We’re known by the company we keep, and this is true for brands as well.
More and more, brands want ambassadors with good characters whose values align with their overall message. Brands are paying attention to their ambassadors’ public perceptions and reputations.
As more regular people use social media and the internet to build huge personal platforms, affiliate marketing has quickly become a must-have solution for these brands.
What is affiliate marketing?
Affiliate marketing refers to the practice of digital creators partnering with and promoting brands on their personal networks, such as a blog or social media platform. These affiliate marketers earn income based on the number of people who purchase merchandise through their affiliate links.
Affiliate marketing helps reduce a brand’s pressure to find the perfect spokesperson. It also increases the likelihood of success as affiliates are often vetted by networks or agencies. Unlike celebrity endorsements or influencer marketing – strategies that typically have a few people or one person acting as the face of a brand – affiliate marketing is a strategy without limits.
Affiliate marketing programs allow marketers, or “affiliates,” to take their income into their own hands. This strategy is, in some instances, referred to as a form of passive income for those who endorse products.
By this, we mean affiliates aren’t always actively selling to make money. They put their strategies in motion and any sales that come through their site drive income. It’s as close to easy money as you can get.
How does affiliate marketing work?
Affiliate marketing is pretty straightforward. A company looking to promote or sell a product will reach out to an online creator with a sizable platform and following. The business pays the creator an agreed upon commission rate to promote their products to their audience through promotional codes, affiliate links, or ads.
Affiliate marketing requires three things:
- Affiliate marketers: creators with a platform that promote these products and services
- Affiliate merchants: businesses that sell a product or service
- Consumers: potential customers that fall within a target audience
Once the affiliate marketer and the merchant agree on the payment terms, the affiliate marketer then creates content promoting that product. The affiliate marketer will include affiliate links provided by the merchant to promote the product. Affiliates are credited and ultimately paid through tracking associated with their affiliate links.
Here’s what an affiliate marketing transaction looks like from start to finish:
- An affiliate marketer displays an ad promoting a product or service from an affiliate merchant on their website, blog, social media platforms, or email newsletter.
- Potential customers click the ad or link to learn more about the offer from the affiliate merchant.
- The customer is tracked via a specific tracking code attributed to the affiliate marketer who promoted the referral link.
- The customer makes a purchase and continues through the payment process as normal.
- The affiliate merchant marks that the purchase was made through an affiliate link and works to validate the sale.
- Once the sale is validated and completed, the purchase is credited to the affiliate marketer, who then receives a commission from the affiliate merchant.
Using affiliate marketing software, the affiliate merchant can track how many purchases were made through the affiliate. This data helps marketers determine the effectiveness of their affiliate marketing relationships, as well as properly attribute affiliates for their work.
When a business enters into an affiliate program agreement with a creator, they are essentially paying for access to that influencers built-in audience. Businesses recognize that it takes years of time and effort to organically build a niche audience. For many companies, the choice between investing in building a new audience is less appealing (and more expensive) than working directly with a creator who already has that audience.
Types of affiliate marketing channels
The first and most obvious step to becoming an affiliate marketer is building an audience and a platform. Anyone with a sizable digital platform and an audience can get into the affiliate marketing game. It doesn’t matter whether your audience comes from a hobby blog, a YouTube channel, or an Instagram account.
Here’s a look at some of the most popular affiliate marketing channels.
Social media platforms
Social media influencers are one of the most popular ways to promote affiliate links. If you’ve built a sizable following on social media, affiliate marketing is an easy way to monetize your audience.
You might be surprised to learn how few followers it takes to monetize your social media accounts. Micro influencers can have as few as a thousand followers and be eligible to work with brands.
Here’s how to ready your social media accounts for affiliate marketing:
- Switch your personal account to a business account to track analytics
- Double-check each platforms specific guidelines for creating sponsored content
- Always tag the brand you’re working with and include relevant hashtags and links
Switching from a personal account to a business account is about balance. You don’t want to risk alienating your audience or making them feel like you’re spamming them. When it comes to creating affiliate content on social media, it’s smart to test the waters first.
Start by posting unsponsored product review content on your channel and giving honest reviews. Don’t ask your followers to buy anything yet. After a few months of this pattern, start mixing in affiliate marketing content with your other posts. Always include an affiliate disclosure in your posts to let your followers know that you get paid commission off products purchased through affiliate links.
As the second largest search engine next to Google, YouTube has its own set of rules when it comes to affiliate marketing. YouTubers make the bulk of their revenue from displaying ads within the videos on their channel. The more popular a channel gets, the more views their videos receive, and the more money they make off the ads.
A YouTube Affiliate makes videos with the aim to persuade the viewer to purchase the product featured in their video. Like affiliate marketing through a blog or other social media channel, the YouTube affiliate is paid a commission based on the number of sales made using their affiliate link. These links are often placed within the video description box for the corresponding video.
