Affiliate Marketing: What It Is and How to Start Making Money

Affiliate Marketing: What It Is and How to Start Making Money

If you’d like to make passive income with affiliate marketing, this post is going to become your new Bible.

Not only am I going to teach you the basics of how to become an affiliate marketer, but we’ll also dive into some real examples from professional affiliate marketers who are making thousands or even millions of dollars per year without spending money on PPC or any of that nonsense.

We’ll cover promoting products on Amazon, creating SEO-optimized content that ranks well on Google, email list promotion strategies, how to choose the best affiliate program for you, and give you a step-by-step guide to the whole process, so you’ll be earning affiliate commissions in no time.

Let’s dive in.

Let’s start with a (somewhat long-winded) definition:

If you’ve been listening to us for long, you’ve learned that bloggers make money by building an audience that trusts them, and then offering products or services that will genuinely help that audience.

Affiliate marketing is really just a quicker way to offer products and services without creating them yourself.

For bloggers, that means you find a product or service that you like, promote it to your readers, and earn part of the profit on each sale that you make.

Simple idea, right?

Let’s see an example.

In our WordPress hosting post, we give readers the ins and outs of how to choose an excellent host. A portion of readers want to know who we recommend based on those criteria, and so here’s what we say:

Siteground

The arrow is pointing to an affiliate link. If anyone clicks on that link and buys from them, we earn a commission

Bloggers can include links like this in blog posts, emails, social media posts, and much more. We’ll get into all the possibilities later.

For now, though, here are a few terms it’s important to know:

Affiliate — the partner who promotes the merchant’s products for a commission. Also called the publisher.

Affiliate agreement — an informal agreement specifying the rules that both parties agree to, responsibilities, rates to be paid and other legalities.

Affiliate Terms of Service

Affiliate link — a trackable URL that identifies the affiliate as the source of targeted traffic to a merchant’s site. (A click on an affiliate link counts as a referral.)

Affiliate Link

Affiliate network — an online marketplace where merchants list their company’s products and where affiliates can find products to sell.

Affiliate Network

Affiliate program — a program set up by merchants to pay commissions when affiliates refer people to their products.

Affiliate commission — a percentage of the total sale that is paid to the affiliate for referring the sale.

Affiliate Commission

Cookie — in affiliate marketing, cookies are used to assign a unique ID to the buyer in order to tag the purchase as being referred by you. Cookies usually have a predetermined lifespan, so that even if the buyer doesn’t purchase right away, you will still get credit for the sale if it occurs within that time-frame (often 60 days or more).

Affiliate Cookie

Customer — the end user or purchaser of the merchant’s product or service.

Merchant — the owner or creator of the product or service. Also known as a retailer or brand.

Referral — credit for a click or a sale that occurs when the affiliate sends traffic to the merchant’s site.

How Does Affiliate Marketing Work?

Affiliate marketing can get pretty technical, even for those well-versed in digital marketing. Fortunately, you don’t need to know all the details to get started.

The actual mechanics run in the background, thanks to the merchant’s affiliate program software.

But here’s a quick look behind the scenes:

  1. When an affiliate joins the merchant’s program, he or she is given a unique ID and a specific URL to use when promoting the product.
  2. The affiliate includes the link in their blog content and/or subscriber emails and invites readers to click it to find out more.
  3. When a potential buyer clicks on the link to visit the merchant’s site, a cookie identifying the affiliate is placed on their computer. The cookie ensures that the publisher is credited with the referral sale even if it occurs days or even weeks later.
  4. Whenever a buyer completes the sale process, the merchant checks the sales record for a cookie identifying the source of the referral.
  5. If the merchant finds a cookie with an affiliate ID, the affiliate is credited with the sale.
  6. The merchant makes reports available so that the affiliate can see their referrals (clicks) and sales.
  7. The merchant pays the affiliate commission at the end of each payment period.

Here’s a graphical overview to help you visualize the process:

affiliate links

The flow is pretty straightforward once you understand it, and it works the same no matter what kind of product you’re promoting or how established you are as an affiliate marketer.

So let’s look at the typical progression for a blogger who’s serious about making affiliate marketing a major source of income.

How to Start Affiliate Marketing in 5 Steps

Here’s the key point you need to understand if you want to become an affiliate marketer:

You’re earning a commission in exchange for giving readers valuable insights on products or services they were already thinking about purchasing.

