How affiliate marketing works

Affiliate marketing is a sales model where a company pays a third party to sell a product or service.If you’ve ever listened to a podcast ad or seen a social media influencer promote a product, you've likely observed affiliate marketing.In exchange for rec...

How to start affiliate marketing

1. Decide on a niche

A niche is a segment of a larger market defined by unique characteristics. It becomes your specialty and the topic people will know you for. Travel blogging would be an affiliate marketing niche, as would pet care or tiny homes.These aren’t your only options, of course. There are hundreds of affiliate marketing niches available. So how do you go about finding a profitable niche that interests you? Consider the following:The goal is to choose a niche with good business prospects, but also one that you enjoy. Running an affiliate business takes commitment and time. If you enjoy the process, you’ll be more likely to stay committed.

2. Choose your affiliate marketing channel

The next step is considering what channels you’ll use to reach your audience. Each affiliate marketer has a different approach.For example, while affiliate marketer Ryan Robinson has an Instagram account, his blog is his core source of income. Other marketers focus solely on Instagram or TikTok affiliate marketing to earn commissions.Many newcomers to affiliate marketing will set up one of these two channels:

A niche product review website

These sites review companies’ products for a specific audience and compare products with each other. They can also publish buyer’s guides and product tutorials to help shoppers make buying decisions, such as the The New York Times’ Wirecutter affiliate marketing site.

Informational content for blogs and social media

Bloggers, social media influencers, and YouTubers publish affiliate content that resonates with their audience to gain influence and encourage clicks.A good example is how Ryan Robinson’s blog focuses on freelancers. He regularly publishes new content related to freelancing to draw in an audience that's relevant to the brands that he’s affiliated with.Authenticity and audience engagement are two critical elements of affiliate marketing. If you can’t connect with your audience, they likely won’t buy the products you recommend.Not sure which platform to choose? Start where you're comfortable. If you enjoy creating social media videos, make Instagram your platform. If you’re a good writer, maybe blogging is the best route for you. Creating on platforms you already understand will help you create content that connects with your audience and drives affiliate sales.Are you great at making YouTube videos? YouTube offers its own affiliate marketing program. To be eligible to join, you must meet specific criteria, including participating in the YouTube Partner Program, being US-based, and having more than 20,000 channel subscribers. Brands can also join the YouTube Shopping affiliate marketing program. Eligible Shopify merchants can seamlessly sync products to YouTube through the Google & YouTube app on Shopify. This enables creators to tag products to their videos and allows viewers to shop while they watch.

3. Find a relevant affiliate marketing program

Ensure the right fit by focusing on affiliate offers and products that will appeal to your audience, and not just on high-paying affiliate programs.A few things to look for when choosing an affiliate program include:Finding an aligned program is critical to running a successful affiliate business. For example, True Crime Obsessed is a comedic podcast where best friends and hosts Patrick Hinds and Gillian Pensavalle talk with a comedic spin about truecrime documentaries.Using this very particular take on a popular niche, they garnered over 200 million downloads and leveraged their audience to promote a variety of affiliate products and services. When a listener clicks an affiliate link and buys a product, they receive a commission.To find good affiliate opportunities, ask your favorite brands if they have an ambassador or affiliate program. That way you can promote products you already appreciate and enjoy.You can also find products and brands to work with in the following affiliate marketplaces:

4. Create valuable content

In 2023, people spent an average of six hours and 35 minutes online per day. There's no doubt that global attention is available for online content creators, but to capture it, you must make your content valuable to a specific audience.Blogs are a good way to create relevant content, with a reported 65% of all affiliate marketers generating traffic through blogging alone.Promoting an affiliate link on social media is another free way to get your content into the hands of the people who might be interested in it. There are plenty of affiliate marketers who operate entirely on social media, like @taylerfit who built her TikTok account to over 460,000 followers with fitness content. She makes money promoting brands like 1UpNutrition through affiliate marketing.On Tayler’s link-in-bio page, fans can find affiliate links to the products she promotes in her content. She makes affiliate income every time a fan clicks and buys one of those affiliate products.

5. Build an audience

To build an audience, first you have to reach them. Creating email lists helps you to directly reach your audience. You can send newsletters, updates on new content, and exciting offers directly to anyone who signs up to be a part of your email list.If you’re operating mostly on social media, follow and tag influencers who may be interested in your niche. The name of the game is to do what you can to increase the traffic to your website or social media page.Reeling them in is just the first part, now it’s important to build trust between you and your audience to keep them coming back.Don’t just try and sell anything to your audience in order to gain a quick buck. The more they feel your genuine interest, the more they will trust you.

6. Follow FTC regulations

The FTC protects consumers from deceptive marketing practices. Unfortunately, there are affiliate marketers out there who are more than willing to promote scams and misleading products.To prevent this, the FTC requires that any affiliate marketer disclose their financial relationship with any brands or products that they are promoting. In short, you need to tell your audience that you’re getting compensated for promoting the products you’re promoting, and you must always tell them when a link is an affiliate link in order to stay compliant with the FTC.If you’re not in the US, you may be subject to different laws and regulations concerning promoted content. Ensure that you’ve checked with the relevant government body in your region.

What are the benefits of affiliate marketing?

Now that you understand how affiliate marketing works, here are some of its key benefits.

You don’t own the products you’re promoting

Most public affiliate programs are larger and don’t require that you buy any of the products you recommend, like Amazon Associates. You simply join their affiliate program, grab your link, and post it on your page or website.It’s perfect when you’re starting out, because you don’t have to invest a bunch of money off the bat. You can take time and experiment to see which types of products and services are gaining the most traction with your audience.

It’s a passive income source

Once you’ve established the groundwork to keep traffic coming to your site, you’re pretty much set. All you have to do is choose the right affiliate partners that will appeal to your audience and post those links. Your unique links and codes will continue to bring in a recurring commission for you, as long as you keep them visible on your site.

It has high earning potential

Affiliate marketing has six-figure earning potential for newcomers. You may not bring in that sort of money right at the jump, but there is real potential for affiliate marketing to replace your nine-to-five.Back in 2016, affiliate marketer Pat Flynn told Business Insider that he earns up to $170,000 per month from affiliate commissions.Adventure junkie and founder of affiliate website Biking Know How Rohan Kadam also turned his blog from a passion project into a successful online business by using affiliate sales. “I scaled my business, especially during the COVID pandemic, and made it profitable in a short period,” he says.

How much can you make as a new affiliate marketer?

How much you can make with affiliate marketing is completely up to you. It’ll depend on how much traffic you can generate, how well you gauge which affiliate products and services your audience will respond to, and the commission rates of the affiliate programs you join.Commission rates vary widely among affiliate programs. High-ticket programs may offer higher rates and larger payouts, but this needs to be balanced against less frequent sales. Programs for lower-value products typically offer 1% to 20% commissions on sales, which may be more frequent.Some brands operate their own affiliate programs with bespoke commission models such as flat rate commissions or payment for traffic rather than sales. As your performance improves, you may also be able to negotiate preferable rates with your affiliate partners.

Earn passive income with successful affiliate marketing

There’s no doubt affiliate income is a smart way to earn money online. With a little time and effort upfront, you can build an audience and earn consistent payouts through your affiliate site—all without taking on too much risk.