How to Start a Profitable Online Business With Affiliate Marketing

affiliate marketing
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Affiliate marketing has been around for a long time — since the beginning of e-commerce essentially.

But this “old school” method of making money online is still going strong because all the benefits it offers to small scale, solo internet entrepreneurs are still valid. And it’s an especially powerful business model to those without much experience doing business online. Many successful online business owners make their first dollar online with affiliate marketing.

Here are just a few of the many reasons why affiliate marketing is such a popular online business model:

  • Low Cost: With affiliate marketing, you don’t need much — if any — startup capital.
  • No Inventory: You don’t need to create products or rent or buy warehouse space to store them. There’s no need for you to invest in “stock” that may or may not sell, in other words.
  • Zero Hassles: Perhaps best of all, you won’t process orders or ship products… or handle returns, phone calls, or handle anything having to do with customer service.

Affiliate marketing is hassle-free — allowing you to focus on marketing, sales, and making money. It’s perfect for beginners. And, because the money-making potential only increases with the more experience you gain, expert-level internet entrepreneurs stay in this game too.

So how does affiliate marketing work?

Affiliate Marketing 101

At a basic level, affiliate marketing is a pretty simple business model.

  1. You promote another company’s products in your own marketing efforts, like social media, your website, your email list, your blog, or any other marketing channels you use.
  2. When a customer clicks on a link to order a product, they are taken to your affiliate partner’s shopping cart to complete the transaction.
  1. The link is assigned to you specifically and tracked so that you get credit for any customer you send to your affiliate partner.
  2. If the prospect buys, you get a commission, usually between 5 percent to 25 percent, sometimes, even more, depending on the product. In the cases of very high commissions (some up to 100 percent), the company is often hoping to later upsell the customer on a higher-ticket item. So they’re using you to help generate leads, essentially.

Getting just a percentage of a sale may not seem like a good way to make money but when you start sending hundreds of customers each week or even sell just a few big ticket items, it quickly adds up to a tidy income. It’s especially sweet when you consider that your startup and operating costs are so low.

As with any online business, success and a steady, high income is possible with affiliate marketing. But it’s not going to happen overnight. It takes consistent work, especially when you’re getting started. But soon, you could have a viable money-making business.

A Recipe for Affiliate Marketing Success

One of the key elements to success with affiliate marketing is picking the right products to promote. They could be digital information products, memberships, physical products, online services… there are many industries that use this model.

When promotiing to your target market, you may be promoting one or many of these different types of products as an affiliate.

Speaking of target markets, you want to focus in on those popular niches with proven track records for sales. Why struggle when you can leverage the popularity of established products that customers love. The cool thing is you can also often run an affiliate marketing business in an industry that you have a personal interest in — you can combine passion with profits.

Here are some ways to do your necessary market research.

  1. Keep an eye on Facebook and Twitter for trends. What niches or types of products are “hot”
  2. What are the best-selling products on sites like Amazon.com and eBay?
  3. What’s on the news… what are people talking about?

The more buzz a product or niche has… the better for you.

A popular product means more sales.

Some popular niches right now include yoga, natural health, gluten-free, organic, supplements, financial and investment advice, dating, apps, online video games, and more.

Remember, while most inexperienced marketers shy away from markets that are popular and have a lot of competition, successful marketers know that these are the markets you want to focus on because that's where the money is.

Finding Affiliate Partners

There are many, many affiliate programs out there covering just about any product or service imaginable. But not all of them are created equal. You want to join a trusted program with a reputation for taking care of its partners — and paying them the right amount of their commissions on time.

Any time you find an affiliate network that you think has potential, do a quick search on Google or forums related to affiliate marketing to see what people have to say about them.

Here are some established affiliate partners with good reputations.

  • Clickbank.com focuses on digital, downloadable information products.
  • Rakuten.com (formerly Buy.com) is a major online retailer offering everything from electronics to groceries.
  • Amazon.com — you’ve shopped here. You know the range of products it offers. Now become an affiliate with the Amazon Associates program.
  • CJ Affiliate by Conversant works with some of the best-known brands in the world.

Marketing Your Affiliate Marketing Products

Social media is a great free way to get the word out about your business. Everybody is on Facebook and Twitter these days. And they’re not just sharing funny cat videos. Often they are in the mood to buy, especially if an appealing offer comes across their feed.

Also free is search engine optimization. Sounds daunting, but SEO is at its heart a simple proposition. Basically, you add valuable content related to your niche to your website or blog consistently using “keywords” that someone searching for products like yours or information about your niche might use.

You post regularly, at least a few times a week. And over time search engines like Google find your content and reward you for providing valuable information by putting your website higher in the results. The higher you are in the results, page 1 in particular, the more traffic to your site.

Scan your email inbox right now. No doubt there are at least a few emails you get from merchants or other businesses with products you’re interested in. This is email marketing. And it’s a great tool for affiliate marketers. Essentially, on your website, a landing page, blog, or social media, you ask visitors to your site to provide their email address. Then you send them valuable content along with promotional offerings through email.

Email is a relationship-builder with your potential customers. You want to send them a balance of useful information related to your niche, perhaps an email newsletter, as well as marketing messages, like a sales email, asking them to buy a product on sale. The free information you’ve provided helps them come to know, like, and trust you… which makes it more likely they’ll buy a product.

Paid ads should be your last step in marketing your range of affiliate products. You want to make sure you’re in a money-making niche and have a roster of products proven to sell, as well as proven sales funnel that compels your prospects to buy. That way when you invest the money in a paid ad, which can cost hundreds and thousands of dollars, you’ll see a decent return on investment.

Another tip: start small with paid ads. Test your copy. And once you have an approach that works and you know your systems are in place, you can try rolling out a major paid campaign for your affiliate marketing business.

Next Steps for Starting an Affiliate Marketing Business

Now you have the overall structure for a successful affiliate marketing business, with a step-by-step guide for getting started.

It might seem overwhelming. But if you take it a day at a time, you can do it. Just do one task related to starting your business each day, whether you can dedicate 15 minutes or a few hours. Slowly but surely, you’ll be able to launch your business.