This complete guide will walk you through how to start an affiliate marketing business, with online marketing tips and tricks to help you grow.
Smart ecommerce entrepreneurs running a thriving business know there’s always more they can do to make that business grow. One way of taking things to the next level is by finding an alternate stream of income. In steps affiliate marketing.
That doesn’t mean starting a second business, but finding ways to complement and grow the business you have by offering more value to your customers and followers.
If you aren’t participating in affiliate marketing, it’s time to consider taking advantage of this lucrative revenue stream.
Find your first affiliate program 🎯
What is affiliate marketing?
Affiliate marketing involves earning a commission by promoting a product or service made by another retailer or advertiser. It is a monetization model where an affiliate partner, which is you, is rewarded a payout for providing a specific result to the retailer or advertiser.
Typically, the result is a sale. But some programs can reward you for leads, free-trial users, clicks to a website, or getting downloads for an app.
Affiliate programs are usually free to join, so you don’t have to worry about high startup costs. Done well, this performance-based opportunity can go from side hustle to profitable online business idea by netting you a healthy income.
How affiliate marketing works
Affiliate marketing involves referring a product or service by sharing it on a blog, social media platform, podcast, or website. The affiliate earns a commission each time someone makes a purchase through the unique link associated with their recommendation.
- You show an ad or a link for Store Z on your website, blog, or social network.
- A customer clicks your unique link.
- The customer makes a purchase in Store Z.
- The affiliate network records the transaction.
- The purchase is confirmed by Store Z.
- You get paid a commission.
Commission rates vary depending on the company and the offer. On the low end, you’ll earn about 5% of the sale but, with some arrangements, you can earn as much as 50%, usually when promoting a class or event. There are also affiliate marketing programs that provide a flat rate per sale instead of a percentage.
Types of affiliate marketing
Affiliates always carry a bit of mystery—you never know if the person has ever really used the product, or if they are just promoting it for the money. Both cases still exist today.
It wasn’t until 2009 when renowned affiliate marketer Pat Flynn broke down the different types of affiliate marketers into three groups. Understanding these types of affiliate marketing can show you the different ways people make money online in this space, regardless of your moral compass.
The first type of affiliate marketing is referred to as “unattached,” or when you have no authority in the niche of the product you’re advertising. There is no connection between you and the customer. Often you are running pay-per-click advertising campaigns with your affiliate link and hoping people will click it, buy the product, and earn a commission.
Unattached affiliate marketing is attractive because you don’t need to do any legwork. Affiliate marketing businesses rely on reputation and trust with a target audience online. Some don’t have the time or desire to build those relationships, so this type of marketing is their best option.
“Unattached affiliate marketing isn’t a genuine business model, it’s for people who just want to generate income,” explains Elise Dopson, founder of Sprocker Lovers. “Our focus for Sprocker Lovers is building community and providing free education around a particular niche first, which in our case is the sprocker spaniel dog breed, and selling second.”
Related affiliate marketing is where you promote products and services you don’t use, but that are related to your niche. Affiliates in this case have an audience, whether it’s through blogging, YouTube, TikTok, or another channel. They have influence, which makes them a trusted source for recommending products, even if they’ve never used it before.
The problem with related affiliate marketing is, do you want to promote something you’ve never tried before? It could be the worst product or service ever and you wouldn’t even know. It only takes one bad recommendation to lose the trust of your audience. If you don’t have trust and transparency, it’ll be hard to build a sustainable affiliate marketing business.
Involved affiliate marketing refers to only recommending products and services you’ve used and truly believe in. “Involved affiliate marketing is the way forward,” says Elise. “It’s rooted in trust and authenticity, which is best for your audience and business.”
In this type of marketing, you use your influence to promote products and services that followers may actually need, instead of paying to get clicks on a banner ad. It takes more time to build this type of credibility with an audience, but it’s necessary to build a sustainable business.
Elise explains that advertising also becomes much easier. “You don’t have to hide behind expensive PPC ads and hope for clicks and sales. An organic Instagram Story or blog post about your experience with a product will go a long way.” Elise prefers this method because it’s honest and is “the only genuine way to become a trusted source on any topic.”
Involved affiliate marketing is the only genuine way to become a trusted source on any topic.
Pros and cons of affiliate marketing
There’s no doubt affiliate marketing is worth it, given its growth in popularity. Statista estimates the affiliate marketing industry will be worth $8.2 billion by 2022, up from $5.4 billion in 2017. It’s also a low- to no-cost business venture you can profit from immensely.
