When you've been learning about affiliate marketing for a short period of time, the actual concepts behind it can seem pretty obvious and clear. To people who are complete beginners though, even the most basic elements of affiliate marketing can be confusing.
I remember before I started, I wasn't even sure how these people emailing me got paid (and I wasn't even sure whether the emails were automated or not). Fairly frequently, we get emails here at HPD from potential customers asking us if we help them handle inventory, if they can run an affiliate site from their respective countries, how exactly they'll get paid.
So it's apparent that not everyone reading our blog is familiar with the most basic concepts of affiliate marketing; how it all works. If you'd consider yourself one of those people, then this post is for you. We're taking a step back and looking at the most basic questions:
- How does a site visitor earns you a commission?
- What is your role in the tracking and fulfilment of anything they order?
- How do you get paid?
- The difference between an eCommerce business and an affiliate business
- Different types of commissions. Payment terms, percentages, cookies, and so on.
It's important to point out that commissions aren't the only way of making money from your website. You can earn via display advertising, via services, digital guides or courses, or sponsored posts as well. But to keep things simple, we're just going to cover how you earn affiliate commissions.
How Do Affiliate Links Work?
In the most basic sense, an affiliate link is just an ordinary link to somewhere, but it has a piece of code on the end which tells the place you are linking to, that this visitor came from your site.
So if you link to Amazon.com like this: “http://amazon.com.”
That's a normal link and Amazon doesn't really know who sent them the visitor.
But if you used a link like this: “http://amazon.com/your-affiliate-id.”
Then anyone who visits Amazon through that link, will get tagged in their system as coming from you. This means that if they buy something, Amazon knows to give you credit.
Affiliate links work pretty much the same way for almost every affiliate system, so it's not just Amazon that works like this. At HPD, we also have an affiliate program, and our affiliates would link to us with their ID on the end.
For example, a link to our done-for-you sites page would look like this: “https://humanproofdesigns.com/affiliate-websites” but if an affiliate links to it, it may look like this: https://humanproofdesigns.com/?ID=0 (where the ‘0' would be that affiliate's number).
Usually, an affiliate link adds a ‘cookie’ to the browser of the person who clicked the link, so that they are tagged as having come from you.
To use our affiliate program as an example again, if somebody buys a site from us, we can see whether they came from one of our affiliate’s links, or whether they were an organic (or unique) customer.
Cookies can stay in your browser for any length of time.
Amazon issues a 24 hour cookie, we issue a 30 day cookie, and others can be even longer.
What this means is that even if somebody leaves the site after clicking an affiliate link, but then returns at a later date and makes a purchase, you can still earn a commission, as long as they return before that cookie expires (and they use the same browser).
Most people have no idea this is happening, and it doesn’t affect their experience at all. It doesn’t cost them any extra to buy something via an affiliate link, and it doesn’t usually result in them visiting a different page. It’s simple a way that the vendor can track who sent them that customer.
Think of it as a referral program, if that makes the overall concept easier.
What’s Your Role In All This?
Once you’ve sent a visitor to a vendor (such as Amazon), your job is pretty much done. Anything the visitor does after that is handled by the vendor, in 99% of cases. Some affiliates in certain niches may offer a bonus or some coaching if somebody purchases through their link, but let’s keep it simple for now and assume you’re not doing that.
So, somebody has visited your site, clicked on your Amazon affiliate link, and gone over to Amazon and bought something.
Well done, you’ve earned yourself a commission!
Amazon will be the ones to take that customer’s credit card details, fulfil the order, handle the customer service, and otherwise do everything required. They are Amazons customers.
What you have to do is wait for a cheque in the mail from Amazon.
Depending on what the person bought, you will earn anywhere from 4% to about 10% commission.
In Amazon’s case, you’ll earn that commission on ANYTHING the customer purchases, regardless of whether it was the product you recommended, and regardless of whether they buy 1 thing or 100. Whatever is in their shopping cart qualifies for a commission.
