What is Affiliate Marketing and Does it Work? [An Affiliate’s Review]

What is affiliate marketing? The short answer is…

Affiliate marketing is getting paid commissions for referring customers to someone else’s product or service.

Does it work? Yes. You can earn an income by partnering with companies, helping them get customers for their products and services, and earning a commission for referrals.

While the simple answer can clear confusion about what you get paid for, it’s far from explaining all of the necessary ingredients in successful affiliate marketing.

Let me explain…

What is Affiliate Marketing? An Overview

what is affiliate marketing and does it workThis is the much hidden truth about affiliate marketing that drives most people to fail at it…

Affiliate marketing is a business model. It requires the same business systems that every other business requires. Effective systems equals affiliate marketing success, and ineffective systems equal affiliate marketing failure.

The Affiliate Marketing Lead Generation System

The most common lead generation tactics that are used for affiliate marketing are:

  • Pay-per-click advertising
  • Solo ads
  • Search engine optimization
  • and social media

However, since affiliate marketing is a business model, it doesn’t have to be limited to four lead generation strategies.  Instead, you want to observe and learn your target audience.  Then, you want to decide where they go when they need products like what you’re promoting.  They may go to locations online or offline to find the solutions you promote, but you have to learn where they go.

Then, you want to position yourself in the flow of need.  In other words, if your target audience is mothers of young children and you’re creating content online with the hopes of helping them, you can promote your content everywhere the target audience may be.  In addition to the “normal” lead generation activities, you might also get results from:

  • Sponsoring events where young mothers may go
  • Volunteering in the community where your target audience is
  • Handing out pamphlets with information
  • Setting up booths at the tradeshow
  • and finding as many opportunities as you can to solve problems with your content and with your presence for the target audience

The Affiliate Marketing Lead Conversion System

Unlike other business models, since many affiliate marketing businesses operate predominately online, they use technology to convert prospects into buyers.  Where other business models would focus on live prospecting and following up in-person, by phone, or in personally addressed emails, affiliate marketers do different activities instead.

Instead of live prospecting, affiliate marketers often attract prospects thru search engine optimization or pay-per-click ads, then once they have new visitors on their website, they build trust, credibility, and authority thru well-written content, video, or audio.

what is affiliate marketing and does it workWhile “get rich quick gurus” make affiliate marketing seem easy, it’s a huge understatement!  Building engaging content that motivates people to take action is a skill that not everyone has. Most people go to school and learn how to perform skills necessary for other work, but not work like affiliate marketing. The hidden skill most people overlook is the ability to invoke action without a live meeting or interaction.

If you’ve never practiced persuading anyone (even family, friends, co-workers, or others) to do an action without speaking to them or without your personal connection, it might be a learning curve to perform well in affiliate marketing.  If you have a site about fitness, you might be teaching people how to work out and selling the tools they need. A brick and mortar business will grab the person by the hand, call, follow up, and lead the person to exercise live and in-person.  In contrast, an affiliate site is likely to provide all of the education, so the person can meet their fitness goals on-demand, and persuade them to do their fitness in writing, on recorded audio, and thru video.

One or two articles isn’t going to solve the person’s problems, therefore, the “gurus” who make affiliate marketing appear as a get-rich quick scheme are lying thru their teeth. A sustainable business has to provide a valuable solution to enough people, then it can generate revenue and profit.  There’s no shortcuts to success (in affiliate marketing or otherwise).

The lead conversion system in affiliate marketing typically consists of content.  The content has to answer the questions of the target audience, help them discover solutions to their problems, and help them to have a better overall life experience.  Similar to the offline sales experience where it takes more than one conversation to build trust and generate a sale, in affiliate marketing it’s typically not one article that will convert a prospect into a buyer.

Added onto content, tools like:

  • Email marketing
  • Webinars
  • Live video
  • Video marketing
  • or Offline Meetups…

Can be helpful to build trust, context, and authority faster, which can also help improve sales.

