I remember December 3, 2009, like it was yesterday. It was a pivotal moment in my life, but at the time, I didn’t realize that.
I had just gotten off the phone with one of my customers. Once again, they were blaming me for a problem on their blog that honestly wasn’t my fault. I was pissed off and fed up with their complaints.
You see, back then, I ran a web development and hosting company and created blogs for other businesses.
Some of them were very successful. I had helped this customer grow their blog from the very beginning. They had gone from zero to over half-a-million visitors a month. They were making great money with this blog too.
But I had had enough of building blogs for others.
My clients were getting wealthy from my work. Everyone was getting rich… except me!
This was the spark that made me want to create my own blog.
On that date, December 3, I registered the domain name InvestorJunkie.com. The investing niche was an obvious choice for monetizing through affiliate marketing.
I already had some experience with affiliate marketing from my web-hosting business. I noted from my annual income reports that affiliate marketing accounted for one-third of my revenue. Yet I really didn’t have to do anything.I had no products, no inventory, and — best of all — no customer service. I just resold someone else’s service. Each commission was 100% profit for me.
It seemed like a no-brainer to me.
So I proceeded to build this blog into a real business. So much so that the income from my blog exceeded that from my existing business after just two years.
To make a long story short, I did very well with affiliate marketing. After nine years of building the blog, I sold Investor Junkie for $6 million.
My blog didn’t sell courses or have a paid membership area. I didn’t have any annoying ad banners, either.
All of the blog’s income came from affiliate marketing.
I’m here to tell you that affiliate marketing is a real business. The journey won’t be easy, and you certainly won’t be an overnight success. But I can say it’s possible to be very successful with affiliate marketing.
This beginner’s guide will tell you how to get started with affiliate marketing. I wish I had had something like this to help me through the process. So let’s get started!
Before we dive into the steps, let’s start with the basics of affiliate marketing and define exactly what it is.
What Is Affiliate Marketing?
Affiliate marketing is an arrangement by which you earn a commission for promoting another company’s products or services.
Affiliate marketing is sometimes also known as performance marketing or CPA marketing. The definition of affiliate marketing makes it different than other forms of digital marketing.
Although it’s a form of online adverting, affiliate marketing is much different than just hosting ad banners.
Unlike ad banners, with affiliate marketing, you usually don’t get paid unless a visitor “converts.”
Typically, a conversion is defined as a purchase made by the prospect (the visitor to your site). But some merchants define “conversion” differently. It can be as complex as a customer not only purchasing a product but also performing a specific action after that purchase is made.
Affiliate Marketing Glossary of Terms
Like any topic, affiliate marketing has its own lingo. The definition of affiliate marketing itself is a word salad and a lot to digest. So let’s break down the terminology you’re likely to see.
- Merchant — The business selling a product.
- Product — The item sold by the merchant and promoted by the affiliate.
- Affiliate — The third-party promoting the merchant’s product. Also known as the publisher, associate, or partner.
- Super Affiliates — The highest-performing affiliates. Typically, fewer than 20% of affiliates are super affiliates, yet they generate 80% of all conversions.
- Affiliate Link — Also called the tracking link. This is a unique URL that tracks the clicks and conversions from the affiliate.
- Conversion — An event defined by the merchant that is deemed payable to the affiliate. It can be anything defined by the merchant but is usually a lead or the purchase of the merchant’s product.
- Prospect — An individual who performs a conversion with the merchant. Also known as a lead, customer, or client.
- Affiliate Network — An optional middle man between the merchant and the affiliate that helps facilitate commerce.
- Affiliate Manager — A person who works with affiliates as a go-between with the merchant. Their goal is to maximize the performance of the affiliate program.
- Affiliate Program — An arrangement in which the merchant pays commissions to affiliates.
- Offer — A specific promotion of a product.
- Click-through Rate (CTR) — The percentage of affiliate-link clicks per number of web page impressions.
- Conversion Rate (CR) — The percentage of clicks that converted.
- Cost per Action (CPA) — A commission model in which merchants pay affiliates for conversions only.
- Cost per Click (CPC) — A commission model in which merchants pay affiliates for clicks only. It’s typically used with ad banners, rather than affiliate marketing.
- Postback URL — A URL used for server-side conversion tracking; also called server-to-server tracking.
- SubID — A string of text embedded as part of the affiliate link that is defined by the affiliate and used to track conversions by the affiliate.
- Creative — An ad banner image or text that is used by the affiliate to promote the merchant’s product.
- Copy — Written text that helps promote the merchant’s product.
- Co-branding — An instance in which the affiliate’s logo, copy, or branding appears on the merchant’s landing page.
- Landing Page — The merchant’s webpage to which affiliates refer traffic via an affiliate link.
