Entrepreneurs tend to create these kinds of opportunities for themselves where they can create something that results in a steady stream of passive income. Given how much work goes into running a business, these sources of passive income are good to have. As Barbara Carr, the CEO of Fuse Empire, often says, “One of the best feelings of being an entrepreneur is when you wake, check your bank account, and find out that you’ve made money while you were sleeping.”
One of the best examples of this type of relatively hands-on income generation is affiliate marketing. By using your own business reputation and online presence to promote other people’s products, you position yourself to make some easy side income while also potentially forming a strong business partnership. But what exactly is affiliate marketing and how can it work for your business?
What is Affiliate Marketing?
Affiliate marketing is the process by which brands or advertisers commission partners (known as affiliates) to promote their products and drive referrals on their behalf. This often includes making posts or hosting links related to the product. For each sale that you are responsible for, you receive a small commission. Perhaps you’ve seen a link on a webpage referred to as an “affiliate link,” or maybe you’ve seen a blog post labeled as a “sponsored post.” These are examples of affiliate marketing at work. When handled effectively, affiliate marketing can result in a lot of extra income, often for a comparatively small amount of work.
According to Statista, business spending on affiliate marketing will hit $8.2 billion in the U.S. by 2022.1 The practice is already widely used and is steadily growing in popularity, making it a smart option for small and large businesses alike. It is also a relatively low cost, as there is almost no money is required to get started: all you really need is a website. It’s also a relatively low-risk option: if you find success in affiliate marketing, you can easily scale up based on your available resources, while if it doesn’t work, all you’ve wasted is time and a little bit of money.
How Does Affiliate Marketing Work?
Most affiliate marketing programs work like this: you make a deal with someone to promote their products, whether through posts on your website, your blog, or your social media. This can be a simple shout-out on Twitter to an in-depth blog post related to the product. Whatever method you choose, you will include special links or ads to the product itself, typically with some type of cookie that recognizes where the customer originally came from. When a customer buys the product, the affiliate network will keep track of the details of the transaction and once the sale is confirmed to be valid, you receive your paid commission.
Most affiliate marketers focus on either blogs or YouTube videos to promote products, both of which have their advantages and disadvantages. With a blog, you are less subject to sudden changes to a website, whereas YouTube has a habit of making sudden changes to its algorithm that can make it harder for people to find your content. Additionally, if you ever need to adjust or update your content, it is much easier to edit a blog post than to remake a video. That said, certain audiences tend to prefer video content and YouTube is great if your affiliates let you use coupon codes. Ultimately though, it will come down to your audience and their expectations.
Getting Started as an Affiliate Marketer
Once you roughly know who your audience is and what type of content you would like to make, you need to find an affiliate network to join. Though business leaders sometimes work out affiliate deals one-on-one, most affiliate marketers make their money through partner programs. Almost everyone has an affiliate program, from Amazon to eBay, though given just how many are out there, it can be difficult to decide which ones are the best for you. The best option is to simply do your research, looking for programs with competitive conversion rates, a reliable payout process, and customizing link capabilities. From there, all that’s left is to make the best content you can and work with your platform to drive traffic.
Affiliate marketing might not be for everyone, but it is a process that can go a long way towards building up a steady stream of passive income. Whether you’re acting as part of a larger affiliate program or working with companies directly, affiliate income can ensure that even when you’re sleeping, you’re being rewarded for your hard work!
1. Guttmann, A. (2019, March 6). U.S. Affiliate Marketing Spend 2022. Statista. Retrieved October 1, 2021, from https://www.statista.com/statistics/693438/affiliate-marketing-spending/.