How to Start an Affiliate Marketing Business

Imagine that all you need to make money online is a website. You don’t have to create your own products or offer services. Sound good? Welcome to affiliate marketing.

According to Statista , U.S. businesses will spend $8.2 billion on affiliate marketing in 2022, while Influencer Marketing Hub estimates that the industry will continue to grow to $15.7 billion by 2024.

Starting today, you’ll be in a great position to take advantage of this.

What is affiliate marketing?

Affiliate marketing is when you promote other companies' products or services. When someone buys through your affiliate link, you earn a commission. These commissions are usually a percentage of the sales price or a fixed amount.

For example, here’s a link to a book on Amazon:

If you click through and purchase the product ($33.25 for the hardcover edition), I will earn $1.50 if I am an affiliate.

Is affiliate marketing legal?

Affiliate marketing is not a scam. It is absolutely legal.

• This is legal as long as you comply with the relevant laws and regulations in your country.
• This is ethical , as long as you disclose your affiliate relationships and only promote products you believe in.

Learn more: Yes. Affiliate marketing is legal. But is it worth your time?

Why should you do affiliate marketing?

Here are four reasons why you should consider affiliate marketing:

1. Low cost and low risk

Starting a business is risky and costly because it requires upfront investment, including products, employees, equipment, rent, etc. Affiliate marketing only requires a website. If you fail, you have just wasted your time and a little money.

2. Passive Income Potential

If you have a job, you need to work a few hours to earn income. If you do affiliate marketing, you earn income as long as your site gets traffic and they buy through your affiliate links. This can happen at any time of the day, even when you are sleeping.

3. Work from home or anywhere in the world

Earning passive income means you can work from anywhere, anytime, as long as you have internet and access to your affiliate website.

4. Easy to expand

A typical salesperson sells products from just one company. As an affiliate marketer, you can promote products from several different companies and earn commissions from all of them.

**Learn more: **How to Start Affiliate Marketing with No Money (5 Steps)

How does affiliate marketing work?

When you join the affiliate program, you receive a unique link that contains a tracking ID. This allows merchants to track whether you have referred customers to them.

A user who clicks on your link has a small file called a cookie stored on their device. This usually has an expiry date, so you get paid even if they delay purchasing for a while. For example, if you're an Amazon affiliate, this is how it works:

1. Someone visited your post about the best winter jackets.
2. They clicked on an Amazon affiliate link for one of your recommendations.
3. They close their browsers and go pick up their kids from school.
4. The next day they returned to Amazon to check the product again.
5. They purchased the recommended products as well as some ski gear.

Because affiliate cookies are stored on that person's device, you can earn commissions for recommending products and ski gear.

[]()## How much money can affiliate marketers make?

According to the Authority Hacker Affiliate Marketing Survey , the average affiliate marketer earns $8,038 per month.

However, the average monthly income for affiliate marketers with less than one year of experience is only $636.

So, don’t expect to succeed right away. Affiliate marketing takes time. If you’re just starting out, your income may look more like this for a while:

You need to keep your expectations in check. You won't make tons of money right away, but don't let that discourage you.

The success of others tells you that with hard work, time and the right knowledge, you too can reach their level.

**Learn more: **Here’s how much money you can really make from affiliate marketing

How to Become an Affiliate Marketer

An affiliate marketer is simply someone who does affiliate marketing.

So if you follow the section below on how to get started with affiliate marketing, and actually put in the work to create an affiliate site, drive traffic, and convert visitors, you will become an affiliate marketer.

Learn more : How to Become an Affiliate Marketer (5 Steps)

How to Get Started with Affiliate Marketing

Follow these seven simple steps:

**Learn more: **The Affiliate Marketing Handbook for Beginners

Step One: Choose Your Niche

Your niche is the category you want to talk about and promote.

To stand out among the countless other websites out there today, my advice is to be specific. Instead of attacking a large niche like food, attack a smaller niche like BBQ. This can help you build a more focused audience and may also help with SEO.

