In the rest of this piece, we’ll discuss everything you need to know about affiliate marketing focusing only on what works without boring you with unnecessary guru hacks and tricks. Let’s dive in!

Key Highlights

• Affiliate marketing is a performance-based marketing strategy
• It usually involves three parties: the merchant, the affiliate, and the customer
•  Affiliate marketing isn’t a get-rich-quick scheme. It requires hard work, consistency, time, and patience
• In-depth product knowledge is necessary for success. You attract customers by providing fewer and more trustworthy recommendations
• Affiliate marketing isn’t solely about selling products. It can also be a channel to increase impressions or other conversions

What is Affiliate Marketing?

Affiliate marketing is performance-based marketing, where a business’s products and services are marketed by a third party (the affiliate) to help the business reach a wider audience.

• The affiliate earns a commission for each new lead or purchase they generate from their marketing efforts.
• The business provides the affiliate with a unique affiliate link that tracks the performance of its promotions and allows the business to measure the success of its affiliate program.
• The affiliate link also helps the business know which affiliate was responsible for the purchase.
• Affiliates are usually publishers, content creators, or social media influencers who run a blog, a popular channel, or a website, and affiliate marketing helps them monetize their audience.
• Affiliate marketing helps businesses expand their brand reach and tap into the large audiences of affiliates.

How Does Affiliate Marketing Work?

Affiliate marketing involves three parties – the business, the affiliate, and the customer. Here’s how it works:

Business Signs Up For An Affiliate Program

The first party in affiliate marketing is the business (the brand providing the product being sold). The business decides to participate in affiliate marketing and signs up for an affiliate program, which gives them a platform to manage its affiliate program and generate unique affiliate links for individual affiliates to track sales and promotions.

• Affiliate platforms connect businesses with top-rated affiliates in different industries and help businesses find the best offers.
• The business can find reputable affiliates in their particular niche quickly without having to go through the hassle of manually searching and screening potential candidates.

Affiliate Promotes The Business

Once the business has partnered with an affiliate or several affiliates, the next step is promotion. The affiliate promotes the business’s products on their website, blog, or social media accounts. When affiliates promote a particular product, they link to it via the unique link the business provides.

• Some of the most popular ways affiliates promote products are by writing reviews and recommendation articles, creating review videos, or providing other promotional materials.
• The goal is to encourage customers to click on their affiliate link and purchase the product.
• The affiliate has already built a large audience that trusts them, so they often convert more customers than direct advertisements from the main business to the end customers.

The customer Makes a Purchase

The customer (belonging to the affiliate’s audience) is convinced, clicks on the marketed product, and purchases on the business’s store or website via the affiliate’s link. Each signup or purchase is recorded and tracked via the affiliate’s unique link, and then that affiliate is credited with the sale.

• The order fulfillment, customer onboarding and follow-up, and everything else are handled by the business.
• The affiliate then earns a commission on the sale as determined beforehand.
• Most affiliate platforms feature dashboards where affiliates and businesses can see successful sales records and other vital metrics.

Business Pays The Affiliate a Commission

The business pays the affiliate a commission on each purchase – usually an agreed-upon percentage of the product price.

• For affiliate programs that deal with generated leads, the business pays the affiliate a fixed amount per lead.
• Some affiliates, however, charge a retainer, especially if they generate consistent results over a specified time interval.
• Affiliates may also specify to be paid immediately after each successful purchase or stick to a payment plan: e.g., accumulated commissions being paid bi-weekly, monthly, or quarterly.

The Pros and Cons of Affiliate Marketing

Pros of Affiliate Marketing:

Given the growth and rapid adoption of affiliate marketing across several industries, it’s safe to say it’ll be taking a leading role in marketing in the future. This explains why 81% of advertisers and 84% of publishers “do” affiliate marketing. In this section, you’ll learn five more reasons to incorporate affiliate marketing into your marketing strategy:

Increased Reach

Affiliate marketing offers a sustainable way for small and large businesses to reach a wider audience. Affiliates, for instance, bloggers and content creators, have a large following, many of whom don’t even know your brand. By promoting your offers on their channel, they drive traffic to your site.

Tomahawk Shades is a perfect example of a B2C business that has benefitted from affiliate marketing. “We onboarded Tomahawk Shades to the AWIN affiliate network in August and started recruiting publishers.” Joe Sanfilippo of Today’s Business says. The results: they gained 32.63% of new customers in two weeks!

Cost-Effective

Since affiliate marketing is performance-based, you only pay the marketers for the results generated. The affiliate bears costs incurred from advertising the products. This provides a perfect way out for small business owners looking to increase sales but have a limited marketing budget.

Asides from business owners, freelancers and niche experts with a large following can also delve into affiliate marketing without worrying about business capital. By leveraging their already established authority, they can easily monetize their audience. For instance, a blogger creating quality SaaS content can choose to advertise tech products or services to their readers to generate extra income.

