What is Affiliate Marketing?

What is affiliate marketing? Most people have heard the term “Marketing” and have a good idea what it means. But what about the “Affiliate” part? Affiliate marketing is simply acting as a facilitator (or middle man) between a consumer who wants to buy a product (or service) and the company that wants to sell a product (or service). When done correctly, affiliate marketing is what I call a win, win, win relationship. How so? Let’s take a look.

Most affiliate marketing sites are based on a market niche, that is a relatively narrowly focused product or products within a category. An example of this might be golf clubs. Golf clubs fall into the larger category of sports equipment, the smaller category of golf equipment which can also include golf bags, golf balls, practice aids etc.. Generally, the more narrow the niche the better. So we could further narrow down our niche to drivers which fall under the category of golf clubs. So now our categories go like this. Sports equipment, golf equipment, golf clubs, drivers. By narrowing down the product,

Let’s say that someone wants to buy a toaster. That consumer might search Google for “best toaster”, and let’s say you have a website called “Toaster World” where you talk about all things “Toaster”. You would have various types of toasters with discussions about the pros and cons of each one. You might even have reviews or a rating system to rank the toasters from best to worst. After browsing your site, the customer decided on the right toaster for them and clicks on a link that takes them from your website to the toaster companies website. When the consumer purchases the toaster, the company pays you a commission. This is a win,win,win situation.You are providing a service (adding value) to both the consumer and the company. The consumer doesn’t have to spend time going to 10 or 15 different websites looking for the best toaster. The company doesn’t have to spend time and money getting that customer. And you get a commission without having to deal with inventory or shipping costs.

What is Affiliate Marketing? Pros & Cons

Pros

Very little start-up costs (see “How to Start Your Own Business with No Money“)

Virtually unlimited number of products or services to choose from. This means that no matter what your interested in (Cars, Boats, Dogs, Horses, Fashion, Children Etc) you can find an affiliate program to make money with.

No direct selling. You are not going out trying to sell someone a product. The customer is already looking for something, you are just connecting them with a company that sells what they are looking for.

Huge market that will continue to grow for the foreseeable future. With over 2.5 billion people using the internet (and over 6 billion people in the world). Buying things on the internet will become an increasing popular way to do business.

Can be done in your spare time. In fact, I recommend that’s how you do it. Unless you are independently wealthy, don’t quit your day job! While you will eventually be able to (Hopefully). Just like any business, it takes time and effort to become profitable.

Cons

Can be slow to get started with a relatively long learning curve. No one is an expert at ANYTHING overnight. The same is true with affiliate marketing, learning all of the ins and outs of the business will take time. The good news is there are A LOT of good free resources out there to help you become successful (see my #1 recommendation for Affiliate Marketing training).

Websites need to be constantly updated. Providing good content and relevant information is key to the success of any Affiliate Marketer. Not only does this keep your website fresh and interesting, but it also helps with search engine rankings.

Sales tend to be “one and done”. How many times will the same person want to buy a toaster? 2-4 times in the span of 20 years? That being said, there may be millions of people looking to buy toasters at any given time. (There are also affiliate programs that offer subscription services to people, and those can pay you a commission every month).

Picking the right”niche”. While there are virtually no limits to what you can sell as an affiliate marketer some products / services will sell better than others. For example, say you are interested in dogs. What is a better product to specialize in, the best grooming supplies or dog collars? This is where having the right training comes in (see my #1 recommendation for Affiliate Marketing training).