While this can be done in any number of ways, there are a few content niches that lend themselves well to affiliate marketing. A few examples include:
- Beauty bloggers: post affiliate links to make-up products used in their videos
- Haul videos: post affiliate links to products shown in the unboxing video
- Parenting vloggers: post affiliate links to products they use for their children
- Hobbyists: post affiliate links to tools or products they use in their craft
YouTube affiliate marketing is appealing because of the low barriers to entry. You only need 1,000 subscribers to be eligible to monetize your channel through their program. Like with any monetized channel, the more your channel grows, the more views you get, and the better chance you have of your audience using your affiliate links.
Personal blogs are one of the biggest drivers behind the affiliate marketing boom. What makes a personal blog perfect for affiliate marketing is the ability to optimize for search.
By creating SEO-driven blog content that mirrors the search results of your desired audience, you can attract people who are ready to purchase a product directly to your affiliate site. It’s easier to convince people who are already looking for a specific product to use an affiliate link than someone who just happens to stumble upon it.
Here are some tips for readying your personal blog for affiliate marketing:
- Ensure your website is compatible with all devices and is mobile friendly
- Regularly check and maintain the SEO health of your website
- Include an affiliate disclosure page on your website for your readers
Email newsletters also work wonders in tandem with your blog because it gives you the opportunity to deliver content with your affiliate links directly to people’s inboxes. This is just another proven tactic to help drive traffic and clicks to your affiliate site.
Digital media and news websites
Affiliate marketing isn’t just for solopreneurs. Businesses with sizable following can also leverage affiliate marketing to turn a profit. Since digital marketing changed the face of online media, digital media companies have found a way to turn affiliate marketing into a powerful revenue source.
By using affiliate marketing alongside things like product round-ups, holiday gift guides, and more, these companies can leverage their large traffic numbers to directly connect consumers with products they are searching for, all while getting a little cut themselves. It’s a win-win.
How to become an affiliate marketer
Affiliate marketing is a great side-hustle. It’s one of the few marketing strategies that allows you to set something and forget it once it’s posted. Affiliate marketing content can make you money while you sleep, while you work your day job, and while you take your kids to the park.
Now, all of that doesn’t mean there’s no work involved. There’s plenty to know about becoming an affiliate marketer.
Choose the right affiliate program
Once you’ve built your audience and understand the rules for your specific platform, it’s time to start finding affiliate merchants to partner with. Getting started with an affiliate program is a lot like dating. Depending on which platform you’ve built an audience on and your niche, different platforms will work better for you.
It’s best to choose two or three platforms to get started with until you get comfortable with the process. Full-time affiliate marketers often have a roaster of five or more platforms they use to handle their programs.
Here are some popular affiliate marketing platforms you can use to begin your search:
- Amazon Associates
- CJ by Conversant
- ShopStyle Collective
- Shopify Affiliate Program
- YouTube Affiliate Program
Take the time to explore each platform and their benefits. Check which affiliate program will give you the best rates, which ones offer the most flexibility, and which ones have the most active users. All of these things will happen if you partner with more brands and get better affiliate deals.
Find your content niche
Affiliate marketing works best when your content has a point of view and your affiliate promotions fit within that niche. Your niche is simply the type of content you create on your channel.
A good way to find your niche is to ask yourself what you’re passionate about. If you’re really into fitness, your niche could be an Instagram account for your yoga practice. Maybe you play sports outside of work, your niche could be a hobby blog reviewing your favorite golf clubs.
Ideally, your audience will consist of other people with similar interests to your niche. This will make marketing your affiliate links to your audience easier. If they share the same interests as you and engage with your niche content, there’s a higher chance the products you promote will appeal to them.
Curious which niches drive the highest number of affiliate programs?
- Fashion (18.7%)
- Sporting goods (14.6%)
- Health and wellness (11.1%)
- Travel (8.6%)
Source: Hosting Tribunal
Negotiate your rates
New affiliates often want to know much they should be charging for commission. The average affiliate commission rate is anywhere between 5% to 30%, depending on a few things. The size of your platform, the number of followers you have, website traffic, name recognition, and more can all impact your commission rates.
Simply put, the more in-demand you are, the more you can charge.
Affiliates most frequently get paid on a percent commission of sales made. There are however a few paying structures that businesses frequently use to attribute and pay their affiliate commissions. Wondering how people get paid through affiliate marketing?
Most creators get paid commission based on one of the following payment structures:
- Pay per sale: the affiliate makes commission based on the number of sales made using their affiliate link or website
- Pay per lead: the affiliate makes commission based on the number of leads generated through their affiliate link or website
- Pay per click: the affiliate makes commission based on the number of times their affiliate link or website is clicked by consumers
Create hyper-relevant content
Convincing people to purchase products through affiliate links is an art. It requires the ability to sell a product while speaking to the customers needs. If you can create hyper-relevant content targeted at your audience’s pain points, you can then easily introduce your affiliate product as the solution.
Use these questions to brainstorm content ideas for your affiliate program:
- What problem does the product solve for you?
- Why do you enjoy the product more than others like it?
- Why is the product relevant to your audience?
Answer these questions as a way to brainstorm new content ideas. You can also look in the comment section of your blog or social media posts for ideas. Followers often ask questions or seek advice from creators. Turning these questions into content allows you to solve a problem and plug your affiliate links.
