What is affiliate marketing and how does it work?
Getting up at six in the morning in order to commute to a job you may not even like is not for everyone. With affiliate marketing, you decide when you want to work, and with the right knowledge and a lot of hard work, you can make a nice living with this marketing method.
In this guide, we explain what affiliate marketing is, how it works and what you need to do to succeed. More specifically, this article serves as a complete guide with information regarding everything related to affiliate marketing.
What is affiliate marketing?
Affiliate marketing is a marketing method where you receive a commision for marketing a company’s goods and/or services. The main goal is that a win-win situation arises; you get a good monetary compensation for your job and the company gets to sell more products and can also avoid spending money on traditional marketing like tv-ads.
It is both most common and most effective to use a website to market the affiliate partner’s products. Your “sales” or “leads” are in turn tracked using affiliate links.
This is how affiliate marketing works
- You market products and / or services on your website.
- The customer clicks on an advertising link that belongs to a product.
- The customer is redirected to the affiliate company’s website.
- The customer buys a product from the company.
- An affiliate network registers the purchase, so you can get paid.
- The company confirms that the purchase has been successful.
- You get your commission from the affiliate network.
Note that you do not have to join an affiliate network to engage in affiliate marketing, but since affiliate networks offer so many collaboration partners, it is a good idea to join at least one of those.
4 tips for successful affiliate marketing
1. You need one or more well designed web pages
You can also engage in affiliate marketing via email lists and social media, but to be able to make a lot of money you usually need a website. Note that we are experts in developing affiliate websites that load quickly and convert well. Contact us for more information.
Read more: You can get a really nice and affordable affiliate website by letting us do a Figma to WordPress conversion.
2. You need to understand what you are marketing
For example, if you are marketing food supplements, it is important that you know which supplements are better than others, and how food supplements work. More specifically, you need to contribute with a value to get many visitors to your affiliate website, and if you do not have the right knowledge, you do not contribute with much value.
If you do not want to come up with the written material yourself, you can hire an SEO writer. It usually costs around 0,12 USD per word, but in the long run it can be worth it.
3. Be as objective as you can
People who visit affiliate websites are looking for expert advice on a specific product or product niche, so exaggerating and publishing a lot of marketing terms is a bad idea. The visitor wants unique, detailed and objective information that cannot be misinterpreted as pure marketing text.
If the visitor wont get a hold of high quality material, you can count on him or her pressing the back button and visiting another web page instead.
4. Set aside time and set clear goals
It takes time to become big in affiliate marketing, so set aside time so you can work with your affiliate websites continuously. Setting up clear goals that you must achieve within a certain time frame is also a good idea, otherwise it is easy for your affiliate projects to become unsuccessful.
Also note that it takes a lot of time to get a full time income via affiliate marketing, so do not quit your day job until you know that you can support yourself with the income you get via affiliate marketing.
The 4 major players within affiliate marketing
- The company, such as an e-store, that sells products.
- The publicist, i.e. you, who refers paying customers to the company.
- The consumer, who visits the company via your affiliate links.
- The affiliate network, that offers affiliate programs and pay the affiliate marketer.
2 ways you can get paid through affiliate marketing
1. You get paid per sale
It is normal to get a certain percentage of the sale of a product. That means that it is important that you give the visitor every piece of information that they may want, so they can make an informed decision whether it’s a good idea to buy the product or not. If the visitor does not buy the product, you will not receive any compensation either.
2. You get paid per click
It is unusual to get paid for every customer who clicks on your affiliate links, but this reimbursement model still exists. In this case, the company pays you to get more traffic to its website, without the customer having to buy anything.
4 benefits of affiliate marketing
- You do not need to keep any stock, as you only market products.
- You do not need to offer support, as the company that sells the products is responsible for that.
- You can work wherever you want, for example from home.
- In time you may receive a passive income, which means that you earn money around the clock.
Answers to frequently asked questions
What is the meaning and definition of an affiliate?
An affiliate is someone that refers a service or a product by sharing tips and/or guides via social media, a blog or a niched website. The affiliate earns money when someone makes a purchase by clicking an affiliates link, i.e. a tracking link that makes sure the affiliate is compensated.
What is CPA within affiliate marketing?
CPA means cost per action, so if an affiliate refers 200 customers and gets paid 20 USD for every referred customer, the CPA is still 20 USD. In short CPA is a term for the cost that the company has to pay the affiliate marketer for a successful lead.
What is EPC within affiliate marketing?
EPC stands for earnings per 100 clicks. If you as an affiliate marketer make 2 sales per 100 clicks, and make 50 USD per sale, the EPC is 100 USD in this case. Better conversion optimization and better monetary compensation per lead is important in order to be able to increase the EPC.