What is Affiliate Marketing? Can You Really Work From Home and Make Money With It? [2021]

What is Affiliate Marketing? Can You Really Work From Home and Make Money With It? [2021]

Exactly what is Affiliate Marketing and how does it work? We will tell you how to become an affiliate marketer in 2021 and how you can make money by selling other peoples’ products or services.

What is Affiliate Marketing?

Affiliate Marketing is promoting third-party products or services and earning a commission for every sale, lead or click. Think of it as Refer-a-Friend on a large scale.

Some of the biggest companies in the world including Amazon and eBay have an affiliate program. Other well-known companies like Uber or Airbnb are practically affiliate marketers themselves: They promote other people’s transportation services or homes and receive a commission for it. (You can become an affiliate for both companies).

The Three Types of Affiliate Marketing

There are three types of Affiliate Marketing:

  • Pay Per Action (PPA)
  • Pay Per Lead (PPL)
  • Pay Per Click (PPC)
Affiliate Marketing can help businesses generate sales, leads and clicks
Affiliate Marketing can help businesses generate sales, leads and clicks

PPA Marketing: Pay Per Action

The vendor pays the affiliate a commission once the customer completed a purchase. This can be a percentage of the sale or a fixed price and is the most common affiliate marketing structure.

PPL Marketing: Pay Per Lead

The vendor pays the affiliate a commission for a lead. This could be a potential customer signing up for the vendor’s newsletter or a trial of a product and is usually compensated with a fixed commission.

PPC Marketing: Pay Per Click

The vendor pays the affiliate a commission for a click, no matter if the customer ends up buying something or taking any other action on the website. This is also usually a fixed price.

How does Affiliate Marketing Work?

Three parties are involved to make Affiliate Marketing work:

  • Affiliate / Publisher
  • Customer
  • Vendor / Seller / Product Creator

Basically, the affiliate (you) refers the customer to the vendor. And for the trouble you went through to acquire said customer, the vendor pays you a commission. In some cases, a fourth party is involved, which is the Affiliate Network.

CJ Affiliate is one of the largest Affiliate Marketing Networks
CJ Affiliate is one of the largest Affiliate Marketing Networks

Every affiliate gets a unique link that includes the affiliate’s ID or username. This way, the vendor can track where a certain customer came from and compensate the affiliate for the referral.

As for the customer, it’s just a normal link – especially if you do Link Cloaking. If it weren’t for the affiliate link disclosure you have to include (more on that later), nobody would notice.

After the customer clicks on an affiliate link and gets redirected to the vendor’s website, a so-called cookie is generated and saved on the customer’s device. This cookie has a lifetime, which in the case of an Amazon affiliate link is 24 hours.

What this means is that when a customer clicks on your affiliate link and buys something from Amazon within 24 hours, you get a commission. But if they finish their purchase more than 24 hours after you referred them, you get nothing.

The easiest start for your website

Why Should I Get Into Affiliate Marketing?

As a content creator, you don’t need to create your own product or worry about returns and customer service. Instead, use Affiliate Marketing to generate passive income for you even while you sleep!

Affiliate Marketing spending in the United States is expected to hit $8.2 billion by 2022.

Source: Statista

As a vendor, it helps you reach potential customers and costs you absolutely nothing until a certain action (usually a sale) takes place.

Affiliate Marketing for Content Creators

You spend a lot of time researching and writing great blog posts for your website. Or you might take and edit beautiful pictures and videos and share them with your followers on Social Media.

Get started with Affiliate Marketing by recommending books
Love reading? Get started with Affiliate Marketing by recommending books!

Affiliate Marketing is a great way to monetize your content and get paid for doing what you love and already do. It could even help generate enough income to make a living with it!

Let’s say you recommend your favorite books to the readers of your blog. Why not include an affiliate link to Amazon and get a commission every time your reader ends up buying something, even when it’s not a book?

Affiliate Marketing for Vendors

Working with affiliates is also an opportunity for vendors to increase their revenue or customer base. And unlike advertising, this is a performance-based business.

Trello usage tips are shown on an iPad
Affiliate Marketing is especially popular for software and digital products

As a vendor, you only need to pay your affiliates once a previously agreed-upon event takes place. That could be the sale of a product, but also the potential customer calling you, signing up for a trial of your product or visiting your website.

So referring to our previous example, Amazon only has to pay a commission to the affiliate if the customer actually buys something. If he or she just leaves, Amazon didn’t spend any money on acquiring this customer.

