Affiliate marketing is one of the most widely used techniques for creating a passive income stream online. Data reveals that affiliate marketing spend is expected to rise to $8.2 billion by 2022, which is a massive increase from $5.4 billion in the year 2017.
If you want a basic insight into affiliate marketing, continue reading to discover how you work as an affiliate to market products and generate an additional income source.
What Is Affiliate Marketing?
Affiliate marketing is best defined by Pat Flynn on Smart Passive Income.
According to him, “Affiliate marketing is the process of earning a commission by promoting other people’s (or company’s) products. You find a product you like, promote it to others and earn a piece of the profit for each sale that you make.”
The Main Parties Involved in Affiliate Marketing
There are generally four stakeholders involved in affiliate marketing. These include:
- Affiliates: The people who market a product
- Product Developers: The people or business that makes the product
- Networks: The networks handling the affiliates
- Consumers: The final users of the product.
How Does Affiliate Marketing Work?
An affiliate, also referred to as a publisher, can be a company or an individual. Generally, these are content developers or bloggers working in the industry of the product they are developing.
The affiliates help market the product or service by developing content such as videos, blog posts, images, etc. They can even market their content to get transactions by creating an email list, getting search traffic from SEO, or putting up advertisements.
When one of their followers or visitors conducts a transaction, the affiliate earns a commission. These transactions can include submitting a lead form, making a purchase, etc. The amount of money the affiliate earns is dependent on the terms of the affiliate program.
How Do Affiliates Get Paid?
Here are some of how affiliates earn money.
- Pay Per Click. The affiliate earns a commission for all clicks that were made, irrespective of whether a sale or lead happened. This payment structure is very rarely used as it isn’t very profitable for the product creator.
- Pay Per Lead. The affiliate gets a commission for every lead they generate. This can include trial creation, submission of online forms, or any pre-purchase.
- Pay Per Sale. This is the most frequently used affiliate marketing model where the affiliate earns a commission for each sale they generate.
Amazon Affiliate Marketing Program
Amazon’s affiliate marketing program, known as Amazon Associates, is one of the most popular affiliate marketing programs. It’s free for bloggers and website owners to become Amazon Associates. The affiliates market products from Amazon on their website by generating links. When visitors click on the link and purchase products from Amazon, the affiliates earn a referral fee.
Last Few Words
Affiliate marketing has transformed for earn-money-quick tactic into something that requires you to build real trust with your audience to get the rewards of the efforts that you invest.