Affiliate marketing is a type of marketing in which online retailers or businesses pay a commission to external websites for the traffic or sales generated from their referrals. If you are an affiliate marketeer, then the amount you earn will be entirely performance-based, determined by your own marketing efforts. Affiliates are rewarded by businesses for clicks, sign-ups, and sale conversions. Affiliate marketers both promote products and services, as well as generate sales.
The affiliate marketing sector is growing rapidly. In the United States, affiliate marketing spend is expected to reach $8.2 billion by 2022, which is a considerable increase when compared to the $5.4 billion spent in 2017. Here we will outline everything you need to know about how affiliate marketing works, the main types of affiliate marketing, and how you can get paid using this marketing approach.
How Does Affiliate Marketing Work
The way affiliate marketing works is quite simple. Businesses join affiliate marketing programmes to allow other website owners or influencers (known as affiliates) to promote their products for them. This can take on a variety of different formats as the affiliate earns a commission each time someone completes the required action through the unique link associated with their recommendation. Usually, this action is completing a purchase, but sometimes commissions are paid for click-throughs, signing up for an email newsletter, sharing their personal information, or other actions deemed valuable to that business. The steps involved in this process are straightforward:
- You show an ad or link for the business that you are promoting on your website, personal blog, or across your social media accounts. You can use this link anywhere you have an online presence.
- One of your readers or followers clicks on your unique link.
- If you are being paid per click, which is rare, then this would be the end of your transaction.
- However, in the majority of cases, you would need the customer to make a purchase from the business you are promoting.
- Once the purchase is completed the affiliate network will make a record of the transaction. This purchase would then be confirmed by the business.
- When the purchase is confirmed and completed, you will receive a monetary commission for your part in the sale.
One of the most common questions asked about affiliate marketing is ‘how much commission will I earn?’ The answer to this depends on the company you are working with. Commission amounts range from as low as 5% and as much as 50% of the value of each sale. Alternatively, some affiliate marketing programmes will offer you a flat amount per sale rather than a percentage of each sale.
Types of Affiliate Marketing
There are three main types of affiliate marketing. These are unattached affiliate marketing, related affiliate marketing, and involved affiliate marketing.
To become involved in unattached affiliate marketing, you don’t have to have any experience or authority within the niche that you are promoting. You will not build a relationship with the end user, you will simply put an affiliate link in front of someone via Google Ads, Facebook Ads, or other similar websites, and if that person clicks on the link and buys the product then you will earn a commission. Because no experience or reputation within the sector is needed for unattached affiliate marketing, this is a great way for those new to affiliate marketing to get involved in the sector without first building up a reputation or trust with their users, which can take time and effort.
Related affiliate marketing is perhaps the most common type of affiliate marketing, where you use an existing online presence, such as a blog, podcast or social media following, to promote brands or products that are related to your niche. With related affiliate marketing, these may be products or brands that you don’t use yourself (for example, personal finance blogs may include affiliate links to several different banks that are not the bank they use for their own personal banking). This form of affiliate marketing relies on your authority within your niche, with your readers or followers assuming you have promoted a brand because you trust or recommend it.
Finally, involved affiliate marketing is (as the name suggests) the most involved form of affiliate marketing: marketers have an established reputation in their niche and they have used a product or service, truly believe in it, and are happy to personally recommend it to their audience. This type of affiliate marketing is used within your content, and because you are offering your advice and expertise it is considered the most effective form of affiliate marketing. It also has the potential to be the most lucrative.
How You Get Paid Doing Affiliate Marketing
Affiliate marketers often work with affiliate marketing programmes or channels, which conveniently display all of your affiliate links in one place, and then pay you any commissions earnt, usually on a monthly basis. As has already been outlined above, you will be paid a small amount for each purchase that is made via one of your affiliate links.
The amount that you can expect to earn from this kind of marketing varies wildly, with affiliate incomes spanning a huge spectrum. At the bottom end of the scale are affiliate marketers that only make a few pounds a month, whilst at the other end are those bringing home six-figure salaries. As a general rule, the bigger your own online presence and the larger your following, the more money you can make. One well-known blogger, Ryan Robinson, has reported that he earns over $17,000 per month from his affiliate income alone.
Common Channels Used for Affiliate Marketing
Interested in exploring the world of affiliate marketing for yourself? Some of the most popular affiliate marketing channels that are a great place to start include:
- Amazon Associates. One of the easiest-to-use affiliate programmes, once you’ve signed up you can then proceed to get your own affiliate link to any product on Amazon.
- Like to Know It. This is the largest influencer shopping app and is ideal for social media influencers or affiliate marketers in the niches of family, fitness, fashion, beauty or home. It is primarily linked to Instagram accounts.
- Shopify. This is a highly regarded programme that is easy to use and free to sign up for.
Conclusion
Affiliate marketing is a great way to earn passive income from an existing channel, whether that is your own website, blog, or social media outlets. And if you’re looking for a new revenue stream then establishing your own website or blog using a hosting channel such as Thames Cloud Services is a great way to boost your income. The bigger you grow in your niche, the bigger your audience will be and therefore the more affiliate income you have the potential to earn.
