Home Affiliate Marketing What Is Affiliate Marketing and How Does It Work: 2020 Beginners Guide

What Is Affiliate Marketing and How Does It Work: 2020 Beginners Guide

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What Is Affiliate Marketing and How Does It Work

Before we dive into the details, it’s essential first to have some understanding and perspective of the term ‘affiliate marketing.’ 

Early morning a person wakes up at an ungodly hour to rush to his office through streets jammed and total gridlock. Sound terrible? What if, instead of following the same path of monotony to earn a few bucks, a person could make money from anywhere and at any time — even while he/she sleep? 

In this article, our experts will be going to help the readers understand what is Affiliate Marketing and how does it work.

Let’s begin!

What Is Affiliate Marketing?

In simple words, AM is a popular tactic to drive sales and generate revenue. In fact: it is the process by which a person (known as an affiliate) earns a commission for marketing someone else products––either an individual or a company. 

How Does Affiliate Marketing Work?

The three main parties are: 

  1. Product creators or sellers.
  2. The advertiser or affiliate.
  3. The consumer.

Because affiliate marketing works by product marketing and spreading the responsibilities among parties, with a share of the profit, it manages to make an effective marketing strategy. Let’s dig in the complicated relationship these parties share to ensure success.

1. Sellers

The seller, aka product creator, can either be a large enterprise or a solo entrepreneur. In other words, he is known as the vendor, merchant, or retailer. What could be the product? The product can be anything like household goods, or other physical objects, or a service, like makeup tutorials.

The brand never involves in the product/service marketing. It is the job of an advertiser. 

For example, the seller could be a SaaS company, also known as Software as a service that leverages advertisers to help sell their software. Likewise, the seller could be an ecommerce merchant that wants to reach a large audience.

2. The affiliate/publisher 

The publisher can be either a sole entrepreneur or a company. The job of an affiliate is to market the seller’s product attractively, thus persuading an audience to make purchases. 

If the consumer makes purchases, the affiliate receives a commission, or we can say a small portion of the revenue made by the seller. 

3. The consumer

The advertisers share merchant’s products with the consumers on social media, websites, and blogs. When a purchase is made, both the seller and the affiliate share the revenues. Sometimes the affiliate discloses with the consumer that they are receiving commission from the seller for the sales they make. But most of the time, the consumer is completely oblivious to the whole infrastructure of affiliate marketing.

The Complete Step-By-Step Guide to Start Affiliate Marketing

To begin, the affiliate searches for a product of his/her interest, then promote it and earn revenue from each sale they make. The tracking of the sales transactions is done via affiliate links. No doubt, affiliate marketing is extremely beneficial to both affiliate marketers and brands. In short, it is the new push towards old and hectic marketing tactics.

Step 1) Create a Website or a Blog

Theoretically, an affiliate can start the product/services marketing on any platform, either a website or a blog. Even Instagram works.

Step 2) Choose an Industry/ Niche

Choose a topic that targets a specific category. Like ‘food’ is a vast category; therefore, one can target ‘grilling food’ that sounds unique too. 

Step 3) Join Amazon Affiliate Program

The 3 options are:

  1. High-paying, low-volume affiliate programs
  2. Low-paying, high-volume affiliate programs
  3. High-paying, high-volume affiliate programs

Step 4) Content is king

Create great content in the form of resource pages, tutorials, review posts, or emails.

Step 5) Optimization and tracking

The affiliate must optimize the page and track his/her rankings in Google. SEO rules must be followed. 

Step 6) Rinse and Repeat!

How Do Affiliate Marketers Earn Revenue?

Undoubtedly, affiliate marketing is an inexpensive and quick method of making money for those looking to earn extra income online. But how do publishers get paid?

The answer is complicated. Here are the various ways for an affiliate to get paid.

1. Pay per sale–– standard structure

In this option, the merchant pays the affiliate after the consumer purchases the product. The amount of the payment is set as a percentage of the product sale price.

2. Pay per lead–– complex system

This structure compensates the affiliate on his/her efforts based on the conversion of leads. In this option, the affiliate have to persuade customers to visit the merchant’s website to fulfill the required action — whether it’s signing up for a product trial, subscribing to a newsletter, downloading software or files, or filling out a contact form.

3. Pay per click––an active system 

This program provides incentives to the affiliate when he/she redirects the potential customers from their advertising platform to the merchant’s site. In simple words, the affiliate must encourage the customers to the extent that they will redirect to the merchant’s site. 

Why Choose To Work As An Affiliate Marketer?

  • To earn passive income.
  • No customer support.
  • Work from home.
  • The power of SEO.
  • Cost-effective.
  • Convenient and flexible.
  • Performance-based rewards.

How Much Money Can An Affiliate Make?

In simple words, there is no limit to earning. Moreover, it depends on the niche a person is working on and the amount of hard work he/she put on in. There are a lot of affiliate marketers who’re making six or seven figures a month.

Final thoughts

The affiliate marketing wheel mentioned-above is fundamental, and applying them step-by-step will surely get you paid on the right foot. But it is a lengthy process. Just don’t expect the freedom to quit your fulltime job until you get succeed. Well, that’s what the new concept is about. 

Got questions regarding what is Affiliate Marketing and how does it work? Let us know in the comments section below.

Keep reading to learn more about affiliate marketing and spread awareness. 

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