If you have read my “Complete Beginners Guide to Affiliate Marketing” where I walked you through each and every step needed to start your online affiliate marketing business, you would have seen that I mentioned joining affiliate programs among the most important steps.
And of course, like many others just starting out, you must be curious and want to know How Do Affiliate Programs Work?
Before I proceed with providing in-depth detail on that, let’s quickly recap what affiliate programs are.
What Are Affiliate Programs?
In a nutshell, affiliate programs also referred to as associate programs, are connections between business owners also known as merchants, and affiliate marketers (simply referred to as affiliates and are mostly content creators).
In these programs, the merchants pay the affiliates for driving customers to their products or services.
It allows affiliates or content creators to earn money without owning a physical product of their own. Instead, they promote the product of others!
Also, the products owned by these business owners are made known to a wide range of interested people which would, in turn, generate a lot more profit for them.
In other words, you could think of it as a form of promotion or advertisement, but in this case, the merchants do not pay for the advertising before seeing the result.
They only pay after a result like making a sale has been seen. Thereafter, they reward the affiliate for that result!
From what I have said so far, you can tell that affiliate programs mainly belong to the business owners.
They deal with the sales, shipping, delivering, and other services involved in that business. What the affiliates need to do is to simply sign up and promote their products.
How Do Affiliate Programs Work?
There are three things involved in an affiliate program;
- The Merchant Website
- The Affiliate Website or Social Account
- The Customers (also known as Visitors or Traffic).
The merchant must have a website where his products or services are displayed.
The affiliate may either own a website of his own or a social network where he would be able to promote the products or services of that merchant.
This is how the customers come in;
Let’s say I love to eat and try new foods and cuisines from different places.
And, because I want to share all of those with people that are also very interested in food, I decided to create a website where I share my experience and review restaurants signature meals and cuisines on it.
To God be the glory, so many people visit my website. They learn more about these restaurants from my contents, visit their website by following the links I provided on my post, and even order the same delicious tomato pasta I reviewed.
If I had not mentioned them on my post, these people might have never known such a place that serves and delivers “the best tomato pasta on the go,” existed!
Pretty cool right!
That is the power of affiliate marketing and affiliate programs!
Whereas, if I do not join their program, I will be throwing away lots of potential income on the table while they are making their own profit! They are the only ones that win!
Although it may seem like I am not losing anything, that is not absolutely the case.
What did I lose?
TIME! I lost the time I spent writing about them.
Whereas, if I had joined the affiliate program of that restaurant, I will get paid for sending them customers, or get paid a certain percentage of the sales I have made for them.
My time and effort were rewarding. WE BOTH WIN!
This is what brings me to the next discussion.
I believe by now you want to know and understand how you earn exactly from affiliate programs?
Do they pay you for the sales only?
What if the person does not buy something from the merchant website, which other ways can I earn by promoting their services?
What Do Affiliate Programs Pay Affiliates For? – “Primary Earning Methods!”
An affiliate program can offer either of these three earning methods; You can either get paid for sales, get paid for clicks, or get paid for certain actions.
1. Pay-per-Sale or Cost-per-Sale:
The main advantage of this is, it has a high pay rate. It is a commission structure that is a certain percentage of the actual sale.
You only get paid when someone visits your website, clicks from the link you place that directs them to a merchant website. And on reaching there, make a purchase of something.
For them to know the sale is from you, you would be provided with an affiliate id (also known as associate id) when you join the affiliate program.
This id would always be attached with any affiliate link you place on your site that is from that merchant.
Aside from your associate id, there is also something we call “Cookies” that would be attached to your affiliate link.
The cookies would continue to track your id in the affiliate link from every click and sale for a certain duration of time.
The cookie time length of affiliate programs ranges from hours to days, and even months. For example, Amazon.com affiliate program has a 24 hours cookie length.
I have also come across some affiliate programs in the health & beauty niche whose cookies length last for 365 days, that’s a very rare case though!
During the time the cookie tracking is active if a visitor does not buy something the first time they visit the merchant website, and he returns to the merchant site some other time to buy something even without coming to your site directly to click that link again, you get paid for that sale.
But, if the cookie time has elapsed, you won’t get paid if the customer returns later unless they go back to your website or wherever you left your affiliate link and click on it again. And, the cookie time continues to run again till its duration elapsed.
2. Pay-per-Click or Cost-per-Click:
With this method, customers do not need to buy something before you get paid. You are paid for the number of times a visitor clicks your link to the merchant’s site.
Although it may be a lot easier to earn with this method of payment, the pay is not as high as that of pay-per-sale option.
