People all over the world are doing an increasingly large share of their shopping online. With global retail eCommerce sales surpassing $4.2 billion dollars USD in 2020, you might wonder how you can start a business that takes advantage of the transformation in how we shop.
While you can always start your own product-based business and sell your goods online, there’s an even better option if your goal is to earn money online without having to carry physical products and deal with expensive overhead costs: starting an affiliate marketing business.
We’ll walk you through how to earn semi-passive income on sales of products you endorse, with the added bonus of being able to work from the comfort of your home or anywhere in the world.
What is affiliate marketing?
Affiliate marketing is essentially the promotion of other companies’ products in exchange for a commission. When someone discovers a product through you and makes a purchase, you will receive a payment.
Your main job as an affiliate marketer is to establish yourself as a trustworthy source of information and to create and share content that ultimately drives sales.
You can promote as many affiliate products as you want and grow your business by driving more and more traffic to your links. That’s the beauty of affiliate marketing—the sky’s the limit when it comes to how much you can grow. Better yet, you can get started even if you have a small business budget.
How does affiliate marketing work?
When a company wants to reach a wider network of new potential customers, it can enlist the help of an affiliate marketer. Affiliate marketers often have established networks or niches they can promote to. For example, they may maintain several websites and email lists. The affiliate can advertise by writing review articles, creating ads, or sending out a newsletter. In exchange for the promotion, the affiliate receives a commission on each successful sale.
As you can see, the principle behind affiliate marketing is pretty simple. If you’re a savvy digital marketer and want the freedom of working from anywhere in the world, this can be an amazing income stream that you can keep growing as your audience grows.
How much money can I make as an affiliate marketer?
Like most businesses, there is variation in how much money affiliate marketers take home each month. The most successful affiliate marketing experts can earn well into the six figures monthly, while new affiliate marketers may take home just a few dollars. Don’t be discouraged if your first month’s earnings aren’t very big; as your marketing skills improve, so will your earnings. The best part of affiliate marketing is that once you have a good system setup, you’ll be making money with little hands-on effort.
Highly successful affiliate marketers offer valuable content and have established an audience that trusts their opinion. One of the most successful affiliate marketing websites, The Wirecutter, was generating $10 million USD per year when the New York Times purchased it for $30 million USD in 2015.
There are some key variables to consider that can increase your chances of being successful. These include choosing the right niche for your business, selecting products to promote wisely, and carefully considering how you will promote your offers. We will go over what you should keep in mind when setting up your affiliate marketing business.
Affiliate marketing is often presented as a passive income source, and while it’s true that you can avoid a lot of the hands-on aspects of running other types of businesses, it still takes a bit of work and testing to be successful. However, once you’re up and running, you’ll love this hands-off side hustle or full-time business.
How do affiliate marketers get paid?
There are three different types of affiliate commission structures you’re likely to encounter when researching different affiliate programs:
1. Pay per sale
Pay per sale is by far the most common way that affiliate marketers get paid. It’s as simple as it sounds: for each sale, you get a flat rate commission. If you’re marketing a $100 product that has a 10 per cent affiliate commission, you’ll earn $10 for every successful affiliate sale you generate through your marketing efforts.
2. Pay per lead
Some companies will offer payment for each lead you generate for their business. For example, they may have a goal of getting more newsletter subscribers or people signed up for a free trial of their digital products. They can have an affiliate program that pays you each time someone completes a sign-up form they arrived at through your affiliate link. This is more common for high-ticket products or software subscriptions that have a long sales cycle.
3. Pay per click
A company may compensate affiliates for driving more traffic to their website by offering payment for each time a visitor clicks from the affiliate offer to the merchant’s website. While these payouts are smaller than those you can get with pay per sale, they can still be profitable if you drive a large amount of traffic.
Is affiliate marketing better than other types of blog monetization?
If you have a blog and want to start earning money from it, affiliate marketing has awesome benefits over other popular blog monetization strategies.