While industry growth is a good indication of success, entrepreneurs also take this referral marketing route for a few other reasons.
Easy to execute
Your side of the equation simply involves handling the digital marketing side of building and selling a product. You don’t have to worry about the harder tasks, like developing, supporting, or fulfilling the offer.
Since there’s no cost to join affiliate programs, you can start making money with an established affiliate product or service without any upfront investment. Affiliate marketing also can generate relatively passive income through commission—the ideal money-making scenario. Though initially you’ll have to invest time creating traffic sources, your affiliate links can continue to deliver a steady paycheck.
Easy to scale
Successful affiliate marketing offers the potential to significantly scale your earnings without hiring extra help. You can introduce new products to your current audience and build campaigns for additional products while your existing work continues to generate revenue in the background.
Before you get too excited, know that great affiliate marketing is built on trust. While seemingly there is an endless number of products or services to promote, it’s best to only highlight those you personally use or would recommend. Even when a product interests you or fits within an existing hobby, becoming a great marketer for that product takes a lot of work.
Affiliate marketing also has a few disadvantages compared to other platforms. Before jumping in, let’s look at a few challenges you’ll face on your journey to success.
Affiliate marketing is not a get-rich-quick scheme. It requires time and patience to grow an audience and gain influence.
You’ll want to test different channels to see which connect best with your audience. Research the most relevant and credible products to promote. And spend time blogging, publishing free content on social media, hosting virtual events, and doing other lead-generating activities.
There’s no boss handing you a weekly paycheck as an affiliate marketer. Affiliate programs work on a commission basis, whether you’re paid by lead, click, or sale.
Companies use a temporary browser cookie to track peoples’ actions from your content. When a desired action is taken by someone, you receive the payout.
No control over program
Affiliates must obey the rules set by a company for their program. You need to follow their guidelines for what you say and how you present their product or service. Competitors must follow the same recommendations, so you have to get creative to differentiate yourself from the crowd.
How do affiliate marketers make money?
Affiliate marketing income spans a large spectrum. There are some marketers that’ll make a few hundred bucks per month and others that make six figures a year. The larger your following, the more money you can make.
Compensation software company Payscale reports that the average annual salary of an affiliate marketer is $52,130, based on over 7,000 salary profiles, with the highest tier making an annual salary of $72,000.
There are also marketers like blogger Ryan Robinson, who makes over $17,000 per month through affiliate income alone. This image below shows Ryan’s blog income for March 2021:
But how do affiliates actually get paid? When you choose an affiliate program to promote, you’ll notice there are different payment models. Companies also call it a price model, payout model, conversion type, or another variation.
Regardless of the name, the payment model tells you what goals you will get paid for. If you’re promoting a software product, the action could be a free trial signup. For marketers that promote physical products, the goal will likely be a purchase.
Many programs run with last-click attribution, which means the affiliate who receives the last click before purchase gets 100% credit. However this is changing, as programs improve attribution models and reporting. For example, you could share equal credit for a sale if there were multiple affiliates in a buyer’s conversion funnel.
Five common ways affiliates get paid include:
- Pay per sale, where you earn a commission for each sale you make. It’s a common payout model for ecommerce offers.
- Pay per action, which earns you a commission for a specific action. Many affiliate programs use this payout model because it’s broad and can be applied to different offers: a newsletter signup, a click, contact request, form submission, etc.
- Pay per install, where you are paid for every install generated from your website traffic. The goal of your content would be to promote mobile apps and software so that people download or install them.
- Pay per lead, which pays you every time someone signs up for something. It’s a popular payout method because companies use it for sweepstakes, lead generation, and other types of offers. Cost per lead offers are common for beginners because it’s easier to generate leads than to sell products to an audience.
- Pay per click, a rare payout system where you earn commission on every click on your affiliate link. Pay per click programs are used by big merchants with a goal to build brand awareness. Customers don’t need to sign up or buy anything, just to visit the merchant’s website.
How much you make depends on your affiliate niche. For example, our research* found that the highest average commission rate ($70.99) was for business-related programs. While books and media and clothing categories earned just over $6 per commission. The maximum average commission we found was around $289.06 per sale.
How to start affiliate marketing in 4 steps
- Pick your platform and method
- Decide your niche and audience
- Find your products
- Choose your first affiliate program
Just like running your own small business, becoming a successful affiliate takes dedication and discipline. Use the following step-by-step guide to start your affiliate marketing business.
