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 this:
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, often through an affiliate network, 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 through an affiliate program. 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 as an affiliate marketer.
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. So, let’s dive into my affiliate marketing guide. Ready?
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.
(Image source: CJ)
I will explain all 4 parties 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 affiliate 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 that defines who you are as an affiliate marketer.
You can be both the creator and the marketer and still profit from the underlying idea of sharing revenue.
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.Now let’s look at all of the parts of a successful affiliate marketing system.
From solo entrepreneurs to startups to massive Fortune 500 companies, anyone could be the merchant behind an affiliate marketing program. 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. An affiliate marketing business can produce a few hundred dollars in commissions each month or tens of millions of dollars.
It’s where the marketing happens. An affiliate promotes one or multiple affiliate 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 by running a review blog of the merchant’s products. For example:
It could also be an entire site that’s dedicated to finding cool products related to certain topic and promoting those affiliate products.
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.
The affiliate will try to market to the consumer on whatever channel they see fit, whether that’s a social network, digital billboards or through a search engine using content marketing on a blog.
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.
The consumer will not typically pay a higher price to the affiliate marketer, as the cost of the affiliate network is already included in the retail price.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 consider the network part of the affiliate marketing equation. But, I believe that an affiliate marketing guide needs to include networks, because, in many cases, a network works as an intermediary between the affiliate and the merchant.
While you could technically promote an online course someone has created and just arrange a direct revenue share with them, letting a network such as ClickBank or Commission Junction handle the payment and product delivery puts a more serious note on your affiliate marketing.
Sometimes, affiliates have to go through an affiliate network to even be able to promote the product. For example, this happens if the merchant only manages their affiliate program on that network.
The affiliate network then also serves as a database of lots of products, out of which the affiliate marketer can choose which to promote.
(Clickbank is an example of a network)
In the case of promoting consumer products, like tools, books, toys and household items, the biggest affiliate network, by far, is Amazon. Their Amazon Associates affiliate program lets you promote any item that is sold on their platform.
Anyone can sign up and then generate a custom affiliate link to Amazon products. If someone purchases through your link, you earn a small commission.
With the basic terms clarified, let’s get an overview of how you can best get started with building your affiliate marketing business.
You can become a merchant and have others promote your product, in exchange for giving them a commission from the sales that they make.As I said, there are basically two sides of the affiliate marketing equation that you can choose from, assuming that you’re not going to build an affiliate network such as Commission Junction.
Or, you can become an affiliate marketer 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 on both sides of the affiliate marketing industry.
How to become a merchant in 4 steps
If you want to become an affiliate program merchant and then make money by having affiliates sell your product, there are 4 simple, yet not easy, steps that you can take.
First, you need to have a product idea. I’ll show you a few ways that you can generate those ideas, based off what’s already popular, in the next section.
Second, you have to validate your idea. You could just go ahead and build your idea. But, what if people don’t even want it? An idea is only good if people actually want it to come to life.
Third, you have to actually create the product. Since creating a physical product usually comes with huge investment and risks, I’ll only show you ways to create digital products. These are the best place to get started since they typically only require your time and little or no money.
Also, once your product is created and released, you still need to find affiliates to promote your product and this is where affiliate networks can help.
Step 1: Coming up with a product idea
People always say it’s hard to come up with an idea. It’s not. Ideas are easy.
But, if you think that your idea has to be super original and born out of the pure genius of your brain, that’s hard.
If you want to make money with an affiliate marketing business, you can’t be romantically attached to your idea.
Instead, just look at what products and services are already out there. Consider how you can improve upon them, by delivering something that solves the problems with those products.
You can, of course, always, choose a topic that you’re interested or involved in.
Imagine that you’re a housewife or a stay-at-home Dad, for a second.
Maybe you want to create a product that makes household chores easier. For example, you could look for a vacuum robot to get some ideas.
This is the first Google result, a review site for robot vacuums:
Just by looking at the individual reviews, you can instantly see what’s bad about these robots and what you could potentially improve upon.
No virtual walls that tell the robot where to go and where not to go is a common problem, mentioned in 6 out of the 10 reviews of the top products!
Lack of a remote control was also a common ‘con.’
However, the virtual wall came up again and again and again.
