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How Affiliate Marketing Works in 2020 (and More Questions!)

Affiliate marketing is not a gimmick. It’s a legitimate way of earning money that you can do from anywhere.

And you’d be happy to know that you could do it too.

In this post, we’ll go over everything you need to know about affiliate marketing in 2020. We’ll cover what affiliate marketing is, how it works, what you’ll need to get started, and a few tips on how you can maximize your efforts.

Ready to make some money? Let’s get started.

What Is Affiliate Marketing?

So what is affiliate marketing exactly? And more importantly, how does it work?

Affiliate marketing is a way of earning money through affiliate links. Through this method, users get a commission every time a person buys a product or service through a special link you place on your site.

This way, the vendor you partnered with gets promoted on other platforms and potentially land a sale while you get something on the side for your efforts. It’s a win-win situation for everyone involved. And since customers still pay the original price (in some cases, even less), they won’t have any reason not to buy through your link.

The Affiliate Marketing Lifecycle

Say you’re a photography blogger. Since your audience is interested in camera gear, it makes perfect sense to work with an affiliate that sells photography equipment. Let’s use the B&H Affiliate Program as an example.

how affiliate marketing works - what is affiliate marketing - b and h

You need to apply for a partnership. And if accepted, you will receive a link from B&H that you will insert in your content.

Note: It’s very important that you only use the link given to you. These links track customers. Meaning if you don’t use the link provided by the vendor, you won’t get any credit — even if the customer discovered the product through your site.

Depending on the terms of the affiliate program, you could write reviews, product highlights, real-world tests, or any other type of post that promotes the product.

When customers click on the link, they are redirected to the vendor’s landing page and immediately tracked.

If they complete the sale, the vendor makes a record of this purchase and captures the details of the transaction. And once confirmed, you’ll receive your commission.

And the cycle continues.

The more affiliate links and products you add to your site, the more chances you have of earning commissions.

Affiliate Requirements

We mentioned that you need to apply for an affiliate partnership. This is usually the case. Although, it’s worth noting that some affiliates are not as strict while others have tight policies that you have to adhere to.

B&H, for example, has the following requirements:

  • Applicants must have a multi-page website.
  • The site needs to be fully functioning.
  • There should be no broken links.
  • The content needs to relevant to B&H’s product offerings.

As far as affiliate requirements go, this is lax. Some vendors require their users to meet minimum site traffic numbers in order to qualify such as the Airbnb Affiliate Program.

how affiliate marketing works - what is affiliate marketing - airbnb

How Do Affiliate Programs Work?

There are different ways that marketers can earn money online. And one of the more popular options is to run an ad campaign through Google Ads.

However:

Ads are getting less and less profitable as the times change. That’s why there are marketers who don’t find them viable any longer. Plus the rate at which users earn money isn’t sustainable as a short-term investment.

Let’s explore the monetization options for ads first to better understand what makes affiliate programs work.

Cost Per Click (CPC) and Cost Per Mille (CPM)

There are two ways you earn money through Google Ads. And you have to select between one or the other.

CPC means advertisers pay you every time someone clicks their ads. With CPM, advertisers pay you depending on how many times people viewed the ad. The latter makes it possible to earn money even if your audience does not interact with the ad at all.

But there are problems that come with both payment models.

The CPC model is straightforward and comparable to affiliate marketing. However, the biggest problem with CPC is that it requires users to intentionally click on an advertisement. It’s very unlikely that users would click on ads on purpose. And while Google does a great job of matching ads to your niche, you don’t have a say at what particular ad would pop on your site.

With CPM, you’ll need a significant number of page views before you see a return on your investment. Unless your page finds its way to more eyes, you may not get enough views to get paid.

Cost Per Action (CPA)

Affiliate marketing works on a CPA model. Some refer to it by another name, cost per engagement (CPE).

This means that you’re paid whenever a user takes an action. For e-commerce sites, it’s usually every time a user completes a transaction. But there are also cases where it’s about signing up for a free trial, online course, or a webinar.

