What is Affiliate Marketing? A Beginner's Guide to Online Partnerships
When it comes to marketing concepts, there are probably none with more misinformation and confusion surrounding it than affiliate marketing. Some consider it a phony, get-rich-quick pyramid scheme. Others swear that it can turn your 5-day workweek into a 5-hour one.
In reality, neither of these things is true about affiliate marketing, at least not for most people. There are a few exceptions. Some influencers have done particularly well with affiliate marketing by putting in a lot of hard work.
However, “gurus” who claim you can become the next billionaire with the click of a button are endemic in the media and in online culture. For most, this isn’t the case.
That said, you can make a living with affiliate marketing. It’s more akin to freelancing than anything else. Affiliate marketing provides passive income, but there’s a great deal of work you must do before you start seeing serious returns.
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For this reason, affiliate marketing isn’t for everybody.
For example, if you’re living paycheck to paycheck, it may not be a good idea to quit your job to start an affiliate marketing home business. It’s a competitive marketplace, and, in most cases, you won’t be bringing in much money after immediately starting.
Instead, you may be better off running your affiliate marketing business in your off-hours until you get fully established.
According to one study, only 0.6% of the affiliate marketers surveyed had been in business for at least one year. All the rest were brand new.
Thankfully, the affiliate marketing landscape has matured dramatically since then. There are plenty of use cases and best practices to follow, and more and more companies are open to working with affiliate marketers. About 15% of all digital marketing revenue comes from affiliate marketing.
Here’s everything you need to know to get started. First, what is affiliate marketing, anyway?
What is Affiliate Marketing?
Affiliate marketing is a type of performance-based marketing. In an affiliate marketing arrangement, a business provides its affiliates with income based on each visitor or customer they bring in through their marketing efforts.
In other words, as an affiliate marketer, you earn a commission by promoting someone else’s products.
Typically, an affiliate will be a website owner or a social media influencer. The trick is having enough visitors to your website or enough of a social media following that a business could benefit and grow its sales by partnering with you.
And therein lies the biggest challenge of affiliate marketing: making the numbers work. Anyone can start a blog, but if you intend to monetize it by becoming an affiliate marketer, people need to read your blog.
Generally, there are either 3 or 4 parties involved in affiliate marketing, depending on whom you ask:
- The Merchant: the business that hires an affiliate to promote their product(s).
- The Affiliate: the individual or company who promotes the product(s).
- The Customer: the business or consumer who finds products through affiliates and buys them from the merchant.
- The Network: the organization that acts as an intermediary between the affiliate and the merchant.
There isn’t always a network, but networks can provide first-time affiliates with an easy way to get their business started. They usually handle payments and product delivery, so each party is confident about every transaction.
In fact, sometimes, working with a network is in your best interest. Not every merchant will partner with an affiliate if they don’t work with a network, and networks often offer entire databases full of products you can promote online.
Here are a few of the most popular affiliate networks:
Most of these networks make it easy to start, and most don’t require any upfront payment. Others work like marketplaces for affiliate links, which you can choose and then place on your website.