3. Pay-Per-Lead or Cost-per-Lead
This method of payment is based on other actions aside from sales that a visitor does on the merchant site after clicking your affiliate link.
The action may involve filling a form, signing up for something etc. they are mainly things that would require the visitor’s personal information like email.
By doing those actions, they become a sales lead that could be contacted further in the future etc.
And you as an affiliate get paid only if a visitor performs the required action after clicking your link because they only become a lead if they can be contacted.
In a nutshell, it means you get paid for the number of leads you generate for the merchant.
The next time you find yourself filling out a form on a website, keep in mind that you might be helping some affiliate marketer earn a few bucks.
You are empowering them and are making the world a better place without realizing!
Other Types of Affiliate Programs That Provide Further Ways to Earn More Money
Aside from earning from your own directly generated sales, clicks, and leads; some affiliate programs offer further ways you can earn from their program. Let see how these programs work below:
How Recurring or Lifetime Affiliate Programs Work – Their Earning Method:
My ultimate favourite of all!
These types of programs allow you to earn what we call “Passive Income.”
You continue to earn for every recurring sale from that one visitor that clicks on your affiliate links.
A visitor does not need to click on your link multiple times to generate income for you.
Let’s say you promote a merchant service on your website, and that service requires monthly subscription payment from every customer.
The moment a visitor clicks on your link to the merchant site, and subscribe to that service, you continue to earn from every other future monthly payment, not just the first payment.
These kinds of affiliate programs are one of the reasons why I love and appreciate affiliate marketing.
This is because unlike your traditional “9 – 5” or “brick and mortar” jobs where you get paid once for one sale or action (active income), you continue to get paid repeatedly for a single action!
It is the method My #1 Recommended Affiliate Marketing Program that teaches people the in and out of how to make money online utilizes.
How Two-tier Affiliate Programs Work? – Their Earning Method:
In a two-tier affiliate program, you as an affiliate can refer other people to be an affiliate of that merchant’s affiliate program. When you do so, you earn a commission from the sales generated by those referred affiliates of yours.
Do not mistake this program for network marketing or MLM (Multi-Level-Marketing) because of its similarity. It is not MLM.
Instead, you could say it is a very good example of what we call “Multiple Streams of Income!”
Multiple incomes in the sense that, you earn from your own sales, and if others become an affiliate through your affiliate referral link, you also earn from their own sales as well!
Now that we have explored all the methods you can earn from affiliate programs, let see the ways you as an affiliate can promote your affiliate programs links on your website so they can generate income for you.
Types of Affiliate Links to Use on Your Websites!
First, I want you to digest this fact;
If you want to make money from an affiliate program for real, you can’t just dump all sort of affiliate programs links on your website and expect to see money flowing into your bank account in a blink of an eye.
Like every other successful business out there, there are important steps and guides to follow!
Your links or affiliate programs MUST be relevant to the content of your website. By that I mean;
You can’t be writing a post on “the best dog foods” and leave a link to a “travel agency site” simply because you are an affiliate of their program.
You will want to link to an affiliate program that indeed offers or sell dog foods to provide value to your readers or visitors.
But, if at all you are linking to a “travel agency site” there must be a reason for that.
It could either be you have mentioned or cited them as an example in your content, and you decided to link to them just in case someone might be interested in that quick out of the box mentioning.
All-in-all, it still comes down to the relevancy!
Do you get the picture of it now?
To proceed, there are mainly four different types of affiliate links you can add to your website to enable you to make money. These are;
1. Text Links
2. Image Links
3. Banner Links
4. Search Box Links
Text Links: these are the once you attach to a relevant text within a post.
From the examples I gave earlier, I might just add my affiliate link to these words “dog foods.” So when someone clicks on them it takes them to the website of a merchant that sells dogs foods.
Of course, I would have joined the affiliate program of that merchant for me to earn from the sales!
You can also find some examples of text links on this site as well.
Image Links: this is when you use these types, let’s say you add an image of a dog that is eating in the dog foods post to make it visually appealing to your readers.
You may want to link that image to the dogs’ foods your affiliate program is offering or selling.
Banner Links: You know one of those Black Friday promotions banners like the one below, you have clicked on in the past to take advantage of the “50% off” or “biggest sales of the year,” those are excellent examples.
If the banner was on an affiliate marketer’s website or created by an affiliate, his affiliate link would have been attached to it.
Search Box: These kinds of links are readily available in Amazon.com associate program. How they work is that you would be provided with a code (a longer link version) which your affiliate id is already within or attached.
When you place that code on your website, it shows as a search box that allows visitors to search for products of their choice. Immediately they click on search, it takes them to where the product is on Amazon.
