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How to Make Money Affiliate Marketing: How Does It Work?

Digital affiliate sales count for millions, if not billions of dollars in revenue each year...

It's become tremendously popular in the past 10 years - and for good reason.

However, there are a ton of little things that go into the affiliate process.

Let's get started and take an exact look...

What Is Affiliate Marketing - Defined

How To Make Money With Affiliate Marketing

Affiliate marketing is a business relationship where business owners will pay independent marketers (affiliates) commissions based on sales or lead generation performance.

From a business owner's perspective, affiliate marketing is a customer acquisition channel that leverages independent marketers (affiliates) to drive traffic, leads and sales in exchange for a commission paid on specific actions.

Wow, that's a log I know...

Let's simplify things

Affiliate marketing is like having a commission only digital sales force who only get paid when they deliver sales.

For independent digital marketers, affiliate marketing is an opportunity to earn income selling other people's products.

The business owner has done the hard work of creating all the products or services. The business owner also has done a lot of the heavy lifting of creating other things such as:

  • Online social media accounts
  • Websites
  • Content for search engines
  • And other systems to deliver the products or services

Those who may only want to focus on the sales side of things can then choose to promote the products or services without all the responsibilities of being a full-time business owner - and THAT is the appeal of being an affiliate.

Affiliate marketing is simple in theory, but it is not easy due to the mis-information being sold by fake gurus, the shear volume of competition, and wide variety of digital marketing skills (and the amount of work) required to make money as an affiliate marketer.

Let's dive deeper into what is affiliate marketing and how websites use affiliates to drive sales.

The Tech Side of Affiliate Marketing

How does affiliate marketing work

Before you get started on the tactical "how to"… You must understand how affiliate marketing works from a broad overview and a mildly technical perspective.

This video here is the best free affiliate marketing training online, so start there if you are a visual learner and enjoy videos.

Online merchants, e-commerce stores, or vendors add a specific tracking system to their websites that offers every affiliate a unique ID and tracks clicks or referrals from affiliates all the way to the checkout process and completed sale.

When affiliates sign up for businesses' affiliate programs they often receive a special link. This is your affiliate link and contained within this affiliate link there is a tracking code that works with a tracking cookie.

That's a lot to unpack there just to sell stuff online, but keep reading...

When a potential customer clicks through any affiliates special "affiliate link" the tracking cookie on the merchant site (the business owner's site) picks up any affiliates "affiliate ID" and stores that data on the potential customer's browser.

When that user completes a purchase, the merchants website (the business owner's site) recognizes any affiliates "affiliate ID" in the cookie on their browser and the sale gets attributed to the corresponding affiliate, thus paying out a commission.

I promise we won't get any more technical than that!

Cookie Duration

The one key you need to keep in mind is what's known as the cookie duration.

Every affiliate program has the freedom to set their own cookie duration…

Being an affiliate on Amazon, it is set to 24 hours, where most products are 30 to 60 days… Sometimes as long as 6 months or 180 days.

The cookie duration is how long after the visitor clicks on your affiliate link you are able to get credit for the sale.

Two super-quick examples using Amazon and their 24 hour cookie duration so this whole concept makes sense:

Example #1 - A user clicks on your affiliate link today and completes the check out tonight (5 hours later) for a new set of headphones. You earned the commission because the click was attributed to you and the sale was completed within the cookie duration window.

Example #2 - Another user clicks on your link today and completes the checkout two days from now (48 hours later) for their headphones. You do not earn the commission because the cookie expired before the user completed checkout.

What you need to remember: The longer the cookie duration the more time and opportunity you have to close the sale and earn a commission!

Amazon's 24 hour cookie window is one of my biggest challenges with the Amazon affiliate program, but that's a topic for another blog post! A 30 day or 60 day cookie duration is far better.

Now that you understand the tech, let's look at the theory behind successful affiliate marketing.

3 People Make It All Work

There are three parties involved in you making money as an affiliate marketer and they each have different goals and responsibilities.

making money as an affiliate marketer

#1 - The merchant or vendor - Their goal is to sell their products and their responsibility is to have a high converting sales page and a functional checkout process.

#2 - The end user or customer - Their goal is to solve a specific problem, achieve a specific goal, or obtain a specific item they're searching for (that they believe will solve their problems or achieve their goals)

#3 - The affiliate marketer - Your goal is to connect people who are searching for solutions with the products that will aid the process of achieving their goal. This is done via any of the merchant's affiliate programs. Your responsibility is to build trust, educate and presell the item to the end user...

