How To Make Money With Affiliate Marketing

So we now know what an affiliate network and affiliate program is, how we can set up a website to sell products, and how we can use the social channels to get people to visit our website. Still, the one thing that may still be relatively unclear is how to make money from all this and this is what we will explore in this chapter.

Affiliate Commission

Most affiliate networks and programs work the same way. They will pay you a percentage of anything they make from a sale that was made to a customer who came to their site through your link. Most programs pay a certain fixed percentage, and these percentages can vary anywhere between 1% and 50% depending on the type of product you are selling and the price of the product. Since most people use Amazon Associates program as their main affiliate network, we discuss how this program’s affiliate commissions work in order to explain the general idea. In Amazon Associates, affiliates are paid a different commission for different types of products. Selling video game console products for instance, will earn you 1% of the price while selling a downloadable game product will earn you 10%. While you may be tempted to just jump for the highest percentage, some of the lower percentage products are actually easier to sell, so there will be some tradeoff whichever way you choose to go. Some products, such as personal computers, will have fixed caps on commissions you can earn, which will often mean that selling the most expensive products available will not be to your advantage, but these are calculations best left for a later day.

Understanding Cookies

Now, you may be wondering what a cookie is in the first place. No, we're not talking about the delicious sweets your grandma likes to make you, We're talking about the tiny files downloaded to your computer when you visit a certain website. What cookies do is let the retailer know where the customer came from. For instance, let’s say you have an affiliate website and someone clicks a link on it, leading them to Amazon. Amazon would have no idea where the customer came from if not for the cookies. When the customer clicks your link a tiny file called cookie is downloaded to their computer allowing Amazon to know that he is your customer and you deserve a share of the profits for sending him there. This is a neat little system that has been in place for many years and has worked for the most part without a flaw. When talking particularly about Amazon, their cookies remain on your customer’s computer for exactly 24 hours. This means you will not only earn commissions from the customer buying the particular product your link led to, but any other product they purchase on Amazon within a 24-hour period. This may not seem like a major deal as you may think people will either buy the product or not, but in fact, about 40% of total Amazon affiliate commissions are made by customers purchasing a DIFFERENT product within the 24-hour frame. Sometimes even multiple additional products on top of the one they were looking into buying. This is great for marketers of course, as it allows them to make money from purchases they were not specifically responsible for. Other programs often have longer lasting cookies and with some programs, cookies will never disappear until the user decides to delete them, which for most users is pretty much never. Most people are not technologically savvy and don’t really care about stuff like cookies. This means in some niches and with some affiliate programs you can end up making revenue for a customer who clicked your link months ago and returned to the site due to an email the company sent them or a variety of other reasons.

Revenue Share

Depending on your niche, what you are selling to your customers may not be an actual product but rather a subscription to a website or simple introduction to a company. One fantastic example of this is the online gambling niche, in which you do not sell anything to your customers except for the idea of using a particular online gambling operator to play at. In this industry, affiliates get paid either on a Cost Per Acquisition (CPA) or Revenue Share models, both of which try to reflect the value of the new customer brought in. Revenue share is the more common method of payment in these programs and what it does is it pays the affiliates a certain percentage of all revenue the company makes off the customer, either lifetime or over a specified amount of time. The CPA model on the other hand, pays the marketer a fixed amount of money for every new customer who plays real money games but does not pay further revenue in the future. Hybrid deals mix the two, paying a smaller amount for the new customer along with a small percentage of the future revenue created by the customer. Other things you may sell based on revenue share models are subscriptions to different software or other online services, which will continue to pay a percentage of their revenue to the affiliate as long as the customer continues to pay the subscription.

Pay Per Click Affiliate Marketing

While these programs are somewhat outdated, pay per click affiliate programs do still exist and they offer some of the more forgotten aspects of Internet marketing to their customers. What a pay per click program is, is a program which pays the marketer every time someone clicks on their link, regardless of whether they make a purchase or not. While this method may seem appealing to a marketer, the payment per click is of course significantly lower than payment per sale and at the end of the day most marketers will end up making the same or less money with such programs. Focusing on the more standard affiliate commission model, is likely the smarter idea while trying to optimize your conversion and number of sales by producing great content and powerful call-to-action links.

Be Persistent

Success in the world of affiliate marketing certainly does not come overnight. While eventually you may end up building an affiliate empire that will be bringing you a steady stream of income month after month, the first months may be very tough. It is completely normal for new affiliate marketers to be several months into the project before showing any profit and early on, any profits you do make will be small. Take the little wins and keep going. The success will come but it will also take time, dedication and hard work so don’t rush things or expect anything huge to happen when you first start out. Instead, keep learning and improving in all aspects of the trade from content creation and link placing, to traffic sourcing and monetization. The more work you put into it, the faster the money will start flowing in so keep that in mind and let future profits be your driving force today.

If you always do what you have always done, you will always get what you have always got. If you want something to change YOU will have to do something.