Displaying ads on your blog used to be an effective way to monetize your website, but ever since social media advertising became more profitable, the potential income generated from banner ads has shrunk. You’d need to drive a vast amount of traffic to earn a significant income from displaying ads alone.
Another common monetization strategy is to do sponsored posts for relevant products in your niche. While you can do this in conjunction with affiliate marketing, sponsored posts only generate a one-time payment. With affiliate marketing, a single popular blog post that has affiliate links throughout can generate ongoing revenue with little to no extra work on your part.
Instead of having to drive huge numbers of visitors to your blog to make a good income, as is the case when displaying ads, you can focus on developing a smaller but more engaged audience that is interested in your affiliate offers.
Affiliate marketing also means your content can keep working for you long after it’s been created, meaning that putting in the work upfront can keep making you money months and even years later.
How to get started with affiliate marketing
One of the best things about starting an affiliate marketing business is that you can begin right away. The start-up costs are low and you can start setting up your business today.
Decide your niche and audience
Marketing is all about cultivating a niche audience and becoming a trustworthy authority for people who are your ideal target market.
You might have an amazing small business accounting software to promote, but the only people who would be interested in this offer are small business owners. If you try to promote your offer randomly, it’s less likely to be seen by people who will actually convert.
If there is an area you’re passionate or knowledgeable about, consider making that your niche. It’s much easier and more enjoyable to talk about a niche that you’re already familiar with. It will also make it easier to be consistent in your content creation and marketing efforts, which is one key to success in affiliate marketing.
Keep in mind that it’s best to choose a narrow niche. This is often referred to as niching down. For example, if you’re interested in the outdoors, you might find that you’re more successful if you niche down to a category like camping rather than every possible outdoor activity.
Research products you can promote
Once you’ve decided on your niche, it’s time to look for products you can market. If you aren’t sure which companies have affiliate programs your audience would be interested in, Google is a great place to start. Search for “affiliate marketing program” + your niche, and you’ll quickly discover some of the top affiliate marketing programs in your industry.
If there is a particular company or brand you’re interested in promoting, you can do an online search with the term “affiliate program” or “customer referral program” and you should be able to quickly determine if they have a program.
Amazon also has an affiliate program called Amazon Associates. You have to apply and be accepted to the program before you can start promoting Amazon products. But once you are accepted as an Amazon Associate you can promote most products on their site for a small commission. With such a vast selection, you’re sure to find products relevant to your niche that will appeal to your customers.
Choose an affiliate program
You’ll likely come up with a long list of possible affiliate programs to join. Start with one or two that you’re most interested in, and you can always add more as you learn what kinds of offers convert well for you.
Most affiliate programs fall into one of two categories:
- High volume, low paying programs
To make money with low paying programs, you’ll need to generate more clicks and achieve a high conversion rate. On the plus side, it’s easier to get a customer to convert to a relatively inexpensive and popular type of product.
- Low volume, high paying programs
To successfully make money with low volume, high paying programs, you may need to spend more time establishing yourself as a trustworthy resource for your audience. After all, why should they trust what you have to say about an expensive product, service, or software?
As a general rule, low paying, high-volume offers are a better choice if you’re marketing directly to consumers, while high paying, low-volume offers are ideal if you’re marketing to businesses.
Keep in mind that if an affiliate program has a small payout, it may not be worthwhile unless you already have an audience to promote the offer to for free. Otherwise, your return on ad spend (ROAS) may be too low, eating into your profits.
Promote your affiliate offer
Once you’ve selected your first offer, it’s time to promote it and generate those sales. To do this, you first need to create some compelling content. This can be a blog post, a YouTube video or an informative landing page. Your content should provide real value to your target audience beyond just being a sales pitch for the product you’re promoting.