How to Start Affiliate Marketing

So now that you have an idea and became interested, you want to know how to make money with Affiliate Marketing. You need three things to start:

  • Product
  • Place
  • People

Let’s dive right in and start with the product search.

Amazon and eBay are not only two of the biggest affiliate programs around, but luckily also easy to sign up for. They don’t require you to have a track record and you can get started within minutes. Another network suitable for beginners is ClickBank. And all three of them are CPA networks, which we will be focussing on in this article.

Some companies have their own affiliate program and are not part of affiliate networks like ClickBank. If you have a certain product in mind that you enjoy using and would like to become an affiliate for, just head to the respective website and search for “Affiliates” or “Partners” to find out more.

Amazon Associates

Amazon is one of the most popular brands worldwide. With more than 3 billion items for sale, you most probably have at least a few products at home that you could review and promote to get started. Due to Amazon’s popularity, you will also enjoy a higher conversion rate than with unknown brands.

Get started with Affiliate Marketing with Amazon Associates
Amazon Associates is probably the biggest affiliate program worldwide

Learn How to Become an Amazon Affiliate from our guide for beginners.

eBay Partner Network

Just like Amazon, eBay is a very well-known brand around the world. You can leverage this trust with your readers and followers by promoting some of the one billion items up for sale.

ClickBank

ClickBank is another popular affiliate network based in California. Commissions are usually a lot higher than on Amazon or eBay, as you will mostly be promoting digital products with higher margins instead of physical products.

Get started with Affiliate Marketing with ClickBank
The ClickBank Marketplace, where you can find thousands of digital products to promote

Discover How to Make Money With ClickBank in our step-by-step guide.

Which Products to Promote as a Beginner

One of the most popular ways to promote a product is by reviewing it. That’s why joining Amazon Associates or eBay Partner Network is a great way to get started with Affiliate Marketing.

Coffee pouring in a cup
Promote products that you are familiar with, for example your coffee machine

You don’t need to buy products to review or learn anything about topics you know nothing about. Just find yourself a product at home that’s available on Amazon or eBay and get started!

Don’t make the mistake to promote the product with the highest commission you can find by creating an inauthentic review. Your readers will know and the competition will crush you. Instead, tell the world why you love your new coffee machine and build a loyal following.

You could promote your affiliate links in WhatsApp messages to your friends, add them to your Instagram bio or post them in forums. There are several places where you can put your links. Usually, successful affiliates prefer using their website, YouTube channel, and/or email list.

Website

Creating your own website has never been easier and will only cost you a few dollars per month. You can even get started for free using Wix or similar services.

Create a website to kickstart your Affiliate Marketing success
Scatches of how a website could look like

Focus on a specific niche with your blog and create content on a regular basis. This makes it a lot easier to build an audience and an email list of loyal followers, who you can then promote your affiliate links to in the future.

Learn How to Create a Website in One Hour and find some examples of successful affiliate websites in one of the next chapters of this article.

YouTube

Another popular way to do Affiliate Marketing is through YouTube. Most people prefer to watch videos over reading, and this is also true for product reviews.

What you should do is take advantage of both YouTube and your website. Create a video review of a product and at the same time transcribe your video and make a blog post out of it.

This way, you generate content for the two biggest search engines in the world – Google and YouTube.

Email List

If you are just getting started with Affiliate Marketing, you probably don’t have an email list yet. But you should definitely try to build one starting today if you are serious about becoming an affiliate.

Gmail Email Inbox
Email Marketing is very targeted and can help increase your ROI

Email Marketing is still one of the best ways to reach customers. These people already know you from your blog and signed up for your newsletter, which means they are really interested in your content and the products you promote.

You have joined an affiliate network, got your affiliate links and your first product reviews are ready and published on your blog and YouTube channel.

Now it’s time to have people find your content and actually click on those links so you start making money with them. Later on, you will be able to promote affiliate products to your subscribers as well.

But for now, there are two ways to generate traffic to your affiliate links:

  • Organic Traffic
  • Paid Traffic

Organic Traffic

If people search for something on Google and click through to your website, it’s called organic traffic. All you need to invest is your time to create outstanding content and then optimize it for search engines, so it actually shows up in Google or YouTube.

Sam Oh from Ahrefs talking about the basics of Search Engine Optimization (SEO)

Depending on the keyword you are targeting, it may very well take several months until you consistently show up on the first page of Google. It’s important that you choose a niche and stick with it so that Google and your readers see you as an expert in this area. You can study keyword research in this very detailed guide from Backlinko and optimize your blog post accordingly.

