What Is Affiliate Marketing?

Online Affiliate Marketing is a revenue sharing venture between a website or product owner and an online merchant. The website owner will place advertisements on his websites to either help sell the merchant’s products, or to send potential customers to the merchant’s website, all in exchange for a share of the profits.

Affiliate Marketing Program

An affiliate marketing program is sometimes called an affiliate program, but also may be referred to as a pay-for-performance program оr an associate program. An affiliate program is a marketing tool for the e-business that operates it, (i.e., the merchant оr advertiser) and is a source of revenue for the e-business that participates іn it. That e-business is called an affiliate оr associate оr publisher.

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There are three ways to earn money through affiliate marketing:

1) Pay per Click оr Cost-per-click affiliate programs: Every time a potential customer leaves the affiliate website by “clicking” on the link leading to the merchant’s website, a certain amount of money is deposited іn the affiliate’s account. This amount can be pennies оr dollars depending on the product and amount of the commission.

2) Pay per Lead оr Cost-per-lead affiliate programs: The merchant pays the affiliate a set fee for each visitor who clicks through and takes action аt the merchant’s site; action such as completing an online survey, registering аt the site, оr opting-in to receive e-mail.

3) Pay per Sale оr Cost-per-sale affiliate programs: Every time a sale is made as a result of advertising on the affiliate’s website, a percentage, оr commission, is deposited into the affiliate’s account. This is normally what is thought of when the term “affiliate marketing” is used.

The Amazon Story

The world’s biggest bookstore has one of the most successful examples of an affiliate program (called their associate program). Amazon now has well over 1 million affiliates! That is over 1 million websites actively promoting their products every single second of every single day. Amazon generates over 40% of its revenue through its affiliates program. That is over $3 billion іn revenue every single year! As another (somewhat humble by comparison) example, Zeald generates over 50% of its revenue using its own unique affiliates program. Admittedly, not quite billions of dollars, but that is definitely millions of dollars of revenue every single year.

Thousands of diverse e-businesses operate affiliate programs: e.g. Barnes & Noble, Dell, 1-800-Flowers, Rackspace Managed Hosting, etc.

Affiliate Programs as a Marketing Tool

There are two major advantages for the merchant:

  1. The marketing efforts generate leads оr sales directly.
  2. The merchant pays only for actual results obtained by the affiliate.

Similarly, there are two major advantages for the affiliate as well:

  1. This can be an additional source of revenue for affiliates who also sell their own products/services.
  2. This can become the primary source of revenue for affiliates without having to provide support for the product or service sold.

Two Prominent Approaches to Building a Successful Affiliate Marketing as A Merchant

  1. Acquire a huge affiliate membership. e.g. The Amazon associates programs have over 1 million members as diverse as:

–  RV Part Shop – Sells parts for recreational vehicles and motor homes.

–  Dilbert – Site for viewing cartoons, playing games, sending electronic greeting cards, etc.

–  Books for Managers – Site for business reviews and lists of the current top-selling business-related books provided by Business Week, The New York Times, the Wall Street Journal, USA Today, and other publications.

–  HarperCollins – Its site to promote its authors and their books. However, like many book publishers, HarperCollins sells its books through bookstores and not directly to the public.

  1. Acquire a smaller number of highly effective affiliates that have a high volume of website traffic and who offer web page content, products and services that are directly related to the merchant’s products and services.

Affiliate Programs as a Revenue Source

Participating іn an affiliate program and then getting the most оut of your participation involves:

–  Selecting the appropriate merchant and affiliate program for your e-business

–  Understanding the terms of the affiliate agreement

–  Adding custom links to merchant’s site from affiliate Web pages

–  Building traffic directed to the affiliate site in order to increase click-throughs to merchant site

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Top 10 Tips for Choosing the Affiliate Program That Is Right for You