Pick your platform and method
The first step is figuring out the platform you want to build your audience around. Every affiliate marketer has a different approach and platform. There are many affiliate marketing ideas you can choose from based on different methods:
- Niche topic and review sites. These are sites that review products for a specific audience or compare a line of products against their competitors. This method requires you to create content related to the review space and post regularly to draw in an audience.
- Digital content. Digital content creators include bloggers, YouTubers, or social media influencers. They create niche content that resonates with a target audience. The goal is to organically introduce niche products their audience will enjoy. This increases the chances they’ll buy and you’ll earn an affiliate commission.
- Courses, events, workshops. If you’re an educator, you can integrate affiliate partnership offers into your events.
No matter which route you take, authenticity and audience building are the two most crucial elements for affiliate marketing.
If you cannot authentically connect with your audience, chances are you won’t have success in converting them into affiliate sales.
To pick a platform and method, ask yourself:
- What platforms do you use the most?
- Which platforms do you understand best?
Common platforms affiliate marketers use are:
- Pay per click (PPC)
Starting with a marketing platform you’re comfortable with helps you create high-quality content. This can result in a stronger, more engaged audience you can turn into sales.
Decide your niche and audience
When it comes to choosing a niche, aim for something you’re passionate and knowledgeable about. This helps you come across as authentic and as a trusted source of information for potential customers. It also helps you evaluate which products and brands you want to promote.
Say, for example, you started a blog about dogs. You own a sprocker spaniel and you’re passionate about helping other owners care for their sprockers.
You create a blog like Sprocker Lovers, and you regularly post and encourage people to subscribe to an email list and share your content. Sprocker spaniels are your niche, and you’re going to invest in content marketing and optimization to grow your audience of owners.
« The niche you choose for your affiliate site guides how much time or effort you’ll need to put into building it to a point where you begin to see SEO results, » says Elise.
« SERPs for software, marketing, and health care, for example, are all dominated by huge blogging sites with even bigger marketing budgets. The secret is finding untapped areas where competition isn’t as fierce—and getting in there before other people recognize it.”
As you post more, you can use affiliate marketing devices like social listening tools, website analytics, and social media insights to discover who your audience is and what they like.
It’s important you know your audience so well, that you understand why they follow you in the first place.
Remember, you’re not paid to post. Affiliate marketing is a performance-based online business. If you know what your audience likes, you can then refer the best products to them and earn more affiliate income.
Find your products
To earn revenue as an affiliate marketer, your audience needs to connect with what you’re saying. The items or services you promote need to be products they genuinely want. Getting this wrong can hinder your success and diminish your credibility—as well as your audience.
If you’re curious where to look for products or brands to work with, don’t worry. There are tons of affiliate marketplaces, including:
Another option is to visit the websites of the products and services you use and like to see if they have an affiliate program. Large companies often have programs they promote on their site, such as Amazon Associates or the Shopify Affiliate Program.
You also can take a more direct approach. Reach out to the owner of a great product you come across and see if they offer an affiliate marketing program. If they don’t, they might be happy to set up an arrangement with you, such as offering you a special coupon code to share with your followers.
The best deals often are found when you’re the first to inquire and have a relevant distribution channel, such as approaching the seller of a new fitness product if you’re a health and wellness blogger.
Affiliate marketing programs will have terms of service you need to follow, so read the fine print. For example, your link usually will have a cookie with a specified timeframe, and some programs don’t allow you to purchase pay-per-click ads using the product or company’s name.
Choose your first affiliate program
As you brainstorm products or browse through affiliate platforms, the most important criteria to keep in mind is that the product should be aligned with your audience, or the audience you hope to build. Ask yourself, is it something your target audience would find valuable? Does it fit with your area of expertise?
A food blogger probably wouldn’t promote beauty products, for example. A wide range of other products, such as cookware, meal kits, gourmet ingredients, or even aprons would make more sense.
Also make sure the product or service you’re promoting is a fit for the platform you’re promoting it on. For example, home décor and clothing are well suited to image-heavy platforms like Instagram. However, if you’re promoting more in-depth purchases, like software, your conversion rates may be higher on longer-form platforms, like a blog or YouTube.
Tips for affiliate marketing success
As we mentioned earlier, affiliate marketing revenue eventually can become a form of passive income, but you still have to do some heavy lifting upfront. The success of your program will depend on the quality of your review.
To create a good review, it’s best to get personal. Share your experience in your blog, social media post, Instagram Story or YouTube video. If you’re writing a personal review, give a candid opinion based on your experience with and knowledge of the product. The more open you are, the more authentic you will be. People will be more comfortable following your advice if they feel they can trust you.
