What is Affiliate Marketing and How it Works

On this page I answer the most common questions I get about affiliate marketing and how it works:

1. Will I be selling a product? If so, who provides the product!
2. What will it cost me (in time and money)?
3. What should my affiliate marketing business be about?

affiliate marketing guideYou will also see here some examples of how I go about affiliate marketing. For example, the images in this post are all images I have used in my Facebook advertising. You can click on the sunset image included here to see the kind of page my ads lead to. From there you can get my free guide and learn much more about affiliate marketing and how it works.

Note: paid advertising is a more advanced form of affiliate marketing. The answers below focus on a more basic approach, which is where most people begin.

What does affiliate marketing mean to you? Please add your questions or comments in the comments section below. If you think you have the answer to a question, please contribute your thoughts. Let’s work on this page together to make it as helpful as possible for everyone …

1. Will I be selling a product? If so, who provides the product!

Affiliate marketing is about promoting products as an affiliate for some of the most well known and respected companies online.

Here is one example of how it works:

You can signup for the Amazon Associates Program and promote any product you like on Amazon for a commission.

It is completely free to signup for affiliate programs like the Amazon Associates Program. Most companies have an affiliate program these days.

In affiliate marketing jargon, they are the “merchant”, and you are the “affiliate”.

In true “all roads lead to Rome” fashion, the affiliate marketing merchants would like to see every website on the internet promoting them. Having an affiliate program gets them closer to achieving that goal.

That’s also why affiliate programs are getting better for website owners all the time. The various merchants are competing to get you to promote their products over their competition.

Affiliate marketing merchants will sometimes offer recurring commissions for monthly subscription products. That means you get paid every month for as long as your referral remains in that merchants monthly program. This can result in a cumulative effect to your efforts month over month.

Disclaimer: There is no guarantee you will make money or achieve any kind of specific result using the information presented here. Results can vary from person to person.

Affiliate Marketing is the way that most people get started in online business. You can focus on building a cool website without worrying about:

  • creating or sourcing a product of your own
  • collecting payments from customers
  • spending time on customer service

That is how affiliate marketing works in a nutshell.

Okay, so how do you actually do this? Your affiliate marketing merchants will give you special affiliate links to place on your website.

When your website visitors click on an affiliate link and buy something from the merchant, you earn a commission. That’s the most basic approach. By requesting my free guide, you will learn more advanced strategies also.

The merchant wins, you win, and your website visitor wins because you have just helped them solve a problem or make a decision on the best product for their situation.

This is why people sometimes say you can earn money online while you sleep. A website or blog is the most basic form of online automation. It is awake even when you aren’t …

… and making a sale requires no direct input from you once your website is setup and attracting visitors. This is the essence of earning “passive income” online.

This is also what people are talking about when they say you can create more freedom in your life with an online business …

… because when you promote products as an affiliate, the merchant (e.g. Amazon) does all the selling, takes care of all the customer service, and sends you your commissions like clockwork.

Your commissions can arrive in a variety of ways based on your preference, and the options offered by each merchant. The most common ways to get paid are by physical checks, direct deposit in your bank account, or via Paypal.

Disclaimer: There is no guarantee you will make money or achieve any kind of specific result using the information presented here. Results can vary from person to person.

2. What will it cost me (in time and money)?

fbgirllaptop300On the money side, the costs are ridiculously low compared to starting any other kind of business.

In fact, in my free guide you will learn about a way you can try this out completely free (by creating your first website as a “sub-domain” on another website) …

… it is much easier than it sounds. The setup is automated (it can be done in under a minute). This is a fully functional website with no costs of any kind. It is a great way to test the waters for yourself.

However, to have a “real” viable online business you will want your own domain name eventually. This costs around $10 to $15 per year, depending on where you register it.

You can transfer your free website to your new domain later, or start from scratch once you have learned a few things from your free website.

You will also need website hosting. This is often included if you signup for certain training programs.

However, if you go it alone then good website hosting is typically around $5 to $7 per month. In many cases the hosting companies offer a free domain name. In that case the hosting cost would be your only cost.

Other than that, any other costs would be optional. With a website you can publish pages with your affiliate links and attract visitors from search engines like Google.

On the time side, this is where the trade-offs begin. If you restrict your “money costs” to those mentioned above, then you will spend more of your own personal time to make progress with your online affiliate marketing business.

If you have more time than money, this is a good approach. You can do this in your spare time and enjoy watching the process unfold.

However, if you have some money to invest, you can accelerate your progress. You can invest in training, in more sophisticated automation tools, in outsourcing some of the work to others etc.

Again, most of these costs are ridiculously low compared to the costs of any other kind of business.

In the end, how much you spend in time or money is completely up to you.

3. What should my affiliate marketing business be about?

get my free affiliate marketing guideNow this is where my free guide can really help you a lot. It is the ultimate brainstorming tool.

There may be many things you are passionate about, but only a few may have real potential for significant online profits.

There may be things you could become passionate about as you learn more about them, and the profit potential that comes with them.

The subject areas to consider for an affiliate marketing business are referred to as niche markets.

What is a niche market? A niche market is nothing more than a group of people interested in a particular thing. You yourself belong to many niche markets related to everything you are interested in at this point in your life.

Success with an online affiliate business is strongly tied to picking a profitable niche market to focus on.

Picking the right niche market is such an important part of succeeding online. Getting it right from the beginning can save you a lot of time and trouble learning things the hard way.

Get my free 659 Profitable Niche Markets guide to learn more about affiliate marketing and how it works.

Please leave your questions or thoughts on affiliate marketing in the comments below…

PURR Passive Income PowerP.S. To learn much more about affiliate marketing and how it works, please consider picking up my book PURR Passive Income Power™.

Learn advanced strategies for your affiliate marketing business. Discover tools and techniques for automating online processes. These tools and techniques are key to the online passive income lifestyle …

The book is based on my 10+ years experience earning income online. Learn more

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