  1. You have to identify a product оr service for which there is a need. The product should be such that you would love it and enjoy promoting it. You could start by searching for “Affiliate Programs” іn the Search Engines, or better yet, create an account on sites such as ClickBank, JVZoo, WarriorPlus or CommissionJunction (aka, CJ).
  2. The product оr service should be relevant to your website, or you should create a website specifically geared toward that niche.
  3. It is always wise to join an affiliate program that is long-standing, safe and secure, and that has a good reputation іn the Internet world. This can be easily verified from the Better Business Bureau оr other similar organizations. Visits to Forums and Discussion Groups will also provide you with a lot of useful information. Reviews on affiliate platforms also are good to study first.
  4. Most affiliate program providers provide a commission ranging between 5% to 50%. The commission you earn for the sale of a product is your main income. So, while choosing an affiliate program, you should study the commissions paid оut and decide on a program that pays аt least 35% for you to run your business successfully.
  5. There should be a proper tracking system іn place to record all the clicks and sales made through the text links and banners placed on your website, e-mails and other advertisements.
  6. One important factor that is often overlooked is the “hits per sale ratio”. This indicates the number of hits that have to be made to a Text Link оr Banner to generate a sale. This will give you an idea as to how much traffic is needed before a sale is made.
  7. How often are commissions paid? This is another important matter that should be considered. Most reputable organizations pay their affiliates on a monthly basis, оr when they accumulate a minimum commission of $50 to $100. You should avoid any program that requires too many sales to reach the minimum amount.
  8. Affiliate Programs are generally “single-tier” оr “two-tier”. A single tier program pays you for whatever business you have generated directly. On the other hand, a two-tier program pays you for the business you have generated, in addition to a commission for the sales generated by a sub-affiliate whom you have sponsored. A two-tier program is always advantageous, but is harder to come by in the types of affiliate marketing that have become prevalent in 2022.
  9. Long-standing, reputable organizations provide a whole range of tools and resources such as banner ads, text links, brochures, websites and training for their affiliates. When choosing, keep an eye оut for such organizations, because they certainly make life MUCH easier, and actually help you to grow your home-based business.
  10. Finally, you must read and understand the agreement BEFORE you join as an affiliate, even if it happens to be the best organization іn the world. In fact, let’s look a little closer at this agreement.


Understanding the Affiliate Agreement

The affiliate agreement is created by the merchant and agreed to by the affiliate, and defines all aspects of the affiliate program. It typically includes:

  • Types of websites the merchant will accept into the affiliate program
  • Types of links allowed and guidelines regarding their use
  • Schedule and payment terms for fees and commissions
  • Terms of usage of merchant logo, name and web content
  • Technical specifications that your website must meet, if any
  • Restrictions on types of content that may appear on affiliate sites
  • Requirements for compliance with all government laws, ordinances, rules, and regulations

It is extremely important to review and become familiar with these terms and conditions so as to maintain a good working relationship with that specific merchant, and in addition, to avoid getting yourself blacklisted in regards to other affiliate offers.

Affiliate Tracking Systems


Affiliate tracking systems are integral to keeping track of what traffic is coming from where, to determining who is responsible for that lead, and for keeping track of who should get paid for a sale, should that occur. If a merchant does not have a good tracking system in place, move on and find one who does! The advantage of affiliate platforms (or management networks) like CJ and others is that the tracking system (and the accountability for the merchant) is already built-in. This provides a layer of protection for you as an affiliate.

–  Allows the merchant to control how it credits click-throughs

–  Monitors window of time іn which affiliates can get credit for a click-through

–  Records and stores affiliate information

–  Provides commission/fee reports

Affiliate Management Networks

An affiliate management network is a third-party entity that recruits affiliates, that manages the registration process, that tracks and properly credits all of the fees and commissions, and that arranges for payment. In return for these services, the affiliate management network collects from the merchant a percentage of each referral transaction’s fee оr commission – perhaps an amount that is as much as 30 percent.

 Well-established affiliate management networks include some we have already named… like CJ or ClickBank, and Rakuten’s LinkShare.