The affiliate marketer's job is not to sell the item… That is the merchants responsibility!

This is so important it is worth clarifying...

Your job as an affiliate marketer is to build trust with potential customers, and increase awareness for the merchants solutions to those individuals searching for a goal or solution.

This is called 'Pre-Selling'!

If you really want to do well in this space, then you'll need to build trust with an audience BEFORE you pump them through an affiliate program.

Most people approach the affiliate marketing game thinking "great, I'll just run some ads for some products and earn a commission when people click and buy."

If you are ready for the tactical, step-by-step about how to make money as an affiliate marketer and a vendor, be sure to watch this video, now.

The problem with direct-linking affiliate marketing method is two-fold

#1 - The merchant or vendor can do this themselves… And you are often prohibited from running ads that use the merchants name or the specific product name, or any other trademarked items. This is how people get their ad accounts banned!

#2 - There is no TRUST!  The customer does not trust you, they don't trust your advertisement, they don't trust the merchant or they don't believe the item will actually solve the problem… The customer is filled with doubt and skepticism.

Until you assist that visitor in getting over their doubt and skepticism... nothing will happen. No affiliate commissions and any marketing efforts will have been in vein.

But when you communicate in a way that builds trust, amplifies the desire, and allows them to see the emotional benefits of completing the sale… You are well on your way to earning full-time income as an affiliate marketer.

And this leads us to the most important question...

How Do You Make Money With Affiliate Marketing?

How to make money with affiliate marketing

At this point you've learned a lot about affiliate marketing from the parties involved, their goals, the tech the cookie duration and even your job to pre-sell not sell...

So how does it come together for you, one of the many affiliates out there who want to earn a living doing this?

Well… There's actually several ways it can work depending on the types of products and the types of traffic that you're focusing on.

First, I highly recommend you watch this video by my buddy Justin (and his team) that explains affiliate marketing in a very clear and concise manner.

Then, read below for a few stories that outline some specific examples to paint an extremely clear picture about how affiliate marketing works when done the right way.

As you read the following scenario pay attention to various elements such as:

  • How to get started
  • How an audience is built
  • How the online presence and websites are handled
  • And ultimately how commissions are made...

These are just general things to take note of moving forward

Affiliate Marketing Success Scenario #1

A busy soccer mom named Sally has four kids and a husband who works full-time from home is ready to go on a smoothie kick. She has been eating too much fast food, is a little overweight and had a few green smoothies at a friend's house recently.

She not only feels better when she has a midday smoothie, but she doesn't feel the fast-food craving…

And her kids seem to avoid the midday temper tantrum crashes when they have smoothies, too!

Just this little insight paints such a big understanding of her, her challenges and her reasons for buying.

Obviously she's looking for a blender... And maybe some Organify greens (a kick-ass Clickbank affiliate product)

But she is looking for more than just a blender... and when you acknowledge that you will have a head up on your competition! You must build a relationship with your audience.

This process of learning more about the end user, their life, their 'story' is required and I call it creating a customer avatar.  Click here for my ultimate guide to creating your customer avatar post.

Ok, let's get back to Sally and HOW she will set out to achieve her goal...

My best guess is that she will turn to Google in her busy life, probably on her cell phone, to find the exact blender she is going to purchase.

She will type in a phrase that we call a keyword phrase… And it will probably be a longtail keyword phrase meaning she's going to search more than "blender."

Odds are her search phrase will be closer to "best blender for a family of 6 for under $100"

So how do you connect with her?

Well in this scenario, a content heavy website that is focused on either blender reviews, getting fit through green smoothies, or countertop appliance review sites could all have a great chance of ranking well in Google for her specific search phrase.

For learning how you can create this type of content FAST... Content that will be useful to your audience and will rank well on google, click here and watch this video.

Let's say you have a specific post on your blender review site that has the title "Seven best blenders for big families under $100"

She sees your post title in the Google search engine results and thinks "aha, this is exactly what I'm looking for…" And then she clicks.

Now it's up your copy to do the job of pre-selling the right blender for her. She's already sold on a blender… So no need to sell the idea of a blender. Just help her find the right one that fits her needs - one that she will actually use!

