Affiliate Marketing: A Beginner's Guide to Passive Income
Updated: December 5, 2018
You're here because you are curious to learn more about affiliate marketing. Before we dive into it I want to talk about a dream.
A lot of people get into blogging because they have this dream.
You probably have this dream as well.
The dream is making passive income.
What is passive income?
Well, in the dream world, passive income is income that is generated at any time no matter what you are doing:
The idea is that people buy things and you make money.
Sounds like any other type of business, right?
Doing this on a blog seems pretty easy on the surface but anybody that has started a blog knows that isn’t the case.
What makes this difficult?
A couple of things actually:
- You need something to sell
- You need an audience that wants to buy
Both of these things take time.
It takes a healthy amount of time to build an audience. Some bloggers spend years trying to get an audience that is viable.
Once you have the audience you want to provide them with something to buy. Creating a product that people love takes a tremendous amount of time and energy.
What’s scary about creating a product is how can you be sure that anyone will even want to purchase it?
Who wants to spend time building an audience and then creating a product that nobody is interested in?
The correct answer is nobody. Nobody wants to go through all of that trouble.
If you want to make money with your blog you can’t avoid building an audience. It's impossible to make money from nobody.
However, there is a way to make money selling products without creating any products of your own and it is called affiliate marketing.
It’s one of the most awesome ways of making money with your blog. Not only does it help to make you money but it is also a great way to benefit your readers.
If this sounds great to you then continue reading because you are about to learn all about affiliate marketing and how to be successful with it for your blog.
What Is Affiliate Marketing and How Does It Work?
First, let's begin with a definition. This is Pat Flynn's definition of affiliate marketing:
Affiliate marketing is the process of earning a commission by promoting other people’s (or company’s) products. You find a product you like, promote it to others and earn a piece of the profit for each sale that you make.
Wikipedia expands things a bit more and includes 4 different parties when it comes to affiliate marketing: the merchant, the network, the publisher, and the customer.
When it comes down to the actual marketing, there are two sides that matter in the affiliate equation: the product creator and the seller.
Let's spend some time look at the 4 different parties involved in affiliate marketing.
The merchant is the creator of the product. It can be a big company or a single mom selling an ebook. Anyone can be the merchant in the affiliate marketing equation.
In most cases, they don't even have to be actively involved. They just have to have a product that other people are willing to sell for them.
How sweet is that?
This party is also known as the publisher (in most cases, this is you). Affiliates, like merchants, can be individuals or large companies.
They are responsible for moving the product. It's on them to convince their audience that a product is worth something of value to them.
There are a number of different ways that you can do this.
- The Wirecutter does it by providing massive reviews of different product categories. The site is completely dedicated to reviews of products.
- This Is Why I'm Broke doesn't review products it simply goes out and finds cool ones.
- Making Sense of Cents is a personal finance blog showing you how to save money. Michelle makes affiliate revenue by recommending products that she uses.
This is the customer. Without them, there is no money. You are hoping that you can turn readers into consumers so that you can earn commissions from product sales.
The Affiliate can market to the consumer a number of different ways: social networks, ads, or content marketing.
Does the consumer know they are being put through an affiliate cycle? That depends on the affiliate. Some affiliates will let you know right away that any links they show you are affiliate links while other affiliates might have a disclaimer in the footer or sidebar.
If you're worried about telling people that you are doing affiliate marketing it's important to know that the FTC requires some type of disclosure.
If you're worried that any type of disclosure will push people away then don't worry. Affiliate are making thousands of dollars each day through affiliate marketing.
The important thing is that you are providing enough value that your audience trusts you.
Not all affiliate definitions contain the Network within them because the Network doesn't always exist. For example, some affiliates work directly with merchants to sell their products, while other affiliates find products to promote through affiliate marketplaces like ClickBank or Commission Junction.
Going through a network is an easy way to get started with affiliate marketing because networks offer a wide range of products that you can test out.
The biggest affiliate network around is Amazon. Their Associates Program is the most common affiliate network used due to the fact you can promote any product found on Amazon. That means you have access to millions of products. It's almost impossible not to find something that would fit your site.
Common Affiliate Questions
Before we dive into how to become an affiliate let's answer some common questions and cover some affiliate terminology.
What Is an Affiliate Program?
An affiliate program is a system that allows you to sign up with a merchant to sell their product. Many blogs tend to sell web hosting services through the web host's affiliate program.
What Is an Affiliate Web Site?
An affiliate website is simply a website that sells products through an affiliate program.
What Is an Affiliate Code?
An affiliate code is a small string of text that merchants or networks give you to help distinguish the traffic you send from other affiliates.
Usually, it will look like this:
ref portion is the affiliate code.
Why Affiliate Marketing Is the Best
Affiliate marketing is great for bloggers and other site owners for a number of reasons:
- You can monetize your blog from day 1. If you are creating your own products then you can't monetize until they are complete or presale them which is hard if you're just getting started.
