Affiliate Marketing: Is It Right For Your Business?

How would you like to earn some passive income? You can do that with affiliate marketing.

Well, probably.

Affiliate marketing is competitive, spammy at times and is a whole crazy world. Let me explain.

There are numerous ways to earn passive income. For example, you can invest in real estate, purchase some high-yielding stocks, or buy bonds. Those options require a significant up-front investment, though. That’s especially true if you want to earn a decent income. If you don’t have a whole lot of cash to throw around and you’re willing to invest some time, then one of the best ways that you can earn passive income is with affiliate marketing. In this article, we’ll go over affiliate marketing and explain how you can generate some cash flow by selling products or services online. I’ve done affiliate marketing on some level for over 10 years. There is a lot to know.

What Is Affiliate Marketing?

Companies want you to go to work for them. No, they don’t necessarily want you as an employee. They want you to promote their products or services online. When you do that, you become an affiliate for that company. As a result, you generate a commission for each sale. For example, let’s say you have a blog that promotes fitness. On the left-hand sidebar of that blog, you post a link to an e-commerce site that sells workout clothes. When your visitors click that link and make a purchase, you get a commission for the purchase.

That’s essentially how most affiliate marketers earn their money. Affiliate marketing is a classic example of what the professionals call “push-through marketing.” That’s when companies offer incentives to sales reps to increase sales. In this case, the incentive is a commission. In case you’re wondering, “pull-through marketing” is when companies offer incentives to customers. That’s a whole different ballgame. The good news is that you can usually become an affiliate marketer without a whole lot of effort. You just provide your business name, tax ID, and other relevant info to a company or affiliate network. Most importantly, though, you’ll need to provide payment info so the company can pay you for your successful efforts. After a short review period, you’ll get the news about whether or not you’ve been approved.

Approved Affiliate Marketer?

Yes, you will have to get approval to become an affiliate. Why? Because you’ll almost certainly do all your affiliate marketing using one or more websites. If any of those websites touch on controversial subjects or include extremist viewpoints, companies will often say thanks but no thanks. As a rule of thumb, merchants don’t want to be associated with controversy or scandal. Also, some companies look for experienced online marketers before offering their stamp of approval. They don’t want to subject their brand to greenhorns who might not know how to sell online. That of course begs the question: how do you become an affiliate marketer without experience and how do you get experience if you can’t become a new affiliate marketer? The good news is that not all companies are picky about who they allow into their affiliate programs. Some companies, like Amazon, can afford to take chances with newbies and just ban them later if they find problems.

A Tale of 4 Parties

In affiliate marketing, four parties are involved:

• The Merchant – Companies that sell their products online are called merchants. Sometimes, in an effort to increase sales, merchants are willing to outsource their sales efforts to affiliates for a commission.
• The Affiliate – When somebody wants to earn a commission by selling products or services offered by merchants, that person becomes an affiliate. Sometimes the affiliate is called “the publisher” because he or she almost always uses a website to handle the marketing. Please note that an affiliate doesn’t have to be an individual. It can also be a business, such as an LLC or corporation.
• The Network –  An affiliate network brings together affiliates and merchants. You can think of it as a dating site for e-commerce. Some companies (such as Amazon) act as their own affiliate network, while others join a third-party network.
• The Customer – Affiliate and merchants alike need customers to earn revenue. Merchants rely on affiliates to find customers that they otherwise wouldn’t have found.

Merchants: Who’s Selling Online?

Obviously, there are countless companies selling products and services online. The question that’s relevant here is: which ones offer commissions to affiliates? Fortunately, there’s no shortage of them. In fact, it’s almost certainly the case that you’ll find affiliate opportunities in a niche that you’re very familiar with. That could give you a competitive advantage over other affiliates in the same space. You can usually find an affiliate opportunity by just Googling the name of a merchant whose products you think you can sell followed by the words “affiliate program.” For example, if you Google “Giorgio Armani affiliate program,” you’ll see an opportunity to earn a commission by selling Giorgio Armani products online. That might be just what you’re looking for if you’re in the fashion space. Also, if you’re on a website that sells products that you think you could successfully promote online, scroll down to the footer of the home page and look for an affiliate link. It will usually read “Affiliate Opportunities” or words to that effect. Follow that link and be on your way to earning some passive income.

