Understanding Affiliate Marketing

Last Update: June 12, 2015

Today, I'm going to discuss affiliate marketing. All the information provided in this blog can be used if you have your own product or decide to sell for another merchant. Let's just jump right in and get started. I know you have a lot of questions, so we'll begin with defining affiliate marketing.

Affiliate Marketing Defined
You, the affiliate drive traffic to a merchant's site via your website or blog, using special affiliate links that are personalized for your use. The merchant may be selling a product like DVDs or ebooks, or they may be trying to sign on clients, such as a bank.
The merchant pays you a commission once the visitor has completed the desired action, such as purchasing a product or completed a registration form. (Money exchange is not always the final goal.)
When you send a consumer to a merchant's site the specialized link you were assigned by that merchant tracks the activity and purchases of the consumer. Obviously, other affiliates have similarly personalized links to the same products on the same merchant's site(s).

Affiliate Goals
As an affiliate your goals is to drive the highest possible targeted traffic to your merchant(s) through your unique affiliate link.
Once you have your website or blog up and running, and it promotes the free flow of traffic to the merchant(s) through your affiliate link (s), you can continue to earn money from it whether you are in bed, on holiday, or sleeping. This is called passive income.
It's passive because after the initial effort of researching your chosen market, building a website and setting up your campaign, you can earn with minimal day-to-day input in your campaign.

Affiliate Marketing Example:
Take Grit City Publications, for example. That company produces emotobooks. They have a website and affiliate program. Of course, you can apply these principles to any affiliate capable merchant.
First, build a content rich website about some kind of related matter that applies to the company's affiliate program. In the case of GCP, topics about pop culture and fiction apply.
Next, sign up and receive an affiliate link. The link given to you is unique and contains your affiliate ID (a number or your affiliate name). The link allows the merchant to track sales generated from your visitors so that you receive commission for sales generated through that link. You then place this link on your site or blog, and in appropriate online sales venues to drive traffic. If a visitor buys an emotobook, you get a commission.

Cookies Explained:
It gets better! With some reputable affiliate programs, a visitor does not actually have to buy during that visit. Say Jim lands on your website, clicks your affiliate link to some product on your website. He gets taken to the product's merchant site, looks at the sales page and then leaves without purchasing. During that click, a “cookie” is placed on Jim's computer. Cookies are nothing more than a bit of code that says that Jim's computer viewed the product on a specific date and time. It also holds a record of who referred Jim to the product, (i.e. you).
A week later, Jim decides to make the purchase. If he remembers the URL of the product's merchant website (Amazon, for example), and then types it into his web browser, the cookie kicks in and uses the original affiliate link, your link. The webpage recognizes Jim as being refered by you.
What does this mean? You still get your commission!
Cookies could be valid for as little as one day, but could maintain up to 60 days. Some are lifetime cookies. As long as the purchase is made from the computer where the cookie is stored, within the time limit of the cookie, and Jim hasn't encountered other marketers cookies since using yours, you get your commission.

Word of caution: Cookies vary in their duration so read the companies affiliate agreement carefully to find out the life span of their cookie. A 3 month cookie is obviously more desirable that a one week cookie.

Is Affiliate Marketing for You?
That's the question, isn't it? Working as an affiliate can be a lot of fun and highly profitable, but it has its perils, like any career. See the following list:
1) You do not need to develop your own product. You make money promoting other peoples products.
2) You have no responsibility for after sales service for the product. This is all handled by the merchant.
3) You do not deal with shipping, storage, packaging ,or inventories.
4) You can promote one product, several products, or drop a product if you are not satisfied. You are essentially your own boss.

What is in affiliate marketing for the merchant?
More Exposure = More people will buy. Which is great for the merchant. Affiliate programs for any product/company is an awesome way to get products spread throughout the web. If you are the developer of a product or owner of a merchant site, you should look into starting your own affiliate program.

What affiliate Marketing is Not:
Affiliate marketing is not a get rich quick business. It requires a lot of energy and determination to meet your own goals. Even if you don't want to start a business, you still must treat it as though it was its own business.
You can't make six-figure salaries by sitting around thinking everything is on auto-pilot. If you just want extra cash on the side, it still requires devotion. As you get involved with affiliate marketing you will come across a lot of products that claim to teach you how to make hundreds of dollars in 15 minutes. Beware of the hype!!
The reality for most of marketers is that it takes months of hard work to start making a substantial income. Time + Energy + Devotion = Money.

Financial Freedom:
Ask yourself, if you continue in your current job (just over broke] for the next 10 years, will you earn enough to be financially free for the rest of your life? No, of course not. I've done the research. The top surgeons in the world are making around $400,000 - $500,000 a year. Can these people retire in ten years? Yes, they most likely can, but they went to school for years, devoted their life to a noble profession and have worked all their lives to accomplish this goal.
Now if you find an opportunity that if your worked at for a few months or years, that anyone can learn, and has the potential to make you financially indpendent for the rest of your life, take advantage? Of course you would.

Passive Income:
Let's think of our friend Jim, who works a regular job. He goes in, does his work, goes home and gets paid at the end of the month. He gets paid ONCE for the job he does. He needs to go to work again and again to get paid again and again. In affiliate marketing, you sit down, set up the website, set up your trafic generation methods and then build upwards. As long as traffic keeps coming to your affiliate marketing website or blog, you stand to make money again and again.

Multiple Streams Of Income:
Jim can only do a finite amount of work a day. He is limited by hours, home life, and physical ability. He cannot do 6 full time jobs a day.
In affiliate marketing, you can build 1, 2, or 30 websites, all of them earning. Like I mentioned, however much time you put into this business, that's what you can expect to earn. It takes time, determination, some investing, and the will power not to give up.

There are many affiliate companies out there. Amazon, Ebay, Clickbank, and SFI are just some of the big guns. I hope you've enjoyed this post and I now hope you have an idea of what affiliate marketing is and what it can do for you.

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OldMCSEGuy Premium
Good post.
JohnCWS Premium
Thank you Sir!
CShepherd Premium
Hi John. An excellent post. Thanks.
JohnCWS Premium
Thank you for the feedback!
ninjazrb Premium
I think this is a really good summary of what affiliate marketing is all about. Thanks for this post.
JohnCWS Premium
You are very welcome! And thank you for the comment.