How Does Affiliate Marketing Work – A Quick Guide

We’ve all heard the stories. The all those millionaires that were born from it, the passive income rolling in, the ferrari, the lambos… That’s all nice and all, but what exactly is this black magic that we call “affiliate marketing”? How Does Affiliate Marketing Work?

Affiliate marketing is a process by which a merchant pays out a commission to another party, known as the affiliate, for referring new business to it.

Easy.

Now, 

This is not something that’s brand spanking new that is going to revolutionize the world as we know it. Far from it.

Affiliate marketing has been around for a while, and will definitely stay for… well, even a “longer while”. 

The idea here, is creating a “win win” scenario, for everyone. Again. Easy.

It’s like when you see a cute girl walking down the street:

If you want to get to know her, you’d probably want to try to walk in the same direction as she is going, get side-by-side, ask a few questions, and see if there is any chemistry.

If yes, exchange contact info and both get back to your own lives.

If no, hey… at least you didn’t road block her, open you up eyes uncomfortably wide and spit out something stupid like “wow, jeez i LOVE your hair”.

That totally didn’t happen to me…ever. Nope.

What i mean is, that’s not a “win win”.

Affiliate marketing should work in both increasing sales and/or brand growth and recognition, in exchange for some revenue. Beneficial to both parties. A win-win. Symbiosis. Mutualism… Whatever you wanna call it.

To make this model work , we’ll need 3 crucial components:

1. Something to promote
2. A way to promote it
3. Someone who wants it

So in essence: affiliate marketing is joining point 1 with point 3 through point 2…which will be you.

In other words, you’ll be letting number 3 know that number 1 exists, HOW you make that magic happen, is totally up for you to decide!

You could choose socia media like youtube or instagram, paid traffic, search engines, banner ads, email or even vouchers, as long as the company can track back to your efforts you should be good to go.

If you successfully send a potential customer (lead) over from point A to B, through your special affiliate link, and a successful action is taken, you’ll make money. Horray!

You now know what to do 😉

The great thing about how affiliate marketing works, is that you as an affiliate, don’t really have to bother too much about what happens after your job is done since you didn’t have to create any product or service to begin with!

And it’s not up to you to keep working on better product and customer experience, product delivery, updates, or optimizing all the processes. This is the merchants’ job.

This in turn, gives you the flexibility to choose brands that both care about the customers, AND will also have your back!

Brands that don’t give you resources, miss payments or have a freaking high as heck refund rate because their product is absolute crap…will miss out on your ability to send them more customers, and will perish.

If the new hairstylist 2 blocks down the street, slices a piece of your ear off, you’re probably not going to recommend them, even to your worst enemy. Ever.

This is kind of the same thing: The product has to be something that actually is good, and they’ll have to give you good resources to promote it.

Now, you might however be thinking…

-Okay, but how much money can i make as an affiliate?

How does “as much as you want” sound like?

Exciting, right?

Since affiliate marketing works as a performance based system, the sky is the limit :D. The more you do the more you get back.

HOWEVER, this also means that the floor…is pretty darn low, and most people never make a sigle dime.

This is an aspect of it that i love: If you don’t produce results, then you won’t get any rewards. Pretty much just as it should be.

-How and when do affiliates get paid?

The most common way affiliates get paid, is upon a sales transaction which they usually get a percentage of, usually from 30 all the way up to 100%, and the price tag can go from a few bucks to tens of thousands.

Some of these other methods are pay per lead (PPL) or pay per click (PPC), which are action based, but wouldn’t really require a monetary transaction, perse.

As to the “when” part… it’s a bit more complicated, and depends on the affiliate network and the company itself.

Some networks payout once per week, wheareas some companies could pay out anywhere from every day to once a month, and others can make you wait up to 60 days or even more!

-Yeah, but why should i bother becoming an affiliate?

Being an affiliate is crazy good, because you could become very valuable to a company, in fact companies are relying more and more on affiliates because of rise in ad costs (amongst other things).

If you create an audience, you can “command influence“, and thus you have the capacity to advertise which means companies will want to partner up with you. 

Apart from that, you can earn passive income, work on your own hours and have flexibility…what else could you ask for?

-Ok, fine then. So HOW do i become an affiliate, hmm?

This one is easy. Many online companies, usually offer some sort of affiliate program, and usually have no problems accepting new affiliates (usually). 

All you have to do, is google search “company name” + “affiliate program”, and you should be set.

Once you’ve made an account, you’ll receive your special tracking link (aka, your “affiliate link”), that tracks every potential customer, back to you.

Some really good, trusted companies that have affiliate programs are: Amazon, Shopify, Ebay, Target, to TripAdvisor…etc

-But…Isn’t affiliate marketing saturated?

Heck no. 

For every new product that comes out, every new social media platform that gets invented, and every new influencer that is born…there will always be opportunities.

Some niches might be more competitive than others, but saying affiliate marketing is saturated, is like saying influencer brand deals won’t happen anymore because we’ve got too many influencers (we don’t).

Affiliate marketing is growing every year, the opportunities are endless and the start up costs and risk is really low.

So go out there and give it a shot! 😀