What is Affiliate Marketing and How Does It Work


Affiliate Marketing can simply be defined as the online (internet) version of Marketing (sales) jobs.

Do you still remember the days when a sales guy working for a certain company (usually the cosmetic companies) would come and knock on your door and try to sell you a range of cosmetic products? The “older” generation reading this will quickly remember. When the sales guy succeed in persuading you to buy a product, his boss – (the cosmetic company that the sales guy is marketing their products) – would pay the sales guy say, a 10% commission for that sale.

That is affiliate marketing in the real world. I guess you could also call it commission marketing because that’s what it is: somebody gets paid commission for marketing and selling somebody else’s product. The company is the affiliate merchant, or vendor, and the sales guy is the affiliate as he gets commission from a sale.

Just like a marketing agent moves from place to place (door to door) trying to sell or persuade people to buy the products of a particular company in order to earn a commission from the product sales,  an affiliate marketer (internet marketer) is somebody (blogger or webmaster) who markets or advertise the products or services of an ecommerce website (on his blog or website) in order to earn a commission from the product sales or service subscriptions.

Now imagine the same marketing scenario on the internet: the same cosmetic company has a website that sells cosmetics. An internet marketer (an online sales guy)  has a website (a cosmetic blog) that educates people about cosmetics and where to buy good cosmetic products. The internet marketer puts an affiliate link on his cosmetic blog that, when his blog readers click on it, they will go to the website of the cosmetic company to buy cosmetics and if they buy via his affiliate link, the cosmetic company will pay the internet marketer a commission of the sales for referring those customers to their cosmetic website.

So affiliate marketting is just the internet version of marketing in the real world. Thats why some people prefer to call it e-marketing or virtual marketing. So you can either become a marketer in the real world ( and move from place to place with a heavy backpack full of products to sell and earn commissions) OR you can create a blog and become an internet marketer for the ecommerce websites and earn commissions on product sales and service subscriptions online (without you leaving your house). Which one do you choose? ofcourse Internet Marketing! (which makes it possible for you to work from home and make passive income online).

Summarily, Affiliate marketing (also known as Internet marketing) is the act of marketing the products and services of an ecommerce website for a commission.

The main reason why popular ecommerce websites like Amazon, Ebay, Alibaba and other ecommerce websites are able to sell millions of products per day and make billions of dollars per month, is due to the efforts of their numerous hard working Affiliates (bloggers and webmasters) who refer (link) millions of potential customers to their online stores in order to earn commissions on product sales and service subscriptions.

Daren Rowse (the blogger at problogger.com) is one of those hard working affiliates. Daren Rowse has earn more than $800,000 commission by referring potential customers to Amazon.com and earning commission on product sales.

Affiliates (internet marketers) do a great job of converting web users with little or no intension of spending money online, in to potential customers or clients for the ecommerce websites.

Affiliates also help internet users to get a bang for their buck by providing very honest reviews to the products and services of the ecommerce websites. For example whenever you type keywords like best video camera, top 10 cheap laptops,where to buy quality dog food etc, there,s a high probability of landing on the website or blog of an Affiliate; who will tell you what to buy, where to buy, when to buy and how to buy online.

How Does Internet Marketing Works.

In affiliate marketing (internet marketing), if an affiliate marketer (simply called an affiliate) refer (link) a potential customer or client to an e-commerce website and the customer goes to the e-commerce website and buys any product(s) or subcribe to a service, the affiliate who refered that customer or client to the e-commerce website will earn a commission for that sale or subscription.  For example if you refer somebody who needs a Camera to Amazon and the person goes to Amazon and buys the recommended Camera or any camera (product), you will earn a commission for that sale. Let’s take for example that the customer bought a $4000 camera from Amazon, you ( the affiliate who referred that customer to Amazon) will get an 8% commission of $4000 (the price of the product bought by the customer). So $320 will be your commission for referring that customer to Amazon. If the customer added multiple products to his cart,you will earn a commission for each of the product bought by the customer. So if you referred a customer to Amazon who end up buying 20 products from Amazon, you (the affiliate who referred the customer to Amazon), will end a commission for each of the 20 items bought by the customer.