Affiliate marketing best practices
Affiliate marketing is different from any other form of marketing. It allows regular people to tap into the cash-rich e-commerce business by leveraging their personal platforms.
Whether you’re a beginner or a seasoned affiliate, here are a few best practices to keep an eye out for.
Disclose everything upfront
The FTC’s Endorsement Guides requires anyone who gets paid to publicly review a product to disclose when they may be compensated for making a recommendation. Regardless of whether you’re a blogger, social media influencer, or even a celebrity, you must disclose to your audience when you are being paid to promote a product or service.
- If you’re writing a blog post with affiliate links, you can add a sentence at the end of the article that explains you make a commission off purchases made through your links.
- If you’re posting a social media post with affiliate links, in addition to your disclosure in the copy of your post, you can use the hashtag #ad or #sponsored on your post. Some platforms like Instagram even have backend capabilities to mark your posts as brand collaborations.
- If you’re posting affiliate links on another platform, you should check their guidelines for how to create an in-depth disclosure that adheres to their regulations.
As an affiliate marketer, disclosure helps protect you from any legal trouble. An affiliate disclosure refers to how you inform your audience about your relationship with a brand you publicly promote. The only thing you affiliate disclosure must include is acknowledging that you are being sponsored or paid by a brand for promoting their products.
Be selective about who you partner with
When you’re first getting started with affiliate marketing it can feel like any opportunity is a good one. But don’t be fooled. It’s your responsibility as a creator to ensure you’re only endorsing products that you actually stand behind.
Ask yourself these questions before plugging an affiliate product:
- Is this product worth how much it is being charged for?
- Would I use this product if I weren’t being paid to promote it?
- Is this valuable to my audience?
Affiliate networks are built on purchasing power, and your audience will only buy things if they trust your endorsement. Pushing cheap or low-quality products onto your audience will cause them to distrust you, making it harder for you to build your affiliate network. No commission is worth losing the trust of your followers.
Don’t forget about your taxes
When you’re an affiliate marketer, the government considers you self-employed. That means you have to pay taxes on your affiliate earnings every quarter. Don’t let yourself fall behind on tracking your earnings and find yourself in a mess come tax season.
Here are just a few taxes you may be subject to as an affiliate marketer:
- Sales tax
- Self-employment tax
- State and federal income taxes
- State and federal payroll taxes
It’s always best to play it safe and set aside more money than you need to. This helps cover and surprise taxes, expenses, or charges that arise as you’re learning the ropes.
Most professionals recommend setting aside up to 30% of your freelance earnings in a separate account for taxes. That might sound like a lot of money, but remember the cost of coming up short on your taxes is much higher.
Benefits of affiliate marketing
There are several parties involved in affiliate marketing and each uniquely benefits from the process. The merchant and the affiliate both have something to gain when affiliate marketing is done right. Understanding the benefits of affiliate marketing can help guide your strategy in a more effective way.
Benefits for the affiliate
The biggest benefit of affiliate marketing for the affiliate is that they’re getting paid. While the specific percentages vary, affiliate marketers profit a certain portion of every sale that goes through their channel or website. As an affiliate, you work out with the merchant exactly how you will determine profits. Whether you’re paid per sale, per click, per lead, or per call, you profit as the merchant does.
For the affiliate, this strategy is all profit with virtually no money down. You aren’t investing in the success of the product, nor are you paying for the upkeep or production of goods. There’s also no storefront necessary, which means there’s no rent to pay or light bulbs to replace.
Additionally, being an affiliate marketer helps you build your personal brand. The more efficiently you’re able to sell a brand’s product, the more likely it will keep you on or other brands will reach out to you for sales.
And finally, what most affiliates enjoy about the process is the relative autonomy they are given in what they’re selling. When you’re managing your own affiliate strategy, you get to choose which brands you work with and what products you push. You can sell products you’ve used, products you believe in, or products that simply seem interesting to you!
Benefits for the merchant
One of the main benefits for the merchant is having someone else do the grunt work on selling its product. Merchants are not limited to one affiliate which means they can tap a global network of affiliates to sell their products anywhere in the world.
Affiliate marketing also helps brands build trust with buyers. Consumers are more likely to rely on a trusted source for brand information than they are an advertisement. In the current state of influencers and rampant review sites, we’re looking to real people’s opinions more than we are static advertisements or TV commercials. With your affiliates comes the trust of networks they’ve previously established
Another benefit for the merchant is the opportunity to join affiliate networks, which, again, do much of the grunt work for you. From finding affiliates, to tracking pay, to reporting on key metrics, these affiliate networks have a number of business-boosting features.
Affiliate networks, among other things, can even post advertisements for you that help locate affiliates who would make effective and professional brand ambassadors. So, not only are your products being advertised, but they’re being advertised by someone you can trust.
Affiliate marketing is the next frontier of digital marketing
Affiliate marketing is a mutually beneficial relationship between brands and creators that allows regular people to make passive income on the side. With enough dedication, anyone can turn their personal platform into a monetized stream of income.
Just getting started with affiliate marketing? Check out these common affiliate marketing mistakes to avoid.