What do influencers, comparison portals, and recommendation blogs have in common? They all share the same business model: affiliate marketing. And they all earn a lot of money monthly and benefit from a high passive income. Do you want that too? Understandable! Let’s go! In this article, I’ll give affiliate examples and valuable insights into the business model and tell you in my webinar how you can quickly generate five-figure sales per month.
Making money with affiliate marketing is possible. Very well, in fact! Does the name Bianca Claßen mean anything to you? Or the word “BibisBeautyPalace”? No? Most women between the ages of 15 and 25 will know her. Bianca Claßen, also known as Bibi, is one of the most successful influencers in Germany with her YouTube channel and her accounts on Instagram and Co. Several million people follow her profiles (on Instagram alone, there are over 7 million!) and thus participate in her life.
Traditional influencer marketing. Because Bibi has an incredibly high reach, she is also interested in all companies as an advertising partner in beauty, lifestyle, and fashion. In every third post on her profile, she advertises products and raffles off gifts and voucher codes. Her followers also buy everything Bibi holds up to the camera she uses and recommends.
But why am I telling you about Bibi? Because working as an influencer is based on the classic business model of the affiliate business. But don’t worry! Not only big fish like Bibi can build an affiliate business and earn money with it. You can do it too. And I want to explain to you how. With the help of this article and a webinar, we created especially for this purpose. More about that later.
In the following article, I would like to give you answers to these questions about making money with affiliate marketing:
- What is Affiliate Marketing?
- How do I build an affiliate business?
- What are the requirements for affiliate marketing?
- What are affiliate networks?
- How do I become successful with affiliate marketing?
- Earn money with affiliate marketing?
Again and again, I hear or read the following statements: “Affiliate marketing is dead.” “Affiliate marketing consists only of coupons.” “I can save myself many commissions through cancellations”…
Shall I list more myths about affiliate marketing? You can find many prejudices, wrong assumptions, and untruths about this business model on the internet. Please do me a favor and forget about such dubious sites. Please read this article instead because it is possible to make money with affiliate marketing.
Even today, affiliate marketing is both a relevant marketing strategy and a working and lucrative business model. Every seventh euro in online trade is generated by affiliate marketing. And the market has been growing consistently by about ten percent a year for years! Most people will undoubtedly have heard of this business model. For those who have yet to come into contact with it, I would like to bring it to the point briefly: As an affiliate, you sell products – but not your own.
Sounds pretty exciting to earn money with other people’s products. It’s no longer a secret that you can make good money with affiliate marketing. And yet many do not dare to approach the subject. Why? Most people have not yet realized how easy it can be to start an affiliate business. It requires both above-average technical know-how and a very intensive investment of time.
Affiliate Marketing: A Definition
Affiliate marketing describes the cooperation of sales partners to sell products and earn money. The so-called affiliates promote the products of manufacturers or retailers and receive a commission in return. Put: affiliates help to sell other people’s products. This principle works equally well for services. And because affiliates recommend other products, so to speak, this business model is also called referral marketing.
Surely you already know different affiliate businesses, even if you have yet to hear the name of the business model. Have you recently visited a product comparison site to find the best price for your new washing machine, hiking backpack, or hotel for your next vacation? And then, did you follow the link to the best deal? Those are often affiliate links. I’m talking about comparison portals like Idealo or Check24. Test and topic portals like the technology website CHIP are also viral. Whether it’s robotic vacuum cleaners, SLR cameras, or smartwatches in test, the reports include links to the products and direct readers to Amazon, Saturn, or Mediamarkt. And CHIP earns a commission on this. Classic affiliate marketing.
What Does Affiliate, Advertiser & Co. Mean?
But let’s get back to the theory. Strictly speaking, the word affiliate initially means partner. So when asked, “What are an affiliate?” two affiliate marketing parties can be the correct answer. Therefore, it depends on the context of whether promoting or selling distributors is meant. In everyday usage, however, it is more common to talk about an affiliate when referring to someone who promotes someone else’s product and earns money based on commission if the deal is successful. Some also call an affiliate a publisher. If you start your own affiliate business, you are the publisher. I am so precise here that you keep track of all the technical terms and understand the structure of the business model.
Opposite the affiliate is the distribution partners, who want to sell their product. These can be manufacturers but also retailers. In affiliate marketing, these partners are also called advertisers. Many brands act as such advertisers by offering affiliate programs and paying commissions when you promote their products. I could name countless ones here, like Saturn, Zalando, or booking.com. These big companies all offer their affiliate programs. Pick up your smartphone and see if your favorite brand offers an affiliate program.
