Many people slave away at their 9-to-5’s only to receive a paycheck that’s not nearly enough to pay the bills, much less live the life they want. But what if you could work fewer hours, be your own boss, and make more money than ever before?
If this sounds appealing to you, then affiliate marketing is worth a deeper look. In this guide, we’ll cover everything you need to know about affiliate marketing – how affiliate marketing works, the different types of affiliate websites, the best place to learn affiliate marketing, and even step-by-step instructions on how to make money through an affiliate program.
Let’s get started!
What Is Affiliate Marketing?
Affiliate marketing is a form of revenue sharing and a great way to earn passive income. At its most basic, there are two parties involved in an affiliate partnership:
• The merchant/business, who is responsible for creating, pricing, and distributing the product; and,
• The affiliate, who is responsible for marketing the product and getting customers to buy from the merchant
Affiliates can work directly with businesses whose products they like. You can also go through an affiliate network, which we’ll discuss in detail later in the guide…
So how does affiliate marketing work? Let’s get a bit technical here.
Affiliates partner with a business to promote their products and services, usually through a unique code or referral link. Every time someone buys from the business using the code/link, the affiliate earns a small commission.
Merchants can identify who made the referral through tracking cookies. Cookies are small pieces of information that websites store on your computer. When a customer completes the check-out process, the merchant looks for the affiliate cookie attached to the transaction so that they know who to credit for the sale.
Pros & Cons Of Affiliate Marketing
PRO: You Don’t Have To Pay Upfront
Compared to starting up a business, there’s virtually no overhead costs with affiliate marketing. You don’t have to pay for manufacturing, shipping, customer service, or even most of the marketing.
All you need is a computer, an internet connection, and a small amount of money to build your website.
CON: You Don’t Earn Upfront, Either
You don’t get a sign-on bonus, deposit, or weekly paycheck – you only earn when someone clicks on your affiliate link and buys from the merchant. There’s no guarantee that you’ll earn anything, especially if you don’t put in the work.
PRO: You Decide Your Schedule
You can work on your affiliate marketing whenever, wherever. You’re the boss, so you decide how many hours you want to put into it.
So if you want to do four-hour workweeks or take a random vacation, that’s perfectly fine. You can even keep your day job since affiliate marketing is so flexible that you can do it on the side.
The Affiliate Lab is a great way to learn affiliate marketing on your own time. The courses are self-paced, so it’s completely up to you how quickly you want to go through the modules.
CON: You Are Not Entirely In Control
You’re marketing the products, but you can only do so much. The merchant is still ultimately responsible for converting the customer and delivering a great product. This is something you have no control over, although you can mitigate the risk by being more selective about which products and businesses you promote.
PRO: You Make Money Even When You’re Not Working
One of the best things about becoming an affiliate marketer is that you get to earn a passive income. Even a single article can earn you revenue for years if it ranks well with search engines.
You don’t need to clock in your eight hours or complete a project; you basically make money while you sleep. And isn’t that everyone’s dream?
CON: You Have To Spend Time & Money To Make It Work
Affiliate marketing only works as hard as you do. This means that you can’t spend five minutes a week on it and expect great results.
If you want to earn five or even six figures a month, you need to invest both time and money into building your website, developing marketing strategies, creating content, and promoting your affiliate products.
PRO: You Can Scale Up Easily
Because the overhead costs are so low, you can expand your affiliate marketing business as much as you want without having to worry about renting new office space or hiring additional staff. The sky’s the limit!
CON: You Have A Lot Of Competition
Anyone can get into affiliate marketing, and that’s both good and bad. While the low barrier to entry is great for you, it means that there are thousands of fellow aspiring affiliate marketers out there competing for the same limited pool of customers. You have to stand out and be smart if you want to succeed.
PRO: You Don’t Have To Be An Expert
You don’t need extensive marketing training or even a degree to be a successful affiliate. Some of the best affiliate marketers have had no prior experience!
You learn affiliate marketing as you go, testing out different techniques to see which works best.
CON: You Have To Be Patient & Motivated
Making money through affiliate programs doesn’t happen overnight. In most cases, it takes months before you start turning a profit. This kind of job isn’t for everyone – you need to be determined and disciplined enough to see it through.
Affiliate Marketing History
Although the practice of paying commission for a referral is probably as old as business itself, affiliate marketing as we know it today came about in 1989. William J. Tobin, the founder of PC Flowers & Gifts, patented the idea shortly after launching its affiliate marketing program on the Prodigy Network.
By 1995, they had over 2,600 affiliate marketers promoting their products and making money.
1996 was a historical year for the affiliate marketing industry. Two major events would change the affiliate business forever.