In the content of this page you need to find the benefits of the blender and figure out how to translate those to your reader's specific emotional needs… Where can you find these benefits? Often times the five star reviews in Amazon contain some of the best reasons why customers love their blenders that you can leverage.

So if it is dishwasher safe… You reiterate how fast it is to clean by throwing it in the dishwasher because busy moms don't have time to hand wash blenders. She really understands that you get her when she reads content like this...

Now I'm not in the blender world so I'm gonna stop with this example here… But you carry on finding all of the different benefits and translate them to her specific needs…

In your list of the seven best blenders, you might have a "best dishwasher safe blender" and then you might have a "best large capacity blender" in addition to your "best all around blender for under $100" option.

When you help her realize that getting healthier with smoothies can be fast, easy, and fits her budget… She's closer to taking a recommendation clicking through and purchasing from you!

Let's look at another example that takes a totally different approach to affiliate marketing…

Affiliate Marketing Success Scenario #2

A 33-year-old machinist who works swing shift in a manufacturing plant Tennessee gets off of work every night at midnight and has a very difficult time falling asleep…

He thinks he has insomnia and gets frustrated as he lays awake until the wee hours of the morning sometimes not falling asleep until the sun is up and feeling like he only got a nap.

If you've ever had challenges sleeping you understand how big of a problem this feels from his perspective.

Now, since he thinks he has insomnia… He's probably not going to be searching Google for his solution… Although he may and the above approach used with the blender example could work here.

But in this situation you could also probably encounter this individual and millions of others who have a hard time sleeping at night through Facebook advertising.

Think about… What do you do when you can't sleep? Watch Netflix with your phone in your other hand, browsing social media? Yep! Millions of people spend their evenings this way.

Sleep Related Affiliate Marketing Example

You create a free e-book that is titled "Seven Natural Sleep Hacks To Fall Asleep Fast Without Pharmaceuticals"

You offer your free e-book in a Facebook ad through an affiliate marketing funnel.

You obtain their email address in exchange for the e-book… And you have your first opportunity to present an affiliate offer on the thank you page they see after the often. This is called the bridge page and it works best when you put a video introducing the affiliate product that is the ultimate sleep solution…

Now a quick note here, you should only be promoting products that you've tried, purchased, and had a great experience with yourself! Remember, your goal is to build trust and to offer actual solutions to their actual problems… How do you know if it's a solution? You try it out and see if it works for you first!

Back to our little solution here… The e-book!

Your e-book is simple. You maybe even had it ghostwritten by a writer on UpWork... Maybe you wrote it yourself. Doesn't really matter!

Out of the seven options, you might link over to Amazon for a specific herbal tea that helps induce sleep… That can be an affiliate link for a specific physical product!

Maybe you recommend the blue light eliminating glasses that help people fall asleep as an affiliate… Now your book has two affiliate links inside!

Not every option here should be an affiliate link… Recommending people have a healthy diet and get good exercise don't require affiliate links. But there's probably a way to get them in there if it's more relevant excavation point

Then finally you have an audio program you recommend that is the ultimate sleep solution with specific audio programs that are scientifically proven to help people fall asleep when they listen to these audio MP3s as they lay down for bed.

Ultimately the user should take all seven recommendations in order to sleep better… But three of those recommendations they can click through and purchase immediately from their phone!

Don't forget! you also have this person's email address… And you can follow up with helpful emails they give you even more quality advice to build more trust and ultimately earn more commissions.

This is my favorite approach to the game of affiliate marketing because you are capturing their contact information in a way that gives you the right to send email marketing messages in the future… So you can take more time to build the relationship, give more value, and ultimately present more offers… Further increasing your odds for success for the products you promote

Final example… Let's play some golf!

Affiliate Marketing Success Scenario #3

Golfers are notoriously passionate about the game. It is well-known that a golfer is willing to spend large amounts of money to remove strokes from his game so he can get bragging rights in the clubhouse for beating his buddies after a round of golf.

From physical products to fitness products and even membership programs like revolution golf… There is nearly an infinite number of ways to promote the different aspects of golf as an affiliate.

For this example we are going to take the expert approach. I like to call this "Building a niche authority site"

This is most closely related to how I built this brand here at https://www.milesbeckler.com somone who struggled for a decade to earn a living online, then finally figured it out and is now spilling all the beans for free!