The Third Partner: The Affiliate Network
But back to the affiliate business model: to be accurate, in addition to the two roles mentioned – publisher and advertiser – there can also be a third partner: the affiliate network. Affiliate networks are platforms where affiliates and advertisers can sign up and find each other. Affiliate networks, therefore, act as an intermediary between the two parties and handle all payment matters. One affiliate network you’ve probably heard of is Amazon Partner Network – I’ll discuss that separately later in the article. But also other platforms like MyLead are suitable as affiliate partners. There are over 3500 affiliate programs to choose from here. Also, this network has many free tools that will help you make money (Content Locker, Hide links, e-books, and fantastic support). Additionally, there is news like Facebook Ads and Web Submit.
In my free webinar on affiliate marketing, I’ll reveal which affiliate programs and advertisers I can recommend to you. So, feel free to check it out.
Affiliate Marketing: How to Build an Online Business
Phew, pretty complicated? Actually, not at all, once you understand the basic structures. So now we come to the exciting part, how to start your own affiliate business and earn money.
Let’s look at an example of affiliate marketing to make the whole thing easier to understand. First of all, six steps are relevant, which I have also shown you in the following infographic.
Earn Money With Affiliate Marketing Example: The Gardener Blog
Let’s say you are a passionate gardener and share your knowledge on a blog. If you write an article about pruning roses, you could also recommend suitable products in your text. This recommendation would read, “The rose shears from XY are my favorite to use for years.” After that, you put a link to the product page of the advertiser you want to promote, in this case, the title “Rosenschere von XY.” Once your blog visitors read your post and their interest in the rose shears is piqued, they will click on your link to take a closer look at the product.
By clicking on the affiliate link, your readers become users on the website of your distribution partners, and you have successfully directed visitors to the advertiser’s site (generated traffic). However, in most cases, you do not receive any remuneration for this. Users usually have to purchase something to earn money with affiliate marketing. So only when the customers buy the rose scissors through your linking do you get a commission for it.
The next important step is to pay the customers. This is because the advertiser must be able to track which affiliate persuaded the customer to make the purchase. The purchase can be tracked via an ID in the forwarding – this means that the advertiser can easily see that you sold the rose scissors. You will then receive your commission. If the application was made through an independent affiliate program, such as Amazon PartnerNet, you settle the payment issues directly with the advertiser. This is different if an affiliate network stands between you and the advertisers.
The Requirements For Affiliate Marketing
To start an affiliate business as a beginner, there are a few prerequisites that you should have in order actually to make profits. Let’s start at the beginning.
1. Use The Right Platform
First, you need a platform to place your promotional content and affiliate links. The best place for this is your website or blog. If you’re on social media, that’s suitable as well. Again, running an affiliate business via YouTube, Facebook, or Instagram is possible. But be careful: keep in mind that you are always subject to the regulations of the social media channel.
2. Generate Reach
You probably will have a few followers right now. That’s not a bad thing. Everyone started small. And you have to start somewhere. The important thing is that you start building that reach now. The more people you reach with your content, the more potential customers you generate for advertisers. And you’ll earn more money accordingly. Logical.
3. Build Trust
When do people buy something? When are they willing to spend money on products if they have yet to learn them? This is an essential question for a functioning affiliate business. Feel free to ask yourself: When do I buy a product or service?
I’m happy to help you out here: People will only buy something through your affiliate link if they are convinced by your content and trust what you say. Consequently, it is crucial for your success that your readers and followers can trust you. So make sure to present specific expertise to the outside world in a credible way. It’s best to give your knowledge so ideally that your product recommendations seem secondary.
Affiliate Marketing With Affiliate Networks
You must register as a publisher to connect with advertisers via an affiliate network. Once registered, you have access to numerous affiliate programs from different areas. If you work with a publisher, all settlements for all advertised affiliate programs will also run through one account. This is super easy and uncomplicated because you always have your earnings at a glance.
Another advantage of these networks is the technical component. Affiliate networks take care of the technological basis of tracking and thus also directly a correct allocation of the commission. It never hurts to keep an eye on the commission payments yourself, but such a network is an excellent option for people who like to outsource this task. Signing up and joining these networks is often free for you as a publisher. Sounds pretty easy? And very lucrative? It is. But please consider the following: Your earnings may diminish, as commissions can be somewhat lower within networks. But there is another alternative, in-house affiliate programs.
Affiliate Marketing With In-House Partner Programs
Besides affiliate networks, there is another way to run an affiliate business. And that is with so-called in-house affiliate programs. With in-house affiliate programs, companies that want to run the affiliate program implement it themselves. They offer publishers without an intermediary platform the opportunity to recommend their products. The registration for the partner program and the support then take place on the website of the companies. Thus, as a publisher, you must look for partners yourself.
There are now very many companies that offer an affiliate program. I have mentioned big players like Saturn, Amazon, and Zalando at the beginning of this chapter. But manufacturers or retailers sometimes communicate this. That’s why it’s worth asking companies directly if you want to promote a specific product.
Affiliate Program Or Network: Which Is Better?