Due to the success of the commission-based business model, Tobin filed for a patent for affiliate marketing and tracking. That same year, Amazon launched its own affiliate program. It was not the first program of its kind, but it definitely became the standard of successful affiliate marketing.
Many of the best affiliate marketing programs today are based on Amazon’s model.
The rise of e-commerce only made affiliate marketing much more viable. In 2006, affiliate networks in the United Kingdom generated the equivalent of over $4 BILLION. In 2020, with social media and influencers dominating the online landscape, the global affiliate marketing sector is estimated to be worth around $12 billion, and that number is growing every year.
By becoming an affiliate marketer, you could cut your own piece of this billion-dollar industry.
Different Affiliate Marketing Types
There are plenty of ways to promote affiliate products, but the most common (and most profitable) is through a website. Building an affiliate site doesn’t require much capital or web design experience. With a little time and patience, you can easily create one using WordPress templates or website builders.
But before you set that up, you need to decide what kind of website you’re building. Below are the different kinds of affiliate sites that you can use to promote products.
One of the easiest ways to incorporate affiliate links into your content is by creating a review website. Review sites help people make better purchasing decisions by exploring different options, comparing products and services, and featuring feedback from real customers.
You should be publishing high-quality, in-depth content that readers will find useful. Make sure your reviews are always fair and honest! Don’t recommend products just because you can earn a commission on them; that will chip away at any trust and credibility you’ve built with your readers.
Dave Foy of DesignBuildWeb has some great advice on creating content.
“Provide real value. Many affiliates write quick, generic reviews, without any real opinions, and then wonder why they don’t make sales. Instead, think of how you can provide insane value for your audience. How can you pull out all the stops with your content to make it THE go-to content for your particular niche,” the affiliate marketing expert advised.
“I personally think it’s better to create fewer pieces of content but make each one the absolute best there is on your subject matter, rather than lots of generic ‘meh’ content.”
There are two kinds of review sites:
• General review sites, which cover affiliate products across a wide range of categories. For example, Wirecutter reviews electronics, appliances, credit cards, medical supplies, outdoor gear, cars, and so much more. The advantage of a general review site is that there’s no limit to what kind of products you can offer. The disadvantage is that being a jack-of-all-trades makes it difficult to build authority.
• Niche review sites, which promote products in a particular industry or niche. For example, RunnerClick reviews mostly running shoes, exercise clothes, sports watches, gym equipment, and other fitness-related items. The disadvantage of a niche review site is that you’re stuck with promoting products in a specific category. The advantage is that you can establish yourself as an expert within that niche community, making your reviews more trustworthy.
People like price comparison websites because they can easily see the price of two or more products at a glance. Think of it like a review site that focuses on just one aspect of the product: how much it costs.
A great example of a price comparison website is Skyscanner, where you can compare the price of different airlines for the same route.
Great content is fundamental to successful affiliate marketing in the same way that it’s fundamental to optimizing for search engines. The best way to drive traffic to your site is by providing content that’s useful, informative, and relevant to your readers. And nothing is more useful than a how-to website.
How-to or instructional websites provide step-by-step instructions on how to complete a specific task, like “how to bake bread without an oven” or “how to learn affiliate marketing”.
You can easily sneak in a few affiliate links to products and services that could help people complete those tasks. Using the previous examples, you could link to a kitchen appliance or a course on affiliates marketing.
Many how-to websites earn commissions on related products. For example, Website Setup teaches people how to build websites from scratch, and it links out to web hosting services, paid courses, and the like.
Everybody loves a good deal, so it’s no surprise that couponing is as popular as it is. But gone are the days that you have to clip coupons out of a magazine – today, it’s all about paper-free vouchers and digital codes.
Coupon websites attract a lot of users, plus, it’s a win-win model. The customer gets a discount, and you get a commission. This is a great way to make a lot of money online!
One of the most popular coupon sites in the UK is Voucher Codes. Voucher Codes has discount coupons for more than 2,000 retailers, restaurants, and more.
Free Tools & Resources
Many people can produce articles and videos, but very few can create a useful tool. This is why websites that provide free tools (e.g. credit card debt calculators, recipe measurement converters, etc.) generate a lot of traffic and a lot of income.
If you decide to create this kind of website, make sure that you link to products that are related to the tool.
For example, Money Saving Expert has a credit card eligibility calculator that you can use to determine your credit score and how likely you are to be accepted by a particular credit card provider. The tool then links out to articles that promote credit card companies. Whenever one of his users clicks on the link and signs up for a card, the site gets a small commission.
Again, the pattern here is quite obvious: the more value you provide to your readers, the more effective your affiliate marketing efforts will be.
