It’s been a busy morning, up at 6:30 am for morning prayers, drop my daughter to school, then to the gym to aid the mind and body change. Home, and make a delicious omelette for me and my son, then the door bell rings, my sister dropping my father off to me as she does 4/5 times a week when she works. Since mum died, dad’s health and his dementia have got worse so he stays with me while I work from home. Then it’s work meetings, I am a ‘Process improvement consultant’ for a business consultancy in London. My point is, we all have a life to live and amongst all of this we have to fit in our coaching, learning, online business and blog writing because we have a MISSION we are on! How has your day been?
I have spent quite a few blog posts talking about my journey that lead me to finding affiliate marketing. I haven’t really spent any time on explaining what it is. In this post, I’m going to talk through what affiliate marketing is starting with Dean’s definition and it’s pros and cons. I’ll also touch on the different types of affiliate marketers.
Definition of Affiliate Marketing (AM)
To define affiliate marketing let’s take a look at Dean’s definition from The Iceberg Effect book.
“Affiliate marketing is about promoting other businesses’ products and services in order to receive compensation (commissions) for the sales you generate.” Dean Holland.
A definition I’ve given from some of my Quora answers is; Affiliate marketing is a performance-based marketing strategy where individuals (affiliates) earn a commission for promoting and driving sales or leads to a merchant’s products or services. It involves a partnership between the merchant (seller) and the affiliate (promoter), where the affiliate earns a commission for each customer or lead generated through their marketing efforts.
An easy way to understand it is let’s say you have a product like a car, shoes or in fact, any product or service. In order for you to sell your product or service you need people to come to you, to your website or indeed your shop and to have a look around and hopefully buy something. When they buy something you make money. For you to get people to come to your product you need to spend money on advertising. For example, billboards, TV adverts, posters in shops and radio adverts and banners. Like you see on webpages. For the vendor/merchant this is time-consuming and expensive. You need to produce marketing material, photographs, gifts, offers as well as paying for adverts that will entice your target audience to come to you and purchase.
What if you didn’t have to do that or you didn’t have to spend so much on that, that would be quite beneficial wouldn’t it? What if other people that you approved could send potential customers your way. You could have tens if not hundreds of people who on your behalf would send footfall (traffic) your way.
What if the people that were sent your way were already interested or focused to the niche industry that you sell your product in? Also targeted traffic. So the chances of somebody buying from you would be quite high, because not only is there quite a high volume of people being sent to you, they are also interested in your niche.
The one who would send traffic your way, known as an Affiliate Marketer, and whoever is producing the product is called the vendor or merchant. Affiliate marketers sell products and services on behalf of other individuals or business, and when they make a sale, a percentage commission is paid to the affiliate marketer for the effort in advertising, finding a targeted audience and then sending them your way.
Send traffic to a vendor, when the traffic buys from the vendor, the affiliate marketer gets paid a commission. Further to this upsells and recurring sells can be made which can further increase commissions. We will talk about this another time.
This isn’t a new business model, in fact I understand it’s been around since the 80s. Do you remember the double glazing salesmen that used to come round and spend hours in your house trying to sell your windows? Car salesman, that’s trying to sell you the latest BMW? Or somebody working in a shoe shop the more they sell the more commission they make. Another example is a medical rep, I remember this cause my uncle was one. He worked for a pharmaceutical company and the idea was to sell their particular version of a medicine to dentists and doctors and medical centres and pharmacy chains. When a deal was made, he would get a commission. So it’s not a new thing and it’s also an established business model that does work and is also ethical.
Did you know that Nike, Adidas, Amazon, Microsoft, Apple, Target and AirBnb are just a few of 100s of companies you can be an affiliate for? Even luxury brands like Jimmy Choo and Saks Fifth Avenue as well as many others have affiliate programs.
“In fact, affiliate marketing spend in the United States increased from $5.4 billion in 2017 to $8.2 billion in 2022 — which means there’s plenty of room for those looking to get a piece of the pie.”*
*ref. www.bigcommerce.co.uk
Isn’t this just a pyramid scheme?
