how affiliate marketing works

Did you hear that affiliate marketing is a great way to make money from your content?

Good news: you heard right!

Unfortunately, you don't know exactly how affiliate marketing works or how to get started.

More good news: that’s what today’s post is all about!

How affiliate marketing works

You'll have a much better understanding of how affiliate marketing works once I answer a few primer questions that'll tell you what it is, why you should try it and when to get started. Let's dive in…

What is Affiliate Marketing?

I like to define affiliate marketing as a partnership between a publisher (i.e. blogger) and a merchant (i.e. retailer). The merchant sells products online and the publisher creates content online.

When they partner up, the publisher joins the merchant’s affiliate program (either hosted on a pro affiliate network or self-hosted tracking platform) and upon approval, logs into a dashboard to get things like promotional materials, performance reports, and most importantly, their unique affiliate tracking links.

The publisher then places these links within their content, like in a blog post or linked to a banner. Anytime one of their visitors clicks on a link and makes a purchase at the merchant’s site, the publisher earns a commission.

Keep in mind, affiliate tracking links are only valid for a certain period of time. For example, when you sign up to an affiliate program that advertises a “30-day cookie”, that means you’re only eligible for a commission if your visitor makes a purchase within 30 days. If they buy something on day 31, you don’t earn unless they clicked the link again at some point.

A common commission structure is a percentage of sales, but you may also get a flat rate payment or recurring monthly payment. So if you sign up to a program that pays 15% per sale, expect to earn $15 for every $100 your visitor spends at the merchant’s site.

Here's my silly way of showing you how affiliate marketing works:

Why Become An Affiliate?

With the what out of the way, let’s talk about the why. Here are 5 reasons why you should become an affiliate:

1) No audience minimums

If your blog doesn’t have a lot of traffic yet, affiliate marketing is a great way to start monetizing your content. It only takes one visitor to earn you a commission but you need like a gazillion visitors to get a sponsor.

Unlike with advertising networks, you’ll rarely be rejected when applying to an affiliate network or program based solely on your audience size. I’ve processed thousands of applications and have never rejected someone for that ridiculous reason. Most program managers happily accept bloggers of any size because they know the blogger’s reach will grow in time and if they’ve nurtured the relationship early on, it will benefit the company when they break out.

As long as your site looks presentable and you’ve got some content related to the program you’re applying to, you’ll get approved most of the time. For more detailed info on how to almost always get approved, grab my free Affiliate Application Guide.

2) Great way to diversify your income

Don’t be fooled by 6-Figure Bloggers that tout “smarter” or “safer” monetization methods like online courses or freelance work. They probably want to sell you a course about it. Putting my less cynical cap on, maybe they simply had a better experience monetizing with one particular method – but that doesn’t make it the best.

That’s why I would tell you affiliate marketing is the best income stream out there. Nor would I ever suggest you rely on it as your only income source. It’s risky for pretty much anyone to rely on one stream of income alone, especially if you want to go from blog to biz.

By adding affiliate marketing into your monetization mix, you’ll be wisely diversifying the number of methods you use to make money. That way if another income source dries up unexpectedly, it won't ruin you.

3) It’s pretty much free

There is literally no cost to becoming an affiliate, even when you start making money. It’s actually the merchants who do the spending, by paying your commissions plus various fees their affiliate tracking platform charges them to host the program.

As you become more experienced as an affiliate, you may choose to experiment with paid affiliate tactics – such as advertising – but they’re never mandatory. In fact, most of the top earners I work with as an affiliate manager only use free affiliate activities to make their money.

4) It’s a legit way to monetize your content

Let’s address the biggest elephant in the room. Regardless of what you might have heard, affiliate marketing is not a sleazy way to earn money from your content.

Would you stop shopping altogether because of a few annoying sales people? Or stop drinking green smoothies because of that one time your concoction tasted like smelly socks?

No. You might change things up – like shop somewhere else or follow a different (or actual!) recipe – but you wouldn’t think badly of shopping or green smoothies because of a few crappy experiences.

Same goes for affiliate marketing.

Just because some affiliates do shady things, like promoting products they don’t believe in or gaming the system to increase their commissions, doesn’t mean you should avoid the industry altogether.

As long as you approach it in an honest and authentic way, earning from affiliate marketing will never feel sleazy or gross.

5) It’s a win, win, win situation

What I love best about affiliate marketing is everyone involved benefits from it. Here’s what I mean:

• The publisher (that's you!) wins because you get paid for sharing cool products you love.
• The merchant wins because you help them make sales.
• The customers win because you've helped them solve a problem or fill a need. Double win if you offered a bonus or discount on top of that!

When To Start Using Affiliate Marketing?

As mentioned earlier, it’s never too soon to start monetizing your content with affiliate marketing – even with your very first post.

As a new blogger, you just never know when a piece of content will go viral and send boatloads of traffic your way.

That’s exactly what happened to Gee Nonterah, who told me one of her biggest blogging regrets was not monetizing with affiliate links from day one. Gee didn’t think her 5,000 pageviews a month blog was big enough to worry about affiliate marketing so she pushed exploring it to the bottom of her never-ending to-do list.

Then without warning, a few of her blog posts went viral on Pinterest overnight and her traffic skyrocketed. With her blog now getting over 50,000 pageviews a month, she’s furiously trying to incorporate affiliate links within her top posts, knowing she lost out by not having them there earlier on.

Small blogger? I work with publishers of all sizes and bigger doesn’t necessarily translate to more commissions. Often smaller bloggers have more engagement from their audience compared to their larger counterparts. I've experienced this first hand too. Recently I was a top earning affiliate for a course launch – alongside bloggers with audiences 10-40x bigger than mine.

If you need further “tiny list” inspiration, check out the affiliate stories of Rachel Luna and Adrienne Dorison.

Already have an audience? Get cracking because with established traffic sources, podcast listeners, social media followers and/or email subscribers to work with already, you’re in an even better position to start monetizing with affiliate marketing.

How to Get Started with Affiliate Marketing

I bet you’re pretty darn excited to get started now that you know how affiliate marketing works, right? Yay! I have just the resource for you:

AFFILIATE EXPERIMENTS PLANNER

Enter your info below to grab my *free* Affiliate Experiments Planner so you can map out a year of amazing affiliate promos in a super fun & hands-on way.