Ever since the 4-Hour Workweek was released, everyone seems to have the same goal. To wake up in the morning, open their laptop and look at something like the above image:
(Image source: Top 5 SEO)
That’s the dream, right?
Make money while you sleep.
For 99% of people, affiliate marketing is how they get started.
The idea behind it is that you promote other people’s products, earning a commission if people actually end up buying, thanks to your marketing.
It’s based on revenue sharing. If you have a product and want to sell more, you can offer promoters a financial incentive. If you have no product and want to make money, then you can promote a product that you feel has value and earn an income from it.
I’ve talked a little about it before, but today I want to dive deeper into what affiliate marketing actually is, what sides there are to it and how to get started.
The best definition of what affiliate marketing is can be found on Pat Flynn’s Smart Passive Income:
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.
However, Wikipedia talks about 4 different parties that are involved: the merchant, the network, the publisher and the customer.
Other definitions talk about 3 parties, instead of 4.
I will explain all 4 parts in a second. But, when it comes down to the actual marketing, there are 2 sides of an affiliate equation: the product creator and seller and the marketer.
Therefore, affiliate marketing can be seen as the process of spreading product creation and product marketing across different parties, where each party receives a share of the revenue, according to their contribution.
It’s not just the promotion or just the product creation.
You can be both, the creator or the marketer and still profit from the underlying idea of sharing revenue.
Now let’s look at all of the parts of a successful affiliate marketing system.
The Merchant: Sometimes also known as the creator, the seller, the brand, the retailer or the vendor. This is the party that creates the product. It can be a big company, like Dyson, who produces vacuum cleaners.
Or, it can be a single individual, like Mariah Coz, who sells online courses to female entrepreneurs.
From solo entrepreneurs to startups to massive Fortune 500 companies, anyone could be the merchant behind an affiliate marketing system. They don’t even have to be actively involved, they just have to have a product to sell.
The Affiliate: This party is sometimes also known as the publisher. Affiliates can also range from single individuals to entire companies.
It’s where the marketing happens. An affiliate promotes one or multiple products and tries to attract and convince potential customers of the value of the merchant’s product, so that they actually end up buying it.
This can be achieved through running a review blog of the merchant’s products, for example.
It could also be an entire site, just dedicated to finding cool products around a certain topic and promoting those.
(This is why I’m broke is one of the most popular affiliate sites)
The Consumer: The customer or consumer makes the affiliate system go round. Without sales, there aren’t any commissions to hand out and no revenue to be shared.
Whether the consumer knows that they are part of an affiliate marketing system or not is mostly up to the affiliate.
Some choose to let their consumers know and more and more affiliates tend to be transparent about their marketing being incentivized financially, but others don’t.
They let the tracking system work in the background, where the customer can follow the purchase process just as usual and the affiliate still ends up being paid a commission.
The Network: Only some definitions consider this part of the affiliate marketing equation. But, in many cases, a network works as an intermediary between affiliate and merchant.
While you could technically promote an online course someone has created and just arrange a direct revenue share with them, letting a network handle the payment and product delivery puts a more serious note on your affiliate marketing.
Sometimes, affiliates have to go through a network to even be able to promote the product. For example, this happens if the merchant only released their product on the network.
The network then also serves as a database of lots of products, out of which the affiliate can choose which to promote.
In the case of promoting consumer products, like tools, books, toys and household items, the biggest network, by far, is Amazon. In Nigeria, you may sign up with Jumia and/ or Konga as an affiliate. Their affiliate programs let you promote any item that is sold on their platform.
With the basic terms clarified, let’s get an overview of how you can best get started with affiliate marketing.
As I said, there are basically two sides of the affiliate marketing equation that you can choose from.
You can become a merchant and have others promote your product, in exchange for giving them a commission from the sales that they make.
Or, you can become an affiliate for one or several products that you’d like to promote and market those to consumers, in order to make money.
While most people start by taking the affiliate route and it definitely is the easier path to take, building enough traffic to make a meaningful income just from affiliate sales isn’t quick or easy.
That’s why I’ll walk you through the 4 basic steps that you can take to get started for both sides next week. Please feel free to share your thoughts, like my page and share to your friends. Cheers!