The beauty of this business model is that you are selling other people’s products, which means you never have to spend thousands of dollars producing something only to find out that no one wants it!
This also allows you to test multiple markets quickly and without too much upfront capital outlay until you know a market is working.
How Affiliate Marketing Works
The most straightforward way to explain this business model is that you sell other people’s products/services online and get paid a commission on every sale you make – you’re the middleman in making the deal.
But instead of knocking on doors trying to sell stuff you don’t really like, affiliate marketing means you only ever have to promote products you like or believe in, and customers come to your website(s) looking for these same products.
You build websites to promote the products and services offered by other companies. If your website visitors make a purchase they are redirected to the merchant’s site (the company you’re promoting), and if they make a purchase you’re then paid a commission of anywhere from 5% – 90% of the item’s price.
If you are the visual type – here’s a little infographic to explain affiliate marketing…
You can choose to use paid traffic from Google, Facebook or Bing, but you also have the option of optimizing your affiliate sites for the search engines so you can benefit from the free visitors they’ll send to your site every single day.
In terms of the offers you’ll promote, these can be found either directly on company websites, or alternatively on affiliate network sites such as Commission Junction, LinkShare, or ClickBank.
You can build multiple sites, promoting multiple products, with the cumulative result of a very respectable monthly income from a business that requires very little upkeep.
Affiliate Marketing vs Amazon Affiliates Business Models
Affiliate marketing is different from Amazon affiliate marketing in a number of ways, but the main difference is that you can promote products from thousands of different companies, and not just what you find on Amazon.
Another major plus is that commission rates for most affiliate offers are between 5% and 50%, which is an awful lot more than Amazon pays their affiliates.
The commission rates paid in affiliate marketing are higher than with Amazon affiliate marketing, but it can be more of a challenge to convert visitors into customers.
When you sign up to promote an affiliate offer you’re given a unique ID code by the merchant, which you then use on your website so that any sales your site generates can be linked back to you.
Even better is that these special codes can track when the person visited the merchant’s site, and even if they don’t make a purchase for several weeks you’ll still get paid your commission.
This is made possible by something called a cookie, and these are used by most eCommerce sites. The companies you represent through affiliate marketing will also provide you with promotional materials, including graphics, videos and even content to send out in emails to your customers or use on social media platforms.
Affiliate offers can also work on the CPA (Cost per Action) model, where you get paid for simply getting people to try something out, or register their interest in a credit card, or a new weight loss treatment, for example.
With that being said testing is part of the process, and small changes can increase your conversion rate dramatically.
The 2 Types of Affiliate Marketing
Affiliate marketing is a very broad term, and really, if you’re selling anything online that you don’t own then you are an affiliate marketer.
When experienced internet marketers talk about Affiliate Marketing they usually mean one of two different things:
This variation of Affiliate Marketing involves building a medium to large website that is strategically monetized by specific affiliate offers.
This website, Bighappyprofits.com, is a good example of this variation. Later in this article, I will recommend tools and training that you can purchase that relate to the Affiliate Marketing business model. If you purchase something I will receive a commission for the purchase.
You will notice that I carefully matched the affiliate offers with the content on this page, which is KEY to making sales. It is that It is ALOT more work than just slapping up Adsense code on the page – but the payouts are usually MUCH better than the .50 cents Adsense would pay me.
Affiliate Websites usually involve some sort of opt-in to capture readers’ emails so they can continue marketing to them for months and months.
Many of my other business models have some similar elements to this variation – I chose to make them unique models because they have some very specific elements that make them unique.
- Authority Site – Basically a really big and well-respected Affiliate Site
- Pro Blogger – An Affiliate website with a specific personality behind it
- Amazon Affiliate – An Affiliate website using mainly the Amazon Partner Program
Best Thing About Affiliate Websites
- This method is slow but steady, you can work on your sites in your spare time, and if you get busy for a couple of months – it will still be there chugging along when you return.
Worst Thing About Affiliate Websites
It can take quite some time to start getting traffic to your website if you are relying on organic search traffic from Google and Bing.
Juggling multiple affiliate offers can be a major pain in the ass. There is a very good chance that one of the training courses I recommend later in this article will be dead or closed to new members by the time you read this.
It takes a lot of time and energy to keep all the links current. This is one of the main reasons why the Adsense Business Model is so popular.
