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What is Affiliate Marketing (and How Much Money Can You Make?)

3 weeks ago
If you are looking for a great way to make money from home and build a very profitable business, then affiliate marketing may be exactly the opportunity you have been looking for. Tens of thousands of people make a full-time living from affiliate marketing all over the world. For many, it has provided the opportunity to escape the corporate grind and start a new and much better life. Read on to find out more...



Discover the secrets of making money from home as a highly-paid affiliate. Quickly build a six-figure passive income from anywhere.

The Affiliate Marketing Revolution

If you are looking for a great way to make money from home and build a very profitable business, then affiliate marketing may be exactly the opportunity you have been looking for.

Tens of thousands of people make a full-time living from affiliate marketing all over the world. For many, it has provided the opportunity to escape the corporate grind and start a new and much better life.

Wherever you live, and whatever your background, affiliate marketing provides you with a real chance to succeed as an online entrepreneur. As we will see later, it’s entirely possible create an income that exceeds $100,000 - or even $1 million - a year with affiliate marketing.

​​​​​If you’re feeling like you’re stuck in a dead end job, think you can never make more than $10/hour because you don’t have a college degree, or think you can’t save money or beat the paycheck to paycheck cycle, I want to encourage you that you can. Don’t lose hope!”

​Alexa  

​SingleMomsIncome.com

​Start affiliate marketing today, and you could soon be enjoying all the enviable benefits that this online business model offers, including:

  • Being your own boss 
  • Making money from home (or anywhere)
  • Creating financial freedom
  • Working flexible hours 
  • Spending more time with your family
  • Doing something that you love

There’s no doubt about it. Affiliate marketing can be a real game changer that sets you on the road to a new and better life.

What Exactly is Affiliate Marketing?

So before we get into the details of how you make all this lovely money from home, let’s start with the basics. What the heck is affiliate marketing, and why should you care?

According to Investopedia, this is the official definition of affiliate marketing:

​Definition of Affiliate Marketing


​​“Affiliate marketing is an advertising model where a company pays compensation to third-party publishers to generate traffic or leads to the company's products and services. The third-party publishers are referred to as affiliates and the commission fee incentivizes them to find ways to promote the company.”

Now let’s explain this in simple English. And the best way to do that is to use Amazon as an example. Amazon created the world’s first-ever affiliate program back in the 90s, and this program has generate probably hundreds of millions of dollars in sales since then. So the model works!

Amazon, of course, wants as many people as possible to visit its website and buy products. So to generate more visitors, Amazon is prepared to split the profits with anyone who can send these visitors.

That’s where you come in. Let’s say you have a website that reviews books. You sign up as an affiliate with Amazon, and you are given special affiliate links to add to your book reviews.

If someone reading your book review then clicks one of these links and buys the book on Amazon, you get paid a commission by Amazon. Your website has effectively become a sales executive who gets paid according to the results achieved.

So there are two main players in the affiliate marketing game:

  1. The advertisers (also known as merchants or vendors). These are typically large, online retailers who want help generating more sales on their website
  2. The affiliates (also known as associates). These are independent website owners who are looking for a way to make money from their existing website traffic.

Affiliates send visitors to advertisers, and get paid when these visitors take a particular action. Here’s a great explanation of affiliate marketing that makes it easy to understand:

Affiliate marketing is big business. A study by Forrester and Rakuten shows the industry growing at 60% per year over the last five years, creating a $6.8 billion industry.

Nearly 90 percent of advertisers think that affiliate programs are important or very important to their overall marketing strategy, and most publishers say that affiliate partnerships drive more than 20 percent of their revenue.

​​​​Affiliate marketing is a rapidly growing channel that advertisers and publishers are increasingly using to get in front of the right audience and monetize their content. 


As consumers add more devices and their shopping experiences become more digitally-led, we will continue to see a great deal of innovation in affiliate marketing to keep pace with evolving habits and behaviors."

Paul Tibbitt  

​CJ Affiliate

​Legit or Scam?

We all know that there are many dodgy work-from-home schemes around, so it’s understandable that people are wary of affiliate marketing. After all, making a million dollars in your pajamas? That’s too good to be true, right?

Not at all. Affiliate marketing is a 100% legitimate opportunity. After all, many of the most successful affiliate programs are run by the biggest brand names in the world, including:

  • Amazon 
  • Apple iTunes
  • eBay
  • Target 
  • Walmart

...and many thousands more. With a history that goes back over 25 years, affiliate marketing is a proven money-making method that is safe, legitimate and real.

There is every opportunity for you to make a very successful living as an affiliate marketer, getting paid promptly every month (or every week) and creating genuine financial freedom.

​If you need any further proof, check out these income reports from bloggers - most of whom make lots of money from affiliate programs:

​Source: StartAMomBlog.com

​How Do You Make Money?