Trust is a key factor in your affiliate marketing efforts, because people need to trust you enough to act on your recommendations. The level of trust you’ll need to make affiliate sales depends on your industry and the products you’re recommending—for example, it takes more trust to be an effective affiliate for a $1,000 course than it does for a $20 t-shirt.
Beyond just sharing your experiences, you can build trust by limiting the number of affiliates you promote, or by only becoming an affiliate for products you personally use and sticking to your area of expertise. For example, people trust my recommendations for Canadian financial apps, but that doesn’t mean I’m going to have much luck as a Sephora affiliate.
Talk to a product expert
Another option is interviewing others who use the product or service, or even interviewing the person who makes or sells it. This can give your review more depth, creating a narrative for the reader.
Create a product tutorial
While your success with affiliate marketing can depend on the overall size of your following, another way to drive traffic is by providing a tutorial on the offer.
People often perform “how to” Google searches, such as “how to save money for college” or “how to decorate a laundry room.” If you offer a tutorial that solves a searcher’s problem and clearly showcases the value of the product, your referrals will make more sense in context, and you’ll provide the customer with a stronger incentive to purchase the product you’re recommending.
Build an email list
An email list is a list of contacts you’ve gathered who would like to receive information from you. It’s important to build a contact list because it’s one of the best ways to connect with people outside of social media. When it comes to purchases made as a result of receiving a marketing message, email has the highest conversion rate (66%) compared to social and other marketing channels.
Gather emails from your content and send a newsletter weekly or biweekly to subscribers. Affiliate marketers can send many different things to subscribers on their list:
- Free downloads
- New blog posts
- A look inside your life or business
- Entertaining stories
- Reminders and news
- Special deals
Use your email list as an opportunity to show value to subscribers. If they send you an email back, respond. Be consistent with your newsletter cadence and quality. Then, every once in a while, promote an affiliate product or two to subscribers.
There is no hard rule on how many times to send these promotional emails. Just don’t send them every time or you’ll come off as spammy and untrustworthy. If you’re promoting good products once a month, you’re only providing value to subscribers who need them.
Find relevant search terms
If you’re promoting an offer through a blog post, research which keywords someone might use in a search engine to find an answer to a related problem. Google Ads Keyword Planner is a good tool that can help. (It’s free to use, but you’ll need to create an account.)
Consider your angle
Depending on your offer, figure out how much energy you should invest in instructional or tutorial content, which is often a natural lead-in to someone trying a product for themselves.
For example, you could record a video of yourself using and getting the most out of a physical product or showing off the benefits of a digital product, like software. Unboxing posts are popular, so if you receive the product in the mail, document your experience opening it up.
Set your distribution strategy
Once you’ve written your promotional content, share it on your website or social media platforms. If you have a subscriber list, you can create an email marketing campaign. And be sure to have an affiliate marketing hub on your website with a resources page where you share a quick list of all of the tools you use and love.
Try offering a bonus
Sometimes marketers promote their affiliate programs by offering bonuses to anyone who purchases the offer. For example, you could give a free ebook you wrote to any follower who makes a purchase.
Promotions like this encourage customers to buy by sweetening the deal. They’re especially persuasive if the bonus you offer is something you normally sell, because then shoppers can see its actual dollar value right on your site.
You can find several examples of affiliate bonuses in action when business coach Marie Forleo opens her popular B-School for entrepreneurs each year. To encourage sign-ups through her affiliate link, Laura Belgray, Forleo’s own copywriter, offers a one-on-one copywriting session as a bonus.
Marketing coach Amy Porterfield adds a bonus bundle, with an invitation to one of her live events, access to a private Facebook group, Q&A sessions, and a variety of downloads. Adding a bonus can be a good way to stand out if several other affiliates are promoting the same product.
Keep things legal and above board
Don’t forget to disclose to followers that your post contains affiliate links. For one thing, it’s required by the FTC. But explaining the reason for your affiliation also can help you connect with your audience.
For example, the financial independence bloggers at Frugalwoods offer this disclosure: “Frugalwoods sometimes publishes affiliate endorsements and advertisements, which means that if you click on a link and buy something, Frugalwoods might receive a percentage of the sale, at no extra cost to you. We only write about and promote products that we believe in. We promise not to tell you about stuff that’s dumb.”
If you need help figuring out what language to use in a disclaimer, it’s worth taking time to consult a lawyer.
Affiliate marketing program examples
Looking at some of the companies that participate in affiliate marketing will provide you with inspiration—as well as proof that this is a legit and high-paying revenue stream.
