Affiliate marketing is a system of marketing where by a company pays out a commission to a third party (affiliate) for bringing leads or generating traffic to the company’s products or services.
In this case of marketing the payment is strictly based on performance and the affiliate is incentivized by the commission they receive whenever they make a sale.
This term affiliate marketing has become very popular for online users because it has been associated with businesses that have their foot print online, but it doesn’t mean that offline businesses cannot also apply the strategy but it just wouldn’t work as well.
However, big online businesses like amazon, eBay and many more has over the years adopted this model of marketing, because for real, it is actually a low maintenance sales strategy.
Come to think of it, as an affiliate they don’t really have to bother about taking care of your welfare like a normal staff or worried about paying you even if you are not productive and been lazy like most staff (lets be real here).
This model of business is widely practiced by businesses who want to grow their sales force but without bearing the financial overhead of paying wages.
This method of outsourcing marketing to affiliates who have access and reach to a vast network of their audiences, make it a win win for both the company and the affiliate, because the company makes sales and also the affiliate get paid commission for their effort.
The term affiliate marketing always come up when people are talking about side hustle or part time jobs.
So, this model of marketing makes it easy for bloggers, YouTube content creators and the rest to easily promote any product of their choice to their audience, depending on their niche or the perceived interest of their followers.
Even though affiliate marketing is not really a new concept as such, the internet with the advent of cookies and digital marketing analytics has drastically improved the system and made it a very effective and efficient system that has over the years now turned into a billion-dollar industry. As according to business insider about 15% of ecommerce revenue come from affiliates.
Even though affiliate marketing strategy seem to be about individual bloggers or influencer deciding to plug into the system, in many occasion ecommerce merchants actually do the reaching out to those they feel has an aligning content with their product or target audience demography and ask them to become to their affiliate.
Although, many people find it very difficult to make a steady income in affiliate marketing, many people who have mastered the process, are able to make money on a frequent basis.
The best candidate for affiliate is someone who has access or reach to vast network like having;
- Large numbers of followers on social media like Instagram, Twitter, Tik Tok or YouTube
- Large number of visitors to their website/blog
- Large number of email subscribers to the email list
This kind of person is a very ripe candidate for affiliate programs, but it doesn’t mean that anyone who don’t necessarily have all this qualities or reach cannot be an affiliate, but it Is just that the company will not reach out to them, because their traffic will not be guarantee.
More so, even with a large following, just like succeeding in anything worthwhile you have to do the work. If you don’t work hard and smart enough you will not succeed in this model of business.
Different methods of affiliate
There are different methods of promoting a product for a company and getting paid for the traffic that you bring to them.
There is an affiliate system where by a company, usually an ecommerce merchant creates an affiliate program and makes it open for any body who has the interest and wants to promote their product.
In this case all they need to do is to go to the affiliate program page and sign up and get a tracking link and banners which they can now display on their own blogs or social media pages.
Whenever someone clicks on the link or the banner, they get redirected to the merchant website and if they make a purchase, the affiliate gets rewarded for the sales, in this case the buyer doesn’t have to do any thing other than just buy a product, pay and leave.
This method of affiliate is the best and easiest for user, but much more complex to maintain for the merchant. Company’s like Amazon, eBay and many other ecommerce websites make use of this system.
The second system is a slightly different in the sense that the company does not make it affiliate program open to all, but they filter and only work with those they believe has a good reach and network that will benefit them more.
In this system they could either give the affiliate a link or they will give them a discount code, this code is meant to incentivize the audience to buy the product and them the affiliate gets paid a certain predetermined amount based on the sales made.
This method is actually much easier to manage and good for merchants who don’t have a robust affiliate link tracking and analytics program.
So, they give out discount code that will be used at checkout and that can easy be tracked and calculated.
Types of affiliate marketing
Affiliate marketing can be broadly classified into three different types as it relates with the affiliate.
- Unattached affiliate marketing: this type of affiliate marketing is used to describe a situation where by the affiliate who promotes a product does not necessarily know anything or understands how the product works, but they just go ahead and promote it for the commission.
- Attached affiliate marketing: This is a type of affiliate marketing where by the affiliate actually have an attachment to the product, in the sense that they may already be using the product and are more like an authority and can attest to the quality of the product that they are promoting.
- Related affiliate marketing: This is a type of affiliate marketing where by the affiliate doesn’t necessarily have to have used the product, but they have a related experience and a expertise that can easily generate trust and thus lead to high traffic to the affiliate merchant website from their followers or fans.
One beautiful thing I like with this model of business is that you don’t have any limits to your income. You earn as high as you succeed in making qualified sales or bringing in qualified leads.
This is so because some programs pay you as an affiliate when you bring in qualified leads and not really when you make a sale. (this also could be referred to as referral)
So, for a beginner who is looking to understand affiliate marketing programs and maybe to try it. The truth is you should have an open mind, and don’t listen to those that have failed but rather to those that have succeeded and that will encourage you.
If you are looking to start affiliate marketing, you need to look for a niche that you like and more importantly understand.
When you like a niche, you will be able to stay motivated about the business and when you understand the products, you will find it easier to explain it to potential customers and thus make a sale.
One big mistake you might do in affiliate marketing, is to promote a product that you don’t believe in or don’t understand.
I promise you it is going to be a waste of time and energy because you will not be motivated to try to sell it and you will not be able sound confident enough to your potential customers.
Need for experience
The best and fastest way to understand a product that you intend to promote as an affiliate is to use the product.
But because this might not be possible for every product and services, because this could be online products.
So, the next best thing to do will be to do your own due diligence and research more about the program or products even more than the company has provided.
If it’s possible look for other people’s reviews of the products and services, this will help you to understand more if the product or service is even worth the try.
A lot of money and energy have been lost where people promote the wrong products or products that are not good.
Refund happens when after buying or subscribing to a service, the customer later decides that they no longer want it.
This can easily happen when the product is of low quality or the description of the product didn’t match what the customer received.
Refunds policy in affiliate marketing programs usually states that there is no commission payout for refunded products.
If a customer request for a refund of their money, then you as an affiliate will not get paid.
This is why many online affiliate programs don’t make pay out immediately after sales, they wait until the guarantee period is over.
So, try as much as possible to work with guaranteed products or services to save you the stress.