February 27, 2022

Since you’ve found this page, you have obviously heard about affiliate marketing, but you might not know exactly how it works. You are probably being overloaded with information, but at the same time, have lots of questions.

If we’re being honest, there’s no way this article will teach you how to become an affiliate marketer. In this guide, I will cover the basics if you’re brand new to affiliate marketing and are still learning about it.

However, if you have the basics down, and you’re ready to try your luck at affiliate marketing, you’ve gotta take action. Researching on this or that website or piecing together what you need ot learn on YouTube is certainly possible, but there is a better and faster way to learn.

My recommendation is to give the training at Wealthy Affiliate a try. You can sign up for free to try it out without entering any credit card info. When you are all signed up, you will have a very structured way of learning what you need to know when you need to know it, all in one place, with a community of others to share ideas with and ongoing live training sessions every week. Signing up for Wealthy Affiliate will greatly increase your chances of actually making money online.

With that out of the way, let’s cover the basics and go over how affiliate marketing works.

How The Affiliate Marketing Business Model Works

How Affiliate Marketing Works

As you can see from the diagram above, the actual business model for an affiliate marketer is rather simple. It works like this…

  1. Find a great product or service that offers an affiliate program.
  2. Send potential customers to the website of that product or service using a special tracking link.
  3. If that potential customer ends up making a purchase, you receive a percentage commission on the sale!

While the business model is simple, new affiliate marketers quickly find out that sending ready-to-buy visitors to the website of a product or service you are promoting is actually pretty tough!

Sure, some people get lucky and find a way to use paid advertising and still net a profit. But most new affiliate marketers find that after their paid advertising expenses, they never profit a dime. Actually, paid advertising such as using Google Adwords can quickly run your bank account dry.

Check out this video below from The Lazy Ass Stoner. He has a fantastic explanation that anyone can understand in this video.

VIDEO: Affiliate Marketing For Dummies


How Affiliate Marketers Get Paid

Most companies offer direct deposit, PayPal, or physical checks to pay affiliates. The majority of affiliate marketers are paid a percentage commission for every product the sell. In the majority of cases, there is a threshold that must be met, usually $100. In my experience, most companies pay their affiliates monthly.

But be careful! They will not take taxes out of your commissions. You must do this yourself. Many new affiliate marketers get into financial trouble because they underestimate how much they have to pay in taxes.

Getting paid as an affiliate marketer is usually easy. These companies don’t have to pay you anything until you’ve already made them a profit. That’s a dream form of marketing for most companies. They will pay you what you’re owed, and they will be happy to pay it.

How Affiliate Marketing Works

How To Find Affiliate Marketing Programs

There are many different ways to find affiliate marketing programs. Let’s say you want to start a site on dog toys. You can simply go to google and search for Dog Toys Affiliate Program. As you can see, there are numerous results:

How Affiliate Marketing Works

You can do this for just about any niche and you’ll almost always find pages of results showing you numerous companies you can work with.

There are also special affiliate networks that offer programs from thousands of companies. Some of those networks include:

And of course, most large companies have affiliate programs, too. Just a few examples:

As you can see, you can start a website in just about any industry, and as long as you can get enough people to your site, you will have ways to monetize the site to make money through any number of revenue sources. If you build a site that brings value and sends business, you will have these companies fighting with each other to get your referrals. That’s some job security!

The Barriers To Entry For Affiliate Marketing

Affiliate marketing is more than just having a website and sharing links. Affiliate marketing is a business. A real, actual, legitimate business. When you start selling affiliate products and services, you’ll be considered an independent contractor. You are not an employee. You own your own company and will be treated as such.

Any legitimate business, whether it is online or offline, has barriers to entry. For example, starting a new sports team franchise is pretty much impossible. Not only are the financial requirements out of reach for just about everyone, but you can’t just create a team and be accepted into the big leagues. The barrier to entry for starting a sports team is so high, nobody even tries, and rightfully so. Here is a quick video to help further explain what a barrier to entry is:

VIDEO: Barriers To Entry Explained In 1 Minute


Not all businesses have impossible barriers to entry. Opening a restaurant, for example, is doable. Even if you don’t have the money to open a restaurant, you can take out a loan, do competitive research, and realistically turn a profit with a good business plan.