The Affiliate Marketing Client Fulfillment System

Where other business models have a product or service they’re selling that’s configured or managed in-house, the affiliate marketing business model’s service is REFERRALS. An affiliate marketing business sells traffic and referrals.

In exchange for an affiliate sending a customer who takes action, the merchant pays the affiliate a commission.  The affiliate has to ensure their client fulfillment system is top-notch to reach the highest echelons of success.  They have to:

  • Refer people to quality products or services
  • Create good and quality content that gives context to what they’re promoting
  • Make it easy for people to purchase when they want by making links conveniently located and their sites easy to navigate
  • and, Offer their merchants quality traffic and referrals

Branding System

what is affiliate marketing and does it workAnother widely overlooked system within the successful affiliate marketing business is the branding system. There are “gurus” all over the internet that teach you to slap up a website, add content, and have sales rolling in.  The brand is the impression other people have of a business. If people have the impression of uncertainty, they feel the business doesn’t look “put together”, or they question integrity based on their observations, the business won’t reach the success it could.

The brand ethics are important in affiliate marketing businesses. If people see you commonly exaggerate or mislead, they’ll have a bad impression of the brand.

In addition to the perception created by the ethics and presentation, the brand colors, logo, story, and marketing design is also very important. People become comfortable with brands because of consistency. With brands like Coca Cola, you know to expect red and white labeling, and you also know the quality standard to expect from the drinks.

Similarly, in an affiliate marketing business, you want to create a consistent color palette, logo, and brand story, and you want to consistently deliver quality content, so people can trust you advice.  Over time, you want people to consider you a trusted advisor, and return for questions within your niche.

Other Systems

Once the lead generation, lead conversion, and branding systems are in place and operating well, you’ll start to be required to think about how to make the business more turnkey to scale.  Then, you’ll also need your management system, leadership system, and job prototypes.  You can learn all about how to configure all of your business systems HERE.

How Does Affiliate Marketing Work?

The 4 Normal Components in Affiliate Marketing

For the most part, successful affiliate marketing includes four parties: a person with a problem, an affiliate who knows a solution, a merchant who makes a solution, and an affiliate network who tracks the referrals and the payments.

A Normal Online Buyer’s Scenario

Let’s say for example, the person has a common cold (problem).  The person may go researching for solutions to the common cold. They may know more than one possibility to cure the cold, but their unsure what solution would work best for their scenario.  As a result, they search online for:

“Cures for a common cold”

“Natural cures for a common cold”

“Medicines for a common cold”

“How to get rid of a cold fast”

When they’re searching, they keep seeing articles from your website.  As a result, they’re starting to see you as an expert and building trust with you. They read a couple of your articles and you kept mentioning “Mucinex”, “Honey”, and “Tea”, so they decide to search more to see which is better.  Then, they search:

“Honey vs. Tea”

“Mucinex vs. Tea”

and, “When to use mucinex vs. tea”

Again, your articles are leading in the search results!  At this point, the person has read many of your articles and decides to make a purchase.

The Customer Life Cycle

The customer lifecycle varies in length. Some niches find their readers are looking for immediate answers (like in the example with the common cold), but in other niches, the answers may not be as much of a dire emergency.  Depending on what solutions you offer, you may find a higher or lower conversion rate into sales.

Added to niche, everyone goes the a cycle before making a purchase. Generally speaking, you go from:

Discovery ====> Engagement =====> Evaluation =====> Purchase ====> Post-Purchase ====> Advocacy

As a result, you have to evaluate where the prospects are when they come in contact with you. In affiliate marketing, you have people who are looking to solve their problems online and they stumble across your website on there path to discovery.  They may engage with your content and others’ content several times before making a purchase.

How the 4 Components, the Normal Scenario, and the Life Cycle Impact You

To pull all these topics together. Affiliate marketing works when the person who has the problem is able to find an affiliate with advice that leads them to a merchant with the solution.  The affiliate network will track the transaction and the affiliate will get paid for their performance.

