component that completes the affiliate marketing cycle is the consumers. The consumers are the readers and internet users that see the advertisements.
If they are interested in an offer, they perform a desired action (either by clicking on an affiliate link, submitting their information using sign-up forms, or purchase a product/service).
This action takes them from the publisher’s website to the advertiser’s website to complete the action, which is what we call a conversion.
Once a conversion has been completed, the advertiser awards the publisher with a commission.
Myths Surrounding Affiliate Marketing
There seems to be some myths that won’t go away when it comes to affiliate marketing. Now’s a good time to take a look at a few popular ones and bust the myths.
1. It’s Difficult to Get Involved in Affiliate Marketing
Affiliate marketing is actually something that anyone can do, as long as they are willing to put in some effort and learn on the go.
In fact, most successful affiliate marketers got involved in affiliate marketing without having any prior technical and marketing experience.
Nowadays, the entry barrier is getting even lower with free training modules created to build an online business with affiliate marketing from scratch.
2. Affiliate Websites Don’t Need Much Maintenance
Many affiliate marketers make more than $100,000 per year from affiliate marketing, and they seem to work from the beach perpetually.
While this is the impression many people may have about affiliate marketing, starting a business with affiliate marketing is actually not very different from starting any other forms of online and offline businesses.
An affiliate marketer needs to keep learning and improving, and treat his/her website as a real business in order to thrive.
3. You Should Always Choose the Most Profitable Niche
When it comes to starting an affiliate marketing business, most people go for the “hot niche” because they believe that’s what will make them the most money.
While you may have a chance to earn big with a hot niche, what works for other people doesn’t necessarily work for you.
Your best bet when starting an affiliate marketing online business is to choose a niche you are interested in, and one that you can work with for months and years to come.
For more details, read How to start an online business for free.
Affiliate Marketing VS Network Marketing
Apart from affiliate marketing, network marketing / multi-level-marketing (MLM) is another popular business model with a relatively low entry barrier.
Most of us came across MLMs first because we were approached by friends or family members.
Here’s the typical scenario – an old acquaintance wants to catch up with you, so you meet her up at a cafe.
She starts sharing about a product that she is using, and soon enough, it becomes a sales pitch to get you into buying the same product.
Before you know it, you are being recruited into some MLM business opportunity as a distributor.
Why do MLM distributors do this? There are 3 main reasons:
- It’s very difficult to make good money just by selling the company products alone. MLM distributors have to recruit down-lines to unlock new ranks and higher commissions.
- Some MLM distributors are pressured by their sponsors to recruit friends and families.
- Most MLM distributors don’t have the skills and tenacity to recruit strangers. As a result, they are limited to recruiting people they know.
Personally, I don’t like to get involved in MLMs with people I know. It introduces the conflict of interests into relationships.
Once you become a down-line of your friend, his/her commissions depend on your sales and performance. This changes the relationship in a subtle way, and frankly I’m not a fan of it.
Everything changes when I discovered affiliate marketing, which was much more suitable for my personality compared to network marketing.
Why Choose Affiliate Marketing?
I’ve been involved in both MLMs and affiliate marketing, and found that I prefer the latter that much more.
Here are just some of the reasons why I chose affiliate marketing over MLMs.
1. Do Something Once and Get Paid Over and Over Again.
Depending on how you do affiliate marketing, it is possible for you to do something once and reap the benefits over and over again.
For example, every article that I write in this site has the potential to bring new visitors day after day.
Some of the articles I wrote months ago are still converting new customers and generating revenue every single day.
The effort you put into affiliate marketing compounds itself. It might take a while to see real results, but once it comes, it pays dividends for a long time to come.
Eventually, it becomes an asset that generate passive income consistently.
2. Potential For a Full Time Income
Since you can leverage on the compounding effect from your earlier work, it’s possible to build a full time income from affiliate marketing over time.
When I first got started, it took me 4 months to reach my first $100/month profit. Fast forward 1 year later, I was generating over $1k/month from the same site.
My results with this website at 5th month
My results with this website at 11th month
It was made possible because the effort that I put in compounds and builds on itself over time.
If you can’t work on it full time, at least get started part-time, but treat it as a real business and work on it consistently.
3. No Recruiting and Face-to-Face Selling
When I was involved in MLMs, the biggest hurdles for me were to recruit new distributors and to do face-to-face selling.
Despite pressure from my sponsor, I refused to sell or to recruit my friends and family members.
I had bad experience with acquaintances who meet up just to recruit me, and I wasn’t ready to lose friends over a MLM company.
We all know that recruiting and face-to-face selling is not for everyone. It takes a skilled salesperson to make it work.
Fortunately, none of this is needed in affiliate marketing. You don’t have to meet any of your buyer, and you don’t have to recruit anyone either.
Since your website will do the selling for you 24/7, all you need to do is to focus on providing value to your readers.
I’ve been working on affiliate marketing for more than 1 year now, and I have never faced a single customer.
4. Answer to No One Except For Yourself
To me, this is perhaps the most attractive part of affiliate marketing. Unlike MLMs, there is no pressure from your sponsors, and there is no obligation to attend periodic team meetings.
Just craft your working schedule as you seem fit.
You’re a night owl? Work through the night when you are most productive!
Kinda busy in the upcoming month? Spend lesser time on your site, and you still get a consistent paycheck thanks to the work you’ve put in earlier.
5. Low Risk and Minimal Start-Up Costs
Compared to most MLMs, the start-up costs of affiliate marketing is pretty minimal.
With MLMs, you are usually required to pay a membership fee and buy products every month to become an active distributor. If you can’t sell the products, you’ll have to absorb the costs.
This is why most MLM distributors lose money (99.7% according to Jon M. Taylor, Ph.D., in his book “The Case (For And) Against Multi-Level Marketing”).
When it comes to affiliate marketing, you don’t handle products and inventory to begin with.
Your only job is to provide useful information and direct your readers to products that will help them.
6. Sense of Accomplishment
As a bonus, you have a website and results to prove that you’re helping people.
In affiliate marketing, your income is a direct reflection of how many people you have helped.
Unlike face-to-face selling, there is no one pressuring your readers into buying stuffs from your website links.
They buy because they find your recommendations genuinely helpful.
For people who wants to learn about affiliate marketing and to build a side income, I always recommend them to Wealthy Affiliate, a training platform that helped me made my first dollars online.
To date, I have received more than a hundred emails thanking me for guiding them in the right direction.
Nothing beats the satisfaction you get when you know you’ve really helped someone out there.
How to Get Started with Affiliate Marketing?
As mentioned earlier, I always recommend my readers to Wealthy Affiliate if they want to build a consistent side income from the internet.
It is beginner-friendly and teaches you about the ins-and-outs of affiliate marketing.
More importantly, you can get enrolled into the course and get started with the training for absolutely free.
Of course, there is a premium version where you can pay to learn advanced techniques, but the free membership will cover 10 modules and give you a very good idea about the potential of affiliate marketing.