Finally, let’s talk about the most common affiliate business model: the blog. Personal blogs usually make the bulk of their income by recommending their favorite products to their readers. These are usually niche bloggers who have a strong following within their community, which means they’ve already built up a lot of trust and goodwill.
Blogs have the lowest barrier to entry since you can write about anything you want and then sneak in an affiliate link here or there. The problem with blogging is that you need to build an audience first before you start seeing significant results.
A great example of a successful affiliate blog is Michelle Schroeder-Gardner’s “Making Sense of Cents”. What was originally a personal account of her journey towards financial independence is now a high-earning educational finance blog.
Successful Affiliate Marketing In 5 Steps
Now that you’re familiar with affiliate marketing basics, we can get started on the ins and outs of the affiliate marketing business. In this section of the guide, you’ll learn how to choose a profitable niche, the best way to drive traffic to your money site, and how to avoid the most common mistakes that affiliate marketers make.
For a more in-depth dive into affiliate marketing with SEO master Matt Diggity himself, make sure to register for our FREE webinar here.
Step #1: Choose Your Niche
The first and most important step to becoming an affiliate marketer is choosing what niche you will specialize in. Everything you do from this point onwards depends on the niche, so choose wisely!
It doesn’t have to be something you’re an expert in, but it should be something that you find interesting or have a passion for. This will make it much easier for you to create high-quality content! No matter what you’re interested in, there’s always going to be an opportunity for an affiliate program.
Another consideration to keep in mind is what your audience finds relevant. For example, if you currently have a popular cooking blog, then becoming an affiliate for a car repair company won’t make as much sense as promoting kitchen tools. Choosing a relevant niche puts you a step closer to converting and making money.
One of the secrets to affiliate marketing success is to stick with whatever niche you’ve chosen. As Digital Millionaire’s Brandon explains,
Even though affiliate products span a wide range of niches, we can group them into three different categories. These are physical products, information products, and services.
Physical products are pretty self-explanatory. These are tangible products like clothes, electronics, games, or toys. Most affiliate programs involve pushing physical products, such as the famous Amazon Associates program. Physical products are relatively easy to promote, and there are virtually endless options to choose from.
The biggest downside to promoting a physical product is that these usually come with lower commission rates. This is to offset the costs of manufacturing, storing, and shipping. For example, Amazon offers affiliates up to 10% commission, but that can go as low as 1% depending on the affiliate’s sales volume and the product category.
Information products are products that help people learn something new. This includes guides, e-books, webinars, and online courses. For example, our online masterclass about affiliate marketing would count as an information product.
Information products are also easy to push because they provide real value to your readers. Even better, commission rates for information products (which don’t have high overhead costs) are usually much more favorable compared to other types of affiliate products.
Some merchants are known to offer up to 75% commission – a rate you’ll probably never see when promoting physical products.
Another great benefit of information products is that the businesses offering these often have an optimized sales funnel. Once you drive traffic over to their site, everything is already in place for the customer to convert.
You can also choose to promote services like website development, graphic design, and the like. Just make sure you promote services that your readers will use! Commission rates can be as high as half the sale, so this is something worth looking into.
Step #2: Develop Your Strategy
If you want your affiliate marketing business to make money, you need to have a plan in place first. A solid marketing strategy will help you avoid wasting time and resources while maximizing your passive income.
First, ask yourself how much time you are willing to invest. Are you doing this full-time, or are you juggling it with another job? This isn’t something you can just half-ass – you have to dedicate a part of your daily routine to learning affiliate marketing and creating high-quality content.
Once you have your schedule figured out, you can get started with the meat of affiliate marketing. This is the time to do your keyword research and brainstorm content ideas. Plug those into your calendar so that you have a steady stream of content to publish.
Struggling with your strategy? YouTuber and affiliate marketer Tanya J. Joseph shares this advice: “Don’t reinvent the wheel. Look at your competitors, see what’s working, and just model success.”
Step #3: Create A Website
Your website is your money-maker, so don’t be afraid to invest in it to make it better. This doesn’t necessarily mean you have to shell out thousands of dollars for professional web design, though!
You can build a website on your own without much capital. You can choose from literally thousands of templates, or use a website builder. These are beginner-friendly and don’t require any coding experience or skill.
Step #4: Research Your Products
At this point, you might already have a shortlist of products that you want to push. But before you invest any time or resources into promoting them, you have to be sure that they’re worth the investment. You don’t want to pour hours of hard work into a product that nobody wants to buy!
