Affiliate marketing in the online world is akin to what traditionally was a commission-based sale. An affiliate (blogger) would receive an agreed percentage of the sale price from the merchant (retailer/producer/publisher of the product) when a sale is made to a new customer.
How does Affiliate Marketing Work?
In the conventional world, this is akin to the distributor (manufacturer) to re-seller model or the reseller to shop model in dealing with physical products. These traditional marketing channel involves a margin of profit from the sales or these products or commission for the sales person whom are hired to sell them.
In the online world however, we have Affiliate Programmes set up to help sells e-products (audio, video, apps, worksheets and courses) which then provides a commission to those who recommends and sell the product to others often their audience, followers or email list. The percentage shared ranges from as little as 10% to as much as 50-60% of the overall sale price, because of this, for a number of bloggers, affiliate marketing truly represents a large proportion of income.
In summary, Affiliate Programmes are the evolution of the distribution and sales channel for the online world. The difference is more likely, you won’t need to handle any physical or digital goods or process the buyers payment. These will be dealt with by the seller of the product. You will be paid your commission when actual sales are made.
Affiliate programmes are typically available from two large groups; vendors-merchant networks (directory-based companies) and individual companies or content producers.
When you sign up with a merchant-network, you gain access to a large number of products from which you can selectively decide which you would offer as an affiliate, to your audience.
In the case of individual companies or content producers, in signing up to their affiliate programmes, you then specifically offer that particular product only.
Why Merchants Love Affiliate Marketing
When you are already selling a physical or digital (informational) products and owns the channel to ship or distribute this, any new market or opportunity is certainly welcomed.
Merchant loves to offer an Affiliate Programme either by themselves or through Merchant Networks for their product for that simple reason, to increase sales.
The more people that signs up to their Affiliate Programme meant the bigger their ‘sales force’. They will not only enjoy increased sales but also does not have the overhead of hiring sales persons or pay hefty advertising bills.
So if you are offer a course or product consider creating an affiliate program or sign up to merchant network to increase your sales.
Why Entrepreneurs Love Affiliate Marketing
There are three main reasons why Entrepreneur or Affiliate Marketers love Affiliate Programs:
- You don’t need to come up with your own product be it physical or digital.
- Beyond sending your audience to buy from the merchant or content producer through your tracking link, there is nothing else you need to do.
- You are given all the tools to help you market the product, these may include advertising banners, sales pitches, email swipes, free trials and samples.
Now, it may sound easy but Point 2 above is where the real work takes place. Unless you already have a huge number of audience or followings, you will need to create this by building an online presence and creating a community in order to sell the products.
If you already have a website and community, then understanding your audience, your market and how the product fits will ultimately gives you higher conversion rate and sales. Links and banners can be added directly on the website or sent to the community via e-newsletters.
More and more people are getting used to the phrase ‘Joint Venture’ to describe Affiliate Marketing as the relationship is truly a win-win.
Types of Products
The types of products offered by affiliate programmes range from physical products (for example Amazon’s Associate programme -link) to software solutions such as website hosting; 1&1 (our recommendation for UK) or GoDaddy (our recommendation for US), email list management (AWeber) to coaching programmes offered by individual experienced and established bloggers.
In essence there are no hard and fast rules about the type of products to offer to your audience, however the main criteria must be that whatever products you do decide to offer as an affiliate to the audience on your blog, must tie in with the messages you are sharing.
For example if you are writing a blog on financial advice or investments, then sharing kitchen equipment (via Amazon Associates) would not be a very good idea, but recommending books on the subject that you have read and found really useful would probably work really well.
The Psychology of Affiliate Marketing
Affiliate marketing accounts for a significant proportion of money that exchanges over the Internet today. In the early days of e-commerce, not much thought was given to affiliate marketing (although there were a few early companies in the 1990s) as everyone was trying to reach out to their own specific audience, while everyone else was building up to a point of trusting money exchanging over the Internet.
These days, very few people think twice about paying for something with their credit card on the Internet. As the barrier to spending virtually, has been overcome, the number of means of potential income has increased.
Affiliate marketing as a means of income really relies almost entirely on the trust that you build with your audience. When people have been reading your blog for a while and come to enjoy (even love) your writing voice, you start building a trust relationship with them. This works really well when you provide valuable, useful (even heartfelt) information on your blog (link to what is blogging).
Being your honest self, sharing your knowledge, expertise and knowhow, is one of the fastest ways to building a following on your blog.
Selling that’s not just marketing
Affiliate marketing works because, unlike advertisers who try to push, cajole and sometimes (as it seems) even trick you in to buying a product, it is really based on one person’s experience of actually using that product and sharing that experience.
The true appeal of affiliate marketing is in essence, good ole traditional – word of mouth marketing.
When one person genuinely shares how good or how well a product performed or really works, other people who know and trust that person, generally tune in and listen carefully.
How do I begin to make money from affiliate marketing?
If you have been blogging for a while now and have an audience who enjoys your work, there’s really nothing from stopping you from starting affiliate marketing now, right this minute.
It really is as easy as signing up to the relevant affiliate programmes, writing a blog post, or even creating a quick video on why you like a particular product or programme and then encouraging people to buy or sign up to it themselves.
It costs nothing to sign up and most merchants provide a back office for the affiliates. Once logged on, you can access the back office for promotions, detailed specifications, benefits, case studies and testimonials including email copies and swipes that you can use to help you sell the product(s). Simply copy and paste the link, content or banner on to your website or email and post this online.
Again here, honesty is what stands out most of all. Building that connection of Trust with your audience if really what counts.
BUT I don’t like to rip people off…
We so understand where you are coming from. The term Advertising and Marketing seems so ubiquitous with the whoring of products, regardless of whether it’s good or bad, whether it serves a purpose or not.
The fact is selling as an Affiliate, what you are really doing is offering good service. You are in fact offering an honest opinion and sharing your experience and subsequently your recommendation for a product (or products) that have served you well.
In other words, you are offering a service far beyond simply selling (although yes, in the process you do make some money, and rightly so). You are offering your expertise and experience of using a product or a service, and while doing so, you are helping other people who are also looking, evaluating and trying to decide on a similar or similarly specific product.
The secret ingredient to successful affiliate marketing is really not to ‘sell’ or ‘market’ at all, but to share your experience and recommend the product because you have used it. If you have used more than one similar product and one stood out above the rest, that would be really valuable, important and extremely helpful information too.
For a more detailed explanation and history : http://en.wikipedia.org/wiki/Affiliate_marketing
Over to you
Have you tried affiliate marketing or is it something that you are looking in to incorporating? Do you have any questions on Affiliate Marketing? We would love to hear from you, whether it’s comments, questions, thoughts or ideas. Feel free to leave a comment below or get in touch with us here.
We hope you enjoyed this article and found it useful.