- Ad Blocker — Web browser technology that can prevent the tracking of affiliate clicks and conversions. In addition, it can also prevent the display of ad banners.
- Attribution — The process of correctly identifying which affiliates are generating conversions.
- Charge Back — An invalid conversion that results in the affiliate’s commission being forfeited.
- Commission — The income an affiliate earns for generating a conversion. It is also known as a referral fee, a finder’s fee, or a bounty.
- Cookies — Information stored on a prospect’s web browser to identify that particular visit. With affiliate marketing, cookies are used to track affiliate link clicks and potential conversions.
- Link Cloaking — Hides the affiliate link with a cleaner-looking URL than what the merchant has provided. Link cloaking can be used to better manage links and track clicks and conversions. For more info, see my article on link cloaking.
How Much Money Can I Make As an Affiliate Marketer?
As with any business, the upside potential is unlimited. As I wrote at the beginning of this article, I started my blog Investor Junkie in December 2009 from scratch and sold it for $6 million in 2018.
And I’m not so much of a unique snowflake. In another article, I detail blogs that have all sold for over 7 figures. These are all documented from public information… so they are legit. This isn’t some blogger’s monthly income report that could be made up.
I personally know other bloggers who make over six figures a month blogging — all from affiliate marketing. However, I will say that many bloggers make a few thousand a year — a good side hustle.
In the end, affiliate marketing is what you make of it, how well you execute, and the effort you put into your blog. It is definitely not a get-rich scheme, nor will you be an overnight success.
How Does Affiliate Marketing Work?
A high-level overview of how affiliate marketing works (credit)
At the high level, this is how affiliate marketing works:
- A visitor to your blog reads an article on your website.
- The visitor then clicks on an affiliate link, which redirects the visitor to the merchant’s website.
- On the merchant’s site, the visitor then performs the desired event.
- The affiliate is credited for the event.
The Tech Behind Affiliate Marketing
Behind the scenes, it’s much more complicated than this.
Warning: Nerd Alert!
The details of affiliate marketing can get pretty technical, and I won’t hold back. If you’re not interested in finding out the nitty-gritty of how the process really works, skip this section for now and read the first step in how to become an affiliate marketer.
The HTTP protocol, which drives all websites, is stateless. With HTTP, the website has no memory of previous visits.
By default, when an individual visitor travels among pages on a website, the webserver doesn’t know their identity. A web browser cookie is one method to get around this limitation.
When a visitor clicks on a unique affiliate link URL to enter a merchant site, they are tagged with a cookie.
Cookies can have many uses, but in affiliate marketing, they’re used to identify a visitor from one webpage visit to the next. This way, the affiliate gets credit when a conversion occurs.
Like the cookies you can eat, web browser cookies don’t last forever.
A cookie’s “time to live” (TTL) can vary from a few minutes to years. For affiliate marketing, the typical TTL is 30 days. Typically, the longer TTL, the better.
One of the disadvantages of affiliate marketing is its reliance on cookies to get proper affiliate credit.
Attribution is a hot topic in affiliate marketing.
Now, tracking is not always 100% accurate.
Tracking becomes difficult when a user visits a page using multiple devices (such as a phone, a laptop, etc.). It also doesn’t work when a visitor uses an ad blocker.
Affiliate marketing technology is always improving, but there will be cases in which conversions are missed. Affiliate networks tend to do a better job at tracking conversions than, say, an in-house affiliate program managed by the merchant.
How to Get Affiliate Links
Affiliate links don’t just fall out of the sky.
You need to acquire them by signing up for a merchant’s affiliate program. That program can exist directly with the merchant or, in most cases, through an affiliate network.
Merchants can give you links via two methods – either an in-house affiliate program or a network. Most affiliates work with a merchant through an affiliate network program.
A network affiliate program involves working with a third party to manage your relationship with the merchant. Generally, an affiliate network manages communication, affiliate links, tracking, reporting, and payment.
Affiliate networks typically have thousands of merchants to choose from. You join the affiliate network and then apply to each individual merchant program. Some automatically approve applicants, and others will manually review and approve new affiliates.
Once approved, you will have access to special affiliate links that are unique to you. These unique links can be placed anywhere you want to promote that merchant’s product. It could be on your blog, in an email, on your YouTube channel, etc.
NOTE: It is always important to read the terms of your affiliate agreement before you start promoting a merchant. Make sure you are clear on where you can or cannot place your affiliate links. For example, most merchants forbid you from bidding against their brand name with Google Ads or pretending to be the brand. Always check the restrictions before promoting; otherwise, you may get banned by the merchant.
Affiliate networks have many advantages over in-house affiliate programs:
- They act as a go-between you and the merchant.
- They ensure timely payouts of commissions.
