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Affiliate Marketing

What is affiliate marketing?

Affiliate marketing has been a bit of a buzz-word in the world of making money online over the past few years – and rightfully so. It’s a very intriguing online business option and can be very lucrative if you get it right.
Fundamentally, how affiliate marketing works is that you on-sell other people’s products or services. Generally this is via an affiliate marketing website that you create, but affiliate marketing does not need to be exclusively done via this method.
As an affiliate marketer, you are essentially just connecting would-be customers that are searching for a product, with a person or business that has the product to sell. It’s the same way that a mortgage broker connects individuals looking for a loan with banks.

How do you make money in affiliate marketing?

You receive a payment as an affiliate marketer, generally a percentage of the sale price of an item, each time you directly refer a customer who makes a purchase. Percentages can be as low as 1 or 2%, but sometimes as high as 50%, even up to 100% in some instances – it depends on the product or service.

Why would a person or business pay you a percentage of their product sales?

Businesses typically have to factor in the ‘cost of acquisition’ into their pricing (the cost in time and money to make a sale). So, the business had to put time into developing the product, but not in generating the sale. They can therefore afford to not make 100% of the sale price because they can make the same amount of profit, even after paying you commission for a referral.
Conversely, as an affiliate marketer, you invest your time (and sometimes money) into generating the referral, but you don’t have to put time or money into developing the product or service. Because you didn’t have any costs associated with creating the product or providing the ongoing service, you also do not need to make 100% of the sale price on an item to make a profit.

What skills are required to be a successful affiliate marketer?

Certainly, internet marketing skills are required. Basic skills in being able to establish a website are also required.
There is a fantastic online program that teaches you exactly how to build a profitable affiliate marketing website called the Niche Profit Classroom training program.
The training program takes you through everything you need to know about affiliate marketing from researching your target market, through to building the website and then maximising your income. It even includes a website builder system where you can quite literally build websites with zero previous knowledge and no technical skills at all.
Three major benefits of affiliate marketing:
  1. Residual/Passive income – The ability to perform upfront work (create your website) and have it pay you repeatedly (once you’ve built the site and put in place your website traffic generation channels, the hard work is done – it’s time to cash-in!)
  2. Leverage – The ability to run a business in which you can generate an escalating financial yield while maintaining or decreasing time input and effort (get paid more for doing significantly less). Build the website, let it sit and make money, then move onto the next affiliate marketing website. In the future, you have multiple money-making websites bringing you in increasing amounts of cash, whilst you do no additional work to month number 1.
  3. Low expense to commence and manage on-going – Affiliate marketing websites are typically ‘set and forget’, and low cost to manage. Your goal should be to make your sites profitable within a very short space of time through making affiliate sales that more than off-set any of the small costs you have associated with running your website.
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