When you sign up as an affiliate with a particular affiliate program, you are assigned special links to use when promoting the advertisers’ products. These can be simple text links, or they may be embedded with images.

You simply add these links to your website. When someone clicks on one of these affiliate links, the affiliate management software is able to recognize that the click came from your website. If the visitor goes on to take the required action, you will be compensated for referring the customer.

With most affiliate programs today, you will be compensated in one of two ways:

1. Cost per Sale

This is the most common arrangement in ‘traditional’ affiliate programs. When a sale is made, the affiliate is paid an agreed percentage of the sale. This can be anywhere from five per cent on low-margin physical products (typical of Amazon) to 75 per cent for high-margin digital products (common on ClickBank).

So if a customer places an order worth $100 in total, and the commission rate is 20%, you would make $20 in total.

Now you might wonder why you would consider signing up as an Amazon affiliate and make maybe 5%, when you could choose ClickBank and make 75%. The fact is that it’s a case of horses for courses.

For one thing, ClickBank products may not be a good match for your website. For example, if you have a product review website, you will find it much easier to earn commissions by linking to the reviewed products on Amazon.

Secondly, Amazon makes up for its lower commission rates by being extremely good at selling. You might refer a customer to an Amazon page about a $5 TV cable. But if that customer ends up ordering a $1000 TV set up, you earn commission on the whole sale. Nice!

2. Cost Per Action (CPA)

In a CPA, or cost per action, arrangement, the affiliate is compensated whenever an agreed action takes place. The affiliate may get as little as $1 for a lead that is easy to generate, such as providing name and email address only – or as much as $40 for a trial subscription where the customer pays for shipping.

This option is very popular with affiliates who promote products with paid advertising. Because the cost per action is fixed, it’s much easier to manage their ad budgets so they stay profitable.

​Affiliate Marketing Success Story


For Pat Flynn, what seemed like a disaster actually turned out be a huge opportunity. One door closed behind him, but another door opened up instead.

In 2008, Pat found that he had lost his job. That's bad news for anyone, but it's worse when you have dependents. With a young family to support, he needed to find another income stream fast.


That’s what got him interested in online marketing. He started a website as an experiment, and he was delighted when it started making money. This led him along the path to creating SmartPassiveIncome.com, where he shows other people how to succeed through blogging.


Scrutinize his income reports over time, and you will see that his income has been steadily growing, year by year. Proud to be the ‘crash test dummy’ of Internet marketing,’ Pat says he makes mistakes so that his followers don’t have to.

With his revenues getting close to $200,000 some months, Pat is well on his way to creating a massive online empire.

​The Affiliate Networks

In addition to advertisers and affiliates, there is a third party that plays a big role in the affiliate marketing world - the affiliate networks.

While some companies like Amazon choose to manage their affiliate program in house, the vast majority outsource this problem to an affiliate network.

The affiliate network acts as a marketplace where affiliates and vendors can find each other, and also provides the technology which tracks the sales and manages the affiliate program. There are lots of affiliate networks, but these are the most popular ones – and the best place to start looking for offers to promote.

ClickBank

Although it is possible to sell physical products on ClickBank, it is best known as the biggest platform for selling digital products. Some products on this platform sell in mind-boggling quantities. This is a great place to find high-converting offers that pay well.

​As a ClickBank marketer, you soon learn to love seeing those green and grey bars....

CJ Affiliate

Formerly known as Commission Junction, this is one of the biggest affiliate networks. Having been in business since 2000, CJ is very popular with large retailers of physical products.

You will find a good range of products to promote here, most only sales percentage commissions.

ShareASale

You can think of ShareASale as being CJ’s smaller but more nimble competitor. This platform has a great reputation with affiliates, and has a good cross-section of mid-size vendors across the board. Always a good place to look for reliable offers.

​Many affiliates swear by ShareASale because of its more friendly approach, and great support for affiliates. 

​CPA Networks

As the name suggests, CPA networks are affiliate networks which focus on cost-per-action deals only. These have really mushroomed in recent years, and there are literally hundreds of them.

Here’s a big list of the top CPA networks worldwide. You can also search for offers directly at OfferVault.

The biggest problem with CPA networks is getting accepted by them. Because they have high front-end pay-outs, they become targets for fraudsters trying to manipulate the system. This makes them very wary about whom they accept as affiliates.

Be prepared to send them proof that you are the owner of your own blog, and proof of your identity, plus information on your traffic stats. But if one network declines your application, don’t worry…there are hundreds more to approach.

Earnings per Click (EPC)

With thousands of affiliate offers out there, how are you supposed to know which ones perform well, and which ones do not?