In other words, your readers are already buying things. They are already going to make a purchase whether or not you give them any advice.

The question is, could you help them make a smarter decision than they could alone?

Because that’s where you add value. You earn a commission in exchange for helping people make smarter decisions, and you use your blog and the Internet to systemize that process, providing valuable advice to thousands of people.

Here’s a step-by-step process for doing exactly that:

Step 1: Identify What Your Audience is Already Purchasing

The core question you need to ask yourself is:

What types of products and services is your audience already buying?

For example, Smart Blogger readers all need WordPress hosting, WordPress themes, and WordPress plugins to create their site. So, we carefully research all the products in those categories and make recommendations.

So, here’s the question for your audience:

What Types of Products or Services Do They Buy?

Initially, you might not know exactly what products to promote, but if you think about it for a bit, you can probably guess the major categories.

For instance, what do moms of toddlers spend a lot of money on?

My guess: child care, cleaning supplies, snacks, gas, toys. Many of them are probably Amazon products.

How about aspiring freelance photographers?

Cameras, other photography equipment (lighting, lenses, etc.), photography courses, photo editing software, and so on.

I’m guessing on both, but there’s a good chance my guesses are pretty spot on. When in doubt, you can also email your audience and just ask them.

How to Conduct a Miniature Survey

There are lots of tools out there for conducting surveys, but the simplest one is good old-fashioned email. Assuming you have an email list, just to send out an email like this:

How to conduct miniature surveys

Readers will reply with answers and give you all kinds of interesting insights. Because it’s through email, you can also reply to ask them follow-up questions if you like.

And then you just need to…

Step 2: Choose a Product to Promote as an Affiliate

As an ethical blogger, you’ll always be constrained in the products you choose to represent in one of two ways:

  • Either you’re limited by your experience to products that you’ve used and liked, that have affiliate programs and that are a good fit for your audience, or
  • You’re constrained by the products you can get access to in order to evaluate them, either by buying them outright or getting a free sample or trial.

No matter which approach you take, expect to have to invest time and money into researching the best products for your audience.

Here are your two main options (with your best option listed first).

Option #1: Promote Products You Already Know and Love

This is the most common way to get started with affiliate offers.

You become an affiliate for something that you’ve used yourself, had a good experience with, thoroughly tested and feel good recommending. You should be fairly confident that others will get the same results you did (or better), as long as they do the work.

If you’ve found great success from a course, mastermind, or ebook that your readers could also benefit from, it only makes sense for you to spread the word and share your results.

Do an inventory of the products, services, and courses you already have experience with. You might have a list of a dozen or more.

Which of these would you be thrilled to promote? Cross out any that don’t fit the bill.

Now simply check to see if the merchant has an affiliate program (some won’t but you’ll probably be surprised at how many do).

Using a search engine like Google, search for “affiliate program” + [product name], or simply email the merchant and ask.

Google for Merchant Affiliate

Then run your remaining options through this Good Affiliate Product checklist:

  • You’ve previewed the product so you know its quality (given, in this case).
  • They have a solid refund policy that you trust they’ll honor.
  • They provide good customer support (and you’ve tested it).
  • You have a good story to share about your experience with the product.
  • The offer fits your audience’s needs and won’t abuse the trust you’ve built with them.

The products that tick all the checkboxes are your best opportunities for affiliate income. As time goes on, add as many of these products to your mix as you like.

You’ve found your first product! Apply using the merchant’s process and start promoting.

If you’re just dipping your toe in the affiliate marketing channels, this first option may be enough to get you started.

However, most bloggers will want to try the next one, too.

(And you’ll have to explore the second option if you don’t have an existing product you love that is also a great match for your audience and offers an affiliate program.)

Option #2: Find Products Via an Affiliate Network

If you don’t have any direct experience with or knowledge of products in your niche that could help your readers, you can often find good affiliate products on affiliate networks (← our detailed guide).

But be careful — this approach requires that you invest time into research and money into purchasing products to try out, more so than the first option.

That’s because there’s less trust and prior knowledge involved from the outset. You have to do your due diligence to protect your reputation and the credibility you’ve built with your readers.

When you work through a network, you typically won’t know the merchant ahead of time and usually won’t build a relationship with them (your business relationship is with the network).

The list of popular and reliable affiliate networks include ClickBank, CJ Affiliate, ShareaSale, and the Amazon Associates program.

