Smart entrepreneurs running a thriving business know there’s always more they can do to make that business grow. One way of taking things to the next level is by finding an alternate stream of income. That doesn’t mean starting a second business, but finding ways to complement and grow the business you have by offering more value to your customers and followers.
If you aren’t participating in affiliate marketing, it’s time to consider taking advantage of this lucrative revenue stream.
What is affiliate marketing?
Affiliate marketing is an online sales tactic that lets a product owner increase sales by allowing others targeting the same audience—“affiliates”—to earn a commission by recommending the product to others. At the same time, it makes it possible for affiliates to earn money on product sales without creating products of their own.
Simply put, affiliate marketing involves referring a product or service by sharing it on a blog, social media platforms, or website. The affiliate earns a commission each time someone makes a purchase through the unique link associated with their recommendation. Done well, this performance-based opportunity can become an important part of your business by netting you a healthy income.
How does affiliate marketing work?
To participate in an affiliate marketing program, you’ll need to take these five simple steps:
- Find and join an affiliate program
- Choose which offers to promote
- Obtain a unique affiliate link for each offer
- Share those links on your blog, social media platforms, or website
- Collect a commission anytime someone uses your links to make a purchase
Commission rates vary dramatically, depending on the company and the offer. On the low end, you’ll earn about 5% of the sale but, with some arrangements, you can earn as much as 50%, usually when promoting a class or event. There are also affiliate marketing programs that provide a flat rate per sale instead of a percentage.
Benefits of the affiliate marketing model
Affiliate marketing offers several benefits to affiliates (i.e., you), one of which is its ease. Your side of the equation simply involves handling the “marketing” side of building and selling a product—educating customers. You don’t have to worry about the harder tasks, like developing, supporting, or fulfilling the offer.
Affiliate marketing is low risk. Since there’s no cost to join affiliate programs, you can start making money with an established affiliate product or service without any upfront investment. Affiliate marketing also can generate relatively passive income through commission—the ideal money-making scenario. Though initially you’ll have to invest time creating traffic sources, your affiliate links can continue to deliver a steady paycheck.
Finally, successful affiliate marketing offers the potential to significantly scale your earnings without hiring extra help. You can introduce new products to your current audience and build campaigns for additional products while your existing work continues to generate revenue in the background.
Before you get too excited, know that great affiliate marketing is built on trust. While seemingly there are an endless number of products or services to promote, it’s best to only highlight those you personally use or would recommend. Even when a product interests you or fits within an existing hobby, becoming a great marketer for that product takes a lot of work.
How to find affiliate programs
If you’re wondering how to get your feet wet in affiliate marketing, you’ve got a few options. Not every company offers affiliate programs—some businesses manage their own affiliate programs while others use an affiliate network.
An easy way to find affiliate programs is to visit an affiliate marketplace or platform. Browse your niche to find top performing affiliate platforms. Here are some of the most popular:
- CJ by Conversant
Another option is to visit the websites of the products and services you use and like to see if they have an affiliate program. Large companies often have programs they promote on their site, such as Amazon Associates or the Shopify Affiliate Program.
You also can take a more direct approach. Reach out to the owner of a great product you come across and see if they offer an affiliate marketing program. If they don’t, they might be happy to set up an arrangement with you, such as offering you a special coupon code to share with your followers. The best deals often are found when you’re the first to inquire and have a relevant distribution channel, such as approaching the seller of a new fitness product if you’re a health and wellness blogger.
Affiliate marketing programs will have terms of service you need to follow, so read the fine print. For example, your link usually will have a cookie with a specified timeframe, and some programs don’t allow you to purchase pay-per-click ads using the product or company’s name.
Choosing your first affiliate program
As you brainstorm products or browse through affiliate platforms, the most important criteria to keep in mind is that the product should be aligned with your audience, or the audience you hope to build. Ask yourself, is it something your target audience would find valuable? Does it fit with your area of expertise?
A food blogger probably wouldn’t promote beauty products, for example. A wide range of other products would make more sense, such as cookware, meal kits, gourmet ingredients, or even aprons.
Also make sure the product or service you’re promoting is a fit for the platform you’re promoting it on. For example, home decor and clothing are well suited to image-heavy platforms like Instagram.
However, if you’re promoting more in-depth purchases, like software, your review may convert better on longer-form platforms, like a blog or YouTube.
Creating a plan to promote your affiliate offer
As we mentioned earlier, affiliate marketing revenue eventually can become a form of passive income, but you still have to do some heavy lifting up front. The success of your program will depend on the quality of your review.
To create a good review, it’s best to get personal. Share your experience in your blog, social media post, or video. If you’re writing a personal review, give a candid opinion based on your experience with and knowledge of the product. The more open you are, the more authentic you will be. People will be more comfortable following your advice if they feel they can trust you.
Trust is a key factor in your affiliate marketing efforts, because people need to trust you enough to act on your recommendations. The level of trust you’ll need to make affiliate sales depends on your industry and the products you’re recommending—for example, it takes more trust to be an effective affiliate for a $1,000 course than it does for a $20 t-shirt.
Beyond just sharing your experiences, you can build trust by limiting the number of affiliates you promote, or by only becoming an affiliate for products you personally use, and sticking to your area of expertise. For example, people trust my recommendations for Canadian financial apps, but that doesn’t mean I’m going to have much luck as a Sephora affiliate.