Performance-Based

Since affiliate marketing is a form of performance marketing, businesses can partner with several affiliates and make payments when they generate the desired conversions, usually sales. Businesses can also track the performance of their affiliate program to identify how much they’re generating from the overall affiliate program. This helps make informed decisions in the future, like how to maximize marketing spend.

In an interview with ReferralRock, Dylan Gordon of HustlerShares captures this impeccably:

“As a performance-based marketing strategy, businesses can partner with affiliates who promote their products or services for a commission. This enables them to increase brand visibility and revenue without risk.”

Low Risk

Since you’re not bearing any cost as a business, affiliate marketing is extremely low risk. You don’t have to invest in advertising, content creation, or other marketing strategies. All you do is find the right affiliates, set up a quality affiliate program, and reap the dividends.

Affiliate marketing is also a low-risk marketing channel for affiliates as well. Since it has a low barrier to entry, creators and bloggers can seize the opportunity to generate passive income. However, this only works if you already have a large following.

Increased Credibility

People are more likely to buy from brands they trust. Luckily, affiliate marketing is solely built on that. People trust the recommendations of affiliate marketers because they communicate their values in a way that addresses their pain points.

In addition, affiliates are mostly niche experts and have built a loyal community of readers or subscribers that trust their recommendations. An endorsement from them can help to build credibility for your business.

“Once people know about you, they buy. When they see your video, and with your cookie stored, they will buy it.”

Coach Gianni, an affiliate marketing coach, shares in an interview with Grant Cardone, CEO of Cardone official.

Cons of Affiliate Marketing

In this section, we will examine the common pitfalls of affiliate marketing and how to evade them.

Limited Control

Businesses have limited control over the affiliate’s activities and how they promote their products or services. Sometimes, they may go overboard and use languages that are not consistent with the brand guidelines.

Affiliates aren’t exempted either. What do you do when a merchant decides not to pay for your services? Or changes in leadership? Since you don’t own marketing programs, you’re totally dependent on the merchant’s terms and conditions. Also, you cannot negotiate product pricing or commission rates, as these are determined by the merchant.

Solution:

• Go for merchants that give full autonomy over the products and services you promote.
• Also, prioritize those with quality customer service and good products.
• For businesses, carefully outline your terms and conditions to ensure your brand message isn’t communicated incorrectly. This may require a strict and concise assessment of affiliates before onboarding them into your affiliate program.

Competition

Although affiliate marketing has a low barrier to entry, this can be a disadvantage in the long run. In a scenario where thousands of affiliates promote the same offer, getting consistent sales might get challenging. Highly talented affiliates with better tools and skills make fierce competition, which can discourage you from even venturing into this business model.

Solution:

• To stand out, build a unique personal brand.
• Establish authority and relevance by creating quality content that answers search intent and queries.
• Adopt customer-centric tactics and strategies that keep you afloat, such as SEO and social media marketing.

Commission Dependence

Another potent limitation of affiliate marketing is that it’s completely dependent on commission, and you cannot negotiate the product prices or commission rates. Also, you’re subject to the terms and conditions of the merchant. For instance, the merchant may change their commission structure, and your income will be significantly impacted.

Solution:

• Consider diversifying your income streams to mitigate this issue.
• Create your own products, offer consultation services, or pair with other affiliates to promote their product.
• This can help you foolproof your finances and reduce the effects of sudden changes.

Fraud Risk

In this case, the merchant and affiliate are at risk. A popular affiliate scam is cookie stuffing, where fraudsters place tracking codes on a visitor’s computer to get the commission.

For businesses, some affiliates adopt unethical methods to get sales and commissions. Some even go further to make claims and promises that are entirely untrue, leading to the loss of a potential customer.

Solution:

• Both merchants and affiliates should vet for scams before establishing a relationship.
• Look for merchants/affiliates with a good reputation and honest track record.
• In cases where either party is new, have transparent and open communication to mitigate fraudulent or mischievous activities.

Complex Tracking

Affiliate marketing requires a tracking system that ensures merchants and affiliates make progress and communicate seamlessly. For affiliates selling different products for different companies, tracking each can be difficult and time-consuming. Many merchants use different tracking and reporting methods, making knowing your progress even harder.

Solution:

• Merchants and affiliates should use third-party tools that help to manage multiple tracking systems.
• Google Analytics, for instance, can track website traffic and conversion rates, helping you understand the effectiveness of your marketing efforts.

Common Misconceptions About Affiliate Marketing

Is affiliate marketing a legit way to make money or a scam? Like other business models, affiliate marketing has attracted conflicting opinions that have limited mass adoption:

Affiliates Are Not Real Marketers

It’s a common misconception that affiliates are not “real” marketers because they promote already-made products and services rather than creating original marketing strategies from scratch.

