Want to easily make some extra cash?

More and more brands resort to affiliate programs to promote and sell their products and services. Therefore, more (and better) opportunities become available for affiliates. The industry is expected to gross close to $7 billion by 2021. This comes as no surprise to businesses who have long been using this strategy for growth and expansion to new markets. On the other hand, if you are interested in becoming an affiliate to generate extra income, the opportunities are present. But just like any other venture, it is best to be well informed before diving in.

The current global economic situation makes for a great time to prepare for a second and passive source of income. It is also, the right climate for businesses across industries to look for new markets and business growth. So, within these unusual circumstances, whether you are a business or an individual, take the time to get some guidance, and invest in your future. It is the right time to start a successful affiliate business and get your share of that huge pie.

What Is Affiliate Marketing and Why You Need it

If you look it up online, you will find that:

“Affiliate marketing is a method of earning money by recommending and promoting somebody else’s products or service. For every sale that is made directly from your promotions, you will receive a commission payment. How much you earn depends on the commission levels set by the advertiser and how many products you sell.”

So, it really is a performance-based activity with pretty much a straight forward practice.

There are usually four parties involved in affiliate marketing:

• The affiliates– the promoters of the product
• The product creators– the creators of the product
• The networks– the networks managing the affiliates
• The consumers– the end-users of the product

You don’t need to be part of a network to become an affiliate. But these are the essential components of the classic affiliate marketing method. As an affiliate, you are essentially the middle man or the link between the producer and the consumer.

There is a clear process to the activity, regardless of the methods used to promote your product. Nowadays online businesses are booming, and web traffic is generally the way to get leads. But this applies to more traditional sales tactics as well:

1. Become an affiliate
2. Promote the product or service
3. Generate leads and sales
4. Earn a percentage of the sales

How It Works: The Ins and Outs of Affiliate Marketing

There are two ways to start an affiliate marketing business: start from scratch, or incorporate it into an existing and established business. Whichever way you decide to move forward, the following sections can guide you in the decision-making process and give you insights on the ins and outs of this industry.

Choosing An Affiliate Program

At the core of the affiliate marketing program are the right product, the right company, positive relationships, and valuable content. All of which are essentials in your search for an affiliate program.
The product you recommend will affect your performance, and ultimately your personal brand and standing in the community. So, when you are on the lookout for a program, make sure you are familiar with the product, or at the very least, that you share the same values as its producers. When you are trying to sell, do it indirectly. Therefore you must be able to incorporate your own experience and have enough context to help you recommend the product. This will allow you to build relationships with your clients.

Finding Your Niche

Do not underestimate the industry you are choosing. It will determine your success rate. So, consider these as you are deciding on your niche:

• How familiar you are with this industry or product
• If you can be passionate about what it represents
• Whether other people – a lot of other people or a small group – are, or can, also be interested in it
• If it is just a hit-and-run product dependant on a trend, or does it respond to a real market need
• Are there affiliate programs for this?
• Whether the niche it targets has a good record and how it fares when it comes to sales
• How profitable it can be

Assessing the Market Demand

Market demand is crucial for any sales activity and so, it is in the case of affiliate marketing. The potential demand is an important aspect that can’t be left to chance. Therefore, once you know your niche, you must follow through the steps to discover if it is worth pursuing.

1. Check out the search volume. You can do this by using Google keyword search to understand if your niche is showing any interest in your product, or if it shows a gap to be filled.
2. What is currently available. Look for the products on sale in the niche. If you find volume and variety, that’s a good sign.
3. Search for affiliate programs. If there are many to choose from it not only shows that it is a popular, in-demand niche, but there will also be many products and services to offer for sale.
4. Competitor audit. Check out websites and social media pages in your niche. What do you find? Is the activity low, or is buzzing and has a large audience?

If you reach a positive result, it means your niche represents a healthy buyer market and the demand is good enough for you to make money.

What Is an Affiliate Network?

If an affiliate marketer is a middle man between the producer and the consumer, an affiliate network is an intermediary between the producers and their affiliates. You may ask, why do you need another intermediary? Many times a network is not necessary, and you can easily operate as a lone – freelance affiliate marketer. However, some companies decide to work with a network to add a filter. A layer of trust, if you will.

In these cases, the network manages the relationship between the two parties and offers the possibility for checks and balances. Thus reducing the risk of fraud.

Perhaps the producers don’t have enough in-house resources to manage affiliates directly, as it involves a great deal of tracking, reporting, and pay-out processing. The answer is hiring a third party to do those things: and that’s an affiliate network.

Popular Affiliate Marketing Models

Similarly to ad campaigns, a business runs to promote their services and products, an affiliate program can include one or more objectives. And these are not very different from the pay-out models for direct advertising. Here are a few of the most used affiliate marketing pay-structure models:

• Pay-Per-Sale (PPS): Affiliate gets paid for every sale they generate. In this scenario, most, if not all, the risk is placed on the affiliates. So they are expected to run ads or invest in any cost needed to promote the product. And it is deducted from their gross revenue.
• Pay-Per-Lead (PPL): Affiliate gets paid for every lead they generate. This works for referrals, online forms, website traffic on specific check out pages, or any pre-purchase activity. In this scenario, the risk is shared between the producer and the affiliate. The latter is rewarded on the basis of effort as well as performance. In online terms, it qualifies as a lead generation campaign.
• Pay-Per-Click (PPC): This scenario is purely a type of awareness campaign and it assumes that there is the availability of a website or online platform used by the affiliate for promotions. The affiliate gets paid for all clicks that were generated, regardless of whether a lead or sale occurs. The risk is clearly held by the producer.

How Much Money Can You Make?

To consider yourself successful at affiliate marketing, you must first evaluate the following points:

• What kind of spenders are the leads in your niche?
• What is the payout structure agreed upon with the producer and/or the affiliate network?
• How much will you invest in your sales strategy? Are you spending a lot on online advertising?

The answer to these questions will give you the data you need to assess your projected income. And you must always consider the pure profit, not the gross revenue, to decide whether the amount you are making is enough for you. Align your expectations accordingly, and decide which industries fit best the type of passive income you wish to have.

The Key Takeaways

Some of the things that you do when you become an affiliate will determine the level of success you have. The first of these things is choosing the right product to connect yourself to and promote. Some points to always keep in mind when you are doing so, are:

• Your audience– will the product resonate with them and improve your reputation amongst them?
• Product quality & value –would you recommend this product to your family or friends? Would you use it yourself?
• Profitability –can you see good conversion rates and is the payout structure convenient for your objectives?

These questions are important in self-reflection during your decision making because, at the end of the day, you are projecting an image of yourself. And as a marketer, the products you promote will affect your authenticity and ability to build your brand upwards.

Of course, a brand that implements over-promotion continuously and does not offer real value, will not reap any rewards, and so neither will affiliate marketers.

Remember, there is a multitude of tactics to promote an item or service, but the golden rule of affiliate marketing is one-size-fits-all: only promote products you love and remain authentic in your relationship with your clients. After all, they are not only here to buy whatever you are selling at the moment, but they truly represent your very own, hard-won, clientele – to whom you may hope to promote other products at a later stage.