The nice thing about affiliate marketing is that you can center your post around the affiliate link.

How?

If you’re going to promote stylish window curtains, you can write a post about ways on how to spruce up an old apartment. Not only will there be a link between the product and the post, but you can also use the product itself as an example in the post.

Take this article from The Architect’s Guide.

how affiliate marketing works - how affiliate marketing works - architects guide

In the post, they talk about the best blackout curtains for the home. And while listing down examples, they add Amazon affiliate links. This is not something you could do if you’re working with Google Ads.

And because you’re promoting products that your audience might actually want to check out and buy, your chances of getting paid grows exponentially higher.

How Much Can You Make From Affiliate Marketing?

The short answer: There is no ceiling.

You can make money as long as people are willing to spend.

This is especially true for those who are not stuck with blogging. Affiliate marketing can work on other platforms such as YouTube and social media. If you learn how to diversify, you can earn even more.

Some affiliate marketers can make upwards of $1,000 a day. There are those who even earn more.

Affiliate Marketing Success Stories

Fortunately, you don’t have to take our word for it. Affiliate marketers are more than happy to share their stories of success.

Tom Dupuis, the man behind Online Media Masters, published a blog post where he shared his story. In 2018, he hit $150,000 with affiliate marketing.

how affiliate marketing works - how affiliate marketing works - tom

Adam Enfroy earned $35,174 in one month (September 2019). That is an impressive feat. And to think that even after you factor in his expenses ($3,593), he still walks away with $31.581 in his pocket.

And the affiliate marketing space isn’t just friendly for blog sites with tons of followers. Even new marketers can earn so long as they’re dedicated.

Gursimrat who blogged for almost two years straight with no income wanted to give up at one point. But after exploring affiliate marketing, she earned $529.50 for the first time.

Interestingly enough, both Tom and Gursimrat used SiteGround Affiliates to earn commissions.

how affiliate marketing works - how affiliate marketing works - siteground

How Did They Do It?

Their success was possible thanks to research. They went ahead and studied which affiliate programs were right for them. Gursimrat even took courses that helped her understand affiliate marketing on a deeper level.

But again, the results of your campaign will depend on things like your niche, audience size, demand for the product, the reputation of the affiliate partner, pricing, your SEO, and other factors.

With some luck, you can rake in as much as the affiliate marketers we mentioned above. If not, don’t worry. Sometimes it takes a while for things to kick in.

And remember: You can’t make lots of money if all you’ve got is a single landing page.

You’re going to have to invest more time into writing content. Some affiliate marketers even hire freelancers to help publish posts on a consistent level.

How to Do Affiliate Marketing: Best Practices

Do you think that you have what it takes to become an affiliate marketer?

If you think that you do, the following tips should help you get on your way to earning passive income through affiliate links.

Choose a Profitable Niche

It all starts with the right niche.

If you’re starting from scratch, you should find a niche that people find interesting. But at the same time, you don’t want to select a niche that you either know nothing about or are not interested in covering for a long period of time.

You don’t want to build a site that neither you nor your audience would care about. The key is finding the right balance between both.

Still don’t know which niche you should choose?

When trying to come up with a niche, try asking yourself the following:

  • What do I like writing about? Do you like skateboarding? Cooking? How about lawn care? You should jot down whatever comes to mind. You never know. It might not seem obvious at first but there are topics that not a lot of people blog about. And one of your hobbies or interests might be one of them.
  • Will I make money out of this niche? You might have a killer niche in mind, but is there money in it? If you like cats and doing cat product reviews, then that’s a niche worth exploring. Why? Because there are millions of cat owners out there who are constantly looking for new products. But starting a blog about mouse traps? There could be a market there but just how big do you think it is? And are there affiliate programs that will work with you for that product category?
  • Can I write about it? Writing about a subject might seem easy at first. But after a while, writing about the same subject over and over might leave you regretting your decision. Once the site goes live, you’ll be forced to write tens—if not hundreds or thousands—of pages about the same topic.
  • How saturated is the market? Are there too many affiliate marketers working the same angle as you? If so, then maybe it’s a good idea to search for another potential topic. You don’t want to enter a niche that has too many competitors.
  • How hard is it to find affiliate programs in the niche you’ve selected? If you don’t find retailers with affiliate programs to work with you, then what’s the point? A niche with little to no following would probably not have as many affiliate options as others.