Successful affiliates understand that it takes more than one interaction to build a relationship and make sales, so they create authoritative content and become resource centers for an audience with specific problems.

How Do You Make Money with Affiliate Marketing?

what is affiliate marketing and how does it workWhile most people would like to make money for the content creation efforts (because it takes quite a bit of content building before the money starts to flow), affiliate marketing doesn’t work that way. Instead, there’s very little money flowing until a sizeable resource center is built and solutions are being offered that walk a specified audience thru the customer lifecycle.  Once the resource center is built, you make money when your advice persuades a person to take action on solving a problem they’re experiencing. The normal funnel looks like this:

Person with problem ====> Affiliate with advice =====> Merchant with Solution

The person with the problem finds the affiliate with advice, and the affiliate directs them to the merchant with the solution. The affiliate makes a commission because they’ve made a match.

How Much Can you Make with Affiliate Marketing?

The potential within affiliate marketing is what makes it a very exciting business model.  More and more businesses are adding affiliate programs that pay affiliate marketers very well for their referrals.  If you choose affiliate programs with good commission terms, and you grow your traffic on your website, you can make a very healthy income.

Some affiliate marketers make millions per year and others make nothing.  In fact, majority who attempt affiliate marketing fail because it’s easy to get started and they underestimate the work required.  Very few consistently implement enough that they begin making good money.

There are some very exciting stories from those that persist like:

How Do I Get Started with Affiliate Marketing?

Majority of the success stories I listed above came from people who used the same training.  There are some training programs that claim to teach you affiliate marketing, and there are others with lots of success stories that span decades. My #1 recommended training that teaches you how to get started with affiliate marketing has hundreds (or maybe thousands) of success stories that span over the last 14 years!  Some people have made enough income to travel the world and live a good life and other people have gotten absolutely wealthy.  Once you have the knowledge, it’s up to you and your work ethic to take you where you want to go. CHECK OUT MY #1 RECOMMENDED TRAINING FOR AFFILIATE MARKETING HERE.

When and How Does Affiliate Marketing Pay?

The payment terms vary depending on which affiliate marketing program you promote. Amazon may pay on a different day than Best Buy.  Some programs have a recurring affiliate program that will pay a percentage on a subscription every month for sales. Recurring affiliate programs are a little easier to stabilize and calculate, but affiliate programs that pay one-time per sale can work very well also.

The Good & the Bad

The Good:

  • PRO #1: There’s no ceiling on your earning potential
  • PRO #2: You can earn from anywhere in the world
  • PRO #3: You have a flexible schedule
  • PRO #4: You can offer people viable solutions to their problems
  • PRO #5: You can grow into a full publishing company

The Bad:

  • CON #1: It can be slow to build
  • CON #2: There’s lots of competition
  • CON#3: Many fake “gurus” teach scammy, get rich quick practices
  • CON#4: Some affiliate programs have bad terms that make it very difficult to build a good income
  • CON#5: Some affiliate programs underestimate the importance of affiliates
  • CON#6: It’s a fairly new business model with few people who really understand it

Who is Affiliate Marketing For?

Affiliate marketing is perfect for:

  • The person who is willing to sacrifice time for one to four years to build an income that may last a lifetime
  • The person who wants to earn extra income but doesn’t need it in the immediate future
  • The person who has an existing business and wants to make an extra stream of income

Affiliate Marketing Tools & Training

For affiliate marketing, it’s best to have:

  • A website
  • Training on SEO, Pay-per-click ads, Content Creation, Copywriting, and other specific topics
  • Support and interaction with like-minded people
  • Tools to do Keyword research, Market research, and Competition Analysis

My #1 Recommended Affiliate Marketing Training includes everything you’ll need to get started with an affiliate marketing business: two free websites, 10 free training lessons on affiliate marketing, a very supportive community with 1 million+ members, and tools to do keyword research, market research, and competition analysis.  You can try them out for free without a credit card by going HERE.  There’s a free plan and a premium plan.  Here’s the breakdown:

The other training program I’ve learned from and is:

Dare to Conquer – It’s another highly engaged community of online entrepreneurs who are growth-minded and help one another out to achieve goals. If you need a supportive community and training to become successful in affiliate marketing, definitely check out Wealthy Affiliate (my #1 recommendation) or Dare to Conquer (or both).

