If you want to build your empire online, affiliate marketing can be one of the best starting points. If you have a platform of your own, be it a blog, website, or even a YouTube channel, you can monetize them and start making passive income. Just to give you a hint about how popular affiliate marketing is, here is one prediction: people spent around $5.4 billion in 2017 for affiliate marketing, and this number is expected to reach $8.2 billion by 2022!
In this article, we will be covering 5 key points you have to know about affiliate marketing and how you can start earning from it.
1. What is Affiliate Marketing?
HubSpot defines affiliate marketing as “… a performance-based marketing tactic in which a retailer, typically an online one, rewards a website with a commission for each customer referred via the website’s promotional activities.” The website is called the affiliate and gets paid when promotions turn into real transactions.
In affiliate marketing, there are 3 parties involved usually. The promoters of the products- Affiliates; the Product Creators; and the Consumers who buy the products.
- An Affiliate or Publisher can be a company or an individual. They create content on their site or channel that can promote the products. They also promote their content to get more transactions by targeting SEO for traffic, building email lists, etc. If a visitor of that channel or site makes a transaction (a direct purchase or submitting a form), the affiliate earns a commission.
- The Merchant is the Product Creator who creates the product or service that the Affiliate advertises. They collaborate with affiliates by offering commissions and revenue sharing.
- Consumers are the ones who make transactions. They either submit lead forms or make direct purchases from links, which helps the Merchant and Affiliate earn from the product.
2. How does Affiliate Marketing work?
Affiliates are paid when transactions are completed successfully. Affiliate marketing is usually performance-based- you are paid when the audience takes some action. Some affiliate marketing models are:
Pay-Per-Click (PPC): This is among the rarer models in practice. Affiliates get paid if the audience just clicks on the links, even if no transaction takes place.
Pay-Per-Lead (PPL): With PPL, affiliates are paid for generating leads, but purchase is not mandatory from those leads. Trial creation, form submission, pre-purchase are some methods of generating leads from visitors.
Pay-Per-Sale (PPS): This is the riskiest model for affiliates, but it also pays the most. Affiliates earn only when the visitors make a purchase from the affiliates’ promotions.
3. How to Start Affiliate Marketing?
While getting started with affiliate marketing is rather simple, there are certain things you should keep in mind before jumping in.
i. Choose your platform and niche where you can create good influence easily. Your blog or channel can cover niche topics to reach a very specific target audience, which will help you with marketing as well. You can have your blog on platforms like HubSpot and WordPress, create your newsletters, create social media channels, especially on YouTube.
ii. Your main target with the platform is to build an engaging audience base. You need to spend some time researching your competitors, current trends in your niche, monitor your traffic, and even engaging directly with your present audience. This will help you decide on your target audience group. Then you can create content based on this information and let them engage with it. When they can relate to the targeted content, they will be more prone to purchasing from your promotions.
iii. When you have your content and audience all set up, sign up for an affiliate program, like Amazon Associates. They will provide you with affiliate links that you can share with your content. Usually, there are no upfront costs for affiliate marketing.
iv. When signing up for affiliate marketing, you have to be careful about which products you want to associate with. If you want to be successful with affiliate marketing, make sure you recommend products that you are personally acquainted with. If you have any doubts about the product or are not sure if it will be helpful for your audience, don’t go for it. Also, another secret of affiliate marketing 2020 is that you never directly advertise products. You can make a recommendation based on personal experience and let your audience decide.
While choosing your products, keep 3 things in mind: the audience, product value, and profitability. The product should be resonating with your audience for them to make a transaction. It should be of great quality and value, something you have personally used and would even recommend to your mother. The affiliate promotion should have high conversions and payouts so that you can make a good profit off it.
v. Create high-quality content to promote your affiliate products. You can make comparisons of your products, give detailed reviews, journal your own experience with the products, and even interview people who have already used the products. Whatever you create, it should be authentic. It’s best to steer clear of products you are not familiar with or have not used personally. When you offer authentic content and reviews, the right people will make a purchase.
vi. Keep track of your visitors to better understand their needs. When a visitor clicks on your affiliate link, a cookie reaches into their browser to track their actions. When they make a qualified transaction (form submission or purchase), the merchant will record the action and mark it with your link, leading to your payment. You can optimize your future content by tracking the present content. See which ones have performed best and which areas need improvement. This will help you create better content for better attempts at affiliate marketing.
vii. Get paid after the transactions. Depending on your program, there can be different payout models. You could receive weekly or monthly payouts for your leads and sales. Thoroughly go through the payment structure before signing up. Keep your goals in mind and select accordingly. It could be PPL or PPS. The payment could be one-off or a recurring commission. Choosing the right payout structure will also depend on the products you choose to promote and how you plan on promoting them. If you have to make investments for promotions, then you need to consider those costs as well.
Suppose you want to promote your products and content with paid ads, then add that to your expenses. Compare your earnings on each sale against what you are spending for them. If it is not profitable, you will need to think of other options for promoting or go for other products. If you have a website or blog, then you have to consider your hosting costs. You really need to get into the nitty-gritty of the matter, even if you hate maths. If you want to make this passive source work out, the initial days will be spent with your calculator!
4. How much can You Earn from Affiliate Marketing?
Just like any other financial endeavors, the initial days are not so successful for affiliates as well. Full-time established affiliates can go above $100,000/ month in terms of their earnings, but it’s best not to be overambitious in your starting days.
Affiliate marketing 2020 is all about profits rather than the revenue you make. Consider 2 affiliates. One makes $500/day and the other makes $5000/day. But the one with $500 can be better off if they have no cash outflow. If you are paying for acquisition, you really need to look out for your profits.
Before you get trapped by shining examples of earning thousands per day, you have to make sure your earning potential and expectations from affiliate marketing are aligned. The industry you are currently in, the kind of content you create, the audience base, and their tendencies- all these will affect your earning from affiliate marketing. If you want to be focused on ads from Facebook or Adwords for promoting your products, you should be careful about your investment- be it your money or time. They will ultimately impact your profits.
5. When can you Start Affiliate Marketing?
If you were to survey a group of your friends and ask them about affiliate marketing in 2020, most will probably say there is not much scope. But industry-insiders would tell you otherwise. It is not about direct promotions or spending huge amounts of money on advertising your affiliate products. Affiliate marketing has stood the test of time, and it is going to stay in the future as well. I mean, who would not like to make some passive income from the blog or channel they are already investing their time into? Just like other ventures, you have to do your research, be careful about the investments, and constantly improve your strategies.
In its initial days, the main attraction was to get rich quickly. But affiliate marketing 2020 is more about building trust and faith with your audience first. Only then can you get some benefits of that following. Affiliate marketing is like any other kind of marketing. You have to figure out the basics first. Fake promises will run out soon. No one wants to deal with unrealistic promises. Be realistic about what you are promoting. Be authentic with the audience that trusts your reviews and content. Build your personal brand first and that will automatically attract the right people and products.
If you are not bringing any value to your audience, and are just focused on promoting random products, your affiliate marketing career won’t be as successful as you want it to be. Whatever you choose to promote, it should be something you identify with, something that stems from a true passion. There are multiple tactics available online that tell you how to scale your promotions. But the only rule you ever need to remember is that always promote products and services that you have personally enjoyed or loved, and treat your followers as humans. They are not there to fulfill your desires.
Consciously build your personal brand, create authentic content, choose products you are truly familiar with, and just wait. If you have patience, you will find the right balance for these 3, and your affiliate marketing will reach great heights!