One tip would be to open a buyer account on Flippa.

how affiliate marketing works - best practices - flippa

Flippa is a platform where people go to sell their websites. Type your niche in the search bar to find sites that are for sale in that niche. If people are listing the domains for at least $20,000, then the niche you’re thinking of might be a winner.

Find the Best Affiliate Programs

One of the biggest and most profitable associate programs out there is Amazon Associates. The company is used and recognized by almost everyone. It doesn’t take much to convince people to shop at Amazon.

It also doesn’t hurt that Amazon has a big catalog of products that you could promote.

how affiliate marketing works - best practices - amazon associates

But it is by no means your only option, especially now that Amazon made its latest round of cuts in affiliate commissions.

There are other affiliate programs that could offer better commission fees. Even better, there are affiliate programs that could fit perfectly well with your chosen niche.

Need some help? We have a list of Amazon affiliate alternatives here. We suggest that you check it out if you don’t know where to start.

Build Your Site

It’s fortunate that building a site from scratch is no longer as complicated as it once was. It’s now possible for anyone to start a site, even for those with no coding experience.

It starts with buying a domain name. One tip is to find the right primary keyword through research and incorporate that keyword into your domain. GoDaddy and HostGator are two popular domain registration sites.

Your site won’t go live if all you have is a domain name. You will also need a web hosting solution. Both GoDaddy and HostGator have web hosting services but there are a lot more out there. Find the right balance between price and reputation.

Some web hosting companies offer packages that are too good to be true. When prices are too low, there’s probably a good reason for it — you just might end up getting what you pay for.

Web hosting platforms usually use WordPress. But there are sites with their own built-in site builders. While these could be more expensive, the ease of use and drag-and-drop approach to building a custom website might be worth the price.

how affiliate marketing works - best practices - squarespace

Squarespace is an example of a site that has its own drag-and-drop page builder and content management system.

Create Content

Once your site is live, you should populate it with as much high-quality content as possible. As to what kind of posts you could write, try one of the following:

  • Product Reviews — You can talk about the product you’re trying to sell. Show off its features and let people know who would benefit most from it. It’s important that you remain honest to build up your credibility. You can insert an affiliate link toward the end of the post to give your audience a chance to check out the product listing for themselves.
  • Product FAQ — Users who would like to buy a product would often research about it first. Answer some of the more frequently asked questions. Then leave an affiliate link somewhere on the page so they can purchase right after they’re done reading your post.
  • Inspiration Posts — This is a more subtle way of introducing a product to your audience. Give them a taste of what the product can do for them.

Here’s a guide to using the Skyscraper Technique, an effective content marketing strategy to build content that ranks in search engines.

Generate Traffic

You can only generate traffic if you’re fully optimizing your website. This is where SEO comes into play.

We have a handy checklist of everything you must do after a site goes live. Check out this post on how to increase website traffic for more information.

Promote Affiliate Links

Social media is a good place to promote your affiliate links. But you can also try guest posting on popular blogs and building email lists to grow your audience. The more people discover you, the more site visits you’ll have.

You need to expose your affiliate links to as many potential users as you can.

And if you have the budget for it, you could try paid advertising to get your brand over.

Conclusion

As you can see, you don’t really need much to start an affiliate website. All you need is to do some research and you’re off to the races.

This year is a great time to jump into affiliate marketing. If you’re thinking about starting, there’s no better time than now.

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Craig Campbell

I am a Glasgow based SEO expert who has been doing SEO for 18 years.

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