To find a good niche, you need to ask yourself these four questions:

1. What am I good at?
2. What do I like to do?
3. What am I curious about?
4. What have other people told me I’m good at?

The importance of choosing something you’re passionate about cannot be overstated. You need to create a lot of content to be successful in affiliate marketing. If you choose something you hate, it will be hard for you to stick with it when the going gets tough.

That’s why when I built my first website, I chose to talk about one of my hobbies – breakdancing. Even though I knew nothing about marketing, I managed to grow the site to 2,000 visitors a month.

**Learn more: **3 Ways to Find a Great Affiliate Marketing Niche (With Examples)

Step 2: Identify content platforms

You can do affiliate marketing on any platform. These include:

• website
• YouTube
• Social media (e.g. Instagram, TikTok)
• communication
• podcast

The method you choose depends on your preference and sometimes your niche preference. For example, someone learning breakdancing will prefer videos. So even if you prefer writing, running a YouTube channel might be a better choice.

That being said, we recommend setting up a website and using search engine optimization (SEO) to get your content ranked high on Google. This allows us to continue to generate passive search traffic, which means that clicks on our affiliate links continue to increase.

hint

Whether you're creating a website, YouTube, or other content, be aware that you need to disclose the fact that you're including affiliate links. The Federal Trade Commission (FTC) requires you to be transparent when you receive endorsement income.

If you're building a website, create a standalone page or include this in your site footer:

01.Farnam Street participates in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising commissions by linking to Amazon.

If you're doing this on YouTube, include this in your description:

Step 3: Find an affiliate program to join

There are three main types of affiliate programs to choose from:

1. High pay, low volume - Niche products with few buyers. For example, HubSpot only sells to businesses, but its affiliate program is highly rewarding (100% commission for the first month, 15% recurring commission per month).
2. Low Commissions, High Volume - Products with mass appeal, such as PS5 games. Amazon, for example, only pays a maximum of 10% commission. But the upside is that they offer commissions based on the full value of the purchase, not just the product you recommended.
3. High Pay, High Traffic — Expensive products with mass appeal, like credit cards. The problem is, these programs tend to attract affiliate marketers with deep expertise and financial resources who are willing to use black hat tactics.

Which affiliate program should you join? That depends on your niche and level of expertise.

If your target is consumers, go with the second model: low pay, high volume. If your target is businesses, go with the first model: high pay, low volume. Popular plans include software and web hosting related products.

The best way to find these affiliate programs is to use a Google search. Alternatively, type competing affiliate sites into Ahrefs’ Site Explorer and go to the Linking Domains report.

For example, I know that Pat Flynn promotes a number of software products on his website, Smart Passive Income. Looking at the reports, I see that Pat frequently links to Aweber. If we expand the caret, we see that Pat is an affiliate of that company.

All it takes is a quick Google search to find the application form for the program.

If there is a product you want to promote but they don’t have a public affiliate program, contact the company and ask if they would be willing to form an affiliate relationship with you.

**Learn More: **9 Best Affiliate Marketing Programs for Beginners (In Any Field)

Step 4: Create great content

If you want your affiliate site to be successful, you need to create high-quality content that makes your affiliate links fit naturally. Don’t just blindly pick products from Amazon’s best sellers. Go the extra mile and make sure your content solves your readers’ problems.

For example, if you are doing a review, you should actually buy the product and test it out. Use it over a period of time and report your findings.

Wirecutter takes the same approach for all of their articles, which explains their success. For example, to find the best air purifier, they tested over 50 air purifiers:

If you can work with an expert to review your findings, even better. Again, Wirecutter does this even better, solidifying its position as the gold standard for affiliate sites:

Step 5: Drive traffic to your affiliate sites

You’ve created great content. The next step is to get more people to read it so they’ll click on your affiliate link.