What Are Common Complaints About Affiliate Marketing?

In the affiliate marketing circles, it’s common to hear these complaints:

I made barely any Money in the Beginning!

Every successful affiliate marketer I’ve met starts out spending money before they recieve anything. They have to spend money on a website, logo, possibly other graphic design, website hosting, and other things. The startup expenses are fairly low for an affiliate marketing business, but it doesn’t end there. You also have to take time and commit to create content until it resonates.  For some people, it takes them one year, but for most people, it takes two to four years.  Even successful entrepreneurs like Marie Forleo took years before they earned a full-time income from her online business!

I had to do Alot of Work before Seeing Results!

One of the people I’ve watched evolve in the online business is Grace (“Little Mama), whose income I disclosed above.  She admits that she was writing once weekly and was quite skeptical about the business model when she started out. After one year, she barely made ninety dollars!

Rather than scaling back in response to her results, she decided to double down. She said “when the going gets tough, you have to get tougher”. She started to publish content to her website daily and sometimes twice daily!  30 posts that are more than 1000 words daily!

Hard work is what got her results and others like her. Most affiliate marketers stay on path without significant monetary results for quite some time before getting a full-time income: two years is the average.

The Merchants I’ve been Promoting Shut Down!

I’ve seen some affiliates who invest lots of their time building websites to promote a merchant, and the merchant decides to shut down! It’s best to choose a reputable merchant or to promote a merchant that you can switch out.

For example, if you promote a natural supplement, and the product creator goes out of business, it would be smart to be in position to either: 1) Create the supplement yourself, or 2) Be familiar with another high quality supplement that can solve the problem for your audience.

I was Banned from a Platform that Gives me alot of Traffic!

Every traffic source has rules of engagement. Some affiliates have found out about the rules the hard way. I’ve heard of so many stories of affiliates being banned, and it doesn’t matter which traffic source.  There’s been people who get Google penalties that kill their search engine traffic, people who create sizeable Facebook fan pages only to have the algorithm change and their traffic crash, and people who built their businesses around Myspace or Twitter that suffer when those businesses go in a downward spiral.  The rule of thumb with traffic for an affiliate marketing business is focus on the most reliable traffic source (Google) and add additional traffic sources (social media, live events, etc.) to that.

What Are Common Positive Feedback About Affiliate Marketing?

I can work from Anywhere

Once the business is built, affiliate marketers can maintain their businesses from nearly anywhere with an internet connection.  While there’s an inflated idea that traveling while doing affiliate marketing is easy or ideal, it’s possible (especially when temporary).

I have a flexible schedule

There are moms who are successful moms by day and affiliate marketers by night.  There’s business owners who already had busy schedules and shift their time around to include affiliate tasks.  Alot of scenarios can seem unfathomable for other business models, but may work with affiliate marketing because the main focus is on creating good and consistent content. For the most part, it doesn’t matter whether you create content at midnight or early in the morning, so it enables you to play around with various different schedule ideas.

I can be involved with my Family or Social Life and make good money

Since you can work various different schedules, you can be involved with family and friends.  Of course, there’s still balancing action that has to be done, but it’s possible to have a comfortable balance between family, friends and work with an affiliate marketing business.

I can help lots of people

One of the most admirable things I see with an affiliate marketing business is that many people can be helped. The most successful affiliate marketers are problem solvers and use their content to perform.  Since the internet is growing so fast, billions of people are using it. As a result, nearly half of the world can be impacted by the content you create as an affiliate marketer.

