While there are many ways to make money online, affiliate marketing is one of the most lucrative, has endless possibilities and is one of the best ways to create an online business with very little start-up costs.
Affiliate marketing is a great opportunity to earn potentially significant amounts of money and to have the freedom of owning a viable home business.
So if you’re wondering how do affiliate marketers make money, you’ve come to the right place. There are several ways to make money as an affiliate marketer. I’ll break down a few of those ways in this blog post.
What is Affiliate Marketing?
Affiliate marketing is an online business model where companies, merchants and product developers pay a performance-based commission to affiliates who promote their products and services.
By joining an affiliate program and promoting offers to social media pages, blog or website visitors and/or an email marketing list, affiliates earn some type of prescribed payout.
How Do Affiliate Marketers Make Money?
An affiliate is the middleman between online consumers and merchants’ products. An affiliate makes money when a visitor that he/she referred through an affiliate link purchases or performs the action required of the affiliate program on the merchant’s site.
As mentioned before, there are several ways to earn through affiliate marketing. Let’s take a look at some of these ways.
PPS/Commission Based Payouts
The pay-per-sale or PPS, also referred to as, cost-per-sale or CPS payment model pays affiliates a set commission for each sale they refer to the merchant’s products or services.
The commission can be a percentage of the sale or sometimes it’s a flat rate.
Various creatives are provided by the affiliate program, including, banners and text links.
Some programs, like, eBay and Amazon offer unique creatives in the form of sliders and customized widgets to target relevant products as pictured below.
Examples of Commission-Based Payouts
Here are some just a few examples of the commission payment model and how it works.
- An Amazon affiliate writes a review of the Kindle Fire tablet on his or her website and includes affiliate links that take site visitors to Amazon. When those visitors buy a Kindle Fire, the affiliate makes a commission.
- An eBay affiliate places live auction listings of relevant products on their blog, and each time their site visitors click on one of those listings and make a purchase on eBay, the affiliate earns a commission.
- An affiliate builds a blog about photography and regularly posts various tips and guides about the topic. Along with links in the blog content, in the sidebar of the site, they place banner ads promoting Canon cameras as a Best Buy affiliate. Each time someone clicks on that banner and makes a purchase on Best Buy, they earn a commission.
- A tech blogger writes a review of the latest Apple MacBook and places an affiliate link to Apple’s website within the review. Each time someone clicks on that link and buys a MacBook, or anything else at Apple’s store, the affiliate earns a commission.
- An email marketer sends an offer to their list of subscribers for a new premium WordPress theme, each subscriber that clicks on the offer link and purchases the theme earns the affiliate a commission.
Commission-based payouts are the most popular type of affiliate marketing programs, but let’s quickly take a look at some other payout methods.
Related: 5 Common Affiliate Marketing Mistakes to Avoid
Cost Per Action (CPA)
CPA stands for cost per action and in this payment model affiliates are paid for particular actions completed by traffic they refer to the merchant site.
CPA is different from PPS models because the traffic need not make an actual purchase, but, they only need to perform the action that is prescribed by the merchant company.
For example, giving an email address, filling out a credit card application or signing up for a free trial.
For example, an advertiser, such as Netflix, pays $25 for the action of signing up for a free trial at their site. (This was way before Netflix became what it is today and were willing to pay highly for signups.)
CPA is one of the more lucrative affiliate marketing models because the earnings can be substantial from various high-paying programs. Credit cards and other financial products are the most popular merchants in this space.
Cost Per Lead (CPL)
Cost-per-lead pays affiliates for sending viable leads to their site that they can then engage with their marketing goals. These types of merchants are pretty much paying you for the traffic you send their way.
Cost Per Click (CPC)
The cost-per-click model pays affiliates for ads clicked by traffic on their sites. A form of contextual advertising that comes in both text and image ads are placed on the affiliate site.
Typically, the ads served are highly relevant and personalized to the individual site visitor and so tend to convert quite well.
Is it too late to start with affiliate marketing?
There are many opportunities to make money in affiliate marketing, but, it is NOT a “get rich quick scheme.”
While there are many successful affiliates making thousands of dollars a month and those who are millionaires, rest assured, that did not happen overnight.
In reality, affiliate marketing takes work, there is a learning curve, and it takes time, dedication and commitment to become successful, but, the good news is that if one learns the proper methods, and takes action the probability of being successful is very high.
I love affiliate marketing because it allows you to start making money online without having your own products. It’s one of the first ways I monetize lifestyle blogs while I figure out the niche I want to go in.
Get started with affiliate marketing by checking out my tips and strategies in my post: Affiliate Marketing for Beginners.