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Everything You Need to Know About Affiliate Marketing

Posted by Neha De

October 29, 2020

Many business owners are looking for ways to make more money. One way of doing so is by finding an alternate stream of income, which doesn’t necessarily mean starting another business. It can mean referring people to other businesses or products as part of a process known as affiliate marketing.


: Affiliate marketing is a performance-based method of earning a commission by promoting another company’s products and/or services — the affiliate (you) promotes a product and/or service to others and earns a piece of the profit for each sale that they make. The affiliate does this without holding any stock, fulfilling orders or dealing with customers. Sales are tracked via affiliate links, in order for commissions to be calculated.

Affiliate marketing works as a partnership between a merchant and its affiliates. Here, the merchant is the company selling the product or service and who the customer pays, and the affiliate is the one who promotes the company’s offering to their audience to build a customer base for the merchant and is paid a cut upon a successful sale (or sometimes even for a lead, depending on the terms of the contract).

Affiliate marketing calls for referring a product or service by sharing it on social media platforms, blogs or websites. The affiliate earns a commission every time someone makes a purchase using the unique link associated with their recommendation.

Following are five simple steps for participating in an affiliate marketing program:

  • Join an affiliate program
  • Choose which products/services to promote
  • Acquire a unique affiliate link for each offer
  • Share the link(s) on your blog, website and social media platforms
  • Earn a commission every time someone uses the link(s) to buy the products or services on offer
Commission rates may vary considerably, depending on the organization and the offers. An affiliate can typically earn between five and fifty percent of the total sale value (this happens most often when promoting an event), or get a flat rate per sale.

An affiliate is paid based on how well they perform. Here are the three types of performance-based models common to affiliate marketing:

  • Pay Per Click (PPC)

    : You get paid for all the valid clicks generated, irrespective of whether these clicks result in leads or sales.
  • Pay Per Lead (PPL)

    : You earn a fixed commission for every qualified action a click generates. Typical actions are a free trial sign-up, online form submission, installation of an app or completion of a survey.
  • Pay Per Sale (PPS)

    : You get a percentage of all qualified sales. This percentage is agreed upon by you (the affiliate) and the merchant.

Benefits of Affiliate Marketing

Here are the advantages of affiliate marketing:

  • It’s a simple business idea

    : The main advantage of the affiliate marketing business model is that there are no barriers to entry. All you need to do is to set up an affiliate marketing website (you can also do it without a website), and select a niche as well as product(s) and/or service(s) that are relevant for you to market. Finally, sign up for a selected affiliate marketing program, and you’re good to go.
  • You don’t need any experience or expertise to begin

    : You don’t need to be a marketing genius to become an affiliate. You can learn along the way by testing several paid or organic campaigns. All you need to do it identify which strategies work best and bring in the most profits. Then, optimize and repeat the successful ones to get results.
  • Investment costs involved are extremely low

    : At the start, the operating expenses are typically negligible. Essentially, all you need is a computer, running electricity and an active internet connection.
At a later stage, once you decide to establish your affiliate marketing website, you will incur costs related to setting up a domain, paying a web hosting operator and other minor costs such as designing the website and so on.

  • It’s a great secondary source of income

    : You can become an affiliate marketer while running your business.
  • It provides convenience and flexibility

    : As an affiliate marketer, you can create multiple campaigns on different landing pages and affiliate websites to market your affiliate links so that you can leave the poorly-performing ones behind and optimize the successful ones.
You also don’t have to stick to one affiliate marketing program. And, if one product/service proves to be difficult to sell, you have the option to pick up another one at any time. This allows you to maximize the opportunity to earn money and mitigate the risks of failure.
  • You don’t have to deal with customers

    : Managing and retaining customers can get problematic at times. Fortunately, as an affiliate, you don’t have to worry about any customer-related issues. Anytime you get a sale- or after-sale-related query, you can simply pass it on to the merchant’s customer service team. Of course, you can always opt to respond to merchandise-related questions, as it can boost your SEO.
  • You get performance-based income

    : While some may consider it a drawback, you have the opportunity to earn as much as you can — it all depends on how much time and effort you are willing to put in.

Drawbacks of Affiliate Marketing

These are the potential disadvantages of affiliate marketing:
  • You are dependent on existing affiliate marketing programs

    : Since you don’t own affiliate marketing programs, you are entirely dependent on the merchant’s rules and have to abide by their conditions. A program that looks attractive in the beginning may later become less competitive and lucrative.
  • You have no control over your competitors

    : While the level of competition depends on the industry, aggressive affiliate marketers from the same niche can put up fierce competition, which can be dangerous to your performance.
  • You won’t have repeat customers

    : Once a referral is made, chances are that a repeat purchase will not be made through your channels — most likely, they will go directly to the merchant, unless they get better a deal with you, which again will depend on your contract with the merchant.
  • There is no guaranteed income

    : Pay based on performance can be tricky, and no one can predict how much money one will be able to make.
  • Affiliate links can be hijacked

    : Although, this doesn’t happen often, there have been cases where affiliate links have been hijacked and the hacker has stolen someone else’s commission.

How to Start an Affiliate Marketing Business

Follow these steps to start an affiliate marketing venture:

Step 1: Begin with what you know

: Start by listing your favorite products, tools, apps, etc. — things you use regularly — find out if the companies that make these products offer affiliate partnership programs.

Next, research these brands, their various offerings, and their top selling points. Once you determine which program is right for you, join it. Then, start creating campaigns.

Step 2: Start an affiliate website

: Once you know what’s right for you, set up a website. Most affiliate programs prefer affiliate marketers who have an affiliate site and will want to look at it before partnering with them. This is because they want to ensure the website and content won’t hurt their brand and reputation.

Step 3: Look for various affiliate programs in your chosen niche

: To find the top affiliate programs in your niche, you will have to invest a significant amount of time. You can use search engines such as Google or Bing, and type in “your keyword + affiliate” to start.

Step 4: Track your performance

: It’s extremely important to streamline your campaign tracking and monitor your performance regularly and correctly. For this, set up a Google Analytics account to monitor your visitors’ on-site behavior.

Often, merchants also provide their affiliates with several monitoring panels so they can track their campaign’s performance via an affiliate dashboard.

Step 5: Execute creative strategies

: Once you set up your performance tracking dashboard, you can focus on framing compelling content for your marketing campaigns. How you go about it is totally up to you — you can offer product comparisons, review your favorite products/services, submit content to third-party sites, record and upload YouTube videos or publish gripping content on your blog — make sure you focus on the highest quality.

At the start of your affiliate marketing journey, if the commissions are not what you want them to be, don’t get discouraged. Come up with different online campaigns to increase your reach, constantly improve and adjust your strategies and test out various approaches. With time, you’ll figure out what works well and what doesn’t.


Neha De
Neha De

Neha De is a writer and editor with more than 13 years of experience. She has worked on a variety of genres and platforms, including books, magazine articles, blog posts and website copy. She is passionate about producing clear and concise content that is engaging and informative. In her spare time, Neha enjoys dancing, running and spending time with her family.

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