A great way to gauge interest in the products is by looking them up on Google Trends. Trends allows you to see how many people are searching for those products and when. By analyzing this data, you’ll be able to pinpoint which products have a high demand, which will get more popular over time, and which would just be a waste of your time.
For example, let’s say that you’ve chosen makeup and beauty as your niche. If you search “beauty blender” and see that there’s a high search volume with an upward trend over the last few months, you can reasonably determine that it’s a popular product that you could profit off of.
Step #5: Promote Your Affiliate Links
You’ve chosen your niche and products, and your website is all set up. You already have a few content pieces that incorporate your links – now what?
Even if you have the best content, you won’t earn any income if no one knows about your website. Marketing your content is essential if you want to drive traffic and increase your profits.
There are many platforms you can take advantage of. Social media sites like Facebook, Twitter, and Instagram all offer organic and paid ways to reach your audience. You can also tap influencers to promote your content to their followers.
Many affiliate marketers don’t want to shell out money for paid ads or influencer marketing, but that’s a losing strategy – as the saying goes, at times you have to spend money to make money. Particularly if you want to scale fast.
Just don’t go in the opposite direction and spread your resources out too thin. You don’t have the time or money to master every single marketing platform, so pick one or two to start with. Then, as you figure out what works best for your site, you can scale up and diversify.
The Affiliate Lab has some great modules on how to drive traffic from search engines and social media.
In this next section, you’ll learn more about two marketing strategies that affiliate marketers love to use: search engine optimization and pay-per-click advertising.
Search engine optimization (SEO) helps your website rank high in search engines. The higher your rank for your target keywords, the more likely users will click on your website.
SEO is its own beast that takes years to master, and it doesn’t help that Google constantly updates their algorithm. But if you can take the basic principles of SEO and apply it to your affiliate marketing business, then you could drive a significant amount of traffic to your money site.
Another way you can reach people is through pay-per-click advertising. You can find PPC ads all over the web in the form of banner ads, native ads, and more. You can even buy the top spot of the SERP so that your ad shows above the organic results.
The great thing about PPC ads is that you only pay when someone clicks on it. Of course, this doesn’t guarantee that the person clicking on your ad will also click on your affiliate link and buy from your partner merchant. But it gets them through the door, and that’s already a huge step.
There’s one caveat: PPC campaigns don’t work for all affiliate marketers. If you make a very small profit off the items you promote, then a PPC campaign might be too costly for what it gets you in return. You need to know what your potential profit margins are before you can decide how much to spend on an ad.
For example, if you earn just a few dollars per sale, then spending hundreds of dollars on a PPC ad might not be the smartest choice. But if you sell a high-ticket item with a high commission rate, the leads you generate from a PPC campaign could be worth the money.
An affiliate marketer can be an “independent agent”, which means that they’ve made personal arrangements with the merchant. With enough leverage, an independent affiliate marketer can negotiate for more favorable rates and terms. But if you’re just starting, you don’t have that kind of power yet.
This is where affiliate networks come in.
Affiliate networks are a third-party liaison between merchants and marketing affiliates. Unlike affiliate programs where the merchant sets up the terms, the affiliate network is the one making the decisions. They ultimately decide the commission rates, which are often lower than affiliate programs because the network takes a cut.
There is one major advantage, though: you gain access to their entire merchant network. That means you have more products to choose from, and more opportunities to increase your income.
The Best Affiliate Networks For Beginner Marketers
Searching for the best affiliate network is like looking for Waldo (or Wally, for those of you across the pond) – there’s a lot of unnecessary noise to wade through before you hit the jackpot. Similarly, there are thousands of affiliate networks that make big promises, but you have to find the few that actually deliver.
Before you choose an affiliate network, do your due diligence first. Different networks will have different niches, commission rates, and terms. For example, some affiliate programs will pay you as long as you generate leads.
If you’re a beginner affiliate marketer, check out these popular networks below:
How Much Money Can You Make From Affiliate Marketing?
This is what everyone wants to know. Does affiliate marketing work? And can you earn enough money to quit your day job and live the life you want?
Before we reveal the exact numbers, there’s one thing we have to make clear.
If you consistently drive traffic to your money site and create high-quality content that people want to read, then earning a decent passive income as an affiliate marketer is entirely possible. Some people keep it on as a side hustle, but some star marketers make so much that it becomes their full-time job.
A 2017 study by VigLink found that 9% of affiliate marketers made more than $50,000 in 2016. The vast majority – around 65% – said that affiliate marketing was responsible for 5-20% of their annual income.
Of course, some outliers make hundreds of thousands or even millions of dollars per year. Take the case of Jason Stone, for example. Stone amassed a whopping $7-million in 18 months just through sales and affiliate marketing.