Note: There are a few items at Amazon that don’t qualify for a commission. I’m really trying to keep this article simple for the sake of explaining the process. However, I just know someone will try to call us out in the comments and say “Hey that’s not true, not EVERYTHING qualifies”.
In any case, once that product is shipped, Amazon will update your affiliate area and you’ll see your earnings. Once a month, Amazon will send cheques or make bank transfers to their affiliates, paying out their earnings for the previous month.
So with affiliate sites, you don’t have to worry about customer support, handling inventory, receiving payments, or any of those types of things.
That’s the main difference between an eCommerce site (basically any online store) and an affiliate site.
So that’s the basic premise of how an affiliate commission is earned. There will be some variations on the process depending on what affiliate program you’re working with, but for the most part, Amazon is a great example of how it all works.
From here, we’ll look at different ways you might actually get people to click your links in the first place.
Your Role In Driving Customers
Once again, the actual examples below are done to explain the concepts and aren’t intended to be conclusive or the only way to make affiliate commissions. You may find success with other methods as well.
That said, the example below is a classic example of how we make money at HPD and how many of our customers do the same, with SEO affiliate marketing.
Sticking with Amazon as our example vendor, imagine you are a potential customer, thinking what to buy. Let’s say you want to get some new tool or piece of equipment, like an electric razor, a power drill, a gaming computer, whatever. Amazon sells a bunch of stuff.
Now, what many people do is just go straight to Amazon and look at prices and reviews there, and make a purchase based on that.
What more people do though, is head to Google and type something in like “Best power drill” or similar.
What they’ll find is a bunch of websites which have written articles on those exact topics, and those articles will contain links.
Here’s an example right here.
Here's the first article: http://justcordlessdrillreviews.com/
Here's how they use links:
As you can see, this is a classic review article, and the writer has done a good job of educating their visitors, and helping them sift through multiple products with a bit of quick research. Then find a link directly to Amazon.
That’s pretty much what most Amazon affiliates do, and it’s where we’ve also made a lot of money.
Another type of article you could write is more about how to do something, or how to achieve something, and you may recommend certain things to help do that.
For example, you may want to teach people how to improve their running speed, and in the process, you recommend a certain type of running shoe, where you can insert your affiliate link to Amazon or other shoe retailers.
Or maybe you are teaching people how to fish successfully in a certain river, and you want to recommend a certain type of bait, or tackle, or other equipment.
Camping is a great niche to do these “how to” guides that have a lot of room for affiliate links too.
Either way, the basic premise is the same.
You’re not really trying to sell something very hard, and you’re not pretending to be a store either. A lot of beginners make this mistake and write poor reviews or overly persuasively.
Instead, you just want to educate people, help them understand why they need certain things, or if they already know why, then you want to help them figure out which is the best one for them.
It’s pretty simple, and once your article ranks high in Google and gets a lot of visitors, you can make commissions over and over again.
Other Notes On Affiliate Commissions
At this point, you should have a pretty good understanding of the way affiliate links and commissions work, so we could end this article here and go on our merry way.
However, there’s room for a few other notes that don’t really need independent sections, so let’s just throw them in here.
- Affiliate links work with both digital and physical products.
- Most customers/site visitors won’t realize you’re using affiliate links, so there’s no need to fear them trying to circumvent your link to avoid you getting a commission.
- That said, you’re required to put an affiliate disclaimer in your footer or somewhere else on your site, explaining that you use affiliate links and may earn commissions from them.
- Google is fine with affiliate links. A lot of people state Google hates them. Actually, Google just hates low quality, spammy sites that contain nothing of value. If your site is good quality, you have nothing to worry about.
- Affiliate marketing is one of the easiest ways to get start monetizing your site, because you don’t really need to “sell” anything (you’re just making recommendations in most cases), and because there aren't logistics or customer support issues involved. The vendors handle that.
To learn more about getting started, I suggest you read this the benefits of monetizing your site with Amazon or check out our Amazon course, if you prefer video.
Once you've become familiar with the concept of affiliate marketing, head over and check out the different niches you can enter.