What Exactly is Affiliate Marketing?

When you’re starting something new, it’s good to define your terms so you know what you’re working on. So let’s define affiliate marketing in the simplest way possible…

Affiliate marketing is promoting somebody else’s product for a commission.

In the offline world, an affiliate is what would typically be known as a sales representative. But working online, you don’t have to wear a suit or drag a briefcase of samples around with you!

And as I’ll talk about a little later, everything is 100% automated. Sales and commissions are tracked automatically through web links and cookies, and you receive a check from ClickBank every two weeks or a payment from PayPal at the end of the month.

In fact, once you understand this strategy for making money through affiliate programs, you won’t even have to think about it anymore—except when it comes to deciding how to spend the money you’ve made.

It’s a win-win situation for both parties:

• The merchant makes money without any up-front advertising cost (they only pay you if you generate a sale).

• You make money without the hassles of creating a product, processing credit cards, or supporting customers.

Affiliate marketing is the fastest and easiest way to make money online. You simply promote the unique affiliate link provided by the product owner and you can start making money right away.

When you’re first getting started, you don’t need to create your own products to be successful online. Why spend hundreds of hours researching a profitable market and then compiling all of that information into a product you hope will be a good seller?

You can simply take advantage of other people’s hard work and promote their products helping both you and them in the process.

All you have to do is refer people to a merchant’s website through your personal affiliate link. When someone purchases through your link, you get a percentage of the sale.

Sales are tracked by cookies. A cookie is a small text file stored on your visitor’s computer containing information that identifies you as the referring affiliate.

When you join an affiliate program, you’ll get an affiliate link that contains your affiliate ID. When someone clicks on your affiliate link, your affiliate ID gets stored in a cookie and then the visitor is sent to the merchant’s sales page. If the visitor buys the product, you get credit for the sale and earn a commission.

Affiliate marketing at its basic level is actually pretty simple. In fact, the whole process is as easy as 1 – 2 – 3…

1. Find a product you want to promote…

2. Join their affiliate program…

3. Promote your affiliate link…

4. Collect a check!

Ok, so maybe it’s as easy as 1 – 2 – 3 – 4, but why quibble?

Getting Started As An Affiliate

To make money as an affiliate, all you really need to do is build a list, build relationships, and sell stuff. Sounds simple, right?

Of course, there are minor details, like building a website and driving traffic. But if you concentrate on these three things, you will be successful.

Let’s talk about conversions for a minute, because that’s really the most critical piece of the affiliate marketing puzzle.

Conversion for an affiliate marketer is when a visitor buys the product you recommend.

Three factors count most for conversion:

1. The number of visitors you send to an affiliate product sales page

2. The number of visitors who buy on that sales page

3. The commission amount you get

Let’s do the simple math. If you send 100 visitors to a sales page that converts at 3%, you’ll make three sales. If your commission is $20, that means $60 in total commissions for your three sales. Dividing total commissions by total visitors gives you your profit per visitor, or 60 cents in this example.

But those factors aren’t necessarily constant. Changing them can make a big difference in your income.

If you send 80 visitors to a sales page that converts at 5% and pays you $20 in commission, you make four sales and $1 per visitor. Fewer visitors, translates into more money, because the conversion rate is higher. And that $1 per visitor profit is a great target to shoot for.

But most sales letters don’t convert at 5% without some pre-selling. If your prospect is already convinced that she wants to buy, then the conversion rate for the same salesletter that normally converts at 3% could jump to 5%, 8%, 10% or even higher.

If you build a relationship with people and earn their trust, they are more likely to act on your recommendations. Think about it…

If a friend recommends a movie to you, how likely are you to watch it?

If a friend recommends a certain camera, how likely are you to at least research the exact make and model he purchased?

The bottom line is…if you can get $1 per visitor for any product, then you’re doing well. Any more than that is just gravy.

I hope you enjoyed this article. Please feel free to leave any comments.

Best Regards,
Nathern Jutson

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