Therefore, a great idea could be to develop a virtual wall that works for all vacuum robots.
I imagine that you could sell anyone who owns a vacuum robot a system that works as a virtual wall, so their robot only cleans a predefined space.
Now that’s a valid idea!
This works for anything, I’ll show you.
Another way that you can do research is to use a tool called Buzzsumo, which shows you what’s popular, based on social shares.
Even if you’re into building sandcastles, you can instantly see what content has been recently popular.
People really like cool sandcastles like this one:
If you go on YouTube and search for ‘build a sandcastle,’ you’ll find thousands of results.
Apparently, people really want to know how to build cool sandcastles. So, what could you do?
Record a series of videos where you show people, step-by-step, how to build 5 very specific, epic sandcastles.
Or, you can do a write-up of all of the tools that you need to build epic sandcastles.
You could even come up with some forms or stencils that people can use to make building epic sandcastles a whole lot easier.
The question is…will people pay for it?
Step 2: Validating your idea
In order to not end up doing a great series of sandcastle videos that no one wants to buy, you have to first validate your idea.
How do you do that?
Simple: You ask people to pay you for it.
How do you find these people? Easy.
Take the URL from one of the sandcastle posts on Buzzsumo and plug it into a tool called Topsy.
Topsy then shows you a list of all of the people who tweeted that link.
You can then directly tell them about your idea, by hitting the reply button…
Make sure that you ask them whether or not they would buy your idea — not just if they like it.
Anyone will say that they like something just to be nice.
If they respond with a yes, you need to directly follow up with an ask to buy.
Saying they will spend money is not the same as actually spending it.
When people are interested in your product, give them a chance to buy. You can simply use PayPal and say you’re going to build it if you get a certain amount of orders.
Once you cross your threshold and make sure that people actually want it, you can start creating the product.
Step 3: Creating the product
There are a ton of steps to follow for creating a product and this isn’t an entrepreneurship guide, but I want to point you to some good starters.
I’ll only give you resources for starting digital products, because I don’t want you to waste precious time and money on creating a physical product on your first try 🙂
These are good starting points. Creating digital products is a lot easier, since it just takes time and sometimes a little financial investment, but usually not more than a service fee or a one-time price for software.
Once you have the product created and delivered to your initial buyers, it’s time to open up the affiliate network.
Step 4: Finding affiliate program partners
The tech part is the easy thing here.
With tools like Gumroad or Digital Product Delivery, you can easily set up affiliate program partners and allow them to collect commissions.
(Image source: Gumroad)
The tough part is finding partners who actually have an audience that is interested in what you have to sell.
Let’s stick with the sandcastle guide example.
Do you think there’s anyone out there who sells something remotely related?
Actually, there is.
When you enter “learn to build sandcastles,” into a search engine, several sites pop up that sell educational material about it.
Like Sand Sculpt USA, which offers sandcastle building lessons…
or SandCastle Lessons, which offers a class on the same subject.
Contacting them and getting them to cooperate on a sale together would be an easy pitch because it’s a perfect fit.
The more niche your product is, the easier it will be to pitch to fellow merchants.
You can simply send them an email, introduce yourself and your product and ask them if they want to partner on a sale together, where you’ll share revenue.
Pro tip: Affiliate commissions of 50% or higher are very common with digital products because you have no cost of replication. Don’t be greedy here, split the pot evenly and everyone wins.
Googling “toy review blog” also gives plenty of results, where people write toy reviews.
What’s more, lots of YouTube channels review specific categories of toys. If you find one that reviews kids’ toys, they’d probably also be a good fit for your affiliate product.
Just try finding one person to partner up with and start your first affiliate promotion. You can adjust commissions and details later, the important part is to get started.
However, you could also start the journey on the other side of the fence and just become an affiliate yourself.
Time to recap. So, there are two ways to get started with affiliate marketing.
You can become a merchant or an affiliate.
The 4 steps of becoming a merchant are:
- Coming up with a valid product idea.
- Validating that idea by getting people to pre-pay you for the product.
- Creating that product.
- Finding affiliates, likely through an affiliate network, to partner with who will promote your product.
The more common and slightly easier route is becoming an affiliate. There are also some important steps that you can follow:
Affiliate marketing is a good way to get started with online marketing.