Another very important ranking factor are Backlinks. This refers to the amount and quality of websites that are linking to your site. So after watching the above video about the basics of Search Engine Optimization (SEO) from Ahrefs and reading about keyword research from Backlinko, learn more about link building in this beginner-friendly guide from Moz.

Paid Traffic

While organic traffic is free, it can take months or even longer to rank on Google depending on the niche you are in. Sharing your links on Social Media also doesn’t move the needle because you don’t have many followers yet or you just want to see quicker results?

Then it’s time to think about paid advertising, often referred to as Pay Per Click (PPC). Traffic starts coming in almost immediately if you do PPC. But, you will likely spend a lot of time and money until you figure out how to profitably advertise online.

John Crestani introducing three types of ads: Search Ads, Display Ads and Video Ads.

And for affiliates of Amazon, for example, the math just doesn’t add up. With commissions of a maximum of 10%, it’s practically impossible to run ads and still be profitable. PPC therefore usually only works for promoting digital products with higher commissions.

If you are interested in learning PPC for Affiliate Marketing, you might want to have a look at our Super Affiliate System PRO review.

Every time you endorse a product or service and get paid or otherwise rewarded for it, you need to disclose this fact to your audience. This applies to a product review on your website just as it does to your Instagram profile.

I get commissions for purchases made through links in this post.

Source: Federal Trade Commission (FTC)

The disclosure must not be hidden on a separate page. Instead, the closer it is to your recommendation, the better. Better yet, inform your audience before your first affiliate link. Read the FTC’s Endorsement Guide here.

Some affiliate programs like Amazon Associates require additional disclosure in the footer of your website. Make sure to always read the Terms and Conditions before you get started!

The best home for your online store

Do you need some inspiration before getting started? Have a look at the following three successful affiliate websites. And next time your search for a product review, take a closer look at the links – there’s a good chance you are on an affiliate website.

Wirecutter (General)

Wirecutter is probably one of the most popular Amazon affiliate websites. They focussed on gadgets in the beginning and grew into a huge general review site covering a lot of different categories.

Famous for their thorough reviews, they also do a great job explaining how they tested the products and how they came to their conclusion.

Wirecutter.com Screenshot

See how four of their posts relate to current events (the Covid-19 crisis) and are therefore highly relevant to their readers?

Wirecutter was founded in 2011 and acquired by the New York Times Company for more than $30 million in 2016.

NerdWallet (Finance)

NerdWallet is focussed on the personal finance niche. They review everything from credit cards to mortgage rates and recommend the best ones to their readers.

NerdWallet.com Screenshot

Founded by Tim Chen with just $800, the privately held company behind NerdWallet was valued at $500 million in 2018. You can read about Tim’s inspiring story on CNBC.

The Spruce (Home & Living)

The Spruce is all about home and living. You can find thousands of articles ranging from decorating over gardening to healthy living on their site, many of them containing affiliate links.

TheSpruce.com Screenshot

The Spruce brand also has other websites covering food, pets, and crafts and reaches more than 30 million readers each month.

How Much Money Can You Make as an Affiliate Marketer?

There is essentially no limit. As long as people click on your affiliate links and end up buying something, you make money even while you’re sleeping.

Some affiliate marketers make six figures a month. Some affiliate websites get acquired by the New York Times Company for $30 million (see above).

That said, making money is never easy. To have people click on your links, they need to know about your links first. You need to generate outstanding content on a regular basis and/or master paid advertising to achieve that goal.


Frequently Asked Questions

What is Affiliate Marketing?

Affiliate Marketing is the process of getting paid a commission every time you successfully generate a sale, lead or click for someone else’s products or services.

Is Affiliate Marketing dead?

No. Affiliate Marketing spending in the United States is expected to grow to $8.2 billion by 2022. Some of the biggest companies in the world like Amazon rely in part on Affiliate Marketing to acquire customers.

Can I do Affiliate Marketing without a website?

You don’t need a website to do Affiliate Marketing. Some very successful affiliates promote their links on YouTube or to their Social Media audience. It’s also possible to send links to your email list, post in forums, or drive traffic directly to the sales page using paid advertising.


Conclusion: Should You Get Started With Affiliate Marketing in 2021?

If you want to generate passive income, work from home (or on a beach), and be your own boss, then Affiliate Marketing might just be what you were looking for.

You don’t have to source or create products, you don’t have to take care of customer service, you don’t have to hire employees. All you need to do is focus on selling and let someone else take care of the rest!

How will you get started with Affiliate Marketing? Or do you prefer other work from home opportunities like E-Commerce? Let us know in the comments!

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