What is Affiliate Marketing and Should You Do It in 2021

What is Affiliate Marketing and Should You Do It in 2021
Jay Gross

young businessman writing affiliate marketing out across the world map

You wake up to a blaring alarm clock at 4 am, drag yourself, eyes barely open, from your bed to the bathroom, where you start your morning ritual. 

You eat a quick meal, head out out the door to sit in traffic for your two-hour commute, get to the office and make a mad dash to the Kuerig (just like everyone else), then sit at your computer and start working, eyes still at half-mast.


What if you could sleep in, wake up refreshed as the sun peaks through your window. You lay there, relaxed, until you’re ready to get up and take on the day. You toss on a pot of coffee, and while it’s brewing, you check online and see how much income you made as you slept.

I’m no psychic, but I believe your answer would be number 2.

And that, my friends, is passive income. And one of the main ways to get passive income? 

Through affiliate marketing.

Affiliate marketing allows you to make money while you sleep. Whether it’s full-time or a side-hustle to make a little extra cash, you should be looking into one of the best ways to generate passive income.

And don’t worry if you’re thinking that everyone’s already doing it.

Many are, but it’s growing rapidly, and if anything, now is the right time. 

Affiliate marketing is predicted to grow to $8.2 billion by 2022 (in the U.S. alone.)

And we at Digital Marketing Tools want you to get in on the action. So we’ll cover what 

So go ahead and read on, and get yourself a little of the affiliate marketing pie this year. 


What Is Affiliate Marketing?

Affiliate marketing is a great way to make money online, and you can do it from the comfort of your home. The first step is to find a product that you would enjoy promoting. You can then promote that product (or affiliate product) and earn money from each sale.

The sales then get tracked via affiliate links from one website to another, and you’ll get the agreed-upon income per affiliate product transferred into your bank account.


How Does Affiliate Marketing Work?

affiliate marketing cycle with two businessmen meeting and shaking hands

how affiliate marketing works, put simply

The beautiful thing about affiliate marketing is how it works and how it’s mutually beneficial.

The power of affiliate marketing is that it uses the skills and abilities of a variety of people to create a more effective marketing strategy. Advertisers can share the profits with contributors, too!

Affiliate marketers receive compensation for sales that they refer, and the owner of the product pays them a commission for each sale.

In order to do this, three parties are typically involved.

We’ll go a little in-depth in each one.


1. The Product Creator and the Seller

The business or brand or solo entrepreneur that created the product or service.

Going the route of affiliate marketing essentially saves on marketing costs. It gives a portion of the sales (or leads, or clicks, which we discuss in more detail below) to the affiliate marketer.

In doing so, the brand goes through affiliate websites or affiliate marketers to reach a new audience. By going this route, not only do they find new consumers, but they don’t pay upfront marketing fees (often at a loss); they only pay fees once a sale hits.


2. The Affiliate Marketer

The affiliate marketer can be a business, or it can be an individual.

The business or individual takes a product or service they genuinely like and promote it to their audience on their website, in blog posts, or even directly on social media.

If their audience purchases the product, the affiliate then receives an agreed-upon portion of the revenue made.

Typically the affiliate has a specific audience that they market to, creating a defined niche. Having a defined niche helps ensure their target audience will likely enjoy the product or service offered.


3. The Consumer

Consumers bring the whole affiliate marketing system to a successful conclusion, often not even realizing they’re a spoke in the affiliate marketing wheel.

Note: It is becoming more and more a rule of thumb for the affiliate marketer to disclose that they are receiving commission for the sale; however, it doesn’t always happen.

The consumer sees no difference, no price hike, and often receives the product promptly, just as they would purchasing from the original site.

But without knowing it, they’re benefiting both the product creator and the affiliate marketer in the process.


How Do Affiliate Marketers Get Paid?

hand holding out cash

Photo by 金 运 on Unsplash

So you’re thinking of starting an affiliate marketing business?

But how exactly do you get paid?

There are three main ways that affiliate marketers get paid:

1. Get Paid for Every Sale

Pay-per-sale is the standard structure of affiliate marketing.

It’s as easy as it sounds. The business pays the affiliate an agreed-upon percentage of the sale of each product purchase that is due to the affiliate’s marketing.

This produces a win-win scenario. No upfront fees for either party, but percentages of actual sales are paid. 

This is by far the most common method.


2. Get Paid for Every Lead

A little more tricky (and less common), with pay-per-lead affiliate marketing, the affiliate convinces their audience to go to the merchant’s website and completing the agreed-upon terms. It could be signing up for their email list, subscribing to a newsletter, downloading software, or purchasing a product.


3. Get Paid for Every Click

Again more complex than the standard affiliate program, pay-per-click focuses on (again) driving the consumer to the merchant’s desired website. The affiliate is then based on the increase in web traffic to the desired site.


Why Should Your Business Affiliate Market?

If you’re a business and you have a new product, it may be a good idea to look into affiliate marketing for your business.

Here’s why:


Running a business can be expensive. You need startup fees, cash flow to finance products or services being produced and developed, and potentially the cost of employees (and so much more).