- Affiliate marketing provides you with great customer research into what type of products your audience wants. This is helpful because instead of guessing about which products to make your audience will already be showing you with their wallets.
- It primes your audience to buying from you. Once they are comfortable buying from you once they are likely to continue to buy from you again and again.
- It's ridiculously easy to implement. Almost every merchant and network has easy ways to attain affiliate links for you to use.
- It doesn't require a support team or if you work solo for you to provide customer support. Everything is taken care of on the merchant side of things.
- You don't need to be an expert in your niche or build trust as an authority.
- It requires a minimal amount of effort to get started and is low-risk. If it works out for you then great and if it doesn't it is not the end of the world.
4 Steps to Becoming an Affiliate Online
Becoming an affiliate online is actually pretty simple. Becoming a successful affiliate online is a bit more difficult.
There are 4 main steps involved with becoming a successful affiliate online:
- Review products in your niche
- Collect emails
- Educate your audience
- Grow your business through marketing
Let's dive deeper into each of these steps.
1. Review Products in Your Niche
One of the biggest mistakes that people do when trying to make money with affiliate marketing is to simply drop a link into a blog post or place an ad in the sidebar and call it a day.
This is the equivalent of leaving the grocery store and someone points you the flower shop next door and tells you to go in.
Why should you?
If you want to make money with affiliate marketing you need to provide some value and one of the best ways to do that is through reviews.
The reason why reviews work so well is because they target people who are on the cusp of purchasing a product. If someone is searching for a review of a product it usually means they are ready to make a purchase and just need help deciding what product to get.
How do they do that?
They search for reviews.
This is why sites like Best Products work out so well. Someone knows they need to buy a yoga mat and they can go to a site like that and get a recommendation on the exact yoga mat to purchase.
Sell Products You Know
It is always recommended to only sell products that you are familiar with. The reason why is because you can give an authentic review of the product. You would hate to sell a product that completely sucks but you didn't know it sucked because you never used it.
You also want to keep the trust of your audience. If people are trusting your opinion on something to buy and they buy it and hate it, this can easily reflect poorly on you.
Your goal is to help your audience find the best product available in a specific niche. If you can do that then you will find that you can be pretty successful.
Check out this YouTube Channel that reviews Hot Wheels sets. People see these reviews and trust the person because they are showing them they use the toys themselves.
If your reviews aren't helpful for people then they can easily see that you are there just trying to make a quick buck off of them.
Nobody wants to feel used.
3 Types of Affiliate Marketing
Pat Flynn notes that there are 3 types of affiliate marketing:
- Unattached affiliate marketing
- Related affiliate marketing
- Involved affiliate marketing
Unattached affiliate marketing is when you don't even bother with a website. You have no interaction with the consumer at all.
The way this works is that you purchase Google AdWords or Facebook Ads and use your affiliate link in the ad. Your goal is to target specific audiences to get them to click the ad and let the merchant site do the selling.
This type of affiliate marketing can work very well if you know what you are doing. Because you must purchase ads it can cost a lot upfront with no return if your ads aren't converting.
Related affiliate marketing is when you have a site and you recommend products that you haven't used before.
Many affiliate marketers do this just to test out products first to see how they convert. If they do well then they invest more resources into promoting the product.
Involved affiliate marketing is when you've used a product and you truly believe in it. Pat believes this is the most effective form of affiliate marketing because it's based on your relationship with your audience.
An audience that trusts you will also trust the products that you recommend.
This type of affiliate marketing is the most profitable because the only costs are web hosting and time. When you can promote a product that you understand completely and totally believe in then your audience will feel that as well.
With related and involved affiliate marketing you are hoping that people read your reviews carefully so they see the affiliate links that you have placed in your content. You are counting on the fact that people will see the links and click them to purchase the product.
This usually means you need a lot of traffic to make any type of decent money because most people that come to your site will leave pretty quickly or completely skip your affiliate links.
A better way of getting affiliate links in front of your audience is by directly contacting them and this is where building up a mailing list comes into play.
2. Build an Email List
Building a mailing list is still one of the most effective marketing channels for any business today.
It's crazy that people don't bother building up an email list because they see email as an outdated technology when the reality is, it's the only technology that gets 100% attention. Think about it, when you get an email at the very least you see how it is from and read the subject line.
In contrast, you might not even see all the Facebook posts in your network and can quickly skip over your Twitter feed.
Building your email list is a completely different topic outside the realm of this guide but if you're curious about how to do it quickly then take the 7-day list building challenge.
3. Educate Your Audience
This is where a large portion of affiliate sales take place. If you can actively teach your audience something that uses a service or product, then you will find it much easier to convert readers into buyers.
There are a number of effective ways to do this but one of the most effective is through video.
With video you have two main options that you can do:
- Live webinars
Recorded videos are simply what you see on YouTube. Remember the Hot Wheels review? It's stuff like that.