It should be noted that an Affiiate will only earn a commision if a referred customer end up buying something from an online shop. Affiliates only earn commisions from product sales or service subscriptions. For example you link 100 people to the amazon website and non of them buys an item from Amazon, you won,t earn a commission.

Please take note that an affiliate doesn,t have any business with product delivery (shipping) and customer service (technical support). The shipping (delivery) of any item bought by a customer as well as customer service (technical support) will be handled by the ecommerce websites (the product manufacturers). As an affiliate, your job is to get people to purchase items and you let the manufacturer take care of the rest. For example if you link a customer (through your affiliate link) to the Samsung website, who bought a Samsung galaxy 7 phone that later got bad, Samsung (the manufacturer) will handle the refund and technical support.

In otherwords, the main duty of an Affiliate (an internet marketer) is just to refer potential customers or clients to an ecommerce website and earn commissions from their purchase or subscription.

Somebody may likely want to ask; how do the ecommerce websites know which affiliate referred a particular customer to their website?

The ecommerce websites provide a unique affiliate URL or link  (also called referral link) to each of their affiliates and its through those affiliate links that their affiliates refer (send) potential customers to their ecommerce websites.

Those affiliate URL (links) contain tracking codes (often called affiliate codes) that is used by the ecommerce websites to know the affiliate who referred a particular customer to their ecommerce website so as to assign commission to the right affiliate.

After most bloggers have written a good blog post about the importance of a particular product, they will often provide links to relevant products on Amazon or Ebay. The provided links are often affiliate links. If you click on an affiliate link, goes to an ecommerce website and buys something or subscribe to a service (web hosting service), the affiliate (whose affiliate link was clicked) earns a commission for the sale or subcription. So affiliates (bloggers) link to products on Amazon or other ecommerce websites so that their blog readers can buy any product they recommend through their affiliate links so that that they can earn a commission.

Ever wondered why most bloggers will insist you click on a particular link in order to go to Amazon, Ebay, Hostgator and other ecommerce websites to buy a particular product or subcribe to a particular service (often webhosting service)?. It’s because if you go to an ecommerce website through their affiliate links and buy something or subcribe to a service, they will earn a commission. Those are their money making links.

Some bloggers will even tell you the reason why they want you to click on their affiliate links. For example they will tell you that if you click on their affiliate links and buy the recommended products or subscribe to webhosting, they will be able to earn a small commission for the sale or subscription at no extra cost to you.You can find this info at their disclaimer page.

Like i mentioned earlier, the Affiliate links contain unique tracking codes which enables Amazon, Ebay and other ecommerce websites to know which of their affiliate referred a particular customer to their website. Most ecommerce websites have thousands of affiliates and so without affiliate links they won’t be able to know which affiliate referred a customer to their website.

How to become an Internet Marketer.

Nowadays almost all the ecommerce websites now run an affiliate program and to become an internet marketer (an affiliate) for any of the ecommerce websites, you just need to sign up to their affiliate program, get your affiliate link (affiliate URL) and start marketing their products and services for a commission of the sales or subscriptions.

Some popular affiliate programs include;

Amazon’s Affiliate Program

To become an Amazon affiliate and start marketing the quality products found on Amazon and earn commissions, you just need to sign up to the Amazon’s affiliate program to get your unique Amazon affiliate link ( tracking code) and start marketing.

Ebay’s Affiliate Program

Click Bank’s Affiliate program

Godaddy’s Affiliate program

Hostgator’s Affiliate Program

If you created your blog after reading Neil Patel’s how to start a blog guide or other how to guides you found through Google, then you must have clicked on a Hostgator affiliate link before. Most bloggers (hostgator affiliates) will write a good article about how to start a blog and provide affiliate links to hostgator, Bluehost and other webhosting companies that run an affiliate programs. If a would be blogger click on their affilaite links, goes to hostgator or bluehost and subscribe to a hosting service… let’s take for example that the referred client subscribe to a 3yrs hosting service at Hostgator which cost more than $300, the blogger who referred that client to Hostgator will earn a commission for that subscription. Thats one of the ways that Neil Patel makes money.

etc etc

How to find Related Affiliate Programs to Sign Up To.

Like i told you before, affiliate marketing is all about recommending high quality and very relevant products and services to your blog readers through your affiliate links in order to earn a commission.