Good question…and that’s where Earnings per Click (EPC) comes in. This metric is designed to give you an idea of how well a particular offer generates money for affiliates. If 100,000 clicks are sent to an offer from various affiliates, and the total paid out to affiliates is $100,000, then the average payout is one dollar for each click sent. That’s an EPC of $1.

This is a useful metric for comparing offers, but remember that the numbers you see on the networks are averages. A particular offer may perform better or worse on your blog traffic.

How to Make Sales

So getting going with affiliate marketing is not too difficult. You can sign up with affiliate programs for free, add links to your website and start making money, right?

But wait...where do the buyers come from? You will never make any money from affiliate marketing unless real people are clicking on your affiliate links and taking action. And this really is the heart of affiliate marketing success - driving traffic.

To succeed as an affiliate, you have to figure out how to attract lots of visitors to your website or landing page, and then encourage them to click your affiliate links. You need to find ways to attract the right people and show them the right offer. And must be able to do this in a way that allows you to show a profit.

There endless ways to do this, but they broadly fall into three categories:

Free Traffic

Yes, you can get visitors to your website for free, provided you get good at strategies such as:

  • Search engine optimization: getting your website ranked in Google
  • Social media marketing: encouraging people to spread the word on Facebook, Pinterest, etc.
  • Content marketing: creating YouTube videos, podcasts and other online content

Getting free traffic requires a lot of work up front, without much reward initially. But once these traffic streams start rolling, you can get thousands of visitors a day - all without having to pay single cent. That means 100% profit margins on all your affiliate income!

Paid Traffic

The quickest way to get visitors to your website is to buy ads from companies like Google, Facebook and Pinterest. You can start an ad campaign right now and start getting visitors within the hour.

With paid advertising, you need to pay much more attention to conversion rates and your advertising costs. Get this wrong and you could end up losing money. But get it right, and you might have a campaign you can scale up to make millions.

That is exactly how the big-time affiliate marketers make the most money. Get good at this and there is no limit to how much you can earn.

Free + Paid

Of course, there is nothing to stop you mixing the two methods, and this is exactly what many bloggers do, for example. A popular blogger may typically:

  • Optimize every blog post to rank well in Google 
  • Add pins that Pinterest users can share to each post
  • Promote every new post with Facebook ads

In fact, that’s the very strategy we are using on the blog post you are reading right now!

How Much Can You Make?

Affiliate marketing is one money-making opportunity that really has no earning ceiling. There are thousands of offers for you to promote, and there is an ocean of traffic out there for you to promote to.

So if you are stuck in the mindset of the average income earner, it’s time to reset your expectations. There is no reason at all why you can’t make over a million dollars a year profit from affiliate marketing, like Pat Flynn or John Lee Dumas.

​Affiliate Marketing Success Story: John Lee Dumas


​​Former soldier John Lee Dumas was trapped in the corporate world after leaving the army. He tried various jobs, but hated being trapped in the rat race. Then he hit on the idea of a daily podcast that interviewed the most interesting people in business today – the ‘Entrepreneurs on Fire.’

Although lots of people were doing podcasts, nobody was doing a daily podcast that provide a regular stream of content for commuters driving to work. The podcast and its associated blog took off and became hugely successful. Soon he was making tens of thousands of dollars a month in affiliate income.

  

Now EoFire.com is a highly successful platform. In some months, revenue reaches into several hundred thousand dollars. With John aggressively working on growing the business, we can expect the numbers to keep getting bigger.

Still not convinced? How about another case study to show what is possible. Would $5.3 million in 16 months be enough for you to get by on?

Affiliate marketing has been a real life-changing experience for many people. It has meant the opportunity to gain financial freedom and live an amazing new life.

​​​​​I am just extremely excited about everything. I really love my business and I don’t know where I would be without it. The business is doing well and I’m very happy with it.


I’ve been catching myself saying ‘Life is really good’ a LOT lately. And, I mean it. Life is really good. Yes, $100,000 in income a month! If it weren't for my blog, none of this would be possible."

​Michelle

​MakingSenseOfCents.com

​10 Steps to Success in Affiliate Marketing

Now that you know just how much potential there is in affiliate marketing, it’s time to start turning the theory into practice. Here is a simple step-by-step system that will take you from newbie to successful affiliate in double-quick time.

1. Decide on Your Niche

The first decision you need to make is what kinds of products and services you are going to promote. It’s a good idea to choose a topic you are passionate about, because you will be working with this niche for a long time.

But you need to be sure that your niche is an a profitable one for affiliate marketing. Spend some time browsing the affiliate forums and affiliate directories to find out what offers are available in the niches you are considering.

If you can find a niche that you love, and where affiliates are already making money, you are good to go.

2. Create Your Blog

In most cases, you will want to start a blog which will form the basis of your affiliate marketing campaigns.

