What is an Affiliate Marketing – Top 6 Questions Answered

There are a lot of questions that start with the words, “ What is an affiliate marketing ? “. What is an affiliate marketing business, what is an affiliate marketing program? The list goes on. Our goal today is to answer some of these questions. And get you headed the right direction with affiliate marketing.

What is an Affiliate Marketing… is the start of a wide range of questions asked by people looking to start an affiliate marketing business.

What is an Affiliate Marketing Online Business

 

What is an Affiliate Marketing Business?

 

An affiliate marketing business is any business consisting of one or more people who contract with a company as independent sales representatives. These Sales Representatives send website visitors to the company’s products in hopes those customers make a purchase. In exchange they make commission. Affiliate typically run niche marketing blogs and do product reviews. These tools help them convert sales.

 

What is an Affiliate Marketing Company?

 

There are a couple types of affiliate marketing companies online. One is the retail affiliate program. When a merchant offers their own program for affiliates to market their products for commission. Another type of program is the affiliate network. Affiliate networks run the affiliate programs of multiple merchants. The last is an affiliate program called a network marketing program, we will cover next.

A network marketing affiliate program is one where not only do they offer a commission on sales of products, but you can recruit other free affiliates and earn a commission when they generate sales as well. This differs from MLM or Multi-Level Marketing.

You do not have a minimum sales quota, or auto ship to pay for to get paid. Instead a network marketing program is free to join. MLM is not considered an affiliate program because you must pay to be a basic sales agent and meet company set minimums in sales and purchases to get paid.

 

What is an Affiliate Marketing Commission?

 

A commission is a portion of the sale you make for referring the customer who makes a purchase. Affiliates earn commissions, or a piece of each sale made to their referred customers Affiliate Marketing collageover a term. That term can be as little as a single visit. Or it can be a lifetime sales cookie or hard coded commission. Regardless of the length of time a sale is recorded in the affiliate counts this as revenue.

 

What is an Affiliate Marketing Cookie or Hard Coded Commission?

 

An affiliate cookie is a piece of code that is sent to your internet browser like Firefox, Chrome, or Microsoft Edge. Some cookies last a day and then they expire or become invalid, others last a month, 6 months, or a year etc.…  A Hard-coded commission or hard coded referral is typically tracked by cookie and IP Address, so the customer stays yours for life. If a customer buys during the life of a cookie or hard coded commission, you earn a commission.

 

What is an Affiliate Marketing Niche?

 

A Niche is a group of people who share a common interest. An affiliate niche market is people within the main niche who are seeking something to buy. The best niche for long term wealth building are evergreen niches. An Evergreen Niche is one that pays repeatedly such as selling bath soap, perfumes, lotions, vitamins and diet supplements. It can also be things like model glue, magazine subscriptions, insurance quotes, and advertising.

 

You can focus your marketing through content and ads by focusing on where the prospect is at in the sales process. A prospect will start by doing a general search like sprocket oil, or temporary tire repair. They will use that search to examine brands and types and will select a few to get more information on. That is called discover and research. Affiliates try to jump in at the point where the buyer is searching for best price on Fix-A-Flat or Where to buy Stanley Sprocket Oil. That is the point of buyer intent. If you have the money you can cast a wide net for the general terms or narrow down to those smaller ends of the funnel called sub niche markets. More on niche marketing and affiliate strategy in future post.

 

What is an Affiliate Marketing Strategy?

 

An affiliate marketing strategy is the methods an affiliate will use to attract buyer traffic. Some affiliates will run comparison sites like Esurance or Best Quotes. And others will aim at writing blog reviews and short comparisons of multiple products that fill the same need. Others will focus on single products like Fix a Flat and those buy now shoppers. Some cover all bases like Retail-me-not which offers up Coupons and sale prices updated daily.

Some of us run affiliate niche blogs that encompass multiple techniques and catch shoppers at multiple stages of the buying process. We even write post that help a person realize they need more instruction or need a certain product.

Another part of the strategy is deciding how much each buyer or sale is worth to us. That part is called budgeting ROI or Return on Investment. The fastest path to profits for many is to buy paid advertising or in the case of a blogger to gain paid placement on other websites and blogs to send traffic back to our sales funnels.

Sales funnels are another blog post all on their own. If a chosen ROI is 50% of the sale price a $25 commission earning product sale would allow us to spend no more than $12.50 to generate each sale. If we figure that 100 visitors will get us 4 leads, and 4 leads will get us 1 sale we need to get we can spend no more than 12.5 cents per visitor or 12 and a half cents per click. The math always varies product to product and advertisement to advertisement but the formulae for setting your budget for advertising stays the same.

