What is Affiliate Marketing? How Does Affiliate Marketing Work? How Do You Find a Product to Promote? <=> Online Business

What is Affiliate Marketing?

Let’s start with the most basic of basic questions: what is affiliate marketing?

Simply put, affiliate marketing is a way for you (the affiliate) to earn a commission for recommending products or services to your friends or readers.

To simplify it, here’s the 4 step process for how it works:

1. You find a product you want to promote
2. You sign up for their affiliate program
3. You get a special link that allows the merchant to track the people who clicked your link
4. If they buy the product, you get a commission.

Pretty simple, right?

It can get much more advanced, but in this post we’re just going to start with the fundamentals and get you to the point where you’re ready to make your first commission.

How Does Affiliate Marketing Work?

There are a lot of different ways to track affiliates these days, but all are based off someone clicking your special tracking link.

The most common and basic type of tracking is via a cookie.

When the link is clicked, a small file called a cookie is stored on their computer letting the merchant know that if a sale is made, it came from you.

There are also more advanced methods based on the email used or IP address – but we won’t get into those here, we’ll stick to the basics.

How Do You Find a Product to Promote?

Here’s the thing, you can pick just about any product that you can buy online, and there will be an affiliate program that will pay you a finders fee for referring a sale.

However, just because you can promote anything, doesn’t mean you should. 

The most important thing to consider when selecting a product to market is, “is it relevant to your audience?”

For instance, for me to try and advertise for dumbbells on Location 180 probably isn’t the smartest thing, because 99% of my audience could care less about them.

Note: If you happen to be in the market for dumbbells, feel free to go ahead and click that link and prove me wrong 

However, for me to promote, say, WP Engine a WordPress hosting company – makes much more sense, since almost every one of my readers either has, or has considered starting a website.

When I’m trying to decide what to promote I always ask myself the following questions:

• Do I use this product?
• Will the vast majority of my readers benefit from using this product?
• Is the buying process easy?
• Is there a good affiliate commission? (Not always necessary)

If I answer yes to each of these questions, then it’s probably a good fit and worth promoting.

Action Item: Make a list of products that you use that you think your blog audience would benefit from using as well. Try to think of as many as you can.

Physical Products vs. Information Products vs. Services

Ok, you should have an idea of which products you might want to promote – now it’s time to decide which of those are the best fit for you and your audience.

There are three different types of things you can promote via affiliate marketing:

1. Physical Products
2. Information Products
3. Services

Each of these has pros and cons, and we’re going to look at those now.

Affiliate Marketing for Physical Products

Physical products are probably the easiest thing to promote for one reason, and one reason only: Amazon.

Amazon has the world’s largest affiliate program, and once you sign up, you can get a link for any product on the site, and earn a commission on it!

Pretty cool, right?

Well, yes and no.

Commissions on physical products are notoriously low, due to all of the factors that go into selling them (manufacturing, wholesaling, shipping, etc).

So you can earn a 4% commission on anything at Amazon. Once you’ve referred at least 7 items in a calendar month, your commission will bump up to 6%, then 6.5%, 7 up to a max of around 8.5%.

Even if you’re selling thousands of items a month, you’re still making less than a 10% commission. Because of this I know a ton of people who make a little bit of money off of Amazon, but few who make thousands.

Average Physical Product Commissions: 4-10%. Anything over 10% is very good.

How to Sign Up

Signing up for Amazon’s affiliate program is an excellent starting point, because the chances are good you already use Amazon, are familiar with it, and your readers are too.

You can sign up and get links immediately right here.

If you want to find affiliate programs for specific companies, I would start with Flex Offers. Many of the largest companies work with them (for instance many of the golf companies I work with.

Quick Tip

If you want to promote physical products, there’s probably a better place to do it than Amazon over the long term if your niche is somewhat specialized.

Amazon is tough because they have a 24 hour cookie. That means that if someone clicks your link, and then buys anything, anytime within the next 24 hours you get the commission.

This is an extremely short period of time. Compare it to some other affiliate programs where the time frame can be it 90 days or more.

For instance, when I’m promoting golf products for Breaking Eighty, I’ll usually earn a 6.5% commission based on how many items I refer on average each month.

I could join the Golf Galaxy affiliate program, which pays out 6-8%, but it has a 45 day cookie. So if someone clicks the link and then buys anything over the next 45 days – I get a commission.

Makes it much easier to make sales.

Action Item: If you know your niche and want to promote a physical product do a quick google search for “product name affiliate program” or “your niche affiliate program” to get an idea of what other options are out there.