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Affiliate marketing spending is projected to reach $8.2 billion in the U.S. this year. That’s a 10.8% increase from 2021, suggesting that affiliate marketing is worth more than ever.

If you’re interested in starting as an affiliate marketer, we’ve outlined what you’ll need to know to get started.

What is Affiliate Marketing?

Individual completing online sign up form on laptop

Affiliate marketing involves promoting products and services on behalf of another company. The affiliate partner’s goal is to direct customers to the company.

An affiliate may encourage consumers to:

  • Purchase a product
  • Sign up for a service or a free trial
  • Download an app

In other words, the affiliate partner is the middleman between a company and a consumer. Most affiliate programs are free to join. This is great for beginners because it reduces startup costs.

How Does Affiliate Marketing Work?

Two of the most common examples are Amazon and Shopify’s affiliate marketing programs. Affiliate partners can advertise products from Amazon on their websites or social media pages by sharing their links.

To begin as an affiliate marketer on Amazon, individuals must sign up, receive approval, and place the Amazon affiliate links on their website or social media platforms. Then, when customers click on the link to purchase a product from Amazon, the affiliate earns referral fees.

This is an easy way to monetize a blog or a website because the Amazon affiliate program is free for website owners and bloggers.

The Shopify affiliate program works the same. Affiliate partners sign up, get approved, and receive a referral link. Then they share that link with their audience on different online platforms. The affiliate partner earns a commission when a consumer purchases through the link. The Shopify affiliate program is free to join for everyone.

Commission rates vary depending on the merchant and the offer. However, the Shopify and Amazon affiliate commission rates range between 5% to 30%.

How to Get Started with Affiliate Marketing

Affiliate marketer working on laptop surrounded by Instagram notifications

First, you need a content platform to get started with affiliate marketing and connect with your audience. Common platforms affiliate marketers use are blogs, YouTube channels, TikTok, Instagram, Facebook, and Pinterest.

No matter which platform you choose, make sure to create high-quality content and offer value through attraction marketing. This can result in an engaged audience who is more likely to make a purchase.

Moreover, affiliate partners should stay up to date with the latest trends and tactics to continue making a profit. Consider joining online affiliate communities and listening to podcasts to expand your knowledge.

How to Choose Your Affiliate Niche

There are several popular affiliate niches, such as health, fitness, beauty, pets, and more. Therefore, it is best to choose an affiliate niche about which you are passionate and knowledgeable. This will help you promote more effectively and establish yourself as a trusted authority.

Moreover, providing honest reviews and original content may strengthen your credibility in your niche. For example, if you are passionate about the beauty industry, you could start a blog or a YouTube channel where you provide informative in-depth reviews about a skincare product and provide affiliate links for those who want to purchase it.

Truth About Affiliate Income

Earning income is the most important goal for affiliate marketers. Even though the industry is growing, your potential profit will depend on multiple factors, such as your platform, merchant, and social influence. Statistics about affiliate marketing show that around half of affiliate marketers make less than $20,000 a year, and just 35% make more. Nonetheless, many affiliate marketers make six figures. For example, blogger and entrepreneur Pat Flynn has earned over $3 million in affiliate revenue. Whereas mentor and entrepreneur Jason Stone has managed to reach $7 million in sales in just 18 months.

Affiliate Marketing vs. Dropshipping

Affiliate marketer packing order

Affiliate marketing and dropshipping both involve marketing and sales of a product. However, they are different. Affiliate marketers are not responsible for shipping the product to the buyer. Moreover, their earnings are solely based on the commission paid by the merchant. Finally, affiliate marketers don’t set the price of a product or service, and the profits are dependent on the seller’s pricing.

In comparison, dropship agents buy a product directly from the merchant and ship it to the consumer. Moreover, they get to decide the product’s price and receive full payment. For example, an agent can buy a product from the merchant at $50 and ship it directly to the customer online for $80, making a $30 profit.

For instance, Pet Stores USA is one of the leading dropshipping suppliers in the pet industry with over 50 years of experience. Pet Stores USA ships its products directly to the consumer from its warehouse in Cincinnati. The company offers over 2,500 pet products at wholesale pricing.

Affiliate Performance Marketing

There are many different ways to make money as an affiliate, but they all rely on finding high-intent customers and converting them. Here are a few of the most popular methods and terms you should know about.

How to Use PPC for Affiliate Marketing

Affiliate marketer using ad tracking software to check campaign metrics

PPC, or pay-per-click advertising, is a way to purchase ad space on a cost-per-click basis. You have more control over who sees your ads because you can use targeting and optimization tactics to reach your audience. These tactics include aiming your marketing towards consumers by location, gender, or age.

The most common form of PPC advertising is Google Ads. It lets you bid on phrases people type into Google’s search engine and make it so your ad appears with the search results. You pay Google every time someone clicks on your ad. You can send the traffic to your site or use your affiliate link to send it directly to your partner’s page.

Consider using ad tracking software to better understand how users interact with your ad. Tracking your results, collecting data about how people interact with your ad, and analyzing it will bring insights you can use to improve your ads.

What is CPA in Affiliate Marketing?

CPA, or cost per action, is how much it costs an affiliate to get a customer to complete a specific goal. For instance, let’s say you spend $100 on a campaign to get people to sign up for a free trial, and you get 20 people to sign up. Your CPA would be $5. As long as you get paid more than $5 for each signup, your campaign should be profitable.

What is EPC in Affiliate Marketing?

EPC, or earnings-per-click, is a metric in affiliate marketing that measures the average amount of money you earn when someone clicks on one of your affiliate links. For example, if you earned $100 from 100 clicks, then your EPC would be $1.

When Affiliate Marketing is Not for You?

If you expect immediate results or quick profits, affiliate marketing may not be for you.

Running a profitable affiliate marketing campaign requires much more than getting your referral link and displaying it on your online platforms. Marketers need to build an audience and promote the products effectively. 

Nothing comes overnight, and you need to put in the effort to be successful.

The Bottom Line       

Are affiliate programs worth it? Yes, they are if you are willing to put in the effort. Choose a niche that you are knowledgeable about, grow your following, and earn income in the process. Even though online sales are increasing, don’t expect financial independence right away. The right skills, attitude, time, and consistency should help you run a successful affiliate marketing business and generate long-term profit.

Published by Owen Carter on April 25, 2022

Owen Carter

Owen Carter

Owen is a marketing specialist. He works with advertisers and publishers directly, enhancing their marketing campaigns. Owen understands the importance of having the right tools for the job. He got his start designing and implementing a proprietary platform at a major performance marketing organization. During his free time, Owen enjoys rereading company emails and looking for mistakes.

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