How does affiliate marketing work?

Affiliate marketing works by recommending a product or service offered by another business and earning a commission. As a business model, it can be highly profitable because the business pays you for every referred sale.Not all affiliate marketing programs are the same, though. Some pay different commission rates, others will offer a fixed bonus, and some will offer free products or services in return. Examples of affiliate marketing programs include the Shopify Affiliate Program and Amazon Affiliates.With time and hard work, successful affiliate marketing can turn your side hustle into a profitable business venture.? Looking to make money as an affiliate marketer? Here are the commission rates and payout details for the best affiliate programs.

Why is affiliate marketing a good business model?

Affiliate marketing is a reciprocal business model that works for brands and creators. Both parties benefit from a successful affiliate partnership, with brands increasing their sales, and creators earning performance-based rewards.It’s possible to make a living from affiliate marketing because it’s a profitable business model. Here’s why:

How to start affiliate marketing

The journey to becoming a successful affiliate marketer can seem daunting at first. But if you break it down into smaller steps, achieving your goals becomes a lot easier.

1. Find a niche

The best way to succeed in affiliate marketing is by establishing yourself within a niche. “Affiliate marketing, especially when you’re a beginner with no startup money, takes long-term thinking,” says Vivian Tejeda, writer and affiliate marketer. “F...

2. Choose an affiliate program

Once you’ve decided on a niche, the next step is choosing what affiliate program to join. It makes sense to choose an affiliate site or affiliate products that align with your niche.For example, take vegan fitness and lifestyle educator Derek Simnett. ...

3. Choose a traffic source

At this point, you’ll need to start thinking about your traffic source for your affiliate marketing efforts. According to Vivian, there are many free platforms for creators to consider when starting out as affiliate marketers. “Instagram, TikTik, YouTube, blogging—you can create an account for free on these platforms and start creating content right away,” she says.People often make the mistake of thinking you must become a blogger with a dedicated website (which costs money). Though it may be helpful when you plan to scale the business, it’s not essential.You can start generating affiliate income using other (free) traffic sources, such as social media platforms, YouTube, and forum-based sites like Reddit and Quora. Let’s look at a few advantages and disadvantages of each channel:

Facebook

Instagram

YouTube

TikTok

LinkedIn

You might be thinking, “But I don’t have a social media following. How will I make money?” If you don’t have a following, now is your chance to start building one. That being said, you don’t need a huge following to make money with affiliate marketing—you just need to reach the right audience.The average affiliate marketer makes their income entirely through social media. A great example would be Papery Thoughts, a YouTube channel (among other social media accounts) that creates YouTube videos about journaling.The channel generates affiliate sales through links to products in the video description that the creator uses onscreen. Here, the creator shares an affiliate link with her subscribers for 10% off at The Washi Tape Shop.Other ways of using social media for affiliate marketing include joining Facebook groups in your niche and answering questions, or stitching replies to relevant TikTok videos in your industry. The key to building an audience is participation, not just spamming people with affiliate offers.

4. Create content to build trust

No matter which platform(s) you decide to use for your affiliate marketing efforts, the next step is to start creating content that builds trust with your target audience. In 2023, internet users worldwide spent, on average, 151 minutes per day on so...

5. Grow an audience

While you’re creating content on your platform of choice, it’s also a good idea to start building an email list or SMS list. There are two main reasons for doing this:

You own your contact list

So, you don’t need to rely on social media platforms to interact with your audience. All of the major platforms have hiccups now and then, so when they go down you can always contact your audience via email.

You’re able to leverage affiliate links

While some affiliate programs don’t allow you to include affiliate links in your emails (Amazon’s affiliate program being the main one), you can still email links to content you create that contain an affiliate link—you send traffic to any of your content.Using your email list is a great opportunity to add even more value to your audience—further building authority in your niche subject. Some ideas to help you get started with content for your email list include:When it comes to building an email list for free, there are plenty of email marketing software providers that offer free plans, including Shopify Email, Mailchimp, and MailerLite. It’s worth shopping around to see which one suits you best.Once you build trust with an audience, you can start promoting high-ticket affiliate programs. These affiliate programs offer opportunities to make up to five figures per sale. However, you often need to have an established niche and influence to encourage people to buy more expensive products.

6. Send traffic to your links

Now that you've built trust with your audience, it's time to start driving traffic to your affiliate links. This step is where your efforts begin to pay off, but it requires a delicate balance between promotion and maintaining your audience's trust.Start by incorporating your affiliate links naturally into your content. This could be through:For example, if you're in the fitness niche, you might create a video showcasing your workout routine, mentioning the equipment you use and linking to it in the description.Don't forget to use clear call-to-actions (CTAs) that encourage your audience to click on your links. These could be as simple as "Check out the product here" or more enticing like "Get an exclusive 10% discount through my link."

7. Respond and chat with your audience

The last tip for growing your affiliate marketing business is engaging with your audience. Generating conversation not only helps your followers or subscribers feel heard but also works in your favor for social media algorithms.When people interact with your content, it's generally a signal for algorithms to say that your content is worth boosting and showing to more people who might be interested.On TikTok for example, when you like and respond to comments on your videos, those comments will have a special badge that says “Liked by creator” that stands out against other comments.In this example from influencer and affiliate marketer Lauren Loveless, she’s responding to comments from fans to help them make a purchase on her recommended product from Rare Beauty. Lauren has multiple affiliate links accessed from the link-in-bio page attached to her TikTok account. When she posts content driving to these links, she is engaged in the comments.These interactions are important, as they tell your audience that you do read and appreciate their thoughts. As a result, they’re more likely to interact with your future content (and maybe even encourage others to do so, too).Responding to your audience also lets you find out what they might want from you in terms of future content—a win-win situation.

8. Track your results

Tracking results is an important step most beginners overlook. Without proper tracking, you're operating in the dark and missing out on earnings. Familiarize yourself with the analytics providers by your affiliate program. These often include metrics like:Regularly reviewing these numbers can give you a clear picture of which products are performing well and which might need a different approach. To gain deeper insights, add UTM parameters in your links. You'll be able to understand which products are selling and which content pieces or platforms are driving those sales.Don't forget to keep an eye on your content's performance across different platforms. High engagement often correlates with trust, which can lead to more conversions down the line.

Start your affiliate marketing business today

Affiliate marketing doesn’t have to come with upfront investment. Taking the steps outlined in this guide can be a relatively risk-free way of starting your affiliate marketing journey. The only cost? Your time and effort.So, start thinking about what niche you could start building, working up to a passive income revenue stream, until you can work from anywhere you want (or just tinker with outside your main income).