So, what is the barrier to entry for affiliate marketing? Well, it certainly isn’t money. You can start an affiliate marketing business for very cheap or even for free. You don’t need infrastructure, employees, complicated equipment, customer service, storage, shipping and receiving, or any of the other headaches of most traditional companies. Just about anyone can start an affiliate marketing business from anywhere with an internet connect.

But affiliate marketing does still have barriers to entry. The biggest barriers to entry are commitment, and patience. You see, it takes time to build up an affiliate marketing business. Building a website can be achieved in a single day, but creating enough content to get people onto your site takes months. You will be required to work for free, for 6 to 12 months, with only the possibility of making money from all that invested time and effort.

With so many people I’ve mentored, the vast majority of new affiliate marketers start off strong, but as the months go by, they lose interest from the lack of sales. Very few, it seems, have the tenacity and patients to ever get to the point where they make a single penny.

Benefits Of Affiliate Marketing

While affiliate marketing can be very lucrative, most people don’t get into affiliate marketing to get rich (although that would be a nice thing too!). Most people get into affiliate marketing for all the other benefits it provides.

Unlike most other businesses you might want to start, with affiliate marketing, you can work from home or anywhere else with an internet connection. Heck, I traveled the country building my business!

You also don’t need a lot of upfront capital. Affiliate marketing takes very little money to get started and you don’t need any specialized training, certifications, or degrees. The VAST majority of successful affiliate marketers are self-taught and had no idea how to build a website when they first started, myself included.

Affiliate marketing is also easily scalable and most, if not all of your business can eventually be outsourced. I’ll get into more of that later on in this guide.

You will make money 24/7. Your website and affiliate links will never go down (or at least very infrequently). Even while you sleep, people are going to your website, clicking your affiliate links, and making you money.

Your business will also have low expenses, so the majority of those commission checks will go right into your own bank account. The low risk aspect of affiliate marketing means it is very highly unlikely you’ll lose a significant amount of money. If you fail, you’re no worse off than you are today. If you succeed? FREEDOM!

Drawbacks To Affiliate Marketing

While the good heavily outweighs the bad, there are some negatives to affiliate marketing. For example, since you don’t actually own the products and services you’re selling, you have no control over pricing, customer service, quality control, or anything else. You’re basically just in control of making sales, and everything else is out of your hands. Companies can also change commission structures or even end their affiliate program with little to no notice.

As I’ll get into shortly, you’ll also need to work for free until you’ve built up enough of a following or rank high enough in search engines to get enough traffic in order to make sales and income. Nobody likes to work for free, but the long-term benefits are usually worth it.

You’ll also be at the whim of other services to send traffic your way. You’ll need to rank highly in Google and sometimes Google makes changes that can suddenly send you much less traffic. You also have to rely on social media companies and abide by their policies.

These are all rather minor issues to me, though. I’d much rather have them deal with the hard stuff like payment processing, customer service, etc., and simply leave the copywriting to me.

How Long Does It Take To Become A Full-Time Affiliate Marketer?

The answer to this question is the answer that nobody ever likes to hear about anything. “It depends.” Some people get lucky. They find the right niche at the right time and end up making great money just a few months in. However, I usually tell new affiliate marketers to expect 6 to 18 months before they ever make a single penny, and most could expect it to take in the 12 to 18 month range.

A lot of other factors are at play here, though. Will you be starting this business part-time, or are you able to dedicate 40hrs+ per week to it? When you’re working, are you REALLY working and creating new content for your site? Or are you actually avoiding actual work and getting distracted? Are you continuing to learn about search engine optimization and other techniques to reach more eyeballs? So many factors determine how quickly you will see success. I get into even more detail on this topic on this blog post.

What Is The Primary Day-To-Day Workload For An Affiliate Marketer?

As a new affiliate marketer, your primary job will be content creation. The term “content is king” is a commonly used phrase in this industry. The more content you create, the more people you will reach. Nothing is more important than content. Sure, you’ll need to set up a website, learn marketing techniques, and will have other tasks to do on occasion, but your main task is creating content.