Affiliate Sales Funnels
This method uses Landing pages, or perhaps a very small website (4-5 pages) as the front end to a sales funnel that promotes one specific offer.
This variation almost always relies on paid advertising to generate traffic to the landing pages. Capturing your viewer’s emails is a must in this variation as that is where you will make most of your money.
Best Thing About Affiliate Sales Funnels
You can set up a sales funnel in a weekend and be making sales shortly thereafter. To be clear – you may not be profitable right away – if you make $300 on a Clickbank offer, but you spent $400 on Facebook ads, then you still have some work to do.
Worst Thing About Affiliate Sales Funnels
There are a lot of moving parts to a profitable funnel and if you get any of them wrong you could lose your shirt if you are using paid advertising.
You will need to spend at least $100 on ads just to test a sales funnel.
This is not the kind of thing you can figure out on your own, you will end up throwing your money away for Ads that don’t convert – so you will need someone to mentor you, or you will need to purchase some sort of training – and most of the legit ones sell for around $800 – $900 bucks.
How to Make Money from Affiliate Marketing
There are a number of ways to build a full-time income with your affiliate marketing business, but the two most popular are to either promote products in a market where customers are already spending money or to find a new product that hasn’t received much exposure yet and promote that instead.
If you decide to choose a profitable market as the basis for your website you’ll need to look at markets where online shoppers are willing to spend money, and then focus solely on that market.
So, one example would be to focus on the golf niche, but not to try to sell everything related to golf. The reason you might choose this particular market (also called a vertical) is because golfers are always willing to spend money on their hobby, and that can mean thousands of dollars spent each year.
Once you’ve identified a profitable market, such as golf, you then drill down into that market looking for products that are popular but not always promoted on the bigger golf websites.
For example, you could build a website that focuses only on motorized golf caddies and their accessories, with lots of information and reviews on new and upcoming products of that type – like this guy did:
I found this site ranked #2 on Google for “best motorized golf caddies”, I have no idea how much this site makes per month but with high ticket items like Golf Carts the commissions per sale can be upwards of $200 a pop!
Honestly, this is a pretty crappy site that does not offer much value to viewers. You could easily build a better site and outrank him in the search engines with a bit of work. This could then result in thousands of dollars in commission each month.
Taking the approach of promoting a product that hasn’t received much exposure yet can also be very profitable. Finding an untapped market can give you a head start on other marketers that they can never recover from.
Some of our favorite examples of this include things like the first affiliates to promote media players like those from Roku, or the first affiliate marketers to promote the Force FX range of lightsabers.
How can you find the latest products to promote? Pay attention to the news in hobbies or markets you’re interested in – there’s a new product appearing almost every day, and these companies are looking for affiliates to help them generate sales.
How Much Can I Make from Affiliate Marketing
This business model is one where you’ll get as much back from it as you put into it. It’s scalable to whatever size you want, with unlimited income potential if you’re promoting products in the best markets.
We know marketers who have generated US$60,000 each month promoting affiliate offers in the financial services industry, namely credit card offers. That’s just one example of dozens that clearly demonstrates what’s possible.
Most of the truly successful affiliate marketers tend to operate a number of websites in the same profitable niche, allowing them to create multiple streams of income from one market.
So, although each website might only generate $500 per month in commissions for them, if they have ten websites making that much each month, that equals a cool $5,000 in passive affiliate income. Or an extra $60,000 per year added to your household budget.
Some of the bigger affiliate marketers we’ve met generate anywhere from US$10,000 to US$100,000 in net profit from their websites each and every month. Most of these businesses are run by a single person from their own home, often generating enough income for their partner to quit their day job.
With affiliate marketing it’s not about how much you can earn, but how much you want to earn. After that, it all comes down to picking the right markets and promoting the right offers.
Examples of Affiliate Marketing In Action
This website focuses on the airsoft gun niche, which had very little competition from other affiliates when it first went online. The site generated around $350 per month in passive income, with a spike in December and January of each year – gotta love those Holiday Season shoppers.
Here’s a great example of a review site dealing purely with affiliate offers for accounting packages. The site itself doesn’t look like your typical affiliate website, in that it offers a lot of value through its content, and then passively promotes the affiliate offers, which is just flat out the smartest way to build an affiliate site.
How much are they earning each month? We’d estimate that you’re looking at a business earning well over $25,000 per month in affiliate income, and probably has a small team of people running it.
