Have you heard of Avon? No? Tupperware? Sure you have.
The business model of these giants is simple: they manufacture the products and they look for people who will help sell their products.
In return, the person who sold the item gets a commission for the sale. Affiliate marketing, a semi-passive income, works in a similar manner, but it is done online.
And you can do the same.
Here, I will show you the key elements of affiliate marketing, how it works, and what you can do to succeed in it.
How Does Affiliate Marketing Work?
Advertising is costly and can yield little results. Apart from the advertising costs, a businessman has to pay either a person or a firm to design the advertisement, or probably manage it. To cut on this cost, a merchant may opt to offer a commission for a product that an affiliate sold.
Let us say that the merchant’s business is vitamin supplements. This merchant needs to reach a lot of people and most importantly, convince them to buy.
This is time-consuming, costly, and can pull the company’s profits down due to the high costs of advertising. Any businessman worth his salt knows that to make his business grow, he has to focus on his core competency, which is to develop products that add value to a person’s life.
Advertising the product and selling it has to be outsourced to somebody.
If the merchant, who we will call John, chooses to advertise, he has to pay an ad company to do the ad, and then he has to pay Facebook or Google to run the ads.
If he chooses to hire employees to do the marketing for him, it also entails cost. Is there a way that John can market his product without having to spend too much?
This is where the affiliate comes in. John, with the aid of a technology expert, sets up an affiliate marketing program. In this program, John encourages marketers to sell his product in exchange for a commission. These marketers are called affiliates.
You are the affiliate.
John gives a personal link or code to each affiliate. This is a private code that identifies each affiliate marketer. This code is how John keeps track of who sold what, and how much was sold.
The affiliate—the person who sells the product—has to find people who will buy John’s product. Below are two examples of how to do this:
- Blogging – most affiliates go this route. Affiliates know that there are thousands of online merchants who are willing to pay a hefty commission for each sale. The affiliate has to choose a product that he understands. In our example, vitamins.
He now has to put up a blog that specializes in vitamins. Everything about this blog is related to vitamins, specifically the vitamins that John is selling. The blog will have visitors, especially if its contents are adding value to a person.
To put up a blog, you need a webhost provider. You need a website that will run smoothly, and you can do this with a webhost like Blue Host, a company that offers reliable and affordable hosting services. With Blue Host, you can also build a website through its partnership with WordPress.
This website runs on WordPress. WordPress is the world’s largest web builder. You do not need to code to learn how to build a website, as it has thousands of templates and plug-ins that you can use.
Now, the affiliate can either post a banner of or a link to John’s products in his blog. If a reader clicks this link and decides to buy, the affiliate receives a commission from John.
To successfully run a blog, you also need an email capture or what is called an opt-in form. Usually, people will give their email address to you if you give them something for free, like an eBook.
Once you have a lot of email addresses, you can start sending automated emails. These emails contain promotional materials that convince your email subscribers to buy.
One such tool that can do both email capture and email automation is GetResponse. It is one of the most widely used auto-responder tools by affiliate marketers worldwide.
- Commenting – some affiliate marketers do not put up blog sites. Instead, they scour the Internet for forum sites or social media groups related to what they are selling.
If one of John’s products is an iron supplement for body builders, the affiliate marketer would likely be looking for social media groups whose members are interested in body building.
Here, the affiliate marketer will comment and respond to inquiries that these body builders have. He will attempt to add value by being an expert in the arena of body building.
He will give advice and provide his insights. And in that comment, he will insert his link (the code John gave him). If readers click this link and buy John’s iron supplement, the affiliate receives a commission.
Experts in the affiliate marketing niche also use forums like Quora, and they also use paid ads sometimes. You will also see them in YouTube doing product reviews.
YouTube is an effective way to market someone else’s product. You can do tutorials and show the product in action. It is a platform where you can reach a type of market or audience that does not want to read, but instead prefer to watch.
Before you can start an affiliate marketing in YouTube, you need a video editor or maker. The two best out there that most YouTubers use are either Camtasia or ViddyOze.
Camtasia is best used if you will do screencast. A screencast is a kind of video where the content of your computer screen is recorded while you are talking. You can also put a small video at the bottom right that shows your face while the video is recording.
A screencast is what many gamers use to stream their games. It is also the favorite of YouTubers who offer online video tutorials.
ViddyOze, on the other hand, is a 3D animation software. The people who use it are those who love to create mini-films, cartoons, and animation.
Benefits of Affiliate Marketing
There are two people who will reap the benefits in this process: the merchant and the affiliate. The merchant will save on the cost of advertising and labor costs.
John does not have to pay anybody on an hourly basis to look for customers. The affiliates do this for him for free. It’s just that he has to pay a commission for every sale.
This is not a bad set up. If John hired an employee, this employee has to get paid whether he made a sale or not. With affiliate marketers, John only has to shell out money if a product was sold.
And since John is wise enough, he has already baked this commission percentage in his pricing model, so he is not really losing money.
Apart from the financial benefits, John is also saving himself the gargantuan headache that marketing entails. If he has 100 affiliate marketers representing him, then this is tantamount to having 100 versions of himself selling his product.
To the affiliate marketer, the benefit is straightforward: money.
An affiliate marketer can easily set up a business where he can sell products that he did not make. He does not have to keep an inventory.
John has the inventory. The affiliate marketer can also have dozens of products to sell. He has the whole world as his market place and there is no limit to the number of products he can sell.
If you are really interested in affiliate marketing, you are better off taking a course. The free vudeos on YouTube can hep lay down a foundation, but affiliate marketing is a serious business.
95% of the people who start an affiliate marketing business fail. the rasons behind this is they thought they can get rich by simply following YouTube Tutorials.
Those who succeed in it learned from the masters, like John Crestani or Franklin Hatchett. Those who succeeded implemented a step by step process, and they received mentorship from experts.
John Crestani has an online course, and so does Franklin Hatchett. It is best to invest in these courses before you start, or you will get lost in a sea of information in the internet. Most likely, you will end up failing.
With John Crestani’s course called the Super Affiliate System, you will be guided properly. It does require a hefty payment, but this is an investment for your education.
And as you know, education will never get lost. Also, the cost of the course is peanuts compared to the tens of thousdans of dollars you can earn per year.
The Caveats of Affiliate Marketing
Every business has its share of horrors. And affiliate marketing is not spared. Here are a few things that one should consider before getting into it.
- Traffic – despite 7 billion potential customers, getting online traffic is not a walk in the park. An affiliate marketer cannot just post a blog and then expect the whole word to flock to his website and buy.
Marketing online takes expertise. You need to understand SEO, create valuable content, understand social media trends, and you need to be relevant.
- Scrupulous Marketers – snake oil salesmen are very much alive today. If you were John, there is no way you can verify the integrity of all affiliate marketers. Some of them might make false promises about your product just to make a sale.
The bad thing about this is that you get all the blame since your business is attached to your brand name. Customer reviews and feedback will show in your website, not the affiliate’s website.
Now that the Internet is at your disposal, earning money through Affiliate Marketing is much easier than those days when you had to sell someone else’s product over the phone. If you have properly set up your affiliate marketing program, along with your blog and squeeze pages, your typical day will be like this:
You wake up in the morning and you eat your breakfast after which, you check your computer if there are new developments in the products you are selling. You make appropriate changes as deemed necessary.
Finally, you just sit back and wait for sales to come in.