A Quick Guide to Affiliate Marketing: The Basics of the Business Model

You’ve heard about it. You know plenty of friends and fellow hustlers who are infatuated with it. But at the end of the day…

How does affiliate marketing actually work and how do you earn money from it?

This is your weekly blog series, “A Quick Guide to Affiliate Marketing”, and I’m Tre’ Mathis of WiFi Entrepreneur.

Today, we’ll be discussing the basics of affiliate marketing and will try to understand how the business model works.

Just to help you understand how big the affiliate marketing industry is, in 2018, affiliate marketing spending was recorded at $5.94 billion. It’s expected to grow to $6.4 billion by the end of this year.

That’s a billion dollar business idea right there!

Okay, So How Does Affiliate Marketing Work?

Affiliate marketing, at its core, operates on the relationship between three parties:

  • The advertiser
  • The publisher
  • The customer

The advertiser is the merchant who owns the product. The publisher is the affiliate who promotes the product. The customer is the one who buys the product thanks to the marketing and promotional efforts of the publisher.

Whenever advertisers want to sell their products and increase their net customer potential, they ask publishers (people like you) for help. As a publisher, you then promote their products on your website using a variety of strategies anddrive sales for them.

But How Do You Earn An Income?

Stock, Iphone, Business, Mobile, Phone, Communication

Each time you send a visitorto the advertiser’s website through the affiliate link placed on your own website, you earn a commission. This commission is your revenue.

It might seem minimal at first; however, you must understand that this is a game of volumes. If you’re able to direct fairly large volume of visitors to your advertiser’s website, you can make some real money. If you can set up multiple websites that drive consolidated traffic to your advertiser’s website, you can own a pretty impressive business.

And that’s how affiliate marketing works, and that’s how you earn money from it.

What Do You Need To Succeed?

Since the main source of revenue for an affiliate marketer is the people who come to the website, it’s essential that you manage to increase CTRs across your website. Especially for the promotions you put up for other companies.

This involves creating engaging and effective website content that can generate large volumes of visitors and then funnel them to your clients’ websites. Achieving these high volumes will make you more attractive as a marketing affiliate and also improve the potential of generating large revenues at minimal costs.

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