Step 3: Get Yourself Set Up as an Affiliate

Whether you work directly with a merchant or through a network, you’ll have to apply, be approved and provide certain information so that you can be paid.

At a minimum you’ll need to provide:

  • Your personal/business contact information for tax and reporting purposes.
  • Your bank account where commissions will be sent.

In turn, the merchant must provide you with:

  • An affiliate link. Whenever you post about the product, you’ll use this trackable link. It will have a long tag at the end of each link that includes your affiliate ID.

Here’s what some typical affiliate links look like.

EXAMPLE LINK THAT DIRECTS TO THE MERCHANT’S HOME PAGE
https://merchantsite.com/dap/a/?a=1199
EXAMPLE LINK TO ANOTHER PAGE ON THE MERCHANT’S SITE
https://merchantsite.com/dap/a/?a=1199&p=merchantsite.com/page.html

You’ll also usually get some tips and useful assets for marketing the product (often found in a welcome guide or on the affiliate reporting site).

These could include:

  • An affiliate guide as well as instructions on how to use the platform and summary of policies such as payment.
  • Online marketing tools like banners and sidebar graphics.
  • Sample email/webpage swipe copy.
  • Ongoing communications from the merchant about promotions, new products, etc.

If you use a network like Amazon, you’ll get your own link for each of the specific products you promote.

Be sure to check your specific network’s help or support pages for more information.

Tip: If your audience is global (which many bloggers’ are), you might want to check out geniuslink for tracking overseas sales through Amazon, iTunes and Microsoft Store.

Step 4: Start Promoting Your Chosen Affiliate Offers

Ultimately, all your hard work finding and evaluating products only pays off if somebody takes your advice and make the purchase, right?

For that to happen, you need to put your recommendation in front of your audience. Even more importantly, you need to make your recommendation trustworthy.

This is where a lot of affiliate marketers slip up. They think slapping some banners up on their blog that link to affiliate products is all they need to do.

But take a look at this:

Create trustworthy affiliate links.

Does that look trustworthy to you? Nowhere close, right?

Well, here’s a little secret:

The most successful affiliate offers look nothing like that. No PPC or veiled recommendations on social media.

Here’s what to do instead (and what marketing channels to use):

Option #1: Create a Resource Page on Your Blog

Our own resource page is a good example:

Smartblogger Resource Page

It promotes lots of different products, but it also organizes them according to different types of readers and what they might need at the time. It also explains why those products would be helpful to them.

In other words, it’s not just a sales pitch. It’s educational. Because it contains a lot of content, plus it’s well optimized for SEO, it also ranks well on Google and gets organic traffic.

Chances are, you can put together a landing page like this within a few hours. Your readers will also appreciate you putting all of your recommendations in one place for easy reference.

Option #2: Create and Promote Custom Content

This content marketing strategy will be the backbone of your affiliate promotional efforts.

Use as many of the following different techniques as make sense for your blog and audience.

Note: All of these strategies assume that you are already sending traffic to the latest content you’re creating by emailing your list on a regular basis (at least two to four times per month) to let them know what’s new.
A) Write Reviews

You can write detailed reviews of products, courses, books or software products you promote as an affiliate. For example, here’s our review of Siteground.

Why I Use Siteground - Smartblogger Review

Your reviews can focus on a single product or compare competing products side-by-side.

The second approach arguably builds more trust, but it also distracts people by giving them a lot of different recommendations.

If you would like to review multiple products, one option is to create a review site where all the content is simply reviews and affiliate offers. It becomes a “one-stop shop” for your niche.

B) Write Definitive Content on a Related Topic

You can write a definitive, comprehensive post on your site to educate your readers and “soft sell” your products and then work to get it ranking in the search engines.

For instance, you could write an ultimate guide to setting up a WordPress blog and include your affiliate links to your favorite hosting providers.

Whatever the topic, make sure that it’s evergreen content — information that’s likely to be useful and valuable for years to come.

You can create blog posts, videos, infographics or anything similar — but whatever you do, it should not be a sales page. Focus on building trust and authority.

Finally, you should pay a lot of attention to SEO — make sure to optimize for the right keywords, keep WordPress running fast, and build links to your content to get a constant flow of traffic from Google.

C) Create Valuable Bonus Content

Assuming it’s allowed by your affiliate agreement (sometimes it’s not), you can create bonus content, exclusive to your readers, that helps people get even more value from the affiliate product.