How you create that content is up to you. I prefer written content like this article you’re reading right now. Other affiliate marketers prefer to use video blogs or become prolific on social media. It’s up to you, but however you decide to create content, you must create a lot of it and over an extended period of time (years). If that doesn’t sound like something you can do day in and day out, affiliate marketing might not be for you.

How Do Successful Affiliate Marketers Advertise?

Since paid advertising is so risky, most successful affiliate marketers learn the incredibly valuable skill of learning how to advertise for FREE. Now, in order to gain free exposure, you must provide people something of value.

Yeah, I know. You’ve seen some “gurus” talk about “secret” and “underground” automated software that will help send 10’s of thousands of customers to affiliate partner websites every 4 seconds and there’s absolutely nothing you have to do.

….Oh how I wish that was true!

As someone who actually earns a full-time 6 figure income through affiliate marketing, I’m here to tell you that this will take a little bit of time. I know, I know – nobody wants to hear that, but hear me out.

While the vast majority of affiliate marketers have a website, it’s always good to diversify into other areas. Many affiliate marketers tend to gravitate towards one favorite techique, though. This includes…

Email Marketing Many affiliate marketers have various ways of building email lists. This can even be done without a website. The power of email marketing is the ability to advertise to your list over and over again. Usually these lists are highly targeted as well, so you’ll know exactly the products and services they are already interested in.

Social Media/Influencer Marketing Building a targeted following on social media such as starting a Facebook Group has proven to be very profitable for many affiliate marketers. If you are able to become an authority and influencer in a niche, you can have companies gushing over you and begging you to sell their products for them. They will even send you products for free just to showcase to your audience.

Video Blogging The most popular platform for video blogging is YouTube, but social media sites like Instagram and TikTok are becoming increasingly popular. Building a following on video usually takes some time, but can be the most profitable way to sell products and services since your following will be loyal and they will trust you.

Paid Traffic While most affiliate marketers rely on SEO or social media to bring in free website visitors, but others rely on paid advertising. Some affiliate marketers will allow you to use services like Google Adwords or Facebook Ads to promote your affiliate links. This process usually takes a lot of trail and error, so you will lose money first, but if you can find an ad campaign that works, it’s like having a money machine.

Offline Advertising Don’t forget that you can promote your affiliate links offline, too! While not the post popular method, billboards, print ads, TV ads, radio, and any other offline advertising platform can also be used to promote your affiliate products and services.

These are just a few ways you can have an affiliate marketing business without a website. With that said, I ALWAYS recommend having at least a small website to go along with your other advertising methods.

But I Thought Affiliate Marketing Was A Form Of Passive Income?

The idea that affiliate marketing is a passive way to earn money is not really based in reality. Yes, it’s possible to make money from affiliate marketing by doing nothing (through outsourcing, which I’ll get to in the next section). However, there is no getting around it in the beginning. It’s going to take a lot of work. Before you can even think about outsourcing and having others do the work for you, you must do the work yourself. You have to get intimate with how your business works and learn the ropes before you can instruct others on how to help you.

Affiliate marketing certainly can lead to a very passive income source, but it is going to take a lot of time and effort to get to that point.

How Can I Outsource My Affiliate Marketing Business?

Most successful affiliate marketers use outsourcing to grow their businesses. I started outsourcing as soon as I started making money. The first time I received a commission check, I didn’t spend it on myself. I hired freelance writers write some articles for me. This only accelerated the growth of my websites, but also made it possible to take breaks while still getting fresh content posted.

There are several places you can hire freelancers for almost any task from programming, graphic design, website development, freelance writing, virtual assistants, and just about anything else you’ll need. Some services I personally use for outsourcing include:

Many successful affiliate marketers, such as One More Cup Of Coffee, outsource their entire business and travel the world while checking in with their freelancers a few times per week. Others, like Pat Flynn and myself, use freelancers to grow the business while we still actively work on it. I have some websites that are run completely by freelancers, while I grow and expand new projects and sites.

The best part? I can take breaks whenever I want. I recently took 6 months off and my business ran all by itself, and even GREW during that time. The checks and direct deposit commissions just kept rolling in.