My Final Opinion of Affiliate Marketing

Affiliate marketing is one of my favorite ways of making money online. I’ve made majority of my money online from freelancing, but I love the pros of affiliate marketing, so I pursue it daily.  If you are willing to persist past the initial hiccups, learn how affiliate marketing works, and take action, I recommend it. It’s like losing weight or paying off debt, it’s one of those paths that is a challenge while your in it, but it pays off for along time.

——————————————————-

Ready to Get Started with Affiliate Marketing?

If you’re ready to get started with affiliate marketing, follow the path with the most success stories with me.  You can get two free websites, ten free training lessons on affiliate marketing, and you can network with other affiliate marketers to see if this is a path you’d enjoy.  CREATE YOUR FREE ACCOUNT HERE.

Affiliate Marketing

8.8

Easy

4.0/10

Opportunity for Good Pay

10.0/10

Opportunity to help people

10.0/10

Good Training Available

10.0/10

Proof of Concept Available

10.0/10

Pros

  • No ceiling on your earning potential
  • Work from anywhere
  • Flexible schedules
  • Can grow into a full digital publishing company
  • Can help people by offering viable solutions

Cons

  • Slow to build
  • Lots of scammers teaching bad techniques
  • Lots of competition
  • Some bad affiliate programs with low earning potential
  • Fairly new business model with few people who truly understand it

6 thoughts on “What is Affiliate Marketing and Does it Work? [An Affiliate’s Review]”

  1. I’m in affiliate marketing for the past few months. This article had a lot of new information about affiliate marketing that I personally did not know before reading this article today. I learned especially a lot from the Affiliate Marketing Lead Generating System paragraph. Thank you so much for sharing this article with us.

  2. Hi Tiffany, I enjoyed your article because you really give your honest experience and opinion on affiliate marketing.   I am brand new to affiliate marketing, and I can say that yes it does work.  I recently made my first sale with Amazon, it was a small amount, but I was so excited that what I was doing actually worked.  I love affiliate marketing because it gives me the freedom to work from home, and the flexibility to work at my own pace.  When I first started, I thought it would be easy, and I would make lots of money, but that’s not the case.  Affiliate marketing is hard work, and there is a learning curve, but I am excited to see where i will be in a year from now if I work hard and keep creating quality content.

    1. Congratulations on your first sale Jenny! Affiliate marketing is very rewarding once you see the connection between your actions and your sales. In the beginning, there’s no connection between performance and sales, and it’s discouraging, but once authority is built, there’s a direct correlation, and it can be very fulfilling.

  3. Hello Tiffany,

    This was an incredible well-written article about the pros and cons of Affiliate marketing. You do a great job of first explaining what it is and then breaking down who it is for. I like that you stressed that it will not be easy and it will take commitment. It’s easy to lose focus with so many other ways of making money online and other promotions going on. 

    Wealthy Affiliate provides an excellent vehicle to get started and learn the ropes with other people that have been in the same position. That is what makes this platform so great. 

    I would also suggest to focus on video marketing via youtube and facebook as well. Even Pinterest and instagram are starting to integrate video ads into their platforms. Pinterest can be a very powerful free marketing tool if you are consistently pinning content for each article every week. You can build a following on there quicker than you can organically with google. Tailwind allows you to schedule your pins and you can even join “Tribes” specific to your niche that are more likely to listen to your content. 

    Video marketing takes practice and a little bit more of investment into a guru that knows what they are doing. Youtube ads are some of the cheapest ways to promote your products, but many people don’t know how to produce them. It also takes persistent practice to get better at it and create effective content that resonates with people. 

    Thank you for all of the information given in this amazing review. I look forward to your future content and helping to create future entrepreneurs. 

    1. You gave some amazing tips Daniel! You’re right about the different ways you can build a following. To add context for other readers, Pinterest, Video marketing, and the others you mentioned are great additions to the lead generation or lead conversion systems. Thanks so much for sharing your input!

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