This affiliate site in the International Dating niche. Unlike most dating sites they do not have any members of their own but instead, they post reviews of the female dating profiles from all the top global dating sites on the web.
Most of the big international dating companies have very generous affiliate payouts so I’m sure the owners of International Love Scout makes a pretty decent monthly income.
I’ve been following this site for several years and have seen it go from a small niche affiliate site to a large authority site.
It would be pretty hard to compete head to head with this site but you could easily take a different approach and collect some of that sweet dating money for yourself.
Getting Started With Affiliate Marketing
Researching your market and its related products is the most important first step you take when building any affiliate website. You’re looking for a market where people are spending money, but that’s not already saturated with hundreds of affiliate sites all promoting the same offers.
The research you conduct at the very start can have a big impact on how much money you earn later on with your business. In fact, it can be the difference between your site earning thousands of dollars in passive income each month, or earning almost nothing.
One of the costs involved with starting an affiliate marketing business is a domain name for your website, which will set you back around $10 per year. After that, you’ll need a web hosting package, but don’t cut corners here by using the cheapest hosting you can find. Be prepared to spend between $25 to $50 per month on your hosting package.
Most affiliate offers can be promoted using very basic websites, but if you want to take your business seriously then invest another $100 – $200 in having a professional website designed for you.
The final cost involved will be in purchasing an “SEO package” to help improve your placement in the search engines – budget for around $150. Your total investment to get started should be no more than $500, although you can start with far, far less.
What You Need
You’ll need reliable web hosting, and ideally a VPS (Virtual Private Server) hosting package. Website packages suitable for hosting just one or two websites are a waste of time and money.
One solution is to look at reseller hosting packages from companies like Site5, or other professional web hosting providers. With reseller hosting each website has its own individual administration interface, so it can make managing (or selling) those sites much easier.
Another key requirement is accounts with the biggest affiliate networks out there, so be prepared to sign up with Commission Junction, Link Share, Max Bounty, Click Bank, and several others.
Some of these networks require that you have an active website before you sign up, so have a 3 – 5 page website complete before you apply to the bigger affiliate networks. The topic isn’t really important – it’s just the fact you have an active website to convince them you’re not wasting their time.
Best Affiliate Marketing Training Courses
There are quite a few great training courses for the Affiliate Marketing business model, so I have made a quick index below that will give you a basic idea of what each is best for:
PROJECT 24 BY INCOME SCHOOL
This is one of my favorite overall courses right now. It covers so much ground that it can take you from absolute beginner to seasoned pro. This really is the only course you will need for at least a year or two.
Here are some of the best things about Income school:
1. It is always available
Many of the courses I recommend are only available at the whim of the creators, which can be VERY frustrating if you are chomping at the bit to start your online career.
2. The Teachers
Jim and Ricky, he guys who put Income School together, have the perfect storm of attributes. They are legit Niche site owners/builders who make 5 figures a month with their portfolio of sites, they are pretty damn fun to watch, and they are first-rate teachers.
There are a lot of guys out there making 4-5 figures with niche sites, but they suck as teachers. The creators of income school, do a great job of laying out the steps you need to make money online in a series of easily digestible modules that you can consume at your own pace.
3. The Methods
Their methods are a bit different than most of the “Gurus” in the niche site space. They teach you how to get traffic to your site without building backlinks – which is one of the most frustrating tasks for beginning internet marketers.
They don’t use any of the big keyword research tools like Ahrefs or SEMRush, instead, they concentrate on creating solid content that readers love. I think this is a great tactic for newbies as creating content is 100% in your control.
I have been doing SEO for 10 years now and it just keeps getting harder and harder to get quality backlinks that will actually move the needle with your rankings and traffic.
4. Diverse Monetization Methods
Many Niche site courses just concentrate on one specific monetization method, Income School covers several, most notably, Display Ads, Amazon Affiliates and independent affiliate offers. In my opinion, diversification is key to the Authority Site business model.
Affiliate Secrets 2.0
If you’re in a big hurry to start making money online then you won’t find a better course than Affiliate Secrets 2.0.
The creator of this course is a guy named Spencer Mecham. Spencer was the first ClickFunnels affiliate to reach $1 million in commissions so you know you’ll be learning from someone who is actually walking the walk.