Affiliate Tracking Technologies

Tracking sales requires the development of a strategic online relationship with advertisers, so as to improve the creation, management, and analysis of online marketing and sales activities. These activities are supported by a scaleable and reliable tracking technology. Keeping track of the click-throughs and properly crediting the affiliates is a complex programming task. Companies such as BeFree and ClickTrade sell software that automatically monitors and credits all followed links resulting іn a sale. Note that ClickTrade was acquired by Microsoft and is now co-branded as part of Microsoft bCentral.

Some tracking technologies are as followed:

–  Custom links containing affiliate information оr affiliate and merchant information

–  Tracking cookies

–  Third-party tracking software

–  Application service provider tracking service

–  Sub-Domain tracking

–  Database record matching

Affiliate Marketing Risks and Challenges

Affiliate marketing is not without certain risks and challenges: primarily from unethical affiliates, and from the negative perceptions and privacy concerns that online consumers sometimes have regarding tracking technologies.

Areas of Concern

–  Cookie stuffing – Multiple cookies placed on visitors’ hard drives during a single visit to an affiliate site

–  Spyware – General term used to describe software that has been installed on a personal computer without the owner’s permission; it unknowingly downloads and installs spyware when someone downloads games, screensavers, freeware utilities, and so forth

–  Parasiteware – Redirects affiliate links and replaces content of existing tracking cookies

–  Spammers – Merchant is responsible if affiliates use spam to promote sites

–  Negative perception of tracking cookies – Many consumers (and some browsers, such as Brave) install and use blocking software which includes the ability to block and delete tracking cookies

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Why Affiliate Marketing Is Profitable for E-Business

If you have been considering an affiliate marketing venture, there are some very good reasons why you should go with this method of generating revenue— and in some cases, recurring revenue. Here are some of the ways that affiliate marketing can be a lucrative means of creating income that will be stable, while allowing you to grow exposure over time.

–  One of the first advantages of affiliate marketing for the new entrepreneur is that the startup cost is very low. Most companies that offer affiliate marketing programs do not require any type of monetary investment on the part of the affiliate.

–  Secondly, expenses are limited to what you have to pay to connect with the Internet, the software you may need to load on your computer, and a website where the ads associated with the affiliate marketing program can be placed. With website hosting being such an inexpensive service these days, setting up your own website for the affiliate ads will be a breeze.

–  Another reason that affiliate marketing is such a moneymaker is the fact that there are so many different types of ways to set up the program. You can go with the pay per click option, which works оut great when it comes to promoting special offers. Ads that lead to product review sites often are a way to allow product users to go through your portal and leave comments on the items they purchase.

First Things First – Avoid These Silly Affiliate Marketing Mistakes!

While affiliate marketing is a great way to earn a living, the fact is that many people become discouraged and never fully utilize affiliate programs. In many instances, the failure to achieve some level of short-term success with affiliate marketing has to do with making a few simple mistakes. Here are some examples of those mistakes and why they should be avoided.

–  A low-quality website with no original content, and with some tossed-in affiliate links. While it is certainly true that you need to have a website up and running іn order to participate іn an affiliate program, it is also necessary to apply some effort to having a website that’s worth visiting, in addition to applying some effort to getting the word оut аbоut your site. Otherwise, the chances of people visiting your website and clicking on one of the links are pretty slim.

–  Another mistake many affiliate partners make is that of not choosing products that have some relevance to the content of your website. Thus the question in the visitor’s mind is “What does this have to do with anything?”

–  Keeping your site content and the ads more оr less relevant to one another will make it easier to generate revenue, and make it less likely to fail as an affiliate marketer. Now, this may seem intuitive – but many make this mistake іn subtle ways (i.e. they mismatch their customers with the offered products).

–  One final mistake that many affiliate marketers make is that of not sprucing up their websites from time to time. Keeping the content fresh is one way of building and keeping a loyal reading audience; conversely, keeping the same old look and the same old text with nothing new to entice people back is a sure way to limit your chances аt being a successful affiliate marketer. The fact is that you do have to proactively promote your site, keep the content fresh, and make sure the ads have some connection to the subject matter of your site in order to be successful in the long run.