Affiliate Networks

As we’ve seen, some companies that want affiliates have decided to outsource the whole affiliate process to a third party, called an affiliate network. The great thing about affiliate networks is that you just fill out a single application with the network. Then, when you apply to become an affiliate with one of the network’s merchants you don’t have to fill out an application all over again. The merchant has access to the application you filled out with the network. That means you can apply to become an affiliate with just a few clicks of your mouse. In fact, you can apply to several merchants within the space of just a few minutes. Also, keep in mind that when you earn a commission from a merchant you found on an affiliate network, it’s the network that will pay you the commission. That’s also convenient from an accounting perspective because all your income comes from one source. It’s also worth noting that commission amounts vary from merchant to merchant within an affiliate network. For example, one company might pay you just 2% for a sale while another one will pay 15%.

The Big Players

So who are the major players in affiliate networks? There are several of them. One of the most popular affiliate networks is Commission Junction. It also happens to be one of the oldest. I generally use this network.  Commission Junction offers a large portfolio of merchants for aspiring affiliate marketers. If you want to get started with affiliate marketing, that’s a good place to begin. Keep in mind, though, that many merchants on Commission Junction are picky about who they allow to become affiliates. Don’t get discouraged if they all don’t accept you right away. In some cases, merchants offer contact info so that you can reach out to a company rep and ask why your application was declined. Sometimes, the rep will approve your application after a little back-and-forth by email. Bottom line: be persistent. Some merchants will accept your application by default. That means you’ll gain immediate approval to start earning a commission right away! Commission Junction also gives you the opportunity to search for merchants that match your niche. For example, if you’re looking to sell products related to men’s fashion, there’s a whole category for that. If you’re a professional programmer, you might like Commission Junction’s “feed” option. That’s an XML “catalog” provided by some merchants that you can parse and analyze as you see fit. For example, if you’re only looking for laptops sold by Sears, you can grab the Sears product feed and search it for “laptop.” Then, you can write some code that extracts only matching products and include them in your marketing efforts. Another affiliate network is Rakuten Marketing. It’s very similar to Commission Junction in that you can search for merchants and apply to become an affiliate with just a few clicks. By comparison, it seems as though Commission Junction offers better customer service than Rakuten. However, there are some merchants on Rakuten that you won’t find on Commission Junction. Keep in mind that there’s no law against joining both networks. Those aren’t the only two options you have when it comes to affiliate networks, though. Both MaxBounty and PeerFly are very popular among today’s digital marketers. You’ll likely find some very unique niche opportunities on either one of those sites. That’s why it’s worth your while to join them. However, both MaxBounty and PeerFly have a reputation for rejecting new applicants. If that happens to you, just pick up the phone and call the company. Explain your marketing plan and why you should be approved. If you sound like you know what you’re talking about, they’ll probably approve you. Beyond those, there are still more affiliate marketing networks. Just Google “affiliate marketing network” and you’ll see plenty of options.

Amazon Associates

No article about affiliate marketing would be complete without a review Amazon Associates. It deserves its own section. Amazon boasts that its affiliate program is “the web’s most popular and successful” opportunity for digital marketers. According to mThink Blue Book, though, it actually ranks fifth. So why is Amazon Associates so attractive to people who want to earn a passive income? Because it gives them the opportunity to earn a commission by selling anything within Amazon’s immeasurable portfolio of products and services. In fact, some marketers don’t even bother with other affiliate networks because everything they could possibly want to sell is on Amazon.

