You may have heard the term “Affiliate Marketing” and immediately thought, “another internet scam”, or some other term that invalidates the occupation. This article will be a brief overview that offers a broad definition of affiliate marketing, the major components of the business model, and what is needed to become an affiliate marketer to start earning an income from home.
What it Is
Affiliate marketing (niche marketing) is a performance-based marketing program that allows a retailer to pay for the advertising and referral of their products in the form of commission. Meaning, the retailer does not pay for the advertising if a sale isn’t made, or a lead isn’t generated, etc.
Affiliate marketing is a legitimate online business model, and can be viewed as a freelance sales and advertisement position, working for commission only. Unlike an ad agency, the affiliate marketer targets a specific audience within a niche market that they choose (not to the masses) and works to establish a relationship with their audience in order to build trust. Products are researched, reviews are written, and the comprehensive product information, often along with a genuine review, is presented to the audience with a link to purchase, if they choose, given the information that has been provided.
What it is Not
Affiliate marketing is NOT a “get rich quick” scheme. Generally, there is a lot of work on the back end for the affiliate marketer. Building a website, choosing which area of expertise their business will take (niche), a ton of research, and a lot of writing. But once a campaign site is “completed”, it can be on auto-pilot, with minimal maintenance, and potentially generate a very nice passive income for the affiliate marketer as more traffic visits the site and reads the article. Multiple campaigns/websites/products/niches can be created by the affiliate in order to generate several income streams.
Affiliate marketing, just like any business, requires thought and effort, education and time, and the correct tools in order to generate a profit.
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Parties Involved and How it Works
There are at least 3 parties involved in affiliate marketing, and often a 4th party – the network.
Basically, the affiliate chooses a product to promote that is relevant to their audience. If the consumer chooses to purchase through the affiliate link, the affiliate and the merchant or network share the profit of the sale. There is rarely additional cost to the consumer when making a purchase through an affiliate link – the cost of such programs is already included in the purchase price.
The Retailer – A merchant with a product or service to sell, and who wants to reach a targeted audience online by using an affiliate to promote their products.
The Affiliate Network – The network serves as an intermediary between the affiliate and the merchant. Examples are Amazon and Clickbank. These networks provide a database of products to promote, and the affiliate marketer goes through them (not the retailer or merchant) in order to promote these products, and are paid by the network.
The Affiliate Marketer – Someone who advertises products to a specific audience with social media, blogs, emails, and other online marketing techniques. The Affiliate marketer provides a service to both the retailer or network, and the consumer. The retailer is receiving promotion for their product, and the consumer is receiving comprehensive, relevant, and genuine product information to assist with their purchase.
The Consumer – Consumers are the driving force in any market, and the same is true with affiliate marketing. They are the audience that affiliates promote the merchant’s products to – specific products that are chosen for a particular audience.
Advertisers only pay a commission when a purchase is made through the targeted advertising and promotion efforts of the affiliate marketer, instead of paying for non-targeted advertising to the masses.
Affiliates generate an income while providing helpful advice to their audience.
Consumers get a trusted recommendation and comprehensive product information to assist their purchase decision.
Pros and Cons of Starting an Affiliate Marketing Business
- No inventory, customer service, shipping, returns, follow-up
- Freedom to work from anywhere at anytime
- Flexibility to choose a target niche and relevant products to promote
- Some high commission items – digital products can offer near 50% commission
- Many affiliate programs are easy to join
- Little to no cost to start
- Excellent income potential
- Lots of choices with programs/products
- Requires self-motivation and focus
- Takes time to build trust with audience
- Takes time to gain traffic and subscribers
- You don’t control the consumer experience with the retailer
- You don’t control the product or service
- Hard to stand out from other affiliates (unless you are promoting a product within a micro-niche)
How to get started
Basically, choose a topic, get a domain name, build a site, join an affiliate network (or become an affiliate of the product creator), and promote a product with comprehensive reviews. Sounds easy, right?
There are a few other steps in there that you’ll want to do also, such as keyword research, and using those keywords in articles you publish in order to gain authority and ranking with the search engines, as well as writing additional related articles for the same reasons – all of which will have the goal of generate traffic to your site.
Once the traffic gets there, it will be your “job” to convert the visitor to a consumer – through HONEST communication.
You can even do reviews on products you do not recommend. Let the visitor know why you do not recommend, while giving all of the product information. But include your affiliate link anyway – otherwise, if that visitor is dead-set on purchasing that product, they may purchase it through your link.
Affiliate marketing is a legitimate business model that requires skills acquisition, thought, research, and focus in order to be successful. It’s a business that all parties benefit from, that is driven by the market.
Some skills and tools are needed to be successful, and you can get everything you need to succeed – training, tools, support, ideas – at Wealthy Affiliate.
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