The truth:

• To succeed as an affiliate marketer, you need excellent marketing skills.
• Successful affiliates understand the product or service they’re promoting, their target audience, and how to address their pain points and drive traffic that’ll lead to sales.

Affiliate Marketing Is Not a Serious Business

Affiliate marketing is sometimes perceived as a waste of time, a side hustle and never a long-term business. But this actually needs to be corrected! It’s not about stuffing random links on a website or promoting products on social media. From choosing the right niche to earning stable revenue…there’s a lot of work and patience required.

The truth

• Trust is required to build a successful affiliate marketing business. Marketers that sideline this business model don’t invest in building a quality relationship with their audience
• Choosing the wrong or saturated niche can crumble all your efforts to make sales. This is a vital step most newbies skip, and they debunk all success stories they’ve heard.
• Affiliate marketing is a performance-based model, so success depends on experience, knowledge, hard work and determination to get results

Affiliate Marketing Is All About The Commission

Undoubtedly, commissions play a vital role in affiliate marketing. Without it, most affiliates won’t be interested in promoting a company’s product or service. Consider it as the fuel of any affiliate marketing strategy. But here’s where most newbies fail. Although commissions are essential, it’s not the only factor that counts.

The truth:

• Affiliate marketers wear many hats, and to succeed, you have to learn the nitty-gritty of online marketing.
• This includes quality content strategy and creation, search engine optimization (SEO), social media management and advertising, etc.
• It also requires hard work to discover your audience, their preferences, and how to compel them to take action.

Affiliate Marketing Is Just About Promoting Products

Lastly, another common misconception is that affiliate marketing is about promoting products without an accurate understanding of their value. Some even assume the more products you sell, the higher you earn.

While promoting products and services is undisputable, getting your first sales takes a lot of work. Chances are high that you’ll be labeled a scam if you randomly inbox people to make a purchase using your affiliate links.

The truth:

• Affiliate marketing is a multifaceted business requiring the right knowledge and skills.
• It takes consistently creating quality content that informs your audience and marketing strategically without being salesy.
• By creating value, affiliates can build a loyal following or community who trust their recommendations, leading to long-term success.

Is Affiliate Marketing a Risk?

Yes, there are risks in affiliate marketing as there are in other businesses. Level of competition, seasonality, search engines, and social media algorithms…all these are factors outside your control that can affect your affiliate marketing business.

The best part is affiliate marketing may come with its fair share of risks, but the results outweigh the consequences. Plus, there are surefire ways to mitigate risks in affiliate marketing. Here are a few worth adopting:

• Build an email list - Use any email marketing software to collect leads from your social media networks, blogging sites, or any other channel you use for promotion
• Choose the best hosting platform for your affiliate website - Your web host can make or break your online business, so it’s vital to ensure you’re on the safest side
• Don’t put all your eggs in one basket - Explore other affiliate networks, and sell additional products and services. This helps to diversify your income streams
• Read the terms of service - Opt for programs with good commissions and quality offers backed by excellent customer service
• Measure your results - Use third-party analytical software to identify your best strategies and areas of improvement in each campaign

Tips for Finding Legitimate Affiliate Marketing Opportunities

There are thousands of affiliate programs on the internet. To avoid running into scammers, follow these surefire steps:

Research the company and its affiliate program:

There are lots of affiliate products and services for you to promote. To find any, simply type affiliate marketing programs and the niche you’re interested in on Google or any other search engine.

For instance, type the following search query on Google: (product name) + (affiliate marketing programs) + (country).

After listing out the programs, streamline your choices to the quality offers. Here are some tips to help you prevent running into affiliate marketing scams:

Ensure that the company is reputable

Partnering with companies offering high-quality products or services increases your chances of running a successful affiliate marketing business. And the foundation of any business’s success lies with the customers. So ensure you’re choosing a product that would provide value to your audience and solve their problems. Check forums and read people’s thoughts about the product or service before deciding.

Go for a product or service you’re familiar with

In-depth product knowledge is critical to any successful marketing strategy. It allows you to communicate the product’s qualities effectively and answer any questions your audience may have. In addition, you’ll be able to differentiate a high-quality product from a low-quality one instantly.

Read the terms and conditions

For some companies, affiliates only receive payment when the customer/visitor makes a purchase. Remove all guesses by thoroughly reading the terms of the agreement before joining any affiliate programs. A trusted brand should have explicit and transparent terms and conditions, the benefits you stand to gain, and payment procedures.

Check for the cookie lifetime

Cookies are used to track affiliate referrals, and they’re usually stored on the visitor’s browser. Usually, they have a duration, and once expired, you may or may not get a commission. Hence, the longer the cookie’s lifetime, the better it is. Opt for programs with longer cookie duration, at least 30 days.