People love bonuses! You can create many types of bonuses fairly quickly and easily while still giving your readers excellent value.

By the way, this is a fantastic way to differentiate yourself from other bloggers representing the same products.

Here are some example bonuses you could offer:

  • Step-by-step checklists
  • Quick-start guides
  • Video overviews or demos
  • Complementary or discounted services (e.g., coaching calls)

Option #3: Craft Promotional Emails for Your Subscribers

Your email list is your biggest asset when it comes to driving traffic to your offers.

Assuming you’re already emailing your list on a regular basis — for example, every Tuesday, every two weeks, etc. — you can also run occasional promotions where you email your readers more frequently.

If your email marketing software allows it, you can segment interested readers onto a separate interest list, so that only people who raise their hands will receive your free informational and promotional emails.

But even if you can’t segment your list, you’ll want to provide lots of valuable content and build anticipation for your product offers.

Here are some quick ideas:

  • Promote your offers indirectly by sending emails linking to your free content (blog posts, reviews, etc.).
  • Offer occasional special deals exclusive to your readers (discounts, bonuses, etc.).
  • Run “social proof” giveaways — ask your readers to share their experience with your process or product in return for a chance to win.

If you’re promoting a low-priced product like an ebook, digital download or hosted service on an ongoing basis, you might do something as simple as using a P.S. or signature link in your regular emails, with occasional emailed links to custom content.

For courses, masterminds, services or higher-earning products, you might do something closer to an official launch once per year with softer launches once per quarter.

And of course, always follow your merchants’ lead. If they run major launches twice a year, for example, you can participate in those and take advantage of the natural momentum these launches often create.

You may have a different promotion plan for each product. The important thing here is to try different approaches for each product, see what your audience responds to best, and don’t give up!

Step 5: Comply with Legal Requirements (and Best Practices)

In the U.S., the Federal Trade Commission (FTC) requires that you let people know you’ll earn a commission.

But even if it isn’t required by law where you’re located, we recommend it. It’s just good business.

Don’t be afraid to be transparent. People will appreciate your honesty and want to support you to repay you for making their lives better.

So wherever you share an affiliate link, whether it’s in blog posts, web pages, or emails, let your readers know that you stand to earn a small commission if they buy through you — and if they choose not to use your link, no worries.

Assure them that you wouldn’t recommend any products if you hadn’t used them yourself or were confident they could help them.

It’s also a good idea to create an Affiliate Disclaimer page on your website.

Here’s an example of our own disclaimer page at Smart Blogger:

affiliate disclaimer

We’re also clear on how those affiliate links might look within blog posts.

affiliate link

Affiliate Marketing Examples: 4 Types of Products to Promote

So, we’ve walked through the process of becoming a successful affiliate marketer. Now let’s step through some real-world affiliate marketing program examples, walking through four different types of products you can promote and make a tidy profit.

Usually, most of your affiliate income will come from one or two “ringers” — core products that just about everyone in your audience needs and which also pay a good commission.

As you progress, you can add complementary products to round out your offerings and help your audience in new ways, but identifying your core earners is an essential first step.

Option #1: Digital Downloads

Digital downloads are online resources that your readers can access instantly, without having to wait for a package to come in the mail (as is true for physical products).

They could be audio or video files, PDFs, ebooks or even links to webpages where the content lives online.

Examples:

  • Books or ebooks — Books that are either self-hosted on your merchant’s website or downloaded from Amazon, iBooks or other online sellers.
    Backlinko hosted ebook
  • Software — Downloadable programs, games, apps, plugins and cloud services.
  • Mobile applications — Some of the hundreds of apps that are available through the iTunes Affiliate Program and other mobile app affiliate networks.
    iTunes affiliate program
  • Music, movies, TV shows, and more — Media offered through Amazon as well as the iTunes Affiliate Program and others.

Advantages

  • Digital downloads are an easy way to get started and help your audience with pressing problems.
  • There are no overhead costs of production, shipping or storage.
  • Your buyer can access and begin benefiting from their digital product immediately.

Disadvantages

  • Many ebook, software or other download products are relatively inexpensive. You’d have to sell a lot of them to make any significant money.
Our Recommendation?
Do it! But expect higher earnings from other options on this list.

Option #2: Online, Hosted and Professional Services

When it comes to selling services as an affiliate, it’s important to concentrate on those which will be accessible to your entire audience no matter where they’re located (as opposed to service providers who serve local customers only).

