What is an affiliate marketing website and how does it work? There are several parties involved in the process – merchants who sell products, affiliate marketers who promote these products, and customers who buy the products. There are also some affiliate networks that act as intermediaries between the merchant and the affiliate.
When you sign up as an affiliate and you are accepted, the merchant provides you with text links, banners etc. to place on your website. If someone goes through your link and buys a product, you make commission from the sale. This is essentially your reward for promoting their products. The merchant tracks your performance and you are able to see your sales and commissions.
Commission rates vary considerably from company to company. They range from as low as 1% right up to 75%. The highest percentages often come from selling digital products. Many people promote products in the health and beauty market where average commissions are often around 30%.
You don’t necessarily have to sell products to make a commission. Sometimes you receive payment based on the number of visitors you send to the merchant’s website. This is called Pay per Click. You may also get paid once a link is clicked and the person fills out a contact form on the target site. This is called Pay per Lead.
The PROS of affiliate marketing:
- Minimal startup costs: You do not have to have a physical store or employees. All you need is a website and this can be set up at minimal cost. You don’t need to develop your own product. You don’t have to worry about storage, packing or shipping either. You do not have to pay to join affiliate programs.
- A worldwide market: The visitors to your website may come from all over the world and you can sell products from all over the world too.
- No need to offer customer support: The merchant offers customer support and deals with any complaints.
- Passive income: You are able to continue earning, even when you are not seated at your computer.
- Work from the comfort of home: If you are successful, you are able to avoid commuting to work and work from the comfort of your own home. You can work from just about anywhere else in the world too, according to your own schedule and without a boss looking over your shoulder.
The CONS of affiliate marketing:
- Time and effort: It takes plenty of time and effort before you reach the place where you start earning money. Many people do not understand how long it takes. This is not a route to sudden riches. Your website needs time to become established and draw traffic. You need to work really hard at providing great content and giving people reasons to continue visiting. You need to build up a list of subscribers and only then can you start converting them into buyers.
- Discovering what works is a process: Many beginners to affiliate marketing think that the more affiliate links they place on their websites, the more chance they have of making sales. It does not work this way. People have to be given solid motivation for why they should buy a product and how it will improve their lives. They are unlikely to click on a randomly placed link and buy a product. You often have to go through a process of testing to find out what works best for you.
- Stiff competition: You have to be able to stand out above your competitors.
- You promote other people’s products: You earn less than if you were selling your own products and you have to rely on others.
- No immediate payment: You often have to wait some time before you get paid.
- No fixed income: Your income may be sporadic and inconsistent.
Successful affiliate marketing tips
- It is better to choose a handful of good products rather than to try and promote too many. If you promote a few carefully selected products well, you will do generally do much better than relying on people to click on on one of many randomly placed links. When you first start affiliate marketing, you tend to think that if you have enough links on your pages, people are sure to click some of them. You do not focus on helping readers to understand why they should buy a product. You just want them to click those links so you can earn a commission.
- It’s no good trying to promote products in which your audience has no interest. You need to be very clear about what they want to buy. Once your site builds up enough traffic, you can even conduct a survey and get some input from your visitors.
- People want to find out what other people are thinking before they decide to buy a product or not. This is why reviews can be so powerful. If you can review a product in an unbiased way, without sounding too much like a salesperson, you are far more likely to convince someone to buy. If you provide plenty of information in your review, the customer will feel far more knowledgeable about it and, therefore, much more ready to buy.
- Comparing. This is a tactic that often converts very well. Compare the main product with a couple of other similar products and put in affiliate links for all the products, instead of only the one. People like to have some choice, and you will receive your commission no matter which choice they make.
- A good strategy is to use tutorials. If you write a good tutorial about how to use a certain product and then use the right SEO so people are able to find it, you have the best chance of success. People google a certain product because they are already thinking of buying it and your tutorial may be just what they need to make the decision.
- Whenever you promote a product, it makes sense to test it yourself first, so you can give first-hand information. You have to put yourself in the shoes of the potential customer and tell them what they need to know. This is the way to build up trust with your visitors. You don’t want them to follow your advice and be unhappy about what they have purchased.
- Tracking. It is important to know what is working for you and where you are making your commissions. You cannot work blindly if you want to be successful. You need to experiment with types of content, placement of links on the page, text links versus image links and much more. Sometimes small changes can affect revenue.
How to find suitable affiliate programs
The easiest way to find suitable affiliates is by using the search engines. Use your product + affiliate program and see what you can find. Some companies do have in-house affiliate programs, like Amazon and eBay.
Every product or service you use personally might well have an affiliate program. Think of what you are already using and go to the website of the product. There may be a link in the footer that says ‘Affiliates’ or something of that nature and you follow the link to sign up.
Another tip is to take note of the affiliate products being used by others in your niche. Look at the websites and read their posts. See what they have in their sidebars and whether it is something you could promote.
Many companies employ an ‘affiliate network’. Some of these networks are shareasale.com, ClickBank, LinkShare and Commission Junction. When you join up with them, you have access to many different merchants. You can browse through these merchants and decide whose products you would like to promote. Of course, you have to be accepted by the merchant before you are able to promote products.
Affiliates are required to provide a disclosure on their websites. This is to make sure the users know that they may get compensation when links are clicked and products are bought.
Affiliate marketing is not for sissies. Like any other business, it takes time to set up, hard work to produce excellent content and keep visitors happy, as well as much experimenting, testing, and tracking to find out what works best for you. There is also a great deal of competition to contend with. However, if you treat it like a business, there is no reason why you should not be successful, and if you are, you experience many benefits. It has low startup costs, enables you to work from home, earn passive income, and benefit from a worldwide market.