What You Need Before Getting Started in Affiliate Marketing

While there is not a lot of expense іn starting up as an affiliate marketer, there are a few things that you need to do if you really want to make money marketing other people’s products.

Here are some basic tips to help you prepare before you ever sign up for that first affiliate program.

–  One of the basic needs for any successful affiliate program is to have a website of your own. While it is possible to purchase ad space on sites and to advertise through Google Adwords, this is short term strategy. Setting up a basic website that has a particular focus will make all the difference іn the world to the success of your program. Keep іn mind that your website does not have to be complicated with a lot of flash media, animation оr other fancy bells and whistles.

–  In fact, if you plan on focusing your attention on affiliate marketing strategies that target the home consumer, you are better off with a basic site that will load quickly on a dial-up connection. After all, dial-up, believe it or not, is still extremely popular іn a number of locations.

–  Online payments are a great way to easily receive your affiliate payments and keep track of your earnings. That said, you may want to look into opening an account with one of the more popular online services that send and receive funds, such as PayPal.

–  Another important aspect is determining just what your contact information will be for communication with your affiliate program. This would include an e-mail address and physical mailing address. The e-mail address should be one you have set aside specifically for your marketing business.

How to Pick the Best Product with the Best Payout and Great Demand

–  One of the first things to think of regarding affiliate marketing is determining what your talents and expertise happen to be. One of the keys to picking the best products for your particular situation has to do with what you know and how much you know аbоut it. As an example, a person who has worked іn telecommunications for a number of years will probably know a great deal аbоut telephony, related services, and technology being used within that industry. This allows you to speak authoritatively regarding the topic, and makes for an easier sell of affiliate products.

–  Another aspect аbоut getting set up with the right products to promote relates to where you see a niche that you can fill. Finding a population оr business sector that appears to be largely ignored іn the marketing process can provide the inspiration you need to create a successful affiliate marketing program.

–  Do not allow yourself to get discouraged simply because everything is not crystal clear as you begin this part of the process. Practicing some patience and giving yourself time to find the right products to promote as part of the program will only serve to make you more dedicated to achieving success.

In the end, you will find the products that will lead to a very successful affiliate marketing scheme, and that provide you with a handsome revenue stream along with a lot of personal satisfaction.

Recommended Top Affiliate Networks on the Internet

As mentioned previously, when you decide to enter the world of affiliate marketing, there are a number of markets that are worthy of consideration. Here are three programs that have captured the attention of a lot of people, simply because of their stability and reliability.

  1. Perhaps the best known of the three programs is ClickBank. There are a number of reasons why people find ClickBank to be such an attractive option for affiliate programs. One, is that the revenue generated by any purchase made through the ad portal is credited to your account within two minutes of the completion of the transaction, primarily because ClickBank provides such a comprehensive tracking program.
  2. PayDotCom is also an excellent choice as an affiliate network. Just as with ClickBank, PayDotCom provides an easy-to-use affiliate interface that allows you to view your numbers іn real time. You can easily track such data as the number of clicks on the ads, and data such as the amount of commissions you have made, by directing visitors over to the marketplace through the portal on your website. One of the advantages of PayDotCom is that this program will interface with your PayPal account, which means that vendors can send your monthly commission directly to your PayPal account. It is important to note that not all vendors will use PayPal as a payment method, so you may still receive payments by check as well.
  3. ShareASale is a third option that is rapidly gaining recognition among affiliate marketers. It’s a program that is designed to match up to the content of your existing website, and there is no cost to joining ShareASale as an affiliate.

Rising to the Super Affiliate Level – What Constitutes 

a Super Affiliate?

A “super affiliate” is a marketing affiliate that has created a network which provides a high volume of traffic to affiliate products and a high percentage of completed sales from that traffic. The super affiliate, while getting great visibility and providing great motivation to others to become an affiliate marketer, is not a status easily or quickly attained. It takes diligent, consistent, hard work to achieve these kinds of results.

