Understanding the fundamentals of affiliate marketing is a huge piece of building revenue online. Most everyone agrees: if you have aspirations of building a successful online business, a question you need to be able to answer is: “What is affiliate marketing and does it work?”.
The internet is a powerful tool. But have you been using it to its fullest potential? The most successful people who are at the top of their game sure have, and they’ve been doing it for decades.
But don’t worry! It’s not too late to enter this game.
Affiliate marketing is a $6 BILLION/YEAR industry and it’s only GROWING MORE!
In this article I’m going to show you exactly how to take advantage of this gold mine for yourself. With the right training and mentorship, being successful in the world of affiliate marketing will be your reality.
Grab a pen, take notes, and prepare to feel like you’ve just found your golden ticket.
What is Affiliate Marketing and Does It Work?
Affiliate marketing allows you, the affiliate, to be able to earn a commission on products or services you promote through your website for companies, or merchants.
Thanks for reading the article! Leave a comment below.
(Just kidding, there’s more).
Just about every single one of the tens of thousands of merchants you’ve shopped with online has an affiliate program.
Let’s use an extremely popular merchant like Amazon.com as an example. You can buy just about anything on Amazon. As a result, no matter how unique the product, you can make money promoting it through an affiliate program.
How does affiliate marketing really work?
When was the last time you bought something online and researched it before buying it? We all do this.
Additionally, at the end of your review you place you own custom affiliate link that you got from amazon’s affiliate program. This directs the reader to the amazon product page for the lens.
They buy it, and bam, you’ve got yourself a commission!
Different merchants have different affiliate commission rates. For example, amazon pays a 6% base commission with additional performance incentives based on volume. (Update: As of March 1st, 2017 Amazon has made changes to its rates. Read my article here detailing Amazon’s new affiliate commission rates and why you benefit.)
In this case, the lens retails on amazon for $131.95, so your 6% commission with no additional performance incentives would be $7.92.
Wait, you’re not excited about $7.92?
Well don’t write off affiliate programs just yet, because let’s say you also did a review on this Samsung curved 88 inch 4K Ultra HD television.
Just for me, right now, take a wild guess at how much you think an 88 inch television might cost and then click that link above and prepare to have your mind blown before we move on. (Do it).
Because of its hefty price tag, your 6% commission for that sale would be $1,199.88!
Not bad for writing a review and referring your traffic to the merchant.
How much can you make with affiliate marketing?
This is where getting traffic becomes important, because the higher your traffic, the more commission potential you have.
Increasing your website’s traffic comes from a combination of creating relevant content for your site, and making the user experience a great one.
What if there was a tool that studied Google’s search data and told you exactly what your target audience was searching for? There is, and once you read this article on Jaaxy you’ll never leave home without it.
Knowing what your target audience is looking for is one of many factors you need to understand to build consistent traffic. It will also create a better user experience. And with consistent traffic, your opportunity to succeed with affiliate marketing presents itself.
Now, let’s work out some conservative numbers
Let’s say you’ve followed your training correctly, and have built a site that gets 1000 unique clicks per month, just a little over 30 per day, which is very realistic.
Out of those 1000 you have a 20% click-thru rate on your affiliate links. That’s 200 clicks per month. Don’t go buying that new ‘vette just yet, because not everyone who clicks the link actually buys the product.
Out of those 200 who click your affiliate links, we’ll say 1 out of 50 makes a purchase. This is very conservative.
That’s 4 sales in a month, and if those 4 sales were for that crazy expensive television, that’d be almost $5000 (hurry go get the ‘vette!). But a more typical commission is closer to $25 -$30, or anywhere from $100-$120/month for those 4 sales.
Those are monthly commissions working for you even while you sleep, 24 hours a day, 365 days a year. This is that “working smarter, not harder” concept you halfway heard while you halfway slept through that one class way back when.
Can you make good money affiliate marketing?
Let’s bump up the traffic just a bit shall we?
From the conservative 1000 clicks/month let’s ramp up to a steady 3000 clicks/month. And from the conservative $25-$30 affiliate commission, let’s go up to the very nice round number of $100 per sale.
There are many products out there offering this high of a commission that you can earn repeatedly.
Read my review here for my #1 recommendation which not only offers great training on how to create a successful online business and build massive traffic, but also has an affiliate program that meets and exceeds that average of $100 per customer after retention.
So, at 3000 clicks/month, keeping the same 20% click-thru ratio, this is 600 people clicking through your affiliate links every single month. And from the 1 out of 50 conservative scenario we had earlier for customers who actually buy, let’s also ramp up to a very doable 1 out of 20.
That would lead to 30 purchases/month, and if you’re promoting something that returns a $100/sale commission, that would be $3000/month!
Especially relevant is the fact that there is no ceiling to how much you can make with affiliate marketing. Some have even boasted of over $1000/day consistently.
And now that you understand it and finally know what that little “affiliate” link at the bottom of every merchant’s site leads to, it’s time for the obvious next step.
What are the top paying affiliate programs?
There are literally tens of thousands of affiliate programs out there, but if you’re thinking of a top 5, some popular ones are:
- Commission Junction
- Affiliate Window
- Rakuten Affiliate Network (formerly Linkshare)
And definitely don’t forget to check out my top recommendation here.
Still have questions on how affiliate programs work? What products do you love and use regularly? Don’t think there’s an affiliate program in your niche? Think again. Share your ideas and questions! Leave me a comment below. Ask away.
Found an even higher consistent affiliate commission you’d like to share? Leave me a success story! Understanding how to capitalize on the internet is a dynamic process.
In conclusion, I hope this information helps you. Take the right steps, and you’ll be well on your way to financial and time freedom and a very successful online business.