 

Conclusion:

 

Regardless of what your, “What Is?” question may be the most important thing you can do when considering a career as an affiliate marketer is to trust your instincts, commit, and start some serious training. For that I recommend our future post and the powerful training of Wealthy Affiliate. You can try WA for free and start training today. I stayed for the people, the training, and the opportunity. Also $23.50 residual monthly commissions aren’t a bad thing either. Anyhow check out our 2018 Wealthy Affiliate Review through this link or the right sidebar graphic today.

About Andy Zeus Anderson

Proud father of 7, Husband of 1, and internet blogger. I have been an affiliate marketer since January 3rd, 2003, and a blogger since a year later. Learn more at about us on Our About Page

View all posts by Andy Zeus Anderson →

10 Comments on “What is an Affiliate Marketing – Top 6 Questions Answered”

  1. Very interesting article. I’ve been doing a little research on affiliate marketing and your answers have been a big help. Thank you!

  2. Hey there!

    Great intro to affiliate marketing! You got me thinking about a few things I had never considered before.

    I was wondering, do you know if many people are making money on fixed commissions? And are those the same as “bounties”?

    Even with the introduction it seems like there is a lot to learn! Where would you recommend I go to learn more on affiliate marketing? Are there any companies I should avoid (scams)?

    Thanks!

  3. Fixed commissions are often called bounties, a famous site for offering affiliate bounties is Amazon that offers them on certain free trials of discount offers to keep affiliates moving forward. Other times bounties are offered as a bonus for hitting certain sales goals like recruit 25 customers in April and get a $40 bounty.

    As to who to recommend program wise I mentioned Wealthy Affiliate in my closing and the banner is in my side bar to this post. It is one of the most complete courses online today for niche affiliate marketing. They have a free trial and the continued training is very affordable with a great Return on Investment.

    Thanks for your time and thought filled comment.

  4. Thank you for a very thorough overview of Affiliate Marketing. I think Affiliate Marketing gets confused with MLM and this helped to clear up that confusion.

    I was wondering if it is best to promote Wealthy Affiliate with it’s great training and a niche that a person is passionate about at the same time. Is that taking on too much?

    For a newbie how do you know when to start investing in PPC to potentially gain more business? I have heard if you don’t understand PPC it can become very expensive with little return.

    At the end of the post, you mention $23.50 in residual income. Could you expand and explain the math on how it is earned?

    Finally, how long is the average time to get a business like this making a profit?

    Thank you!

  5. I don’t see promoting Wealthy Affiliate as anything but a next step. We give a rough overview of concepts they expand on and guide you through as a process. We don’t wish to reinvent the wheel here so letting WA do what they do makes sense.

    As a newbie I wouldn’t start investing in PPC. I would wait until I have the niche keyword tool at Jaxxy and know well how to use it because as you state it can get expensive fast but only if you don’t know how to find 2-5 cent visitor traffic that is truly looking for what you are presenting information wise.

    The $23.50 is based on a 50% commission rate for Pro Members at Wealthy Affiliate and it is paid every month your referral remains upgraded. In terms of ROI or return on investment for paid advertising I can spend up to $12.50 per acquisition to gain new paid members in order to make 50% of the commission. If my visitors cost 10 cents each I need to get a sale for every 125 visitors to my page by Pay Per Click. With the wealthy affiliate training though I can get those sales off free search engine traffic so PPC advertising serves only to expidite traffic generation.

    The last thing I would remind of is that it is often more important to capture an e-mail address than get a sale because as I stated above. You may not even get an initial sale but your list you can market several products to and that same reader who didn’t buy today may buy several products down the line.

    Thanks for a thought filled comment.

  6. Hey,

    Great article.

    I started my affiliate marketing business just at the beginning of this month and I am still learning.

    I have hear about MLM but there are mixed reviews from all over. Some people recommend it and some people don’t. I guess it is all opinion rather than facts.

    I will keep an eye out for your future posts so I can keep on learning.

    Keep up the good work and all the best,

    Tom

  7. I’m of the camp that MLM is an evil twin of network marketing. I am not one to pay for the right to make someone else a bunch of money while even my lawyer and accountant can’t figure out the pay plan and how exactly you earn a bonus or override. I prefer network marketing and affiliate programs because they are simple to explain and you know exactly how you get paid.

    Thanks for a great comment.

  8. Hallo there,

    I am very green in the affiliate marketing world and I was looking for quality niches that I could make money with for a long time, and I have to say your article gave me the light bulb moment.

    I never knew there were evergreen niches and also that they were these rewarding.

    I have always been a fan of designer perfumes so I am going to go with that. Thanks a lot for your help with niches. 🙂

  9. I’m glad we could help. Designer perfume is a great niche, boil it down and you have tons of sub niche potential as you feature certain designers and their fragrances. Go get them.

  10. I’m glad we could help. There is in my mind no easier opportunity to make money than to sell products you never have to inventory, label, price, and write compelling descriptions for. As an affiliate marketer, you don’t have all of that hassle and expense making it a perfect business for just about everyone.

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