I’ve heard this many times when explaining affiliate marketing where people just say “I know what it is. It’s called a pyramid scheme”. This is actually wrong because affiliate marketing is legal and pyramid schemes are illegal. Pyramid schemes charge a signup fee and to earn money it requires you to recruit more members into this pyramid scheme.
In contrast, affiliate marketing is a legitimate business model where you earn commissions by promoting products or services with an actual value. You actually sell a product or service to an individual that actually adds benefit to them. It’s very important when starting your own business, and especially in affiliate marketing is to be completely legitimate, transparent, trustworthy and earn money in an ethical and moral way. We are doing this to increase value to our lives and our families, and therefore it must be legal and moral. What example would I be giving my children if I was following a business model that was illegal or based on gambling or any other such type business.
How affiliate marketing works
There are many ways in which affiliate marketers make commissions and rates can vary. In some cases, you may just get a low 5% of the sale, or with some higher end affiliate programs, you can earn as much as 50% to 70%, and in some cases, 100% of the commission, depending on sales and recurring commissions.
Affiliate marketers can be identified as three different types
Unattached affiliate marketing – This when you have no expertise in the niche of the product you’re advertising and there’s no connection between you and the customer. This is usually running advertising campaigns with an affiliate link. If people click they may buy and then a commission can be earned. The problem with this model is that you have cold traffic (We will discuss this in future blog ) And there’s no relationship with a focused audience. It’s just about making money and no effort in building a know like and trust following.
Related affiliate marketing involves endorsing products and services within your niche that you haven’t personally used. Whether through blogging, YouTube, TikTok, or another platform, as an affiliate marketer, you possess an audience and influence, making you a reliable source for product recommendations. However, the risk lies in endorsing untested items, potentially harming your credibility with just one bad recommendation. Establishing trust and transparency is essential for the long-term success of your affiliate marketing business.
Involved affiliate marketing entails endorsing only products and services that the affiliate marketer has personally used and genuinely endorses. In this approach, the affiliate leverages their influence to recommend items that followers may genuinely find valuable, contrasting with paying for clicks on banner ads. While it takes time to establish credibility, especially with this more personal approach, it is crucial for creating a sustainable and trustworthy affiliate marketing business. Becoming a trusted affiliate marketer is the ultimate goal in this model. This is what I am in the process of building.
Pros and cons of affiliate marketing
Affiliate marketing pros
Affiliate marketing is great for earning some extra cash. You can either be the one recommending cool stuff from other brands or kick it up a notch and start your own affiliate program. It’s a win-win – brands get a shoutout from trusted creators and tap into new audiences, while you, the affiliate, pocket some commissions for every sale or action your link brings in.
Relatively easier – all you have to do is handle the digital marketing side. No headaches about developing, supporting, or delivering the goods; leave that to someone else.
Low risk, high reward – most affiliate programs don’t cost to join (the best ones do). Once you’ve built up your audience, you start bringing in the money. Plus, it’s like making money in your sleep – thanks to those commissions.
And the best part? You can go big! Scale up those earnings without hiring a squad. Keep the cash flowing by introducing new products to your audience while your existing work keeps pulling in that affiliate cash in the background. (Once you are established, of course).
Affiliate marketing cons
Requires Patience – Affiliate marketing isn’t a shortcut to getting rich quick. Building an audience and gaining influence takes time and patience.
Channel & Traffic – Experiment with different channels to find what resonates best with your audience. Research and choose credible products for promotion. Invest time in blogging, sharing content on social media, hosting virtual events, and engaging in lead-generating activities on your marketing platforms. At the beginning you will use only one way until you have mastered it.
Commission Based – Forget about a regular salary; affiliate marketing operates on a commission basis. Whether you earn from leads, clicks, or sales, companies track actions through temporary browser cookies. You get paid when someone takes the desired action.
Less/No Control – As an affiliate, you play by the company’s (vendor’s) rules. Adhere to guidelines for promoting products or services. Competitors face the same restrictions, so stand out by getting creative within those boundaries.
We will leave it there for now that’s quite a lot to take in.