If you are buying traffic from ads, you may only need a blog to host your landing pages. Whereas if you are actively doing content marketing, your blog will be central to everything you do.

Either way, you can start a blog for less than four bucks, and set yourself on your way to a successful affiliate marketing career. Today’s online tools make it easy to get started, even if you have no previous experience.

3. Add Content

The next step is to build out your blog with content, which will generally be in the form of blog posts. This is where you get your chance to discuss subjects you are passionate about.

You don’t need to be a Hemingway to be write online content. As long as you can read articles that are clear and easy to understand, you are good to go. Check out our writers’ style guide to see how to write blog posts that are extremely effective.

4. Sign up with an Affiliate Network

Next you need to check out the various affiliate networks to find the one that has the best offers for you. Remember to focus on offers that are highly relevant to your readers, rather than the ones that have the most tempting payouts.

Be honest in your application, even if that reduces the chances of you being accepted by the network. You don’t want to go to all the trouble of setting up a promotion, only to find your account has been canceled because you broke the rules.

5. Add your Affiliate Links

Once your application has been approved, log in to your affiliate account and get your links. These may be in the form of text links, banners or other creatives.

Add your links to your web pages and test to make sure everything is working correctly. If you are required by your network to add a disclaimer, ensure this is done according to their instructions.

6. Optimize for Search

Optimize your web pages so that they are able to rank as highly as possible in the search engines. Ensure that you include your main keyword in your title tag and in the body of your article.

Make good use of internal linking to help the search engines to understand what your blog is about, and to help users find your key content. Search engine optimization is a huge topic, so put some time aside to study this in more detail.

7. Share on Social Media

Next you need to leverage whatever following you already have. Although this may be small to start with, it will grow along with your blog.

Start by sharing your blog posts on Facebook and other social media. Create Pinterest images for each blog post, to encourage sharing. Many bloggers get a ton of visitors from Pinterest, so don’t underestimate its potential.

8. Promote with Ads

The quickest way to promote your latest blog post is using Facebook advertising. You can have an ad up and running within an hour, and start getting visitors right away.

Another great option is Pinterest Promoted Pins. Right now, you can still get some great, cheap traffic from Pinterest, so this is definitely worth checking out. Another bonus is that the magic keeps working long after your ad has stopped running.

You can also advertise with Google Ads, but this field is competitive, and you need to be good to make it work. Native advertising is another option.

9. Optimize Conversions

Once you starting getting traffic to your website, you need to focus on converting visitors into buyers. All your money and efforts will be wasted if you are not good at this.

Test different headlines, placements of affiliate links and ‘calls to action.’ You will be amazed at how much difference changing a single word can make.

Optimization is an ongoing process. You should always be testing new ways of converting visitors to buyers more efficiently.

10. Scale up your Campaigns

Once you have a campaign that is making you money, it’s time to scale things up. Paid advertising is the most practical way to do this.

Increase your advertising budget carefully. Start by increasing your daily spend by 20%, and then checking that conversions remain consistent. If they do, you can try another increase.

Using this process, some affiliates have been able to scale campaigns up to make millions of dollars in just a few months. So this process definitely works...but you have to be good!

​I’m more than happy with our income for last month. The months ahead have some really exciting things in store!”​

​Alida

​TheRealisticMama.com

​Getting Started with Affiliate Marketing

The start costs are low, the potential is huge, and it’s a real, legitimate work-from-home opportunity. What’s not to love about affiliate marketing?

If you are excited about the possibilities, it’s time to step in and give it a try for yourself. This video shows you how to sign up with a typical network and start promoting offers:

To start the ball rolling, all you need to do is spend ten minutes starting your own blog. Then you will have taken the first step towards becoming a six-figure affiliate marketer!

​People Also Ask


Who is the most successful affiliate marketer?

The most successful affiliates tend to keep a low profile, but there are many who have made fortunes from this strategy. Check out the luxury yachts in any marina, and you can bet that one of two of them belong to affiliate marketers.


Can you become a millionaire from affiliate marketing?

Yes, for sure. There are many affiliates who make over a million dollars a year from affiliate marketing, and some who make tens of millions. The sky really is the limit.


Which affiliate programs pay the most?

The highest-paying affiliate programs tend to be in niches such as finance, health and business opportunities.



If you are looking for a great way to make money from home and build a very profitable business, then affiliate marketing may be exactly the opportunity you have been looking for. Tens of thousands of people make a full-time living from affiliate marketing all over the world. For many, it has provided the opportunity to escape the corporate grind and start a new and much better life. Read on to find out more...
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About the author

Joe Bensam

I am a keen personal finance blogger and freelance writer. I write regularly for online and offline publications worldwide, and love being part of the entrepreneurial community.


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