So to make lots of money as an affiliate, you will need to sign up to the affiliate programs of ecommerce websites offering products and services that are related to the topic of your blog and highly relevant to your blog readers.

For example if the topic of your blog is about hotels, then you will need to sign up to the affiliate programs of the hotel ecommerce websites.

So how do bloggers find related affiliate programs to sign up to?

  1. Through Google.

To find related affiliate programs through Google, simply type the niche of your blog together with the keyword “affiliate programs” in to the Google bar. For example if the topic (niche) of your blog is video cameras, simply type VIDEO CAMERAS AFFILIATE PROGRAMS in to the Google search bar and you will find lots of affiliate programs related to your niche. Sign up to the affiliate program of the ecommerce websites that offers relevant and quality products and services.

2. Another way to easily determine whether an ecommerce website runs an affiliate program is by looking at the footer of the ecommerce website. If you look at the footer of most ecommerce websites that run an affiliate program, you will see links titled…

Affiliates

Become an Affiliate

Work With Us

Partner with Us

Our Affiliate program etc

If you find any of the above links at the footer of any ecommerce website, then the ecommerce website runs an affiliate program. To join the affiliate program of the ecommerce website and start promoting their products and services to earn commissions, you just need to click on those links and fill their affiliate sign up form.

Qualities to look out for Before Signing Up To an affiliate program.

Check out the relevancy and the quality of the products and services offerred by an ecommerce website.

Like i told you before, affiliate marketing is all about recommending high quality and very relevant products and services to your blog readers through your affiliate links in order to earn a commission of product sales and services subcription.

Brand popularity and Reputation

Make sure that you sign up to the affiliate programs of well-known and reputable ecommerce websites. It should be noted that one of the greatest barriers to ecommerce nowadays is lack of trust i.e. people are very cautious about the type of website they shop from or subscribe to, due the fear that their credit card details may be stolen by the hackers.

Due to the above fact, if you promote the product and services of an unpopular  brand, the conversion rate of your referrals and as well as your commission will be very low due to trust issues. Imagine that you refer 100 potential customers to an ecommerce website and only 2 end buying something due to trust issues. Your commission will be low.

Amazon, Ebay, Click bank are some examples of trusted ecommerce websites. Almost everybody knows Amazon and Ebay and so people will be more comfortable buying from those ecommerce websites. This explains why Amazon and Ebay affiliates make thousands of dollars in commission every month.

Total commission offerred by the ecommerce website.

The commission offerred by the ecommerce websites varies from 4% to 80%. The greater the commission offered by an ecommerce website, the greater the amount of money you will earn from product sales and service subscriptions.

So if you promote the products and services of an ecommerce website that offers a 4o% commission, you will make more money than from an ecommerce website that offers a 4% commission.

However when it comes to choosing an affiliate to sign up to, Brand popularity and Reputation has more weight than commission. Its better to promote the products and services of a trusted brand that offers a 4% commission on product sales or subscription than to promote the service of an untrusted brand that offers a 40% commission.

Standard Affiliates Requirements.

The ecommerce websites running affiliate programs have requirements that would be affiliates must meet if they want to become one their affiliates and start earning commissions on their products and services.

Even though the affiliate sign up requirements of the ecommerce websites varies. Most ecommerce websites use the two requirements (criteria) below to determine the affiliates that should be accepted in to their affiliate programs.

  1. To become an affiliate for any ecommerce website, you will need a blog or a website. You need a platform to promote the products and services of the ecommerce websites so as send potential customers to the ecommerce websites and not e-window shoppers. If you don,t already have a blog, this is how to start a blog. It will cost you just $50 to start a blog. So if you have $50 to invest in this internet marketing business, you can become an Amazon Affiliate today.
  2. You need quality and relevant content on your blog to be able to refer potential customers to the Amazon website and earn a commission.

Case Study

How to sign up to the Amazon Affiliate Program

Due to the fact that Amazon Affiliate program (also known as Amazon Associate program) is the most popular affiliate program, i,m going to show you how sign up to the Amazon’s affiliate program so that you can start marketing the quality products found on Amazon and earn commissions just like Daren Rowse.

For those of you who don,t know, Amazon offers an 8% commission for any product bought by a customer referred to their website by any affiliate.

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