So that’s an overview of how affiliate marketing works. It is one of the best if not the best ways of earning extra income online at the moment. There are people who have become very wealthy and some even have days earning $20,000 on a single day. That’s the future vision, you have to start somewhere you have to put in a lot of time and effort to build your business and it takes time before you see any kind of results. That’s okay, you’re investing in yourself and in your business and the sales will come.
Next time, I will talk about Why be an affiliate marketer and how? We will go into more detail about the important things that need to be considered and done to start becoming an affiliate marketer.
Thank you for reading, I hope it helped you in some way. Is this what you are thinking of doing? Let me know your thoughts. You are only a few steps behind me!
Please leave comments, share with your friends and family and on the social media buttons below.
You can follow me on social media here using this links page. It will be great to see you there.
The best way to keep in touch is by subscribing to my FREE Newsletter where you will get exclusive content and even more value to help you build your online business.
Until next time, take care.
Atif
#Atif’s Academy
Atif,
I applaud your efforts here to really help set the record straight on what Affiliate marketing really is. I understand why people are automatically skeptical because frankly the internet is full of scams and bad salespeople out for a quick buck no matter what they have to promise to get it. But it really is a great avenue for people interested in making money online as you have almost none of the risks of starting a traditional business. I personally love the intimacy of the affiliate marketing space… building those relationships with like-minded people and helping to connect them with the things that can help them achieve their goals.
AK
Acasha, thanks for your comment, in the time I’ve been doing this, it hasn’t been easy to find some explanation around affiliate marketing and what it is. You just get a generic definition but it doesn’t tie into anything in real life that people will understand. So I tried to do that here, relating it to other companies and products that people may not even know follow the affiliate model. I’m glad that you found it useful and that it will bring value to other people as well. Thanks, Atif.
Atif, you give a helpful explanation of the difference between affiliate marketing and a pyramid scheme. I’ve had experience with people thinking I’m operating a scam. Of course, this makes me uncomfortable! I would add in a pyramid scheme, that you make money from the sales of the people you sign-up. In affiliate marketing, commissions are paid directly from the product owner to the affiliate. You never have to put pressure on anyone.
Nakina, thank you, a big part of this was to emphasise that affiliate marketing is not a pyramid scheme. Many people seem to think it is, but to be honest that’s because they don’t understand it. If it was we certainly wouldn’t be doing this. There is always a fine line between good and bad, and as future super affiliate marketers, we will be doing things in a moral and legal way. Many thanks, Atif
Thanks for this, I don’t think people realise how many top companies have affiliate programs, including companies like Amazon, ebay, Sandals and TripAdvisor. All too often they just see the “make money online” type ads and assume the whole thing is a con.
And of course, there is also the other side of the coin, for a product creator, the benefits of having affiliate is huge.
Tony, I totally agree that many people don’t even think that Amazon and eBay etc. have affiliate programs. I think you make a good point about using slogans like ‘make money online’, or ‘side hustle’ . It makes it sound suspicious. But the model itself is sound and very well established people are using those slogans to send traffic to their links. All the best take care thanks, Atif
Atif, loved your in-depth post on affiliate marketing. For many of us already in this space, we can forget how we little we knew at the beginning. Thank you,
Eleanor, absolutely we were also beginners once and we are still learning. Our job is to teach others that are just behind us and add value to them to help build their business. Regards, Atif
Hi Atif, thank you. Your post provides a very detailed dive into Affiliate Marketing packed with very valuable information for someone looking to become an Affiliate Marketer themselves. I especially love your clarification between Affiliate Marketing and a Pyramid Scheme so readers can fully understand that Affiliate Marketing is definitely not a Pyramid Scheme.
I don’t believe people in general realise that the biggest companies in the world use Affiliate Marketing and offer their own Affiliate Marketing Programs too.
Fantastic read Atif with alot of awesome takeaways!
Karen, thank you, you are correct and I’m beginning to see it more that many people don’t realise that affiliate marketing is not a pyramid scheme. People that read this blog should get a clear view of what it is. One of the functions of my blog is to remove misconceptions and add value to people. Thanks so much. How are things going for you? Thanks, Atif.