How to Find and Join Affiliate Programs? – “For Content Creators or Affiliates”
The first choice is to join individual affiliate programs. The two most common highly reputable ones are Amazon and eBay.
The best and easiest way to join many other affiliate programs is through affiliate networks.
Yeah, I know you’re about to scratch your head as to what this is. Do not worry they are not that complicated.
Affiliate networks connect many affiliate programs in one place together.
You can find as many affiliate programs as you want from different niches on them.
By doing that, all your affiliate programs sales and payments will be managed for you, and you get your pay from one place.
This makes it a lot convenient because you would not have to stress about tracking sales and payments from different merchants.
Another alternative is when you have a topic you would want to write about, it could even be a product or service you want to promote, simply search on Google to see if there are affiliate programs on that topic.
You could also search to see if the merchant or brand of the product has an affiliate program.
As easy as that!
Affiliate Programs and Networks are mostly free to join!
The only one I have come across that requires some little bucks for verification is “Awin Global Affiliate Marketing Network (or Awin)—highly reputable and trusted affiliate network,” and that fee is returnable after signup.
Therefore, if you happen to come across others that are asking you to pay an unreasonable amount of money to join them, take to your heels and run as far as you can, THEY ARE SCAMS!
To sign up, you will be required to fill in some personal information like business name, your name, address, and so on.
After you’ve been approved to join an individual affiliate program or the ones within a network, there are some other information and forms you would have to fill like your payment method and tax information.
The most common payment methods you would be provided to choose from are;
- Direct Deposit
- Bank Transfer
- Amazon Gift Cards
Once you start to make sales, keep in mind you may not be able to withdraw your income until a minimum payout threshold is met.
So, you don’t have to freak out if unable to withdraw your first sale commission. That is normal!
Anyways, all this information would be provided to you while signing up and you must have agreed to them before signing up.
How to Find Affiliates for Your Affiliate Programs? –“For Business Owners or Merchants!”
Just as I advised affiliates to find and join affiliate programs on affiliate networks, I highly recommend business owners to do the same for their affiliate programs.
That way, they can easily find you, and you can easily find them as well!
Aside from that, maintaining your own affiliate program which is another alternative, is highly complicated, involving, and time-consuming. You would have to deal with many things like;
- Tracking links,
- Tracking affiliates,
- Tracking traffic of different affiliates,
- Tracking which sales belong to which affiliates,
- Updating links and codes,
- And, many more behind the scenes complicated activities
But, when you join affiliate networks, most of these things are done for you.
As an affiliate program, your initial registration process to join an affiliate network may include;
- Filling an application where you describe your business and website
- Paying a once-off non-refundable payment
- Deposit a certain amount of money that would be used to pay your affiliates
Thereafter, your affiliate program would also pay the affiliate network a certain percentage of every payout to an affiliate.
Have you realized that everyone involved in affiliate programs chain is benefiting? How? Alright, you don’t, That’s OK!
Let me recap that before rounding up this article!
A Win-Win Situation: The “Four Wins” In an Affiliate Program!
1. The “Affiliate Win”: The affiliates involved win because they earn money without bothering about dealing with any business transaction.
In fact, making money from affiliate programs through affiliate marketing is a highly lucrative business for content creators!
2. The “Merchant Win”: Business owners or merchants win because they get a lot more customers to buy their goods and services.
They also get traffic to their websites. And, their brands become widely recognized. The overall result, of course, is profit!
3. The “Network Win”: Affiliate networks win because they make money for setting everything up.
4. The “Visitor or Customer Win”: They win because their wants and needs are easily met.
What would take hours of trips to find, is now a few fingers away. And, things they were once ignorant about, is now well-known to them!
With that being said, it becomes a win-win situation for everyone!
If you whether affiliate programs are worth it, I will instantly answer, YES! You had better find one to join.
This is because as the world is getting more and internet savvy, and the online world expanding, the e-commerce and affiliate marketing business keeps expanding. And it will only continue to get bigger!
Therefore, if you are not thinking of tapping into this incredibly lucrative opportunity, you don’t know what you are missing.
To sum it up, you are throwing money on the table for others to pick!
For those of you who are beginners and are new to most of the things discussed in this article, you don’t need to feel overwhelmed.
I want you to know you are not alone, every affiliate marketer including myself was at one point a complete newbie that knew nothing about the online business world.
But now, many of us are doing just fine and are even trying to educate others about it.
It may take time for you to start making money, but trust me, that time is worth it in the long run.
So be patient, be consistent, and keep taking actions because your success is fast approaching!