Many affiliate marketing courses, like Project 24, depend on SEO (search engine optimization). SEO is the practice of ranking your website in Google search results so Google sends you free traffic.
The problem with SEO is that it could take 6 months before Google starts sending you any significant traffic at all. This is one of the main reasons why the majority of people who start websites lose interest.
The great thing about Affiliate Secrets 2.0 is that the methods it teaches rely almost entirely on paid traffic. This program will show you how to effectively buy ads on sites like Youtube, Instagram, Facebook and AdWords to send a flood of customers to your high paying affiliate offers.
This allows you to start generating sales in days rather than months… BUT it also requires you to shell out cold hard cash to pay for those ads.
This can get VERY expensive VERY quickly. If you combine the ad cost with the hefty $897 price tag for the course, you’re looking at a significant startup cost.
On the positive side, if you can make this work, there are guys pulling in $5,000 a day (yes, per day) with this business model.
This particular strain of affiliate marketing is not for the casual dabbler, if you are not super-motivated and 100% committed to making this work then please do not even consider buying this course. Stick with one of the other 2 mentioned above.
The best thing about this course, and the reason I list it here rather than the dozens of other similar courses, is that Spencer really doesn’t hold anything back. He lays out the EXACT methods he uses to generate insane affiliate commissions.
You won’t find any outdated methods or Facebook ad templates that will get your account banned.
The only thing I don’t like about this course is that it focuses heavily on promoting Clickfunnels, so at times it feels a bit like a multi-level marketing scheme, but the techniques Spencer teaches can easily be ported over to other affiliate programs.
Free Affiliate Marketing Training
Spencer also offers a free training course called AFFILIATE ANNIHILATION that will give you a pretty good overview of his methods. It is nowhere near as comprehensive as Affiliates Secrets 2.0 – but, hey… You can’t beat free!
This course is similar to Affiliate Secrets 2.0 but instead of promoting Clickfunnels and similar online services, Commission Hero concentrates mainly on selling products from Clickbank.com.
If you aren’t familiar with Clickbank, it is the number one marketplace for selling digital products online.
The creator of this course, Robbie Blanchard, knows a thing or two about selling products on Clickbank, he was the #1 Clickbank affiliate in the world, which means he has made millions of dollars with the exact system he teaches in Commission Hero.
The system taught in this course (digital products sold on Facebook) has probably created more online millionaires than any other single system online. But like most business models is has both good and bad points:
Facebook is an incredible ad platform that allows you to target very narrow interests (ie – Liberal basket weavers). And Clickbank has products in just about any niche you can think of, so you will never run out of products to sell.
Facebook is a royal pain in the ass and is getting more and more picky about what they will allow you to promote on their platform, and Commission Hero uses Facebook Ads exclusively to generate traffic to your landing pages.
So, if it turns out you don’t enjoy dealing with Facebook (I don’t), then most of the information in Commission Hero will be rendered useless.
If this particular strain of Affiliate Marketing sounds interesting to you – go ahead and watch the sales video – it will get more into what is included in the course.
Of course – it is a sales video so it will only tell you the good stuff. So, to balance things out a bit – here is more of the bad stuff that the sales video won’t tell you about.
I have several friends making a lot of money with this business model, and here are the 3 main issues they run into:
- Compliance Issues – Facebook has a massive list of No-Nos when it comes to the types of products you can promote, your ad copy, and the types of images you can include in your ads.
- Account Closures – Facebook has been known to shut ad accounts down with no warning, and no recourse to get your account back. If you’re serious about making real money you will probably need to find ways to use multiple accounts or to get new accounts if your main one gets shut down. This is doable – but a real pain in the ass.
- Rising Cost of Facebook Ads – 2-3 years ago this business model was killing it. But the competition is getting more fierce and as a result, you will be paying more for each ad click. This means you will need to really optimize every part of your sales funnel.
I would only recommend this course to people who can handle setbacks because you will probably face many.
Commission Hero gives you a great foundation for putting together profitable campaigns but the truth is, profitable campaigns are not “taught” or “copied”. They are discovered through trial and error – by testing different products, audiences, landing pages, and email follow-ups.
But if you can tough it out and master Facebook advertising, you should be able to make some very good money online. And Commission Hero is probably one of the best places to start your journey.
Affiliate Bootcamp is a bit different than the other training courses on this list. It’s basically a well disguised front end sales letter for ClickFunnels software.