Here are three traffic strategies to consider:

A. Paid traffic

This is how you pay for traffic to your website. You can do this using pay-per-click (PPC) advertising.

The advantage of paid traffic is that the moment you start paying, you get traffic.

However, there are some disadvantages.

First, running ads will reduce your profits. It's normal for advertisers to lose money before they make money...if they make money at all.

You need to have a realistic idea of how long it will take to optimize your paid traffic campaigns.

Second, once you stop paying for advertising, your traffic stops.

Generally speaking, advertising is a great traffic strategy if you’re in a high-paying affiliate program and it’s generating results.

However, if you’re completely new to paid marketing and don’t have a marketing budget (or are using a program like Amazon Associates that has lower commissions), then this might not be a good idea.

**Learn more: **PPC Marketing: A Beginner’s Guide to Pay-Per-Click Advertising

B. Search Engine Optimization

SEO is the practice of optimizing web pages to rank higher in search engines like Google.

As long as your target keyword ranks high in the search engines, you will receive a steady stream of passive traffic.

At its most basic level, SEO means:

1. Understand what your target customers are searching for
2. Create content around these topics
3. Make sure Google understands your page content
4. Get or earn links to make your pages rank higher in search engines
5. Ensure Google can find, crawl, and index your content

Learn the basics in this video or read our beginner's guide to SEO :

C. Build an email list

An email list allows you to communicate with your readers at any time.

Use them to tell fans about new content and keep them coming back to your site for more information. This leads to more affiliate clicks and sales.

You can even add affiliate links to your audience in emails:

To build an email list, you need to convince readers on your website to sign up. This means offering something of value, like a free ebook, email course, etc.

Step 6: Get clicks on your affiliate link

Just because you have great content doesn’t mean people will click on your affiliate links.

There are a few things you need to consider.

A. Link placement

If all affiliate links are at the bottom of the page (where people rarely scroll), you’ll get very few clicks.

On the other hand, if you make every word in your introduction a link, your content will look like spam.

You need to balance link position with the other factors below.

B. Background

Let’s say you’re writing an article about the best kitchen knives under $50.

Your introduction should probably not look like this:

Today, I am going to review the best chef knives.

These links look out of context and spammy.

This would make more sense:

Today, I will be reviewing three chef knives that you can buy on Amazon for less than $50. They are Product Name 1, Product Name 2, and Product Name 3.

C. Labeling

Using callouts like buttons, tables, and boxes can help grab your reader’s attention and make your post easier to scan.

For example, Wirecutter uses a prominent box with product links every time it shares a top pick.

Good Housekeeping took a different approach and created a table with a button:

Step 7: Convert clicks into sales

In affiliate marketing, you need two conversions to make money.

The first conversion is a click to a product page .

You have 100% control over this. Use the above strategies to increase your chances of getting a click.

The second conversion is when a visitor buys a product. In affiliate marketing, the merchant controls the checkout and their conversion rate is not under your control.

The trick is to play to your strengths and seek out merchants with good conversion programs.

Here are a few ways to find them:

A. Public revenue reporting

If people are making a decent income through affiliate programs, then there is a good chance that the product conversion rate is high.

How do you know if people are making money?

Check out public income reports where bloggers publicly reveal how much money they make from affiliate deals.

You can find these reports on Google.

For example, if you search for “amazon affiliate income report” you’ll see a number of blog posts showing how bloggers are making money from Amazon affiliates.

One blogger appears to have made over $47,000 from Amazon Associates:

If you’re in the same niche as her, you can also look at where her other affiliate income is coming from and potentially promote the same products.

B. Ask questions

If there isn’t much information available about the affiliate program you want to join, sign up and ask questions.

For example, you might want to know what their average conversion rate is, or a ballpark figure for the monthly commissions of their top earners.

This can help you determine if the affiliate program is worth promoting.

C. Use your intuition

Sometimes, it’s best to follow your gut.