This is a difficult question to answer. There is no one-size-fits-all answer that I can give you here. Some networks work much better, while others get along better with in-house partner programs. So it depends on what you want and what is important to you.
With in-house partner programs, you must register separately and often get different contact persons. So you always have to be a bit behind and work more independently. In the beginning, reaching the minimum payout limit might be challenging because you get different statements for each in-house affiliate program. However, the payout limit at which your earnings are transferred to you varies from program to program. You can find out the exact conditions on the advertisers’ websites. (Something like this is essential, so look at the conditions carefully).
However, in-house partner programs also have some advantages. Due to the close contact with the advertiser, you, as a publisher, are often provided with individual advertising material. You can negotiate much more here and enter into much more individualized collaborations. But the best comes in the end: The commissions are often significantly higher than with affiliate networks.
Amazon Partnernet
An example of an affiliate program is Amazon PartnerNet. I want to introduce you because it is one of the most used affiliate programs. With a wide product range of several million products, Amazon’s affiliate program offers suitable products for every affiliate with its website. If you can convince customers of Amazon products via your website, as an affiliate, you will receive a commission on the entire shopping cart and not just on the product you have advertised. Yes, you heard right. Amazon also pays the advertising fee reliably and on time. But be careful: Depending on the product category, there are different commission levels. Therefore, find out in advance whether your class’s commission is worth it.
But here, too, success – and thus, your earnings – depends primarily on your topic. If you have discovered a good niche for which Amazon products can be presented, you can build up a successful online business with Amazon.
This is how it works: Make money with affiliate marketing.
The truth is: how much money you can make with affiliate marketing depends on the traffic to your site. Yes, I know, no concrete numbers. But that’s how it is, unfortunately. The bigger the traffic on your website, the more attractive this website is for potential advertisers and the more you can earn with affiliate marketing. An affiliate business builds up slowly and requires regular support, especially in the beginning.
If you put in the effort, maintain your website, fill it with current and new content, deal with search engine optimization (SEO) and increase your reach, the earnings can become bigger and bigger. And eventually grow from a small passive income to an extensive online business.
The Affiliate Marketing Revenue Models
What some of you may still need to learn: It’s not only through affiliate links and sold products that you get a commission. There are also alternative revenue models. I want to introduce all of them to you:
First, the model you surely know. PPS or Pay per Sale (also CPS: Cost per Sale): With this form of payment, you as an affiliate only receive a commission when customers have purchased a product via your affiliate link. So that it can be determined through which affiliate a sale comes, the links are provided with a code. When clicking on affiliate links, cookies are set for the users. This way, precise tracking can take place, and even a sale staggered over time can be assigned.
However, as is generally the case in performance marketing, there are other cases in which remuneration is possible:
- PPL or pay per lead (CPL: cost per lead): With this billing method, the advertiser only has to pay a commission if a predefined action is successful. This action can be, for example, registering for the newsletter, ordering a catalog, or filling out a form. Unlike PPS remuneration, a sale doesn’t need to take place.
- PPC or Pay per Click (also CPC: Cost per Click): With the PPC billing model, you as an affiliate already receive compensation as soon as interested parties even click on your affiliate link or ad. This form of payment is often calculated as a thousand-contact price.
Depending on which compensation model you prefer, you should clarify with your advertiser how exactly you want to be compensated before signing the contract. You may be able to negotiate this part individually – but unfortunately, this only works with some partners.
Earn Money With Affiliate Marketing: The Best Products
Various products from different areas are suitable for affiliate marketing. Therefore, there is no such thing as the best affiliate marketing product. It is more important that the website has a product reference or that the development and content fit together. Therefore, these types of websites are particularly suitable if you want to earn money with affiliate marketing:
- Theme portals
- Niche sites
- Blogs
- Online magazines
- Test and comparison portals
- Social media networks such as Instagram or Facebook
- Video platforms like YouTube
- Coupon portals
It is also recommended to focus on niche products. These may have a smaller target group, but you can also rank better for keywords. Be sure to read our article: “Hidden Champion: Successful with Niche Products.”
Start now with Affiliate Marketing Business!
Affiliate business is characterized by much flexibility and a low weekly time commitment. Of course, in the beginning, you must invest time and effort to fill your website or social media account with basic information about your topic. But once that’s done, you only have to provide your readers with a few new weekly posts. Suppose you’re looking for a business model that runs perfectly on the side and requires little technical know-how and little attention. In that case, an affiliate business is a suitable business model for you.
You now know which set screws leads to the desired success. If you still shy away from building the basic framework, where you first have to fill your website with content and optimize it for SEO. As a supplement for you to this article, you will learn there:
- with which affiliate programs you generate the highest commissions,
- how much extra income can you expect as a beginner in affiliate marketing,
- which Internet industries offer the most significant growth opportunities, and where is your entry particularly worthwhile now?