Atif,
This was a very interesting and informative read. I love how you gave such an in depth explanation of what Affiliate Marketing actually is. There are a lot of misconceptions out there regarding this. Great job!
Kelli
Kelli, thank you and I’m so glad that you found it informative. I try and go to a level that’s deep enough for people to learn something new but not so much that it becomes boring and academic. Thanks for reading and commenting. All the best thanks, Atif
I think comparing it to other sales jobs is exactly right. We’re just selling products online. It really is just a commission-based sales job – certainly not a pyramid scheme.
And an affiliate marketer isn’t limited to just representing one company or product. As we work at it we really are building our own brand and own customer base, learning skills we can use to sell our own products someday if we want.
Nathan, absolutely right it is a commission based sales job. And as you say once established, you can create your own product and your own brand and scale up your business further. How are things going with you? Talk soon thanks, Atif
Atif, thank you so much for sharing. I appreciate the detail that you went into. This post is so important for anyone trying to decide if affiliate marketing is for them. Your post can really help someone understand what affiliate marketing is and provide them with the information they need to make an informed decision!
Alison, thanks so much for your comment. Completely agree. This should help somebody make a decision about the marketing. With Dean‘s book and guidance from my blog on how I am doing it, this should provide a lot of value and confidence to somebody wishing to start out. Thank you so much. Thanks, Atif
Atif, I have read many articles explaining affiliate marketing but this is by far one of the better articles I have come across! I find that many articles when they say they are going to describe affiliate marketing, they only vaguely brush the surface. I appreciate you digging a little deeper and describing some of the lesser-understood types that exist. Thank you for providing a very in depth explanation!
Lauren, so nice of you to say. I found it similar where I wanted detail and most descriptions were quite vague or didn’t have real life examples. They often talk of products that aren’t familiar and you can’t really tie it back. So giving real life examples and more detail hopefully puts this at a level where future affiliate marketers can build their knowledge. How are things going for you? Speak soon thanks, Atif
Well done! This is really in depth and really helpful. A really interesting read, and one I will save for when I talk to my family more about it. You’ve brought some really good points to my attention, which I will certainly use.
I’m sorry to hear about your dad, best wishes for the week ahead.
Sarah, thank you for your kind words about Dad. Old age and illness is a difficult thing. I’m glad you found this post interesting and like you said, I hope people will share this with their friends and family to help them understand what affiliate marketing is. Take care, thank you. Atif
Hello Atif, You hit the nail on the head , for me this is the perfect explanation of affiliate marketing. The definition, types, and the pros and cons. One thing for sure is the pros and cons can’t be emphasized enough . Look forward to reading your next post. Have a great day.
Jon, thank you so much and I’m glad it was of use to you. Pros and cons as you know are in every aspect of life and they must be studied and thought about before you start out on a new business like this. How are you getting on, thanks, Atif
Atif, I appreciate your explanation of three different types of affiliate marketing as I’ve never seen them labelled as such. But I’d like to offer my comments about the unattached affiliate marketing.
A big selling point of joining such a venture is that you DON’t have to deal with customers. The downside is that there can be a huge investment both in joining such a program and in advertising. If you do it right, the AI of the platform can find your correct audience. If you then give the AI constant feedback with the specific customers that have bought, sales can be increased exponentially. There are obviously a lot more details to consider but for me this is too expensive and I much prefer having customer interaction.
And therefore – like you – I am more attracted to the involved affiliate marketing.
Robert, hope the weather is warming up in Calgary for you. As I’ve been reading and researching and learning, I kind of came across how there are three different types of affiliate marketers. This was quite an interesting point as it conveniently categorises what type of affiliate marketer you are. Glad you found it useful. Absolutely, customer interaction is so important. Thank you, Atif
Hey Atif, good in·depth explanation of what is affiliate marketing. I think the best way of practicing affiliate marketing is like you do: involved. For me it’s the most complete and gratifying way of doing it. Needless to say how involved you are with this blog. I follow you from the start and what a nice progress you’ve made in such a short time.
Looking forward for your next post!