If the program or product you are reviewing doesn’t feel “right” or you personally would never recommend the product to a friend or family member, then don’t promote it.

[]()## Affiliate Marketing Example

Here are some examples of websites that make money through affiliate marketing:

1. Wirecutter — Wirecutter is a well-known product review site. According to Ahrefs, it ranks for 4.5 million keywords on Google and generates about 8.9 million search visits per month. It’s so successful that the New York Times acquired it in 2016 for $30 million.
2. RTINGS.com — RTINGS (or “Ratings”) is another product review site similar to Wirecutter, known for its straightforward, in-depth, and data-driven reviews. It ranks for 680,000 keywords on Google and generates about 3.9 million search visits per month, according to Ahrefs. It originally reviewed TVs, then expanded to other gadgets.
3. Money Saving Expert — Money Saving Expert (MSE) is one of the most popular personal finance websites in the UK. Visitors trust it because it provides independent and detailed research on the best tips on how to save money in the UK. According to Ahrefs, it ranks for 906,000 keywords on Google and generates about 5.5 million search visits per month.

Affiliate Marketing Tools

Tools are your affiliate marketing friend. They help you get the job done faster and easier.

Here are some affiliate marketing tools we recommend:

• Ahrefs – All-in-one SEO tool that helps you research target keywords, audit your website, research your competitors, find content ideas, and more.
• Rank Math – WordPress plugin that ensures your pages have the best on-page SEO.
• Google Search Console – Find and fix technical errors on your site, submit a sitemap, review structured data issues, check your Core Web Vitals , and more.
• Google Analytics – Provides key data and analytics for your affiliate sites.
• Thirsty Affiliates — Track your affiliate links, view stats to see which links get the most clicks, and prevent others from easily copying your site and exchanging links with their own affiliate IDs.

**Learn More: **15 Best Affiliate Marketing Tools and How to Use Them

FAQ

Frequently asked questions about affiliate marketing.

What is EPC in affiliate marketing?

EPC stands for earnings per click. It refers to the average amount of money you earn each time someone clicks on your affiliate link. Here’s how to calculate EPC:

EPC = Total commissions you earn / Number of clicks on your affiliate link

How long do cookies last in affiliate marketing?

The cookie duration is how long the affiliate program will attribute a purchase to your cookie. The cookie duration is usually set to 30 days. So this means that if someone clicks on your affiliate link and purchases within 30 days, you will get the sale and thus the affiliate commission. If the person clicks on your affiliate link but purchases** after 30 days, you will not** get the sale.

How to start affiliate marketing on Amazon?

All of the above principles apply to Amazon affiliate marketing. For an in-depth guide on how to set up an Amazon affiliate website, I recommend reading this guide.

**Recommended Reading: **How to Build a Successful Amazon Affiliate Website (Step-by-Step Instructions)

How to do affiliate marketing without a website?

You can do affiliate marketing without a website as long as you have a way to get people to click on your affiliate links. For example, many people get people to click on their affiliate links through Instagram, YouTube, Twitter, etc.

How to do high-price affiliate marketing?

High-ticket affiliate marketing involves promoting products or services that pay out a lot. Payouts are considered “high-ticket” once they exceed $100, but can go up to five figures.

Read the following guide to learn how to do high-ticket affiliate marketing.

**Recommended reading: **High-Price Affiliate Marketing: How to Earn High Commissions

Final Thoughts

There’s no reinventing the affiliate marketing wheel here. These are the basic principles, and applying them will get you off to a good start.

Just don’t expect a life-changing income or freedom from your 9 to 5 job overnight. Affiliate marketing takes time.

Focus on making your first affiliate sales first. As your site grows, set new goals and keep trying.

This is how to build a website that will eventually generate a significant income.

Disclosure: Some of the links in this article contain affiliate links, which means we may earn a commission if you click through to visit us, at no extra cost to you. See how SidelinePlay is funded, why it’s important, and how you can support us.