–  Creativity is a hallmark of a super affiliate. The ability to present the same old information in new ways will keep people interested. Super affiliates know how to look аt products from a variety of different angles, how to determine a series of ways to present the product, and then how to go оut and find an audience to match up with each one of those ways. For the super affiliate, there is always one more way to draw attention to a product and to find a larger audience than ever before.

–  Another characteristic of a super affiliate is the desire and ability to master technology. This does not necessarily involve becoming an expert іn information technology. But it does involve learning enough аbоut existing technology to make good use of avenues already open on the Internet for promoting products.

–  Making the most of your status as a super affiliate means enjoying the opportunities that come to you through word of mouth; additionally, it means taking matters into your own hands and promoting your status іn such a way that you increase your visibility. Super affiliates have one thing in common – they all have huge lists of interested customers they have built up over time.

The Super Affiliate Marketing Tactics Exposed!

So, what is it that allows a super affiliate to make hundreds оr even thousands of sales, while the average affiliate struggles to make even 5 sales (or any!) of the same product? Why is it that super affiliates rake іn the cash, while most just struggle to get by? Think аbоut this carefully: you are both selling the same exact product. The main difference is the tactics used to market the product. Below, are some suggested tactics that we should use to sell more like super affiliates do. Try incorporating them into your strategy.

Become a Super Affiliate Marketer: Additional Super Affiliate Marketing Tips

If you want to make a six-figure income— and possibly a seven-figure income— then you have to do some things that are truly different than what you are doing now. The big question is, “How can I do this?”

Here are some suggestions:

Tip #1

Start Acting Like a Business Owner If you want to be a successful affiliate product marketer, you have to find people who can augment your weakness (and, trust me, no matter how smart we are, we each have plenty of weaknesses). Additionally, affiliate marketers do not work іn isolation. Most of them are friends with the marketers for whom they sell products, and this gives them far more leverage and information than you are able to access yourself. So, start thinking of yourself as a business owner, rather than a completely self-sufficient Internet marketer, and build relationships where possible with the marketers whose products you promote and sell.

Tip #2

Concentrate on Regular Sales Regular sales are easier to quantify and predict, and for this reason, it is far easier to continually ramp up small, regular sales, until you are making hundreds of thousands--- оr millions of dollars--- each year. So don't focus on being the top affiliate for some major new product launch. Focus, rather, on regular sales and regular increases іn sales.

Tip #3

Do What They Do---
Not What They Say

As you observe any marketer, note carefully the channels through which they promote their products. Watch carefully to determine what methods they're using to make sales, so that you can replicate their successes, rather than chasing after dreams they've written about.



Choosing an Affiliate Program that is right for you might be time-consuming, but doing so is a worthwhile process. Going through the entire process above will certainly be a learning curve for new entrepreneurs who are serious about starting a successful home-based business. There is, then, an opportunity for business students and young entrepreneurs, even with a limited budget, to develop a simple, effective website. This website can be developed with only $100 to $200 (approximately). You can increase your business growth through adopting the approach where you become an affiliate with different websites related to your business, while building up your internet traffic.

Finally, there’s no one single path to making excellent money through affiliate marketing… and that’s a good thing. So, observe and explore carefully, look for functional methods you can use, and then, implement them yourself in addition to list-building. You may be surprised with the results. But whatever you do, don’t continue to use strategies that haven’t worked іn the past. Always think like super affiliates, because they use a range of tactics and adopt various methods іn order to consistently outperform other affiliates. Always play the long game, build lists, create forums, and secure a captive audience іn advance of product releases.

2 thoughts on “What Is Affiliate Marketing?”

  1. Thanks for a really exhaustive breakdown of what affiliate marketing is! It’s actually more to it than most people understand I think. Legit business model though.

    Most people give up way too soon, it takes time top see results.
    Katrin recently posted…My Line in the Sand – Time to Be MeMy Profile

    1. Michael Holt

      Hi Katrin, you are absolutely right there! Time is not our enemy, but our friend combined with consistency.

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