Affiliate Marketing 101 – The simplest form


(For those of you who prefer watching a video, there’s a link at the end of this post)

As I said last time, a person finds a product, buys it for 20 dollars, the company gets 20 dollars, the person gets the product, and you get nothing.

So how do we, as affiliate marketers make money?

In its simplest form, affiliate marketing is when we make an agreement with the company. If we send them buyers, they give us some of the money.

Let me break this down a bit more.

As far as the product goes, there are many companies that will let you be an affiliate for them. It doesn’t matter if the product or service is digital, like an ebook or an online course, or if the product is physical, like hedge trimmers or countertops.

Not all companies have affiliates, but you are not limited to digital products.

How do you become an affiliate?

Some companies require you to fill out forms and other companies are part of a network and you have to join the network and there are probably a few other ways that I’m not thinking of at the moment.

SO, you fill out the forms or join the network or whatever it is you have to do. The company provides you with a unique link.

The simplest affiliate marketing model

You give people who want the 20-dollar product your unique link. They click on the link and if they buy the product, then they get the product, the company gets the 20 dollars but gives you 2 dollars.

So the company keeps 18 dollars.

The amount you get as an affiliate depends on the company. Sometimes they will give you a percentage, sometimes a dollar amount as in our example. Sometimes it’s a large amount, sometimes it’s rather small.

But… why?

Why would a company be willing to give you some of its money?

Simple: you brought more customers than they would have reached by themselves.

For example, let’s say a company’s marketing brings in 100 people but the company gets two affiliate marketers to bring in more. One affiliate brings in 75 people and another brings in 50 people.

Now, instead of having sold 100 products, the company has sold 225 products (their 100 plus the 75 plus the 50). That’s 125 more products that they didn’t have to do anything to get except give away a little bit of the profit.

If you could triple your sales by giving away a small amount of profit, don’t you think that would be worth it?

To summarize

So that’s how affiliate marketing works, you’ve made an agreement with the company, they give you a special link, you give that link to people, and if they buy, you get some of the profit but the customer doesn’t pay any extra.

And it’s a great way to make some money without having to make a product, store inventory, or any of the other things that a company has to do.

There is, however, a better way to do affiliate marketing.

What is the better way?

I’ll go into that next time.

For those of you who prefer watching a video, you can watch a short one here: