Earning money while you sleep – passive income; it’s the ultimate dream, right? Well, you might be surprised to find out that about 90% of people who want to earn a passive income start with affiliate marketing.
By definition affiliate marketing is “a marketing arrangement by which an online retailer pays commission to an external website for traffic or sales generated from its referrals.” In essence, the idea behind affiliate marketing is that you promote another company’s or person’s product or products, sometimes through an affiliate network and sometimes through your own webpage/landing page, and you earn a commission if prospects end up becoming a sale thanks to you. If you are the owner of the product and want to increase your sales, then you offer potential promoters an incentive to advertise you. If you don’t have your own product then you find a product that you believe has, first of all, value, and the potential to earn you income as an affiliate marketer.
Do a quick search on Wikipedia on affiliate marketing. You’ll find that Wiki outlines four different parties involved in the affiliate structure: the retailer, the network, the affiliate and the customer as seen below.
Other sources only talk about three parties instead of the aforementioned four.
Now, I’ll be getting into all four parties in a second, but what I want to point out is that when we boil it down to the actual marketing, there are two variables to the affiliate equation: the person who created the product or the person who’s selling it (which in many cases is the same person, and the affiliate marketer. Now, I have left consumers out of this equation because if you really think about it they’re not a variable of the equation as much as they are the answer. But, knowledge is everything so as promised, let’s break down all four parties, find out what role they play and how important that role is to the end-game.
THE MERCHANT
Also sometimes known as the seller, the creator, the brand, the vendor or even the retailer. The merchant is the variable of the equation that is directly associated with the product. It doesn’t have to be a company like Apple or Microsoft, it could even be someone like Frank Kern who just sells knowledge to marketers, rookies and not. Two things worthy of noting here, one: the product doesn’t necessarily have to be something tangible, it can be knowledge or even self-help programs. These are things that you cannot really touch, they’re closer to insight than anything else and two: the merchant can be anyone, from a single individual to companies the size of Google and doesn’t even necessarily have to be involved in the process at all, he/she or the company just have the product.
THE NETWORK
As we previously mentioned, only some sources include the network as part of the affiliate structure or a variable to the equation to stick to our example. There’s no denying that the network is very important as many times it acts as the mediator between the merchant and the affiliate.
Now this not to say that technically, you couldn’t promote a product for someone and just sort out a direct rev share but, if you let the network handle things like payment and delivery of the product then you can sleep well at night knowing that the money will come in on time. At the end of the day, you’re joining an already established network and established means that most likely, it can be trusted. Let’s not forget that sometimes, you can’t even promote a product without going through an affiliate network.
One instance of this scenario would be if the seller only offers their product through a particular affiliate network. Two examples of two very different affiliate networks are Real Estate Affiliates (check over there) and (you might be caught by surprise to hear this) Amazon. Amazon has, in fact, THE BIGGEST AFFILIATE NETWORK in the world. Have you ever heard of Amazon Associates? Their affiliate program allows you to advertise every conceivable item sold on their platform.
SIGN UP HERE: https://realestateaffiliates.com/registration/
THE PUBLISHER (AFFILIATE)
No different to the merchant, the affiliate or publisher, doesn’t have to be a big company like Apple or Microsoft. Affiliates range from entire empires to single individuals. Being an affiliate can give you modest returns (maybe a few hundred dollars at the end of the month) or it can allow for you to quit your day job and enjoy the finer things in life. Of course, to get to that point you’ll need to work hard, establish yourself and get noticed but I cannot stress enough how doable this is. Now the marketing magic begins. The idea is to try and convince prospects that the product sold is valuable and then finally to convert them into paying customers. One way to reach your objective (and there are MANY MORE WAYS to do this but just out the top of my head) you could start a blog that reviews the merchant’s products. Another way you could achieve your goal is by building a webpage or website entirely dedicated to promoting products from different merchants related to the same issue. (you could be the next Amazon)
THE CONSUMER
As we previously talked about, the consumer (to me at least) is not much of a variable in the equation, rather than the answer or end result. There’s no denying that the consumers are the ones that make everything go around, not just affiliation. No sales means no commissions and guess what – no revenue. But you probably already knew that, I mean it only makes sense. To be a successful affiliate you need to first of all understand who you’re selling to, so you can refer them the right product or then your endeavors could end up being futile. You’ll end up driving your prospects away causing them ad blindness.
If you’re going to approach this in a more aggressive manner (pushy advertising), then you’re better off establishing a first point of contact to qualify your prospects and then start advertising to them. If you want a more laid-back approach, letting them do as they please without trying to influence them, then you’re probably better off starting a blog and letting things play out naturally. If your content is written well and delivers quality information, then you can expect that with time, persistence and patience your revenue will increase with every passing month.
There you have it, a brief overview of what the heck affiliate marketing is. Understand these elements that lay in the foundations of affiliation and you’ll be well on your way to earning a passive income and becoming noticed.
