What if you could earn money at any time, from any location — even while sleeping? Step on up and say “Hello” to affiliate marketing.
A Very Simple Process
By promoting the products of another person or company an affiliate earns a commission. The affiliate simply finds a product they like, promotes it, and earns a percentage of the profit from each sale. Affiliates are provided proprietory links to take consumers from one website to another. These are used to track sales.
Affiliate marketing is an excellent way to increase sales and generate substantial online revenue. The modern drive towards less traditional marketing tactics has certainly paid off for both brands and affiliate marketers.
Indeed, affiliate marketing spend in the United States, alone, increased from $5.4 billion in 2017 to $8.2 billion in 2022, indicating that there is still plenty of room for those looking to get a piece of the pie.
Keep reading to learn more about how you can get started with affiliate marketing and what benefits you can expect.
Affiliate Marketing: How Does it Work?
Affiliate marketing leverages the abilities of a large number of individuals for a more effective marketing strategy by incentivizing contributors with a share of the profit thereby spreading the responsibilities of product marketing and creation across parties. Three different parties must be involved for this to work:
- Sellers
- Publishers / affiliates
- Consumers
Let’s look at the complicated relationship these three parties have to ensure the success of affiliate marketing:
Sellers
The seller, whether a sole proprietor or a large corporation, is a vendor, merchant, product creator, or retailer who has a product to sell. A product can be a physical item, such as household goods, or a service, such as makeup tutorials.
The seller, also known as the brand, does not have to be actively involved in marketing, though they and the advertiser may be one-in-the-same and profit from the revenue sharing resulting from affiliate marketing.
The seller could, for example, be an e-commerce merchant who launched a dropshipping business and looks to target a new audience by paying affiliate sites to promote their products. Alternatively, the seller could be a SaaS company that uses affiliates to help sell marketing software.
Publishers / Affiliates
The affiliate, also known as a publisher, markets the seller’s product to potential customers in an appealing manner. In other words, the affiliate/publisher promotes the product in order to persuade consumers that it is valuable or beneficial to them and persuade them to buy it. If the consumer purchases the product, the affiliate receives a portion of the revenue. The affiliate can either an individual or a company.
Affiliates frequently market to a very specific audience, generally adhering to that audience’s interests. This helps the affiliate attract consumers who are most likely to act on the promotion by creating a defined niche or personal brand.
Consumers
Of course, sales are required for the affiliate system to function, and the consumer or customer is the one who makes them happen.
The affiliate will market the product/service to consumers via the appropriate channel(s), such as social media, a blog, or a YouTube video, and if the consumer finds the product valuable or beneficial, they can follow the affiliate link and checkout on the merchant’s website. If the customer purchases the item, the affiliate receives a percentage of the sale.
Follow the Rules
Keep in mind, however, that the consumer must be aware that you, the affiliate, will be paid a commission on the sale of the product.
The Federal Trade Commission (FTC) requirement is that affiliate marketers clearly and conspicuously disclose their relationship with the retailer, allowing the consumer to decide how much weight to give their endorsement.
A disclaimer like “The products I’m going to use in this video were provided by Company X” provides your viewers with the information they need to make informed decisions about whether or not to purchase the affiliate product.
A Final Thought From DigEnet
Please bear in mind that this post is simply a primer created to introduce the concept of affiliate marketing. We won’t delve into the technical mechanics or the various strategies here today.
Recognizing affiliate marketing as one of the Five Pillars of Digital Monetization and applying it to your digital entrepreneurial strategy is vital to the growth of your digital business and your growth as a digital entrepreneur.
Join our learning community if you would like to learn more about affiliate marketing and its place among the Five Pillars of Digital Monetization.