Ok, our individual in this example is Donna.  She is a 61 year old lady who just retired early from years as an executive.  Her husband was also an executive, is a few years younger and they just relocated to a golf community and bought a house on a golf course.

Donna struggles 'keeping up with the guys' off the tee. She just doesn't have the distance. Her fairway game is good... Her chipping game is rough and her putting needs work... But she is a great at getting out of the sand traps because she always finds herself in them!

Golf Affiliate Marketing Example

Immediately, you can see that there are many 'areas' within her game that she will focus on as she continues to hit the links now that she is retired...

She will probably start with her perceived 'biggest problem' (or the most psychologically embarrassing problem) first, then she will work on the next biggest problem, then the next, and so on.

Donna has the chance to become a repeat buyer with a very high lifetime value, by the way... If you hadn't noticed!

Now, for every 'Donna' out there who may relate better to a female content creator, there are a dozen or more Mike's out there who are her husband who have their own challenges... The slice off the tee, can't hit the driver, etc.

So if you are going into the golf world as per our example here, the first step is to niche down and focus in on a very narrow segment of the golf niche. You are going to become the most helpful person online to people searching for solutions around that segment.

This idea if niche'ing down to stand out is MASSIVELY important to your long term success!  Learn more by watching this video, now.

 

Niche'ing down could mean you focus on helping people with putting… Could be chipping… Could be eliminating a slice… Could be yoga for back pain relief for golfers!  But it must be specific and not just 'golf tips'!

This works best when it's around a solution that you found for yourself to a problem that you had yourself.

In the expert example, your "zero to hero" story becomes the driving force in the products and solutions you offer.

You overcame a large problem and improved your game… Now you're going to show them how to do the same!

Since golf is a visual sport… I'm going to use YouTube as the content creation example here. Writing blog posts and even podcasting are both valid approaches to this content creation segment. Create content in the manner that is easiest for you!

Meaning: if you hate to write, don't write! ...Or if you fear being on camera, don't make YouTube videos!

Simple stuff, right?

Through the basics of keyword research you can find all of the questions people are searching in regards to your little subset of the golf niche. You then move forward creating one unique video that is excellent, for each keyword phrase you find.

This is called content marketing… I recommend you start by publishing 90 videos in 90 days and what I call a 90 day content marketing challenge!

This process of publishing 90 pieces of content in 90 consecutive days forces you to become comfortable and competent as a content creator.

Just like your first game of golf and how bad you were then… Your first video will suck too. My first video definitely sucked!

But like your golf game, as you practice more you got better! Your videos will get better as you publish more videos too!

The same applies to podcasting and blogging... This isn't a 'YouTube only' thing!

There is no way around the learning curve. No one is a good golfer the first time they get on the links. You will not be a good content creator the first time you publish content! That is okay!

So let's just condense down that learning curve to 90 days and get you to become a competent and confident content creator with a 90 day challenge.

Right... You are now content marketing machine and your noticing that your audience is growing. People are finding you on YouTube... Well done!

You continue to put out great videos with tips, strategies, tactics and techniques that will could aid them in shaving off a stroke or two in their game.

All while reinforcing through your actions of consistent publishing, that you are the one helping them beat their friends so they get those bragging rights they care so much about in the clubhouse!

Your fans are rapidly falling in love with you because they are taking your tips to the links and they are seeing improvement... And you haven't even asked for money yet!?!

Now, once you get traffic rolling and your channel gains a bit of authority… Do you start bombarding affiliate links at them at this point?

Absolutely not!

Your next steps as an affiliate with an audience is to grow your email list!

You create a free report, or a free video training series they can access in exchange for their email address… And you begin email marketing and email list building!

This is called your 'lead magnet' and the following video explains what makes a great lead magnet:

 

Your big goal in the expert model is to grow in email list because that is your largest and most valuable asset for an affiliate marketing business.

Once they are on your list and they have had a great experience with your training, you can offer a few more tips and then share the main affiliate link via email, whether that is a Revolution Golf affiliate link or a specific physical product on Amazon… It does not matter.

And in this model you continue to alternate giving value in three or four consecutive emails with a new affiliate offer.

The Jab, Jab, Jab, Hook Approach To Email Marketing

This is called the jab, jab, jab, hook approach to email marketing... Which is a boxing reference if you didn't notice.