Martin, thank you so much for your kind words. It’s great that you’ve followed me from the beginning and I hope to grow and learn and build my business. I’d love you to join me on that journey and we can help each other. If you get the chance subscribe to my newsletter and I’ll provide you with the regular updates and further insights via email. Thank you so much. Talk to you soon thanks, Atif
Hi Atif,
That is a great and detailed explanation of affiliate marketing, good job! 🙂
It’s also awesome that you are able to do what’s needed in your work and business while caring for your father! As you mentioned, we all have a life to live and it can get quite challenging meeting all our obligations and family needs. Continue to wish you success in your journey and look forward to your next posts!
Denny
Denny, thank you so much. I am very lucky that I am able to work from home in my normal 9 to 5 job which then allows me to look after my father too. In my first blog, I talk about the reasons why I want to do this and a lot of that is to do with freeing up time so I can spend time with family and look after them which is the most important thing. How are you getting on? I hope things are good. Talk soon thanks, Atif
This is so EXCELLENT and a great explanation of the type of affiliate marketers as well as the pros and cons. I am learning more and more from you and look forward to every post, my friend! I also like the look of your page – well done!
Ernie my friend, how are you and thanks for your comments. I’m so glad that you are learning just as I am learning as well. If you get the chance subscribe to my email newsletter and that will have further insight and subscriber only material. I’d appreciate it if you could let me know if there are any topics that you’d like me to cover, or rather any particular challenges that you have that I could help with, let me know. Thanks, Atif
Hi Atif!
Your post has a nice layout and is easy to read. The flow of your information is wonderful. I enjoyed your in-depth information about affiliate marketing. So many times it is misunderstood. When I first started researching affiliate marketing, several people tried to steer me away from the possibility due to incorrect information that they had seen on social media.
I appreciate your honesty and look forward to future communications!
All the best!
Milissa Neirotti
Melissa, thanks for your comment. That’s a very important point you’ve just made about people steering you away from affiliate marketing. Unfortunately, this is due to lack of knowledge and people worrying about scammers and all that kind of stuff. Scammers are a real life problem and which is why it’s important you learn from people that have done it before that can help you avoid those kinds of things. How are you getting on? I’m enjoying following your journey too. Take care all the best thanks, Atif
Atif,
This is by far is the best blog post you have put out to date. It is very informative, yet easy to read and understand. It looks professional and is laid out nicely. Yet you inject your personality and provide valuable information.
I am proud of you for taking all the advice on how to make your blog better and implemented them. It defiantly shows.
You have raised the bar and I look forward to seeing the next set of changes to take it to the next level.
CJ
CJ, hey, how are you my friend? thanks for your kind words I’m trying to improve my blogs as I go. I’m trying to make them shorter and clearer and more concise. It’s not that easy but like the rest of the business it’s all a learning curve and you have to make small changes as you go. Thank you brother I really appreciate what you said and thank you to you because I will learn so much from you. Take care, thanks, Atif
Atif,
What a fantastic insight into affiliate marketing. I have learnt so much from just one blog. You are evidently a man of many facets. Keep up the good work and I look forward with eagerness to the next one.
Andy
Andy, thank you, and I’m so glad you’ve learnt something from this blog. I guess I just keep trying to learn more things to help grow my knowledge so that I can run my online business. That’s why I’m doing this blog to put some accountability and responsibility on my head so that I have to keep on top of things because I’m not just doing this for me I’m also doing it for my subscribers and readers. If you get the chance subscribe to my email newsletter and you’ll get additional information and material and further insights. How are you getting on? I hope things are going well for you. Thanks, Atif
Hi Atif,
I love the examples you give about affiliate marketing, like the car sales man as well as the major companies like Airbnb.
In fact, affiliate marketing is all around us.
Even insurance agents and real estate agents can be considered affiliate marketers. They sell a product they don’t own and earn a commission for every sale they generate.