This may sound like a bad thing, but it’s not. It is actually a boon for anyone trying to learn how to create Affiliate sales funnels.
The creator of this course, Russel Brunson, wants you to sign up for ClickFunnels, so he packs Affiliate Bootcamp full of so much amazing information that it is almost impossible to resist the measly $100 price tag.
This course is worth 20x what he is selling it for – because it is basically a loss-leader to get you to join ClickFunnles, which is actually a great tool for building the exact kind of funnels he shows you how to create in the training.
Now that is GREAT marketing!
If you’re not familiar with click ClickFunnels, it is the #1 selling Funnel creation tool in the Universe. If you use the internet then you have probably seen sales pages created by ClickFunnels.
What is included with Affiliate Bootcamp?
Affiliate Bootcamp consists of 2 main parts:
1. Interviews With Million Dollar Super Affiliates
This is incredibly valuable information. Somehow Russel got around 15 of the top ClickFunnels affiliates to lay out the exact funnels they used to earn millions of dollars in ClickFunnels commissions.
Basically, it gives you 15 different and unique blueprints you can use in your own campaigns.
The downside here is that all the funnels revealed are for selling the ClickFunnels software, but the methods can easily be ported over to other products.
I can’t stress how valuable it is to see how the top affiliates in the world are actually making their sales.
One interesting point – Spencer Mecham – the creator of the Affiliate Secrets 2.0 training course (see above) is one of the speakers in this series. So, you can get a sneak peek at the methods he teaches in that course.
2. One Funnel Away Challenge
The second half of Affiliate Bootcamp is a bit harder to explain. Here’s how the sales page describes it:
The One Funnel Away Challenge is NOT just some “course” that you’ll never use…
It combines the right marketing KNOWLEDGE…
With the SHOVE you need to EXECUTE your funnel…
And a “no-excuses” ACCOUNTABILITY coach who won’t let you off the hook…
That’s the biggest challenge in getting your first (or next) funnel started…
This too is super valuable information.
WHO SHOULD BUY AFFILIATE BOOTCAMP?
Now let’s talk about who should buy this course as it is not your typical online training that teaches you one very specific method to make money online.
In my opinion, this course is best for someone who already has a specific business model in mind and is looking for a way to execute it. If you are an absolute beginner the sales funnels discussed may confuse you.
Also, the One Funnel Away Challenge will really only provide value if you purchase ClickFunnels software.
ClickFunnels is awesome, but I am a big proponent of ONLY purchasing software when you know what it does and you think it will increase your profits. Just buying software willy-nilly and then learning what it does is a recipe for disaster.
If you are looking for a step-by-step guide on how to get started building profitable affiliate sales funnels either Affiliate Secrets 2.0 or Commission Hero would be a much better choice. (see above)
I know those 2 courses may be too expensive for many of you at this point in your online careers so here is another option…
You can actually get access to the Super Affiliate videos in Affiliate Bootcamp for free. But there is a catch. Each video will ONLY be available to watch for 24 hours, then it disappears, and the really juicy funnels secrets are missing.
I watched these videos before joining the program and can attest to the fact that they are awesome – even without the secret funnel bits.
Both the free and paid version of Affiliate Bootcamp can be accessed by clicking that button below.
Lower Cost Alternative Training on Udemy.com
I know that many of you can’t afford the courses I ‘ve listed above. So, I found some courses that are more affordable over on Udemy.com.
Both these courses are bestsellers, are under $200 and are pretty up to date so they are great low-cost alternatives.
ClickBank Success – Affiliate Marketing Without A WebsiteThis course teaches the same basic business model as Commission Hero. It teaches you how to use paid (and free) traffic to promote products from the Clickbank marketplace.
>>Check Out ClickBank Success<<
Learn how to Build High Quality Affiliate WebsitesThis course is a good low-cost alternative to Project 24. It runs you through setting up an affiliate website, picking a niche and products, and getting traffic to your site.
>>Learn how to Build High Quality Affiliate Websites<<
How Long Will it Take to Make Money with Affiliate Marketing?
If you research your market properly and can find areas with very little competition, you can start generating income from an affiliate business within a few weeks.
The one thing to note here is that the more established an affiliate site becomes, the more money it will earn. This means your income from the site will increase over time, often surprising you with the income potential of just a handful of small affiliate websites.