What is Affiliate Marketing and How It Works – What You Need to Know to Get Started

What is Affiliate Marketing and How It WorksToday, in the Digital Age, affiliate marketing became extremely popular. You can see it being mentioned all around the Internet: Facebook, YouTube, and perhaps, other places online. When you’ve scrolled through your news feed on Facebook, you perhaps saw many people sharing their stories about how they ditched their 9-5 corporate jobs and starting living life on their own terms as affiliate marketers.

I did! In fact, these stories had inspired me a lot and helped we to wake up and realize that I wasn’t born to be a corporate wage slave and that I’m better off starting my own online business.

Back then, the idea of affiliate marketing sounded appealing, yet foreign to me. One day, I decided to give it a go and attended the short training where I’ve learned from A to Z what is affiliate marketing and how it works.

And my goal here is to share this knowledge with you. So, let’s get it started!

What is Affiliate Marketing – Getting Over the Definition

Affiliate marketing involves promotion of someone else’s products on your website. What is so appealing about this type of business is that you don’t have to bother producing some new product, you don’t have to deal with shipping products, renting a warehouse or any of this stuff. You just need to promote someone’s product and get paid for it.

There are three figures involved in affiliate marketing: a customer, a company, and an affiliate marketer.

A customer is the person who has a specific problem that he wants to be solved or a desire that he wants to fulfill. He searches on the Internet or Social Media for a product or a service that can help him to achieve his goal.

A company, in this context, owns a product or a service that can help the customer to solve his problem or fulfill his desire, and it is trying to promote it. It doesn’t necessarily have to be a company; it can also be an individual person (a merchant), who owns a product and tries to sell it.

An affiliate marketer is the person who is in charge of promotion of the company’s product. He gets a commission for each sale of the promoted product that takes place. This commission is a fraction of the price of a product that is being marketed. It can range from 1% to over 70%, depending on the product or the affiliate program.

How Affiliate Marketing Works – No Rocket Science Here!

Now that we know who is involved in affiliate marketing, we need to know how the products are promoted and how an affiliate marketer makes money in more details.

The customer faces a certain problem that needs to be solved. He is researching a solution to his problem on Google and finds information that he needs on some website. The owner of this website is an affiliate marketer. Therefore, we can also call his site an affiliate website.

On this affiliate website, the customer sees an ad of the product XYZ that he believes can help him solve his problem. This ad has the affiliate link to the product that an affiliate marketer is promoting.
When the customer clicks on this affiliate link (an ad), he is redirected to a website of a company or a merchant who sells this product. To be more specific, the customer is redirected to the page that sells this exact product on merchant’s website.

Once the customer buys this product, the owner of the affiliate website, the affiliate marketer, receives the commission for the sale that was made.

A Real Life Example – Just to Give You a Better Idea

Let’s imagine a customer problem who has insomnia; he can’t fall asleep for a third night in a row. This issue drives him bananas, so he researches for ways of overcoming his sleeping disorder.

Then he visits your affiliate website that explains how to deal with insomnia and notices that you also promote a medicine called ABC (this name is just for example purposes) that cures this disorder. The advertisement of the ABC medicine has the affiliate link to Amazon where the product is in stock.

The customer, eager to get rid of his insomnia, clicks on this ad and is redirected to the Amazon link where the ABC medicine is sold. If the customer decides to purchase this product, you will receive a commission that is, for instance, 10% of the price of the product. If this ABC medicine costs $100, the commission that you receive for the sale is $10. These $10 are only for one transaction. What if 15 people go through your affiliate link and buy this medicine? In that case, you will earn $150.

Key Ingredients to Get Started And “Do I Really Need a Website?”

Now that you have an idea of how affiliate marketing works, you are probably eager to get started. But before you jump into the affiliate marketing world, let’s go over the important ingredients for your future affiliate marketing business.

Based on what we’ve covered thus far, you need a website, traffic (visitors who can become customers), and an affiliate link, or more than one link. In fact, the more affiliate links you have, the more profit you can generate yourself.

One of the common questions that people new to affiliate marketing ask is “Do I really need a website for affiliate marketing?” I was in the same boat as well.

Yes, you will definitely need a website; in fact, it is an extremely important component for your future affiliate marketing business. I would also say that it is the fundamental component.

The reason is simple; you need a website so you can to generate traffic to whom you can promote certain products or services. However, an empty website won’t get you very far; you’ll need some form of content on your website to attract visitors. For instance, your website can be a blog or a product overview website.

Once a good amount of traffic is established, you can then consider monetizing of your site. Because we are talking about affiliate marketing here, your site can be monetized by placing affiliate links.

Recommended: What Do I Need to Become an Affiliate Marketer?

Now You Know It!

Now you have a clear picture of what affiliate marketing is and how it works. As you can see, there’s no rocket science involved.

Just a final remark: although the concept of affiliate marketing is simple, the actual procedure of setting everything up and generating traffic will take some time, effort and dedication. So, be patient, don’t give up, put in all your effort, stay positive, and you will definitely reach your goals!

Please, feel free to leave any comments, questions for feedback that you may have! The best way we work is by helping each other.

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