What Is The Affiliate Marketing Lifestyle Like?

I have a much more detailed blog post on what the affiliate marketing lifestyle is like, but I’ll give a shorter answer here.

When you are new to affiliate marketing, the lifestyle is not glamorous. Most of us who start affiliate marketing are doing it on the side. I was a full-time truck driver working sometimes 70hrs per week when I started my first website. In my free time, I would create as much content as I could. After about a year, I was finally making some money.

Fast forward a couple of years, and the affiliate marketing lifestyle was as wonderful as I had hoped. You can read more about my affiliate marketing journey here, but in short, I have been able to travel the United States extensively in my RV. I can work from anywhere I can get an internet connection. My income has also reached levels I never thought possible (well into the 6-figures per year) and has been steady for over 10 years now.

The affiliate marketing lifestyle is incredible. It takes some time to get to this point, but once you make it, affiliate marketing is low stress, you don’t need to work an insane amount of hours (you can even outsource it all as shown above), you’ll make money while you sleep, and have the freedom to live and work from just about anywhere. No exaggeration here – it’s incredible.

Why Working For FREE Is The Way To Quit Your Day Job

Imagine you were interviewing for a job. A dream job. One where you could work your own hours, from anywhere with an internet connection, and you’d never have to sit in any meetings or put up with office gossip. The catch? You have to work for free for 6 months.

Now why would you EVER agree to that deal?

Because after 6 months, you will get paid for your work not just once, but over and over again for YEARS. From there, you just replicate the process as many times as you want and you can grow your income exponentially.

You can vacation whenever you want and you’ll still receive 100% pay. You never have to wake up to an alarm clock and in fact, you make money while you sleep.

No commutes to work, you can be with your kids or your pets all day long, and you can choose to go grocery shopping on a monday afternoon if you want in order to avoid the crowds.

Total freedom and money being pumped into your bank account 24/7/365.

It’s almost literally like building a machine that prints money for you all the time. At that point, all you’ll be focused on is the rate and speed at which the money prints!

That’s the reality I live in. It really is possible. But you can’t expect it overnight. It takes time. Give it 6 months of your BEST EFFORT and I just about guarantee that by then, you will at the very least be earning a nice residual side income for you and your family. Once you start seeing REAL money coming in, you’ll be hooked and it’s only a matter of time before you quit your day job. I quit mine in under a year. Check out my story here.

What Is The Future Of Affiliate Marketing?

If all of this sounds great so far, you might be wondering if this type of business can last. Things have changed a lot over the years, so who’s to say affiliate marketing will still be a thing in just 5 years from now? The answer is nobody knows for sure, but things are looking good for affiliate marketing.

For starters, the VAST majority of brands and content publishers use affiliate marketing. Most people don’t realize just how common affiliate marketing is, but it’s everywhere on the internet.

The trends for affiliate marketing shows now slowdown in grown for the foreseeable future. Affiliate marketing has grown every year for the past 20 years with no reason to believe that will stop or even slow. It will likely only accelerate. Here’s a great article showing how just about every statistic shows rapid and continued growth for affiliate marketing well into the future.

So if one of your concerns is that the business model won’t be sustainable, the opposite is actually true. Now is a fantastic time to get into affiliate marketing.

Yeah, But How Do I Even Start With Affiliate Marketing?

You can start affiliate marketing TODAY! There are plenty of places you can set up a website for free, or close to it. Not sure how to start a website? There are dozens and dozens of FREE tutorials showing you how to do it. For example, if you have a couple hours, you can follow this step-by-step with no steps skipped tutorial on setting up a beautiful looking website.

VIDEO: How To Set Up Your Affiliate Marketing Website Step-By-Step With No Steps Skipped


However, if you are truly ready to start your business in a serious way, I HIGHLY recommend checking out this training program. You’ll get all the tools you need in one place, with all the help, tutorials, and training along with a helpful community of affiliate marketers ready to help and be helped. It really is a wonderful place to start, and it’s what I recommend to all of my friends and family.

“Do not wait: the time will never be ‘just right’. Start where you stand, and work whatever tools you may have at your command and better tools will be found as you go along.”

― Napoleon Hill

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