The jabs are the value that you give for free and the hook is the offer. You don't always land your hooks all you control is how often you throw them and with what level of finesse!

The main point here with the jab, jab, jab, hook method is that you give value, value, value before presenting an offer!

This method of having an email list to focus you marketing efforts on is far better than pay per click ads.

With paid advertising, the moment you stop paying… That is the moment your traffic stops!

That's why you focus on building a list so you can keep mail your list even when you stop the traffic flow.

But I'll be honest, I prefer getting traffic for years based on the efforts I put in today!

Search engines are weary to put your content at the top so it will take a lot of work. Again you can just do paid ads to force yourself on top, but that sort of traffic isn't sustainable.

Organic traffic from search engines is what will help most affiliate marketers.

Also it doesn't matter how you approach affiliate marketing at first. You just need to dive in!

Find the approach that is most in alignment with your personality type and your content creation style you'll use for your site and you will find that all of the successive steps become a little bit easier.

You're probably realizing at this point that growing a successful affiliate marketing business is a lot of work.

Well... You are right! Affiliate marketers work hard - day in and day out.

A product won't promote itself!

Hard Work Pays Off For Affiliate Marketers

But here's the facts... Building a real affiliate marketing business that can pay for the lifestyle of your dreams takes an incredible amount of work.

Affiliate marketing is more work than most employees put in at their 40 hour per week job!

  • But having a successful site that:
  • can promote multiple different products
  • brings in organic traffic rather than paid traffic
  • encourages its visitors to use your insights to better their lives...

...all offers a level of lifestyle freedom (and time freedom) that a desk job can never offer you.

And it is the mis-understanding that affiliate marketing takes MORE WORK than a traditional job that is why most people fail at affiliate marketing…

People buy into hype all the time from the fake gurus claiming that it's easy to make $1000 per day with affiliate marketing will never make it, because when the going gets tough, they look for another 'short cut'. 

The short cut is to become a prolific content creator (which starts by being a bad content creator who sucks less with each subsequent post) and give value to your niche/audience for a few years straight.

When you're focused on being of service to an audience you will find that you can tap into new levels of energy. I don't know how it works, but when you give of yourself to better and improve the lives of others, you get uplifted in that process.

When the niche you choose is something you are passionate about, or you enjoy doing… Like the golf example! The process of creating content becomes fun.

When you are having fun helping others and getting charged up in the process… You have the type of business that can sustain you energetically for years to keep publishing great content and truly become the number one expert in that little tiny sub niche that you will own.

You will own your niche because you will outwork everyone else in that niche!

And don't think some people are passionate about countertop kitchen appliances! Or improving sleep… Or any of the millions of other niches that are ripe for the picking and the world of affiliate marketing.

I hope you found this post to be helpful and insightful… If so, scroll down and leave me a comment below. I want to know if you made it through this whole post because if you did you are a #BadAss!

Now, get out there and start improving the lives of an audience you have an affinity with!

And remember: The money is a byproduct of the value that you give to the marketplace!

If you want a step by step guide for getting started with affiliate marketing, I recommend you check out ClickBank University.

For more info, you can read the full ClickBank University Review here.

A Quick Word About Affiliate Networks

An affiliate network is typically something like ClickBank or AvantLink.

These affiliate networks host individual companies affiliate programs. This means instead of applying directly to Target or R.E.I.'s affiliate program, you can may be able to sign up for the affiliate network that hosts BOTH of those companies and many more.

Affiliate network websites are much easier to use than using websites of individual companies to track per click sales. It keeps you out of a complicated marketing program and will allow you to focus on just one page at a time of individual affiliates.

When you use affiliate networks, it streamlines the online process for affiliates.

Next...

After you know what you wan to promote, look around a few different websites to see what affiliate networks they primary use.

Amazon will be its own monster... However you may be able to promote other products to your audience via ClickBank or AvantLink and be paid MORE than Amazon. It just takes some research.

Conclusion

What is affiliate marketing? Now you know... It's the process of preselling a product by helping your audience understand how that product will enrich their lives.

Leave me a comment if you made it this far and let me know if you liked it or if you have any questions for me!

Cheers,

Miles


Miles is a full time internet marketer who sells information products and a niche membership program with his wife, Melanie. Together they have created a lifestyle business that allows them true location independence and this blog where you get to see behind the scenes and see how they have built their online business from scratch.