For a long time, we had heard about affiliate marketing but were a little fuzzy on the details. We understood the basics, but how do you get into it? How do you promote other people’s products and get paid for it? As we began to develop our 7 Sources of Residual Income we became much more familiar with the ins and outs of affiliate marketing. So how does it work and how can you get into it?
Affiliate marketing is a marketing arrangement by which an online retailer pays commission to individuals or companies who promote their product or service. It is a way for a company to sell its products by signing up individuals or companies (“affiliates”) who market the company’s products for a commission. For people who are naturally good at sales, it can be an excellent source of residual income.
Let us walk you through an example using one of the subscription models from a previous post.
Using the membership website model, let’s say you subscribe to a boutique nutrition and weight loss coaching website. Access to that site and some extra benefits costs $200 a month. That gets you a customized meal plan, customized workout plan, and access to 1 hour per month of live coaching.
You have been following this nutrition expert on LinkedIn and appreciate and value the perspective they bring. You are more than satisfied with the weight management subscription.
You notice a LinkedIn post from this person who has become a trusted resource. It’s a photo of a workout with the caption, “I really like this set of workout bands. You can use them in your home, office, hotel, or outside and do any of over 200 exercises in less than 10 minutes. Follow the link if you’d like to purchase them.” You decide to click on the link and make that purchase, and in doing so, your weight management coach has gotten a commission on the purchase.
This is a powerful way to combine affiliate marketing and the subscription model to monetize expertise and gain a new revenue stream.
The “how” is where we think people get stuck. It involves producing content and unique links so you get a commission on those purchases. Or if you are an online retailer, it involves finding and recruiting affiliate marketers to boost your sales through their content.
Neil Patel has a great post that goes into detail on both sides of the equation. Neil “bottom lines” the steps to take on both the merchant and affiliate side.
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 4 steps that you can follow:
- Starting to review products in your niche
- Building an email list
- Using unique content to educate your audience and make sales
- Growing your affiliate business with PPC advertising
For more on starting out as an affiliate, here is a helpful step-by-step post with details on finding your niche, building an audience and creating the right kinds of content to grow your affiliate business.
Affiliate marketing is a fascinating aspect of the world of e-commerce. Once you get it rolling, it can be an incredible source of passive income, with buyers responding to links to your content and making those purchases long after you’ve put that product on the market as a retailer, or created that Youtube video or product review post as an affiliate.