Live webinars are when you air a live "show" where you teach your audience something. Because they are actively engaged and learning it is easier to make them aware of a product or service you are an affiliate of.
When they see you actively use and promote the product they will be inclined to use the product themselves.
Here is a video showing you how to host a webinar using Google Hangouts:
4. Grow Your Business Through Marketing
You can't rest on your laurels once you've done the first 3 steps. You need to continue to grow your business or else you'll find that it eventually stagnates.
The 5 main ways you can grow your online business are:
- Social Media Marketing
- Search Engine Marketing
- Word of Mouth
- Content Marketing
If you are just getting started then you will want to focus on social media marketing, search engine marketing, and content marketing.
All 3 of these forms of marketing can be done for free and will help to form the basis of your business.
Social Media Marketing
This is when you establish a presence on social media networks like Facebook, Twitter, and Instagram. The goal is to build up an audience that grows attached to your brand. The most difficult part of social media marketing is converting your audience into visitors for your site.
One of the best social media platforms for any type of content site isn't actually a social media platform at all. Pinterest is hands down one of the best marketing platforms on the Web today and if you use it correctly you can expect huge returns fairly quickly.
Here is a traffic snapshot of a health and fitness blog that I launched that uses affiliate marketing to make money.
100% of this traffic was generated through Pinterest. When done correctly it can work wonders for you. If you're interested in learning more about utilizing Pinterest to build your business check out these Pinterest tips.
Search Engine Marketing
Search engine marketing revolves around the mystical arts of SEO.
SEO stands for search engine optimization and it is the practice of optimizing your pages so they rank higher in search engines.
It is definitely more art than science because the search engines never officially reveal all of the things they look for in a page to rank it at the top but SEO experts are able to deduce some of the major considerations.
A lot of people that get into affiliate marketing do so by creating niche websites and their goal is to rank highly for specific keywords in the search engines.
For example, this site only reviews hair dryers. It makes money by linking to Amazon using their Amazon Associates link.
I found this site by searching for "hairdryer reviews" in Google and it appeared on the first page. This is a result of search engine marketing and SEO.
If you're using WordPress for your affiliate site then check out this guide to WordPress SEO.
This guide you are reading now was created for content marketing purposes. Content marketing is the practice of creating high-quality content to attract people to your site.
A large majority of affiliate websites dedicate all of their time to content marketing. By now you've probably guessed that content marketing and search engine marketing kind of go hand-in-hand.
The better content you have, the better chance you have of building links which lead to higher rankings in the search engines.
Poor affiliate will try to whip up a ton of content to a niche website in hopes of appearing for some long tail searches but the best affiliates understand the importance of writing quality content that people find valuable.
This is why The Wirecutter does so well because there is no such thing as a bad piece of content on that site.
Using a Sales Funnel
Once you bring people to your site through whatever means of marketing and get them to sign up for your mailing list you can put them through a sales funnel that will automatically push the affiliate products and services that you are promoting.
Setting up an autoresponder series takes a little bit of time but is an effective way to sell affiliate products because, like webinars, you are providing immense value to your audience and they are taking advantage of it.
When you have a sales funnel setup that means you now have two points of contact to make a sale:
- Your website
- Your emails
This is how you truly grow your bank account through passive income.
Is Affiliate Marketing for You?
It's easy for people to get caught up in the magic of affiliate marketing. On the surface, it looks like you just need to get an affiliate link and get people to click on it but hopefully, this guide shows you that it is a lot more work than that.
While you can make money quickly through affiliate marketing, don't expect to make quit your job type of money right off the bat.
Many affiliates take months or years to reach 4 figures a month with their affiliate marketing efforts.
What's great about affiliate marketing is that it can just be one type of revenue stream that you offer on your site. I use affiliate marketing as a complementary source of revenue as it goes along nicely with the other products and services that I offer.
The Types of Bloggers That Will Succeed with Affiliate Marketing
By now you should know that affiliate marketing isn't for everybody, just most people.
Although you can start to monetize your blog on day 1 with affiliate marketing you shouldn't expect to see results unless you are producing content on a regular basis and actively trying to grow your mailing list.
You'll find that once you get over 500+ people attracted to a specific topic that it becomes a lot easier to sell affiliate goods and services.
Hold Off on Affiliate Marketing if...
If you already have plans to sell services and tools to your audience you might want to hold off on selling affiliate products, at least in the short term.
As a service provider, you want to ensure you invest the right amount of time to getting your audience primed to purchase a service from you as this will be more lucrative. Once you have your services running smoothly then you can start to look into how to integrate affiliates into your revenue model.
There are 4 steps to becoming an affiliate marketer online:
- Reviewing products in your niche
- Building an email list
- Educating your audience
- Growing your business
If you have a blog I suggest you take a look at affiliate marketing. You can find a product that fits your niche and monetizes your audience before you work on creating your own products and services.