Affiliate marketing has become one of the most common and popular methods to generate passive income. Passive income is the dream of almost every entrepreneur. Who does not want to sit freely on their couch with generating income every day? There are many ways to generate passive income but affiliate income is something that every entrepreneur should know. If you are looking for a detailed guide about affiliate marketing, you are in the right place.
Affiliate marketing is the most popular way to generate income that too in passive terms but the main question which might be haunting many of you would be, ‘What is Affiliate Marketing?’ Affiliate Marketing is a method of generating income when a retailer pays a commission to the website for each customer referred through promotional activities such as links or ads of the website. So, it is a performance-based method. As the website will only get money if their promotional activities will refer the customer to the retailer.
Parties involved in Affiliate Marketing
In the case of affiliate marketing, it is not just you and the retailer but there are a total of four parties involved for whom different terms are used. They are:
Affiliates – Affiliates are the ones who promote the product in front of customers. These affiliates are generally bloggers, content creators, YouTubers, owners of any website, or any publisher. Affiliates are generally associated with a wide range of audience either through their content or SEO techniques. They are paid for every transaction their audience made through the promotional activities generated by them.
Product Creators– These are the retailers who are the creators of the product. They want to draw the attention of consumers to their products through affiliates. These are generally retailers or merchants who want to promote their products. For this, they choose affiliates, as affiliates have a wide reach and can successfully promote their product to a wide range of audiences. They pay a commission of every transaction of the affiliates.
Networks – Networks are the networks that are managing the affiliates. These are the intermediaries between Affiliates and the Product Creators. They try to maintain the atmosphere by preventing fraud.
Consumers – Consumers are the customers who reach the retailer through affiliate promotional activities. They include the audience of Affiliates who make a transaction for Product Creator.
In a nutshell, affiliates promote the products of Product Creators in front of consumers. The network is not a must for affiliate marketing but the rest three form the pillars of affiliate marketing.
How does affiliate marketing work?
Affiliate marketing has a simple mechanism. Affiliates generally promote the activities of Product Creators through certain promotional activities such as ads, ad videos, or links. Through these links, some of the people from the audience of the affiliates reach the retailer or merchants. As a result of these transactions, the retailer pays a commission to the affiliates. The networks are the intermediaries who work between both the parties but networks may or may not exits. Their existence is not necessary.
There are three models of affiliate marketing
Pay Per Click – Pay Per Click or PPC model lets the affiliate earn money, every time the consumer clicks on the link or advertisement. The affiliate earns money regardless of the transaction takes place or not. This model is generally beneficial to the affiliates as their risk is reduced while the retailers may find it not that useful as they might not be earning from the clicks but they have to pay the affiliate for it.
Pay Per Lead – Pay Per Lead or PPL model let the affiliate earn only when a lead is generated on the side of the retailer. The PPL model produces an equal level of risk for both the affiliates and the product creators.
Pay Per Sale – Pay Per Sale model is more beneficial for the retailers as most of the risk is on the side of the affiliates. This model is retailer friendly in which the retailer only pays the affiliate if the sale of the product takes place. It takes place if retailers have more say that the affiliates.
Ways to go with affiliate Marketing
Now that you know what is affiliate marketing and how is it beneficial for you, you should also know how to go with it. Different types of affiliate marketing have already been explained and you should look for the one according to your resources and convenience. Most of the people find affiliate marketing a very simple process. They think it is all about promoting and earning but in reality, it might take your one-time attention. Following the ways to go with affiliate marketing:
1. Select a platform and build influence
Affiliate marketing begins with your platform as there is no use of marketing until and unless you have a good influence. Affiliates use newsletters, blogs, YouTube, or websites to build influence. Your website can be centered around any theme including fitness, cooking, photography, writing, or anything you like. It should be specialized in a niche so that you can easily build an audience.
2. How to build an audience
Well, we have already discussed how important the good reach of an affiliate is. It is not an overnight work to build an audience. You need to build an audience with constant efforts and regular updates of your platform. Choose your target audience first and then try to connect to them through your content. Monitor your stats and also try to connect to your subscribers by sending newsletters or other. Keep updating good contact to main your loyal audience and grow their circle more. To maintain a loyal audience is somewhat more important as it will be beneficial for you as affiliates.
3. Time for an affiliate Program
Now that you have a platform and a good audience, you should take your first step towards affiliate marketing by signing up for an affiliate program like Amazon’s Affiliate Program. There are many affiliate programs available and the best part is that there is no viable cost for signing these programs. Once you sign up for an affiliate program, you will get a unique ID. It might seem cost-free in the beginning but if you want to run ads for your affiliate program, the cost will be yours. You have to spend for better promotion of the product.
4. Select the Product for Promotion
What kind of product do want to promote? This question might have come to your mind at first. To get the answers, you should keep a few things in mind like the kind of target audience you have, the profit involved, and finally the value and quality of the product. Always promote a product with which your audience can connect with. Do not go for products which you do not know about. Try to choose something about which you have complete knowledge or fist hand experience for better results.
5. Time to promote the products
To promote the products, you need to create some remarkable content. Discuss it with customers or other people who are engaged in affiliate marketing. Always be aware of the psychology of your target audience. Do not go for a product about which you know nothing as this might affect the promotion of the product. You have to show what the product is, why to use it, and how is it better than its competitors? And this is only possible if you are aware of the product in a better way.
6. Track your success
Whenever a user clicks on your unique link, it is recorded by the retailer through cookies. But it is also important for you to track your work. You should know how many people are leading to particular websites through your website. It will help you determine if your present promotional activities are successful or if you need improvement.
7. Time to earn
The final step is to get paid for your hard work. Affiliate programs pay differently. Some pay monthly basis while others pay weekly basis salaries to affiliates. Also, whether you have signed for PPC, PPL, or PPS model, your income will vary. You will also be required to pay your hosting charges due to which you should always look for a model that will benefit you. Never go for a plan which pays you less than or equal to your spending.
Affiliate Marketing has become very common and popular. It might seem a hectic process but it is one-time hard work, which will pay you off passively for a longer time. Affiliate Marketing will not only pay you passively but it will increase your income stats with time. Updating techniques are required. Also, maintaining the network of your audience is a must for an affiliate.