And affiliate marketing is a low-cost solution that allows you to get your product in front of potentially millions of people with no advertising fees, just a fee for every sale.


Reach a Broader Audience

You have a chance of reaching a vast audience that may have never found your product. And that’s without paying for Google ads or Facebook ads.

Often affiliate marketers have a large audience with a lot of potential purchasing power behind them.


Affiliate Marketers are Trusted

Affiliate marketers, like influencers, are well trusted, especially in their niche.

While they’re getting paid for every product they sell, they’ll ruin their reputation if they boldly state a product or service is fantastic when they don’t even like it themselves.

It will tarnish their status within their niche, and they will lose their audience because of it.


Why Should You Affiliate Market?

woman sitting in the street working with mountain in the background

Image by Matthias Zeitler from Pixabay

Whether you’re trying it out as a side-hustle, or you already have a massive following, there are plenty of reasons to think about jumping into the affiliate marketing pool.

Below are a few that will make it seem like an obvious choice.


It’s Cost-Effective

Just as it’s cost-effective for a business to do affiliate marketing, it’s cost-effective for you as well. You don’t have to worry about the money going into creating a business, product or service, and all the other headache’s that come with running a business.

Instead, you find products you like, and you market them to your target audience.


You can Make Money While You Sleep

By taking the time upfront to market a product, you get to set it and forget it, as they say.

Isn’t that what everybody wants? To “make money as you sleep”?

It’s the new American Dream – passive income.

But it’s not just as you sleep tonight. But the following night. Heck, you can make money months later based on one blog post, which is why you can set it and forget it.

And the better you are at marketing (think: social media posts), the more you’re getting your product out in front of your audience, and the more potential sales you’ll get.


You Can Work from Anywhere, at Any Time

If you scale your affiliate marketing game, you can essentially become a freelancer with the ability to work when, and where, you want.

And isn’t that what everyone wants?

Not only do you not have to be in the same zip code, you don’t even have to be in the same time zone.

Heck, you can be on the other end of the world – you can work from Thailand, selling products to your followers in the U.S.


You Earn on a Performance-Base

I worked 70-hour workweeks in my hay-day and got paid the same amount as when I worked a 40-hour workweek (which became less and less common).

If you’ve worked for corporate America, you probably know that struggle.

But affiliate marketing throws that all out the window. You get paid based on your performance.

Market well and to a big audience, and you’ll get paid for your efforts. The better you do; the more you do; the better affiliate marketing strategy you have – the more you’ll get paid.

How about that?


4 Common Types of Affiliate Channel

There are quite a few affiliate marketing platforms for you out there.

No matter which type of affiliate channel you choose, if people purchase based on your review and included affiliate link, you will get an affiliate commission.

Here are four of the most popular:

1. Influencers

Influencers are where it’s at right now. In fact, there’s a lot of talk that influencer marketing could be its own specialized career niche in the near future.

And there’s a reason for that, because influencer marketing shows people that a brand or product is authentic vs. the traditional method of fake reviews and paid ads – of which people are starting to tire.

Yes, influencers get paid, but an influencer gains their reputation by being honest and not promoting a product they don’t believe in.

Influencers can be in many areas, but typically you see them (or hear about them) on social media. With affiliate marketing on Instagram being the main avenue (and the one that started it all). But, don’t worry, other social media platforms are gaining influencer marketers rapidly as well.


2. Affiliate Marketing Blog

Hey, that’s me!

All kidding aside, whether you want to dabble in affiliate marketing or you want to want to have an affiliate marketing blog, blogging is a perfect way to either dip your foot or go all in.

Bloggers, given their knowledge of SEO and ranking organically on Google, are a great path to affiliate marketing.

Like an influencer, the blogger tests out (and ideally uses often) the product or service, and writes honestly about his or her experience in a comprehensive review, ideally promoting the brand in a significant way, along with an affiliate link to the product. This will ultimately drive traffic back to the brand’s site.


3. Email Lists

Though one of the oldest forms of marketing, email marketing is still one of the best paths to great marketing results. And the same is true for affiliate email marketing.

Email marketers can leverage pre-built email lists and email newsletters with reviews and affiliate links. Or they can build email lists based on their affiliate marketing, focusing on creating a list of consumers who love their reviews and can be consistent purchasers.

4. Large media websites

Another option for affiliate marketing is a huge website that focuses solely on affiliate marketing to the massive traffic they receive (often through banners and other ads). While often more complex than the other avenues, this method offers excellent exposure and can improve conversion rates, potentially resulting in significant revenue for both parties.



Make Money While You Sleep with Affiliate Marketing

baby koala sleeping in a tree

Photo by David Clode on Unsplash

The choice is yours – wake up, drag yourself out of bed, and start each day going into your 9 to 5, or start digging into affiliate marketing to start making passive income – as you sleep.

Take a read through this article and see if it’s something you’re eager to try out. We will be writing another in-depth article about affiliate marketing soon (with more on the how than the why you should – including information on affiliate marketing tips, affiliate marketing tools, and more.


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