What is Affiliate Marketing And How Does it Work

What is Affiliate Marketing is chapter 1 of your comprehensive affiliate marketing guide. This guide is designed to tell you everything you want and NEED TO KNOW about affiliate marketing.

Your Comprehensive Affiliate Marketing Guide:

Chapter 1What is affiliate marketing (and how does it work?)
Chapter 2: How to start affiliate marketing TODAY!
Chapter 3: How to create a website for affiliate marketing

This chapter addresses “what is affiliate marketing” and explains how affiliate marketing works. Before you start affiliate marketing, you need to understand what affiliate marketing is and how it all works.

Ready? Let’s get started. Here is what we cover in this chapter:

What Makes Affiliate Marketing Unique

Affiliate marketing is a unique marketing and selling concept that helps businesses sell more of their own products or services. Without affiliate marketers, companies would be the only ones promoting the products they want to have to offer. But with affiliate marketing, companies can actually sell more products by allowing affiliate marketers to sell the products for them. How neat is that?

What is the Definition of Affiliate Marketing

The definition of affiliate marketing is:

Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate’s own marketing efforts.

Source Wikipedia

A company says:“Hey. We’ll pay you to promote our products!”

company pays affiliate marketers

Affiliate marketing is simply the act of promoting other companies products or serices and getting paid for it. The way you promote products is by being an affiliate of the company. As an affiliate, you get get paid is by commissions. A commission is a percent of the total product sale, that goes to you.

Why affiliate marketing is called performance-based marketing:

Performance-based marketing means to get paid based on your performance. As an affiliate marketer, your primary goal is to sell your affiliate products. The more products you sell, the more money you make. 

Affiliate marketing is basically a sales job. 

You are there to sell someone else’s product. The good thing about affiliate marketing is that you get to choose what you sell. You can choose from over 562 million products! (That’s how many products are available to promote from Amazon.com alone). 

What Does an Affiliate Marketer Do

The role of an affiliate marketer is to find new people to buy a company’s products. As an affiliate marketer, you drive new sales for a product. 

what an affiliate marketer does

The act of affiliate marketing helps companies find new buyers for their own products. And the benefit to you as the affiliate marketer is that you do not have to own, store or manage the support of that product. 

An affiliate marketer says:Hey, I recommend this great product. Here is why you should buy it“.

affiliate marketer product recommendation

Businesses and companies with products and services to sell love the affiliate marketing concept. Why? Because they don’t have to promote their products. You do. 

In reality, companies will do both. Businesses will promote their products AND offer an affiliate program so you can promote it too. 

The benefit of allowing affiliate marketers to promote the company’s products too is that the company can make more sales by tapping into your audiences of people, along with their own audience.

How Affiliate Marketing Works

Now that you understand the affiliate marketing definition and what an affiliate marketer does, we are ready to deep dive into how affiliate marketing really works. 

There are 3 groups of people involved in affiliate marketing. 

how affiliate marketing works

1 is the company with the product to sell. This group can also be called a business, merchant or network. Whatever you want to call them, this group is where you find the affiliate products to promote. 

2 is the affiliate who promotes the company’s product. This group can also be called an advertiser, publisher, affiliate or promoter. This group is where companies find affiliates to promote their products. The affiliate marketer is essentially the middleman between the company and the customer.

3 is the customer who buys the product. This group can also be called a consumer or buyer. This group is where affiliate marketers and companies find sales and commissions for the promoted products. 

What Affiliate Marketing Looks Like

In order for you (the affiliate marketer) to get commissions on sales you refer, your sales must be tracked. The way affiliate sales are tracked today is by affiliate IDs and links. 

affiliate link ID example

An affiliate ID (e.g. aff=kimwolfe) is unique to each individual promoter, so that each person is paid for the sales they personally refer through their ID. You get your affiliate link with your ID attached, from the company or network that has the product to sell. 

Here is how affiliate marketing works for you (the affiliate marketer):

  1. Join an affiliate program
  2. Find products to promote
  3. Grab your affiliate links for those products
  4. Promote the products (with your affiliate links)
  5. Get people to buy the products (through your affiliate links)
  6. Earn commission for all sales tracked (through your affiliate links)

Here is an example affiliate link of an affiliate ID: https://www.affilorama.com/?aff=kimwolfe.

This particular affiliate link captures my referrals for when someone signs ups for any affiliate marketing products from Affilorama. I used this affiliate link in a recent blog post about free affiliate marketing training.

Affiliate Link Example for Recommended Affiliate Marketing Training
Affiliate Link Example within Blog Post Article

Since Affilorama offers the most complete free affiliate marketing training you can find, I wrote a quality article about the training and what you can expect to learn from it.