Shopify’s Affiliate Program is a network of entrepreneurs, educators, influencers, and creators who send referrals to Shopify. It’s free to sign up for the program, you only need to apply.
Once approved, partners get a unique referral link to share with their audience. They earn affiliate income each time someone signs up using their link.
On average, Shopify Affiliates earn $58 for each referral who signs up for a paid Shopify plan. Affiliates can earn as much or as little as they want, it all depends on how much time they spend on their affiliate marketing strategy.
I have worked with dozens of companies over my 11 years online, and I have to say that Shopify has been one of the best to work with! Their affiliate managers and program have made it easy for me to promote their product, make money, and provide value to my community.”
Water bottle retailer Healthish used affiliate marketing to build a million-dollar brand. Rather than take the traditional affiliate route, it used Instagram influencers to build awareness for the launch of its keystone product, the WB-1 bottle.
The brand continues to work with influencer accounts, ranging from those with 100,000 followers and up. It works with around 300 creators per month to create content that markets and sells the bottle at scale.
Learn more by reading The Pre-Launch Strategies of a Million-Dollar Brand.
Wirecutter, an affiliate website promoting gear and gadgets that was acquired by The New York Times in 2016, says it only makes recommendations after “vigorous reporting, interviewing, and testing by teams of veteran journalists, scientists, and researchers.”
Shopping on BuzzFeed started out as a gift guide and expanded to reviews of various product categories.
What makes the site unique is that it covers a variety of ordinary items, giving top picks at three different price points. BuzzFeed’s product reviews are quite thorough, which provides lots of value to the reader. Here’s a post on toilet paper and another on women’s white t-shirts as examples.
One of the most common examples is Amazon’s affiliate marketing program, known as Amazon Affiliates. In fact, Amazon Associates currently has the biggest market share of affiliate networks (45.81%), followed by CJ Affiliate (8.14%), and Rakuten Affiliate Network (7.85%).
Amazon Affiliates offers different products across many different categories. It’s a great way to get into affiliate marketing as a beginner. Creators, publishers, and bloggers can use Amazon affiliate links to direct their audience to product recommendations. From the link referral, you can earn money on qualifying purchases.
Take Sprocker Lovers, for example. Site owner Elise Dopson wrote a blog post titled “Are Spaniels Good Running Partners? & 6 Tips for Safe Running.” In the article, she recommends a tip about how spaniels should wear a high-vis dog jacket when running at night.
If a reader wants to buy a high-vis dog jacket, they can click the link and head to Amazon to complete the purchase.
Retailer Urikar offers a high-ticket affiliate program with average commissions of $1,460, according to data from ShareASale. It sells fitness and wellness products like massage guns, indoor and outdoor workout equipment, and accessories.
Urikar offers a 10% commission on all sales, which can add up quickly if you are a fitness influencer with a big following. It’s most popular product, an AI-powered muscle massager, retails for $139.99, which means you’ll earn $13.99 for each sale. Urikar’s program also provides your own dedicated account manager and dashboard to track conversions and sales.
Start your affiliate marketing business today
Earning money with affiliate marketing programs can be a rewarding way to add a new revenue stream without taking on too much risk. All it will cost you is your time. By investing the hours upfront, you can continue to reap the rewards.
Click here to apply to the Shopify Affiliate Program.
Ready to create your business? Start your free 14-day trial of Shopify—no credit card required.
*Methodology: Data gathered (program name, industry, average commission, average conversion rate) from an affiliate network site of 200 affiliate programs, 20 random programs each from 10 industries. The data comes from a seven-day measurement period (December 7–14, 2021).
Limitations include: Data is gathered only from one affiliate network site. Not all categories could be included because of lack of program availability and time constraints of data collection.
Affiliate marketing FAQ
What does affiliate marketing mean?
Affiliate marketing means you earn a commission by promoting a company’s product or service. An affiliate partner, which is you, is rewarded a commission for providing a specific result to a merchant or advertiser, be it sales, leads, downloads, etc.
How do I become an affiliate marketer?
- Pick your platform and method.
- Decide your niche and audience.
- Find your products.
- Choose your niche and audience
What are the top affiliate networks?
- Affiliate Future
- CJ Affiliate
What is an example of affiliate marketing?
Shopify offers an affiliate program where entrepreneurs can refer merchants to the platform. It’s free to sign up. After a partner applies and gets approved, they receive a referral link. The partner goes and shares that link with their audiences. When someone signs up through the link for a paid Shopify plan, the affiliate partner earns a commission.