Are you tried of struggling to find legitimate ways to make money online? You've read articles and even bought products that claim they will teach how to "get rich quick" but in the end it feels like a scam. What if there was a way for you to make money online, with or without any web development experience? How would you feel to be bringing in extra income each month or even making a full time job online? Avoid the scams. I'm going to explain exactly what affiliate marketing is and how you can use it to your advantage.
What is Affiliate Marketing?
Affiliate marketing is one of the oldest methods of advertising online. In short, it’s not much different then having a sales job that only pays commission. Advertisers, merchants, and product creators will pay good money to acquire customers or make a sale. The amounts that advertisers will pay and the terms of those payment can very. Your job is to find new customers/leads for the advertiser and in return they will pay you. It’s really that simple.
How Does it Work?
At the very basic level all you need to do is:
- Choose an offer to promote
- Find people interested in the product or service you are promoting
- Get those people to click a special tracking link
- Complete the advertisers goal which could be to get the user to purchase something or maybe sign up for a website. This is also known as a conversion.
Read those steps again and realize that there is more too it than most products will tell you. There are some scams out there that will lead you to believe you can “make millions by posting links on google”. This is simple not true. While links are used to track offers and you could use Google to advertise your services you can’t just “post links on google”. Don’t fall for these types of scams.
Where do you find advertisers to work with?
So now you know the basics of how affiliate marketing works but you are probably wondering how you can partner with these companies. That’s where affiliate networks come into play. An affiliate network works as a manager between you, the affiliate, and the advertisers who want to promote their products. The advertisers will pay the affiliate network and the network will then pay you for your conversions.
Working with an affiliate network removes a lot of barriers that you would have if you attempted to work directly with an advertiser. First of all they handle the terms of the offers and most clearly explain those terms to you. You don’t have to negotiate directly with an advertiser, the network handles this for you. There is less risk of not being paid by an advertisers and some networks have paid out commissions to affiliates even when they did not receive any payments due to companies going out of business. You’ll also have access to a wide variety of offers to promote. I will provide more information on specific networks I have worked with in the future.
Do I need to create a business?
One of the great things about affiliate marketing is that there is an extremely low barrier to entry. You don’t have to have business license, although I do recommend it. If you don’t have a business tax identification number than you will need to provide your social security number to the affiliate networks so that the government can tax any income the network pays to you. For legal purposes you are usually identified as a third party contractor. This means that the network can pay you directly, without with holding any tax, and you will later have to claim this income on your taxes.
What are the different types of offers?
When it comes to how an advertiser chooses to pay you, there are a few main types of offers. First, the standard revenue share model. With this type of offer you will get a percentage of sales as commission. For example, an advertiser may pay 8% on sales. If you send a user to the site and they buy $100 worth of goods, your commission is $8. You see this type of offer used commonly with large internet retailers such as Amazon. In my experience these types of offers are usually easier to get the user to convert, but pay a little bit less.
The other most common type of offer is what is known as a Cost Per Action (CPA), Cost Per Sale (CPS), or Cost Per Lead (L) offer. With this type of offer you are generally paid a flat fee for a user to complete an action. For example, a CPS product may cost $60 and the advertiser could pay you $20 per sale. You may even see a $60 product payout a $60 commission because new customers are valuable and the advertiser will make their money on later sales. A CPL offer works the same way but with the goal being collection the information of an interested customer instead of making a direct sale. For this you might see something like a $3 payout to get a user to sign up for a new dating site. A CPA offer is usually some goal like getting a user to download a game, or some software. All of these terms are sometimes used interchangeably.
Where can I get started?
Some networks are more difficult than others to get started in. Some of the smaller CPA networks have lucrative offers, but will need proof that you are already a profitable affiliate and have been making money steadily. The easier networks to get into are the big revenue share networks. These networks tend to have a lower barrier to entry and work with tons of advertisers.
Here are a few affiliate networks that you can apply for today:
- Commission Junction – a large network with many CPA and rev share offers
- Link Share – another large network that works with many advertisers
- ShareASale – lots of revenue sharing options
- Amazon Associates - promote amazon.com items directly through amazon