Here’s another important finding from the VigLink survey. The marketers who have made the most money are generally those who have been at it for longer. Around ⅗ of the highest-earning affiliates have been in the business for five or more years.
At The Affiliate Lab, one of our favorite ways to earn money is by flipping the website once it becomes a high earner. Selling your affiliate site can earn you up to 30x your monthly profit. That means that a website making $5,000 a month could be worth $150,000.
Why Most People Fail At Affiliate Marketing
So if affiliate marketing is so lucrative, why don’t more people do it?
Because it requires passion, dedication, and a solid work ethic – not everyone has what it takes to be a successful affiliate marketer.
If you get into this with the expectation that you will become a millionaire overnight, you will most likely fail. You have to be willing to put in the time and learn affiliate marketing strategies. And you need to have the patience to stick with it, even if you are months (or years) away from your goal.
“The lazy affiliates will give up and quit, and probably go do something else,” said Attila O’dree of iAmAttila.com. “Whereas the best will adapt by focusing on playing by the rules to be able to spend and get traffic, and making up the profits elsewhere.”
Late last year, we asked some of our Affiliate Lab members how much they were earning. A HUGE majority were making $10-50,000 per month, with several more hitting $50k+ and $100k+ monthly revenue. Of course, there were some still hitting less than $300 a month, but most of our long-time members were making bank.
This just shows that you need to keep at it if you want to see five or even six figures.
The truth is that most people quit before they start seeing results. This is why one of our bonus modules at The Affiliate Lab is all about maintaining the right mindset for success. If you can stay motivated despite adversity, then you could make a lot of money from affiliate marketing.
Other Tips & Strategies
• Understand your audience. The more you know who you’re marketing to, the better you will be at marketing to them. Find out what your readers’ biggest challenges and pain points are. Then, choose products that would help them solve those problems.
• Provide value to your readers. Useful content gets clicks, and clicks get you a commission. Above all else, make sure that you’re providing high-quality, well-researched, and well-made content. Everything else will follow.
• Build trust & credibility. If readers trust you, they’ll trust your recommendations. Be transparent with your audience about your commissions, and only promote products that you actually like.
• Track your results. Measuring your results is the best way to find out which of your strategies are working. This will also help you identify your highest-performing products.
• Think of the Pareto principle. The Pareto principle is also known as the 80/20 rule. In the case of affiliate marketing, this means that you should spend 20% of your time learning affiliate marketing’s ins and outs, while 80% should be applying what you’ve learned. Another way to apply this principle: 80% of your income will come from 20% of your efforts. Find out what that 20% is and make that the focus of your affiliate strategy.
The Best Way To Learn Affiliate Marketing
Affiliate marketing is not for everyone. But for the hardworking few who are willing to put in the time and effort, an affiliate website can be a major cash cow.
By promoting other people’s products and services, you can earn a decent passive income without worrying about the upfront costs of starting a business. There’s a niche for you no matter what your interests are – from fashion to electronics to digital marketing, there’s no limit to the kinds of products and services you can promote.
Next you want to join an affiliate network. With access to hundreds or even thousands of potential merchants, you can build the foundation for your affiliate marketing empire.
But if there’s one thing we want you to take away from this guide it’s this: Affiliate marketing is only worth the work you put into it. Be patient and keep at it, even when the numbers aren’t what you want them to be. You won’t hit four or five figures overnight, but with time (and a lot of effort), you’ll get there!
If you want to earn a lot of money through affiliate marketing, then you need the best tools and resources at your disposal. The Affiliate Lab is an online course designed to help you build, rank, monetize, and maybe even sell profitable affiliate websites.
Voted the #1 affiliate course, everything you will learn here is driven by data and real results. It takes the guesswork out of affiliate marketing, putting you in the best position for success.
But don’t believe us, believe the hundreds of people who’ve used our blueprint to hit their financial goals:
“500%+ traffic growth since [I] joined The Affiliate Lab. Broke $3,000/month last month, looking to hit $5,000/month and flip for six figures.”
– Bowen Khong
“The first site that I built using the Lab’s framework/guidance has gone from a brand new domain and two users a day to now, seven months later, 200+ users a day. It went from negative profits to, last month, crossing the $1,000-mark…this month, it’s projected to cross the $2,000-profit mark.”
– Julie Adams
“You said it was the last course I’d need to take. You are right. The intro strategies and processes to take the guess work out and rely on empirical data to create action plans is perfect. After the first day of devouring the info, I’m pretty much speechless.”
– Paul Clukey
Are you ready to become a lean, mean, affiliate marketing machine? Check out The Affiliate Lab and sign up today!