In other words, don’t limit your earning potential by geography.

Your best bet is to represent online, hosted, or professional service providers/influencers you’ve worked with in the past and have full confidence in.

Examples of professional services:

Examples of online/hosted services:

Advantages

  • It’s easy to become a service affiliate, and it helps your audience manage important tasks that require specific expertise.
  • There’s likely a higher earning potential than from digital downloads because services are usually offered at a higher price point.
  • Many hosted services will offer a recurring commission – meaning you’ll get paid for as long as the customers you refer continue to use the service.

Disadvantages

  • Some of your favorite professional service providers (ones you have experience with) might not have affiliate programs in place.
Our Recommendation?
Do it! Especially if you can find an excellent service provider who can potentially help nearly everyone in your audience at one time or another and who can be a strong, steady income generator.

Option #3: Online Courses

Online courses are an important subset of digital products, especially for bloggers, and the market is huge. They’re so popular that they deserve their own category on this list.

Online courses exist on just about any topic you can think of. They range in price from free to thousands of dollars, with higher-priced programs promising big results for students.

Examples:

Advantages

  • Courses are one of the best ways to help your audience achieve a goal that’s important to them or move past a roadblock that’s been keeping them stuck. You can deliver incredible value with little effort on your part.
  • Courses are often offered at a higher price point than other digital products, so your earning potential from each affiliate sale is higher.
  • Courses are popular. It should be easy to find other influencers in your niche whose courses can help your readers.

Disadvantages

  • You’ll have to spend time working through and reviewing courses to make sure that they deliver on their promises (to protect your reputation).
Our Recommendation?
Do it! Help your readers in a big way, and earn big at the same time.

Option #4: Ecommerce Stores

If you decide to promote physical products on your blog, your best bet is to choose high-quality, distinctive products that that will appeal strongly to your specific audience.

Avoid commodity products that your readers can buy anywhere — the commissions are so small you won’t make worthwhile money unless you can drive tremendous traffic to your site.

Commissions on ecommerce products are usually fairly low because of the overhead of production costs, storage costs, shipping, etc. So unless you are planning to build a large review or shopping site, physical products will probably be a very small portion of your blogging affiliate income.

However, if you have a favorite tool of your trade, a must-have gadget that will make your readers’ lives easier, or a high-quality recommendation that you’re sure people will be thrilled with, go ahead and offer it.

You’ll build goodwill even if you don’t make a lot of money.

Examples:

Advantages

  • Once you have an established blog, companies may approach you and offer you free product in exchange for a review. (You should always disclose this, as it could be seen as a conflict of interest.)
  • If you can afford to purchase products on your own in order to test them, you’ll be seen as a truly objective reviewer.

Disadvantages

  • Commissions from ecommerce stores are usually a lot lower because of the overhead, so you’ll have to sell a whole lot more product to make a decent income.
  • Buying products so you can review them before promoting them can be expensive.
Our Recommendation?
Offer physical products only under certain circumstances:

  • They’re directly related to your blog topic and something your audience absolutely needs.
  • They’re not commodities. Specialized and distinctive products from ecommerce stores reflect better on you, boosting your reputation and credibility.

You should now have plenty of ideas for types of products you can represent.

The Bottom Line on Affiliate Marketing

That dream you’ve had of making passive income isn’t just a silly fantasy.

It’s a completely achievable reality.

Sure, it’s not as easy as pushing a magic button, but with a little knowledge and persistence you can definitely do it and even turn it into an online business.

Once you’ve gained a respectable following, affiliate marketing is one of the best ways to make money blogging.

And the best news is that it’s so easy to get started. All the steps for starting an affiliate marketing business are spelled out in this post.

Simply identify the one big thing everyone in your audience needs to reach their goals and start there.

Choose a great digital product from an online business you believe in. Share it. Tell the story of your successes.

Provide lots of valuable content that helps and educates your readers, and take care not to be too salesy.

Be honest and transparent. Nurture the trust that readers place in you.

And finally, be patient.

All your efforts will pay you back with that sweet “cha-ching” of affiliate commissions being deposited into your bank account.

About the Author: Leanne Regalla is a writer and content strategist for B2B software, tech, and supply chain businesses at Writing That Resonates. Quickly avoid the common content mistakes that bore your readers and drive potential customers away with her Compelling Business Writing Checklist.