- They allow you to work with thousands of merchants from one dashboard.
- They serve as auditors of the merchant’s conversions to ensure things are on the up and up.
- They can guarantee more accurate tracking of affiliate clicks and conversions.
- They provide you with better reporting than in-house affiliate programs.
In-house Affiliate Programs
With an in-house affiliate program, you typically work much closer with the merchant and have a much tighter relationship.
Just as with affiliate networks, you get affiliate links from the merchant’s affiliate program. The merchant is responsible for conversion tracking. Unfortunately, you have no way of knowing if a merchant is fudging conversions and depend on the merchant for timely payments.
The advantages of an in-house relationship:
- A closer relationship with the merchant
- Typically higher payouts than what’s available via public network affiliate programs
- More flexible options to increase conversion rates
How Do Affiliate Marketers Get Paid?
As an affiliate, you get credit when a pre-determined event occurs. Usually, the event is a sale or conversion. This is otherwise known as Cost Per Action, or CPA. In affiliate marketing, CPA is the most popular method to get paid. But it’s not the only option.
You can get paid for other types of events as well. Other options are:
- By lead (Cost per Lead, or CPL) — email address, phone number, address, etc.
- Per click (Cost per Click, or CPC) — this is no different than placing an ad banner.
- Impression (Cost per Thousand, or CPM) — Some ads are also by this method.
The type of payout is determined by the merchant but can be negotiated as well.
How often you get paid and the method of payment depends on the affiliate program. The most common way is in a monthly payout.
Affiliate networks are usually better with payments and on a well-kept schedule. Almost all networks require payments on a schedule (almost always monthly). Otherwise, their programs would get shut down until their back payments were made current.
This is an important difference from an in-house affiliate program. While the payout and relationship are typically better, the payments may not be. It’s not uncommon in large company AR departments to make payments on a net 90-day schedule. This means you’ll have to wait 90 days to get paid for conversions that occurred three months prior.
Consider this potential problem if your merchant is a slow payer or requires collections of old invoices.
Most affiliate networks offer an electronic method of payment – usually direct deposit or PayPal. On the other hand, direct relationships may support only direct deposit. Worse yet, I’ve worked with some companies (high-tech firms, no less) that still cut physical checks.
How to Get Started With Affiliate Marketing (6 Easy Steps)
Now that we’ve gotten some basic questions and terminology out of the way, let’s discuss the steps to getting started as an affiliate marketer.
1. Pick Your Niche
The first – and most critical – step of affiliate marketing is picking your niche.
Ideally, you should first consider topics that interest you. More importantly, your niche should be helpful. As an entrepreneur, you want to be a problem solver. If you have a problem, surely others do too!
You don’t create a business to help yourself. You create a business to help others.
Here’s a common mistake entrepreneurs make. They think, “I’m going to start a business to get rich.” Yes, you can get rich, but that’s only the side effect of helping others in the process. The more people you help, the bigger your reward.
Even I fell into this trap when I first started my blog Investor Junkie. Its niche was investing. Yes, I had an interest in investing, and I knew that many struggle with this topic and need help. But my first blog posts were anything but helpful. I wrote about topics that interested me. The result? No one cared.
My blog didn’t take off until I wrote articles to help others.
Another common mistake is picking a niche with no competition. I used to think this way too. I used to think that, in order to succeed in business, I had to create the most complicated business idea that no one else had thought of.
There’s no such thing as a unique idea on the internet. If you’ve thought of it, someone else has already done it.
What matters isn’t how unique your idea is, but how well you execute it.
Pick a niche that’s popular but one that you feel has opportunity for growth. This is exactly what I did with Investor Junkie.
If you think everything has been said about that niche, and that there’s no unique angle about that topic or new functionality you can add to a blog, then perhaps that market is saturated. Maybe it isn’t a good idea for a niche.
But I’ve come to realize that sometimes the simplest ideas are the best.
Another common mistake is making the niche too broad. This is especially true when you are starting out.
Say you make kitchen utensils your nice. It’s too wide a topic. Yes, the search volume is there, but it’s too wide to rank for articles.
Instead, I would recommend registering a domain name that covers a broad topic, but that fits one or possibly two specific niches to start. You can always expand later.
If your topics are all over the map, they won’t help you with your audience or Google.
To continue with the previous example of kitchen utensils, I would narrow my niche down to two topics — knives and cutting boards. Not only are they pretty narrow in scope, but they complement each other as well.
2. Start a Blog
After you’ve determined your niche, the next step is to create your blog. While it’s possible to make money in affiliate marketing without a blog, I don’t recommend it. You want your blog and organic search traffic to be the core strategy of affiliate marketing.
Yes, it’s possible to make money with YouTube or Pinterest, but you don’t own these channels.