Anytime I recommend the training (refer them to the website where the training lives), I use the website link with my affiliate ID to capture all referrals. Although the training is free, I will get commissions when any of my referrals decide to buy a product from Affilorama.

Affiliate links are not just for recommending training. Affiliate links can be used to recommend anything such as the best home security for your home.

best home security website example

Searching for the best home security can lead you to website like asecurelife.com. Notice at the very top of the page, there is a message in small print that says: We may earn money when you click our links

This site looks like a company with a bunch of security products. However, all of the View Plans links are affiliate links.

Best Home Security Affiliate Link Example

When you click any of the product links, you will be taken to the company website. And you’ll notice a special ID within the website link that will capture all purchases and sales commissions.

It’s important to note that buying a product from an affiliate link has no additional costs than buying it from the company. The advantage of buying through an affiliate link is that you, the affiliate, can offer customers more information, helpful guides and extra benefits that may not be offered directly from the company.

How Affiliate Marketing Works for the Customer

As you can see from the best home security example above, the buying process doesn’t really look that different. The process of buying products from an affiliate marketer is very seamless.

In many cases, the buyer may not even recognize that they are buying through an affiliate link. The only difference between buying a product from an affiliate is that you will be redirected to a company website to buy the product.

So, why would a buyer want to buy from an affiliate, rather than directly from the company?

Buying a Vitamix Example

Let’s look at an example scenario of buying an new Vitamix blender.

As a consumer, I personally own a Vitamix blender that is 5 years old. I have started to research newer blender models to plan my next blender shopping spree. As a digital consumer, I start my research online.

First I go to Vitamix.com website. This is the direct company to buy the Vitamix from. When I get to the homepage, I am presented with 22 different blender models. I can choose blenders from 3 categories: Smart System, Classic or Space Saving blenders.

Vitamix Blender Models

I decide to choose the Classic category which is the version I have now. And I am presented with 12 blender models.

The company website doesn’t really offer me any advice on which blender to choose. I am just presented with a page of blenders that all look the same to me. The only thing different are the prices. No reviews, no recommendations, no helping me choose the right blender for me.

This is where an affiliate can save the day.

So I go type in a search on Google: whats the best Vitamix blender.

I immediately find two blender review websites that offer me specific Vitamix buyer guides. Both websites are specific niche topic sites created specifically for affiliate marketing.

Best Blender Review Website Example

You see, the idea behind these sites is to offer valuable information on a topic that can be overwhelming. These sites make it their mission to help make this process easier.

Best Blender Review Website Example 2

Both blender guides offer comprehensive information and research to help me make a decision. Both give indepth reviews about each Vitamix blender to explain each model, compare them to each other and tell me what’s good and bad about them.

At the end of the day, that’s exactly what I want. I need help deciding which blender is the one I want. That’s where affiliate marketers can really help out.

What is Affiliate Marketing Online

Affiliate marketing online is exactly what it says. It is marketing online. 

You use places such as email signatures, social media profiles and posts and websites to promote your affiliate links. Any place you connect with other people over the internet.

Market Your Affiliate Products on a Website

A website online has the potential to reach 4 billion people connected to the internet. And today, it is very easy to create a website. WordPress is one of the leading website builders for affiliate marketers. 

affiliate marketer examples

You can create your website in 30 seconds. (No lie). You choose from over 3,000 free themes to design the look and feel of your site.  You can setup basic website content like your affiliate disclaimers and about page within 1 day.

affiliate links website page example

Then you start blogging (publishing new content) on your site with easy post creation. Building a website on WordPress has never been easier and is definitely the way to go!

Get the Word Out on Social Media

Social media enables you and me to connect easily. We can connect with our family, friends and even people we do not know personally. We are likely to be on Facebook or Twitter. Maybe even Instragram or Pinterest. Social media is a popular use for affiliate marketing.

promote affiliate products on Facebook

Join Facebook Groups to network and recommend your solutions (aka afiliate products). Or create a Facebook business page to promote all of your website content that link to your affiliate products. Or create fun and interesting infographics about your topic that link to your affiliate product reviews. 

Don’t Underestimate the Power of the Email Signature

You can easily promote your website inside your email signature. You set your signature once and forget it. And you never know when your contact will click on your link and find out more about what you have to offer. Ideally, they will be interested in one of your affiliate products. But you never have this opportunity if you don’t do something as simple as including your info in your email signature.

affiliate marketing email promotion example

And that’s what you need to know before you become an affiliate marketer online. Now you are ready to move on to chapter 2 of this guide.

Up Next: Affiliate Marketing Guide Chapter 2 

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