Check For Reviews And Testimonials

Another foundational step is checking reviews and testimonials from other affiliates on the company’s affiliate program. Don’t get swayed by the high commission or promises. Vet the product or affiliate program thoroughly:

• Check your competitors. Are they evading a certain affiliate company or network? Why? Don’t bother looking for hidden affiliate programs that’ll be successful. Most times, these programs are fraudulent, and you may run into issues in the future
• Forums like Reddit, Quora, and Facebook groups are helpful. Ask for reviews from affiliates in these communities
• If you’re starting with an affiliate network, check out testimonials from affiliates who are currently on the program
• Lastly, check the company’s history on its affiliate programs. This should be easily accessible on their website. If not, check external sources like news or reports of their track records

Look For a Clear Commission Structure

Commissions are the driving force of affiliate marketing. The more profitable a business is, the higher the commissions they offer. Ideally, everyone would love to go for programs with a high commission rate. The right affiliate program should have a transparent commission structure and how affiliates get paid. Access this information on the company website via their terms of service.

Types of commission structures in affiliate marketing

• Cost per click (CPC): This is one of the oldest affiliate commission models on the internet. Here, the affiliate receives a commission whenever the visitor clicks a link.
• Cost per thousand impressions (CPM): In this model, the merchant rewards the affiliate whenever the ad generates a thousand impressions.
• Cost per action (CPA): This is one of the commonest commission models in affiliate marketing. The affiliate earns a commission whenever the visitor takes action, like making a purchase, downloading an ebook, etc.
• Cost per sale (CPS): In the sales commission model, the merchant pays the affiliate after selling the product or service. This can be a fixed price or a recurring payment based on percentage.

Look for Transparency In Reporting

A good affiliate program or network must have a quality and efficient tracking system. Affiliates should be able to track the sales, several link clicks, the performance of traffic sources, etc., from their affiliate dashboard. This will help in identifying success areas and strategies that require improvement.

An effective tracking system is necessary for the business to track affiliate partner performance, issue affiliate commissions, assign payouts, detect frauds, etc. It’s a win-win for both parties and fosters effective communication also. Only go for affiliate programs or networks with a reputable reporting system.

Consider The Products or Services Being Promoted

Good product knowledge is necessary for creating a successful marketing strategy. Therefore, before you choose any program, consider the product and service quality and if they’re valuable to your audience.

Promote products relevant to your niche, target audience, and the content you create. Imagine you have a blog in the health and wellness niche. Incorporating automobile or fashion affiliate links in your content will look salesy and confusing. This can drive readers from your site.

Be Cautious Of Programs With Unrealistic Promises

Get-rich-quick-schemes or offers too good to be true should be avoided at all costs. As a newbie, you’ll encounter several gurus who promise instant riches if you buy their courses or materials. More often than not, they use ads like “Earn thousands of dollars while you sleep with affiliate marketing” or “Travel over the world and live your best life without working a day. In general, avoid programs that require a fee before joining.

Seek Out The Support And Resources Of a Reputable Affiliate Network

An affiliate network is a service that connects brands offering affiliate programs with affiliate marketers. They act as an intermediary and sometimes charge a commission off affiliate sales or product listings. Reputable affiliate networks provide account management for both parties while fostering an amicable relationship to optimize each affiliate program.

Listing as an affiliate in any of the best affiliate networks reduces your chances of promoting subpar affiliate programs. The account managers work in the best interest of the affiliate and the company, fostering seamless two-way communication between both parties.

Consider The Length Of Time The Program Has Been Operating

Lastly, give preferences to affiliate programs operating for a long time. The popularity of an already-established affiliate program guarantees high traffic and, simultaneously, faster sales. These programs are likely legitimate with a broader network of affiliates. And if you promote a lesser-known company, prioritize value over anything else.

Conclusion: Discover More Legitimate Ways to Earn Income With Host Advice

Affiliate marketing provides a no-cost solution to promote your products online and generate revenue. Whether you sell physical or digital products, you can make a sustainable income without sacrificing the comfort of your space. But keep in mind that you don’t need to be perfect or an expert in all things before you start affiliate marketing. With the right skills and the information above, you’re armed with the essentials for success.

At HostAdvice, we understand that the success of any online business depends on website performance. Hence, we reviewed and curated this list of the best web hosting providers and website builders for affiliate marketers.

Next Steps: What now?

• Choose the niche you want to promote
• Focus on at most two platforms and scale as you grow
• Find credible affiliate programs to join
• Choose the best web host for your business
• Design your website using any of these website builders perfect for affiliate business
• Create high-quality content and infuse your affiliate links naturally
• Discover and implement the right strategies and tools to drive traffic to your website

Further reading – Useful Resources

• Best website builders for affiliate marketing
• How to Make Money With Affiliate Marketing
• How to Make Money With Affiliate Marketing
• Best affiliate marketing tools that help you make the most of your affiliate marketing business