Amazon pays a commission (called an “advertising fee”) that varies per category. For example, you’ll earn a 3% commission when you sell a toy, but you’ll earn a 10% commission when you sell an item from the Fashion category. You might have heard about Amazon’s “sliding scale” commission structure. It gave affiliates the opportunity to increase their commission as they sold more items within a month. Unfortunately, Amazon ended that program last March. So you’re stuck with a flat-fee schedule for now. One of the best things about Amazon Associates is that it gives you access to a powerful API. That means you (or a developer) can write code that searches for exactly the items you want to advertise on your website. You can search by product, category, keyword, or any number of other options. You can also sort your results by price so that you can be sure that you’re giving your visitors the best deal. Perhaps the most attractive selling point for using Amazon Associates is that everything you sell is backed by Amazon’s well-respected brand name. People tend to feel more comfortable buying from Amazon than they do from some of the lesser-known companies that participate in affiliate networks.

eBay Partner Network

Yes, you can earn a commission by selling products offered for sale on eBay. If that interests you, then join the eBay Partner Network. Remember, though, that eBay is basically an online garage sale. There’s a certain stigma associated with products sold there. It’s not suitable for all markets. However, if you’re catering to people who are price-conscious above everything else, you might find some great opportunities to earn cash by promoting eBay products. Also, eBay offers some generous commission rates. Even better: those rates are doubled during your first three months as an affiliate.

The Logistics of Links

Now that we’ve covered some of the more popular affiliate networks, it’s time to look at how you earn your commission. Suppose somebody visits one of your websites where you’re promoting a product as an affiliate. The visitor clicks the link and purchases the product. How does the merchant know that you deserve a commission? Answer: it’s all in the link. The merchant (or affiliate network) will give you a product link that’s all your own. When a visitor clicks on that link, they’re essentially notifying the merchant that they visited from your site. That’s how merchants know that you deserve the commission. That’s also why it’s extremely important that you get the link right on your website. Fortunately, you can just copy and paste the link to reduce the possibility of an error.

Cookies: An Affiliate’s Best Friend

If you’re not familiar with the web concept of “cookies,” you’re in for a very pleasant surprise as an affiliate marketer. They’ll help you earn lots of cash. What are cookies? They’re essentially digital footprints that websites place on a browser. Cookies contain important information about the user’s visit to the website, such as login credentials. For example: let’s say you visit a website where you have to login. Then, you visit that same site later in the day and notice that you don’t have to login again because the site “remembers” who you are. What happened? The site probably used cookies to make your life easier. What does this have to do with affiliate marketing? A lot, actually. When your visitors click one of your links to a merchant’s site, that site will almost always place a cookie in the visitor’s browser. This is the important part: that cookie acts as evidence that the visitor arrived at the merchant site from one of your links. Then, if the visitor decides not to make a purchase at that time, but comes back later, the site will examine the cookie. If the user makes a purchase at that point, you will still get the commission. Basically what that means is this: if you just point somebody in the right direction towards a merchant site, and that person makes a purchase at some point in the future, you still get credit for the sale. How long does “the future” last? That varies from merchant to merchant. In the case of Amazon, the cookie only lasts for 24 hours. However, other merchants leave the cookie in place for weeks. Although that window of opportunity seems short in the case of Amazon, keep in mind that you get a commission for anything your visitors buy once you send them to the site. For example, somebody clicks on one of your links to buy hairspray on Amazon. She gets to Amazon but decides she doesn’t want to buy that hairspray after reading the description. She keeps shopping on Amazon for a better hairspray. She finds something she likes and buys it. You still get the commission. Let’s take it a step further: suppose that your visitor remembers that she needs a new laptop while she’s on Amazon. She searches around, finds exactly what she’s looking for, and purchases it. You guessed it. You get commission for that, too. You can earn a lot of money by just sending people to Amazon with your affiliate link. That’s something you should keep in mind as you develop your online strategy.

Wrapping It Up Affiliate Marketing For Now

So what are you waiting for? Start an affiliate program or hire an agency to make one for you. Keep in mind, affiliate marketing is a competitive industry. If you don’t have a baseline of traffic, it will take some time.