Sticking with the example of the camping niche, let’s say you’ve joined the MEC Affiliate Program. You could create a blog post or YouTube video discussing the top 10 most important products to bring on your camping trip, or create gift guides for camping lovers. The idea is to create content that will make people want to follow you, subscribe to your blog or channel. That way, even if they don’t purchase your offer on this visit, you’re still growing your audience so that you can market to them again in the future.
Finally, it’s time to drive traffic to your content. There are a few ways you can go about this.
1. Paid ads
The quickest way to drive traffic is with paid advertising. If you’re looking to get traffic as quickly as possible, paid ads are effective.
2. SEO
Search Engine Optimization (SEO) can take a long time to show results, but it can pay off for your business in the long run. By creating high-quality content that is also full of keywords in your niche, you can increase the chances your content will show up on the first page of Google. Choosing a narrow niche is a benefit here, since it’s much harder to rank for broad, commonly searched keywords.
3. Email marketing
Email marketing is a great, low-cost and high ROI marketing technique. However, you first need to build an email list in order to effectively start using this affiliate strategy. Like SEO, this is a technique that requires time and effort upfront, but can pay off in the long run. A common way to build your email list is by offering a valuable freebie to subscribers in exchange for giving you their email address. For example, you might write a short ebook that would interest your niche. With a high-quality freebie, you’ll show new subscribers that you’re trustworthy and that they should open future emails from you.
4. Social media
If you have an existing social media presence, you can use it to drive free traffic to your offer. Even if you’re starting from scratch, you may be able to generate organic traffic relatively quickly on some platforms. For example, while it’s tricky to get traffic without paying for it on Facebook and Instagram, other social media platforms such as Pinterest and TikTok offer better chances of people seeing your content organically. You can use organic advertising techniques to tap into free traffic sources relatively quickly.
Affiliate marketing program examples
One of the best things about starting affiliate marketing is that there are thousands of programs to choose from. Some examples of popular affiliate marketing programs include:
Amazon Associates
Amazon Associates is Amazon’s affiliate program which allows affiliates to earn a percentage on Amazon products purchased through their links. The commission rates vary by product category.
The major benefit of this program is there is a huge array of products you can promote as an affiliate partner, so you can always have something new to share with your audience.
Elementor Affiliate Program
Elementor is a drag-and-drop website builder that allows people to create a website from scratch without knowing how to code. You can promote this to a variety of niches, since within most industries there are people who want to create their own related websites. Since Elementor is available at a range of price points, depending on the tier, you can also promote it to different market segments and earn 50 per cent commission on every sale you generate.
Shopify Affiliate Program
Shopify is a very popular all-in-one ecommerce platform. If your niche is related to business, especially starting a new business, this is a great affiliate program because Shopify is a well-known and trusted company. If you successfully become a Shopify affiliate, you’ll earn 200 per cent of the monthly plan fee for each subscription you generate. For example, if someone signs up for the basic plan at $29 USD per month through your affiliate link, you’ll receive $58 USD.
ShareASale
ShareASale isn’t really an affiliate program, but an affiliate marketing network. The site gives you access to tons of offers to promote in over 40 categories, including business, home and garden, and fashion.
Affiliate marketing offers tons of opportunities to create additional income streams without having to store inventory, create a product, or even deal with customer service. If you’re willing to put some time and effort into growing your audience and developing your digital marketing skills, you can build a business that earns you real money.
Unlike many other businesses, affiliate marketing has the potential to earn you a large income in the long run without investing in overhead costs, R&D, and other common business costs. You may spend some money on improving your website and content, hiring a virtual assistant to help you with content creation, and advertising and marketing, but you can do this in proportion to your increased income.
Starting an affiliate marketing business is also a truly online business model that you can start no matter where you live, as long as you have an internet connection. If this sounds like an appealing lifestyle to you, it’s time to build your own affiliate marketing business.
This article offers general information only, is current as of the date of publication, and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by RBC Ventures Inc. or its affiliates.