Alan, my friend, how are you? thanks for your comment. I thought it was important to give real life examples so that my readers understood how this fits in real life. You have given further good examples about estate agents who receive a commission when they sell a house. How are you getting on? I’m really enjoying reading your journey to, I always learn so much from you. Thanks Atif
Hello Atif,
Your post is, as always, exceptional, showcasing your penchant for over-delivering. I appreciate how you’ve elucidated the intricacies of affiliate marketing, skillfully drawing comparisons with other models, with a noteworthy emphasis on the legal aspects of the affiliate system. Congratulations on another insightful piece, and I wish you continued success.
Ezequiel, thanks a lot for your kind words. It makes me very happy when people get something out of the blogs that really helps them or makes them think. My aim is to plant little golden nuggets in my readers/subscribers heads that will help them avoid unnecessary issues and build their business too. Many thanks take care, Atif
Good job, Atif,
It’s a very in-depth insight into Affiliate Marketing, how common it really is, and how it differs from pyramid schemes. I hope that more people outside our little “Saturday Share” group get to see it when your business reaches that stage.
I always like to leave a little bit of friendly constructive criticism in my comments. On this occasion, I’d like you to reconsider your use of so many large images in your post. I found them to be very distracting, especially the road workers. In my opinion, I thought that there were too many of them, and they were too large being the full width of the text. I tend to have one image every 4 or 5 paragraphs, which cover, at most, half the width of the text with the text wrapping around them. Alternate their alignment, left and right. That would be my preference, but of course, it’s up to you.
Cheers
Phil
Phil, thank you so much for your comments. I’m glad you found it useful and I hope others do too. Regarding your constructive feedback, thank you so much. I would very much welcome my readers and subscribers to give me feedback to help improve the blog. I want it to be easy to read, pleasing on the eye and educational. You are absolutely right. There are too many images in my blogs and they are too big. The template I’m using doesn’t make it easy to size them. However I have found a way of doing it and in my next blog you can see that I’ve made those changes. Appreciate you telling me this and if there’s anything else you think I can do to improve the blog please let me know. Take care thanks, Atif
Great post, Atif,
clear explanation of what affiliate marketing is.
I agree with you that is an easier way to earn money. Many people think it is easy. Is not. As you mentioned you have to put time and effort into creating your business because it is a business.
It is easier because you don’t have to develop the product, store it, ship it to customers and deal with returns.
As an affiliate marketer, you just focus on promoting other people’s businesses, as per Deans’s definition. So it’s a performance-based business, where you get well paid for any sales you generate.
I like your style of writing, well organised.
My day usually starts when children wake up to go to school.
Then I have a few hours before I go to work in the afternoon. That is the time devoted to my affiliate business.
Looking forward to your next post.
Tom
Tom, thank you so much for your comments and taking the time to do so. you can see in my second blog, how I looked at so many different things and there was always a major difficulty with them. Like you say with affiliate marketing, you don’t have to have your own product, you don’t have to store anything, you don’t have to create anything specifically. So it is easier than other business models. Thanks again and look forward to reading more about your journey. Thanks, Atif
Great post Atif. You have certainly done your homework and manage to explain Affiliate Marketing well.
Some interesting comparisons to pyramid schemes which I have not come across myself. Although I dont really talk about it much to anyone as find I have to explain too much.
Good bringing in old school sales as well and reminder that big brands also use Affiliates.
Actually big business with lots of opportunity.
Neal
Neal, thanks for your comments. I thought it was important to just make that clarification with pyramid schemes and affiliate marketing because I’m at the early stages of building my business. So as I learn things I want my readers to also learn that. We could go months down the line, and then people start hearing this and questioning this model. So just being clear and transparent upfront. I think it’s a better thing as it clears the air and confusion as we go. Thank you so much take care of yourself thanks, Atif
Your post brings out a major objection to Affiliate Marketing and that is the Pyramid scheme example. I had a world wise friend visiting from NYC the other night and he thought Affiliate Marketing was a Pyramid scheme, which enabled me to handle the question. But your post opens up many ways to explain what we are doing here. It’s important to have a clear idea of what Affiliate Marketing is, and to be able to say it clearly, like memorizing an elevator speech.
I thought I subscribed to your newsletter but now I’m not so sure. I’ll check it out. Also DMed you on FB. Namaste 🙏🏾