What Is an Affiliate Marketing Business Model?

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You have heard of affiliate marketing before; but what is an affiliate marketing business model? Affiliate marketing is a way of generating income by promoting another person’s business or products, (or a business’ products) and receiving a small portion of the sale (commission). There is some form of cooperations between either 3 or 4 participants in the affiliate business model; it just depends on the relationship between the affiliate and the owner of the product.

Those participants are the affiliate, the merchant, network, and consumer. The affiliate, (or publisher), is the person who promotes the product and receives a commission for a sale, (example of affiliates are vloggers, bloggers, people with big social media presence, etc.)

The merchant, (or advertiser), is the person who is selling the product.

The network is the middleman, and occasional is the participant not included. In the instances where the network takes care of payment and delivery of the product, the affiliate is in contact with the network and not normally the merchant.

The last participant in the affiliate business model is the consumer; the consumer is the person who purchases the product.

How To Become an Affiliate Marketer

So, you want to make passive income by affiliate marketing, but don’t know where to start? You are in luck. The first thing you need to do is to decide what you want to promote, wither it be a company or a product. The product needs to be something you believe in and something you support.

This product should also be something that has a purpose for your audience and for your blog (this article will mainly talk about blogs; however, these ideas are relevant to wither you’re a blogger, vlogger, you command a large social media presence, etc.)

The next thing you want to do is to check your website to see if you are allowed to use affiliate marketing on your site. Once you know the rules about affiliate marketing, you can create your site or set up your blog. On your site you need to also set up terms of service page, a privacy policy page, and a disclosure page; these pages will allow you to build trust with your followers, let them know you are receiving a commission from your affiliate sites, and save you legal consequences later on.

Next, you will want to decide on what you want to promote. The best and easiest way to do this is to promote products, services, and companies that you use already. It will make it easier on you because you know the ins and outs of the product, service, or company that you are promoting; also, you will know pros and cons of it, and your likes and dislikes about it.

The next thing you will want to do is to go to the product, service, or company’s website. You’re going to want to go down to the footer of their page and look for terms like “partners,” “affiliates,” or “affiliate program.” Click on it and follow the instructions on how to complete the setup to become an affiliate. Now, if you don’t notice any of those terms on the site’s footer, you can also send the company an email to ask if they have an affiliate program.

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Affiliate Marketing Network

Another way to become an affiliate marketer is by joining an affiliate network. An affiliate network is a middleman between the affiliate and the merchant. An affiliate network provides a platform for the merchant to list their products and for the affiliate to easily search them. It also allows the merchant to be able to track, maintain, and send payment to their affiliates; while, it allows the affiliate to sign up as an affiliate, track their performance and earnings.

There are many different affiliate networks, so when you choose on, you need to read over their policies and procedures. You will protect yourself legally by reading over them, along with learning about how you receive payment, how much commission you will receive, bonus, etc.

Affiliate Marketing Commission

Depending on the type of program you use, will depend on how you receive your commission. One tier commission is when you receive a commission from your affiliate link. The two-tier commission is when you receive a commission for referring another affiliate, and they join. You also receive a smaller commission off of the person you referred’s commission. The two-tier commission is also known as multi-level or network marketing.

Another way to receive commission is by climbing tiers. Climbing tiers occurs when you receive an increase commission by increasing the number of sales you have.

You can also receive recurring commissions. Recurring commissions, normally work with subscription programs, are when your follower stays signed up for the subscription. The sitewide commission is received when your follower clicks on your link and buys anything from the site, not just what you are advertising.

There are a few other ways that an affiliate can receive a commission; however, less than one percent of marketing programs use these compensation methods. These commissions are called cost per click (CPC) or cost per mile (CPM). Cost per mile happens when you place an ad on your site, and you receive a commission for how many people view the ad. Cost per click is almost the same as cost per mile; however, your follower must click on the ad.

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Affiliate Marketing Niches

Finding the right niche to promote will affect your commission greatly. Generally, if people are interested in the subject, you should be able to make a profit. You may also want to take into consideration, the following of a particular subject has and wither or not the subject is going to stay pertinent or not. The following are a few ideas for you to take into consideration, under the affiliate marketing niches.

Health and Wellness – This niche is one of the top three niches in affiliate marketing. This niche is one that relates to both men and women; since, both men and women are looking for ways to increase their health, fitness, and wellness levels. The health and wellness niche also has a wide variety of subtopics, that can include topics such as how to live longer, how to enjoy a fuller life, what types of vitamin supplements exist, organic/natural lifestyle choices, self-improvement, fitness, etc.

Money and Wealth – Let’s be honest; people want to find a way to gain wealth. Many people are willing to pay money to learn how to attract and gain money and wealth and believe that a small investment in the being will be worth it in the long run. Money and wealth is another niche that has multiple subtopics. These subtopics include tutorials and lectures, (especially if they are created and backed by experts in their field), how to invest your money, how to budget, how to plan for an emergency, etc.

Hobbies – Hobbies is another niche that has a wide consumer base. Many people have hobbies, and the range of hobbies vary from person to person. Hobbies are another niche that has a variety of subtopics, including arts and crafts, reading, sewing, golf, extreme sports, flying drones, fishing, etc. People, also like having hacks on how to improve their hobby, so you could also include a do-it-yourself section in this niche.

Beauty and Fashion – Many women (and some men) are very into what is “hot” each season, wither it be clothing, makeup, etc. So this is another niche that has subtopics that include, makeup, clothing, hair products, how to look younger, etc. Tutorials is another aspect that is good to include in this niche because there are many women (and men) out there, that want a certain look but are not sure how to create it.

Pets – Lots of people treat their pets as if they are a member of their family, so it is no surprise that they are willing to pay big bucks to spoil their pets. Some people will go out and buy their pets, clothes, strollers, leashes, gourmet food and treats, bedding, etc. People will also pick up (or even take courses) on how to train their pets and how to teach them obedience.

Self-reliance – There a large group of people out there who want to become self-sustained and don’t want to rely on others to survive in the world. The self-reliance niche has many subtopics and can also include other niches such as outdoor survival, prepping, renewable resources, camping, and homesteading. Do-it-yourself and tutorials are other things that would be good to include in this niche. Many people have lost the art of canning and preserving food, how to make a fire without matches or a lighter, what trees are good for fires, how to read a map, how to read a compass, etc.

There are so many other niches that listed as well. Other niches include gaming (video games), celebrities, outdoor survival, prepping, renewable resources, camping, homesteading, biodegradable consumables, tiny houses, virtual reality, relationship/dating, technology/gadgets, romance, weight loss, children, parenthood, etc. For the most part, if you are interested in it, you can find other people who are interested in it as well.

Work on Your Own

Basically, if you work in affiliate marketing, you are your own boss, since you are working as a freelancer. You have the independence to schedule your work schedule how you see fit. You can work where you want and when you want, as long as you have a computer and an internet connection. Also, more than likely you can receive a tax break on items such as your phone, computer, and internet subscription.

Another nice aspect of working for yourself is that you have limited bureaucracy or red tape that you have to deal with if you worked in or at an actual company. For example, you don’t have to turn in weekly or monthly progress reports.

 

 

Comments 2

  • Thank you for this very interesting article about affiliate marketing. I have been an affiliate for many years, so I can really appreciate your article, which is a very good introduction to affiliate marketing.

    Despite what some people say, I think affiliate marketing is still the easiest way to learn and start making money online. 

    What courses would you recommend for newbies and experienced marketers to learn affiliate marketing?

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