Affiliate Marketing

Affiliate Marketing: A Quick Guide to for Beginners

What is affiliate marketing?

Affiliate marketing is a performance-based digital advertising model where a company pays another entity (the affiliate) a commission to advertise their products and services through their own platforms.

Companies generally want their affiliate to generate traffic to their website or complete other desired actions. The affiliate typically earns a commission for each successful lead or sale they generate.
Affiliate marketing has proved to be a great means of improving sales thanks to the reach of social media and other digital platforms. 

This type of marketing is popular among brands and affiliates alike because it benefits both parties: companies spend a lot less on marketing their product while reaching a wider consumer base, and the affiliate earns a commission that could either be their main or additional source of income.

How does affiliate marketing work?

Here is how it works:

  1. An affiliate marketer and brand connect.
  2. The affiliate creates content – such as blog posts, articles, videos, or social media posts – that promotes the product, service, or site.
  3. They include affiliate links in the content. When a customer visits the affiliate link or ad it is tracked through the company’s internal analytics. 
  4. The affiliate is then paid a commission for either the click, download, or sale of the product. Usually, this is 5%-10% of the sales price. 

Sometimes, brands hire affiliates to manage their affiliate programs. They are responsible for recruiting new affiliates, tracking program performance, and resolving any issues that arise.

Types of Affiliate Marketing

There are primarily three types of affiliate marketing: unattached, related, and involved. 

Unattached affiliate marketing is when the affiliate does not have a direct relationship with the consumer or customer. There is less effort involved in this type of affiliate marketing because it usually works on a pay-per-click basis – the affiliate gets paid every time a customer clicks on the link and buys the product. Usually, this is opted by brands or affiliates that already have a solid reputation, and don’t depend on the commission they get from links. Their priorities may lie elsewhere, and this income would just be a by-product. 

Related affiliate marketing is when the affiliate promotes products and services they may not use, but that are related to their target consumer or niche. Bloggers, YouTubers, or other digital content creators and influencers are a few examples of related affiliate marketers. These creators have an audience or network that trusts their word even if they may have never used the product themselves. The risk with this, of course, is that the product may not live up to expectations which may affect the affiliate’s reputation. 

Involved affiliate marketing is about promoting products and services that the affiliate has used already and enjoys. These affiliates put a lot of thought into what they promote and how because their audience’s needs and satisfaction are a priority. Sometimes, affiliates promote products they aren’t being paid for but happen to use as part of another experience or topic they are creating content about.

This type of marketing reinforces trust between the audience, affiliate, and brand. It is an effective way to build long-term customers and expand your reach over time instead of quickly. 

Is affiliate marketing the right fit for me?

Affiliate marketing is a great option for a company not looking to invest too many resources or a person interested in earning a bit of income on the side. You can grow as an affiliate marketer as you introduce your audience through more brands. How much you earn from affiliate marketing also varies.

Here are some of the most common ways that affiliates earn commissions:

  • Click-through rate (CTR): The affiliate earns a commission for every click that their link receives.
  • Sale: The affiliate earns a commission for every sale that it generates.
  • Lead: The affiliate earns a commission for every lead that it generates. A lead is someone who provides their contact information, such as their name and email address, in exchange for something, such as a free ebook or a discount code.
  • Sign-up: The affiliate earns a commission for every person who signs up for a free trial or subscription.
  • Referral: The affiliate earns a commission for every person who they refer to the merchant.

The catch with these seemingly low-effort means of income is that they require patience to initially build your own audience and niche. The initial phase will still be slow and needs to be developed gradually. 

Since it is commission-based, the amount you earn per month is not fixed, and the company sets the rules around how you present their product or service. Weigh the risks and rewards before deciding to become an affiliate marketer.

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StellarFinance, Inc. does not necessarily constitute or imply its endorsement, recommendation or favoring, sponsorship, or representation in reference to any specific company, products, processes, or services by trade name, trademark, manufacturer, or otherwise in this article. StellarFinance, Inc. and its affiliates do not provide financial, tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own financial, tax, legal and accounting advisors before engaging in any transaction.