You own a blog and have control over it. You can only rent other channels, such as social media. You can be the hottest Instagram star since the Kardashians, but if Facebook decides it no longer likes you, your business can disappear… overnight.
I’ve seen this happen too many times to other affiliate marketers. Don’t build your business foundation on quicksand.
Think of a blog as a bicycle’s hub. The hub is your blog. The spokes are channels such as email, paid traffic, Facebook, Instagram, YouTube, push notifications, and the like. Those channels are the means to attract visitors to your blog.
I’m not going to cover every step to creating your blog here. Instead, I already have the details in another article aptly named “How to Start a Blog.”
3. Create Content
Since the core of your business is a blog, you want to create content on it. SEO (Search Engine Optimization) is the recommend method to attract visitors to your blog. While you want to create other ways to build out an audience, organic search is still the primary method.
According to GrowthBadger’s research, most traffic to a website is from organic search. Since Google is the No. 1 search engine by a long shot, that means you need to be on Google to be found. Yes, you can focus on social media, podcasts, and paid traffic, but if you aren’t focusing on SEO as a blogger, you are missing out on a huge audience.
For this step, I recommend creating at least 25 articles before you continue to the next step. These shouldn’t be short 200-word posts, but long, in-depth articles pertaining to your niche. If you are in a niche about losing weight, don’t write articles about your cat. Stay in your lane and write about the niche you set out to create.
You cannot skip this step. You need a completed website before you even think about applying for affiliate programs. If your blog has no content, not only will you have no audience, but you’ll stand little chance of getting approved by an affiliate manager.
Therefore, plan on the 25 articles you want to write before you start writing them. Create keystone articles that are easy to rank for. If you can buy a keyword research tool like Ahrefs, I highly suggest doing so. A keyword research tool is invaluable.
And there are some free options available.
Google Ads, Google Trends, and Google’s own search engine results are great free tools for discovering topics to write about. My course SEO for Writers tells you how to use these services for free, and what types of content you should write and how to write content so you are found by Google.
4. Build Your Audience
The next step is to build your audience.
The most common method is via organic search — otherwise known as Search Engine Optimization, or SEO. However, you have more options than ever today:
- Paid traffic
The list goes on and on.
Ideally, you want to build up a fan base of repeat visitors to your blog. Stats show it takes more than one touch point before a visitor converts. The data shows it takes eight to 12 visits before a visitor trusts you enough.
Without question, SEO should be part of your audience-building strategy, because 50-80% of all traffic to a blog comes via organic search.
5. Sign Up for Affiliate Programs
Only after you’ve completed the first four steps should you go on to this step. Applying for affiliate programs before starting your blog is like building a house before the concrete foundation has solidified.
Effectively, when you sign up for an affiliate program, you become a “partner” with the merchant’s sales funnel. But not all affiliate programs are created equal.
To avoid picking the wrong ones, I touch on the best affiliate marketing programs every beginner should sign up for.
With the affiliate programs I recommend, you can sell any product or service via your blog.
Depending on your niche, you should also consider signing up with merchants that aren’t among the ones I recommend.
How do you know if a merchant has an affiliate program? Google “[brand-name] affiliate” or “[brand-name] partner program.”
Many merchants don’t advertise their affiliate programs. Rather than getting an influx of new affiliates, they’d rather keep it hush-hush. You have to contact these merchants directly and ask if they have an affiliate program.
I’ve also had great success by reaching out to merchants that don’t have affiliate programs and asking if they’d like to start one. However, I don’t recommend this option until you are an established player with some clout in your niche.
I’m only half-joking with this next step. Your journey has only just begun. These are the basic steps to getting started with affiliate marketing. Yes, there are many other details not yet included, but this is a solid foundation on which you can build with more advanced topics in affiliate marketing.
Is affiliate marketing easy?
Affiliate marketing isn’t particularly easy. It’s a real business that you must take seriously and work hard to grow. However, if you choose and focus on a niche, create quality content, and build good relationships with a few reputable affiliates, you can become very successful at affiliate marketing.
What are the best affiliate marketing programs?
Not all affiliate marketing programs are a good fit for all websites. Choosing the right partners is a key element of affiliate marketing success. I’ve put together this guide to the top affiliate programs for beginners.
What are good examples of affiliate marketing websites?
The best examples of affiliate marketing websites are the ones that have made their owners big money. Believe it or not, some bloggers (including myself) have sold their affiliate marketing sites for millions of dollars. With that in mind, I’ve identified some of the most successful affiliate marketing websites.
How much does it cost to start affiliate marketing?
Less than you think. You can start out for under $200 for the first year. The biggest expense for a blog just starting out is hosting. It can go up in price as you include other hardware and software For more information check out: How Much Does It Cost to Start a Blog?