Affiliate Marketing Starter Guide

What is affiliate marketing?

Affiliate marketing is when you promote other people’s products or services, and collect a commission for every successful referral.

Here’s an example of how affiliate marketing can work…

The above graphic uses the Amazon affiliate program as an example. Many other ecommerce sites also have affiliate programs you can sign up for.

Such as:

• AliExpress
• eBay
• Target
• Walmart
• Almost every web hosting service (eg Bluehost)

If someone else is selling something online, chances are they have an affiliate program you can sign up for. Then it’s simply a matter of linking to their products and services from your website – or newsletter / ads / social media – and collecting a commission for every sale you refer.

Affiliate marketing is often touted as the ultimate online business model because you don’t have to create any products yourself, nor are you responsible for stuff like order fulfilment or customer support.

You’re simply the middle-man (or woman) who connects buyers and sellers, while collecting a percentage of any sale you facilitate.

Sounds easy, right?

Well, not quite.

The hard part is getting people’s attention – eg. getting them to visit your website, or follow you on social, or watch your video – and providing them with enough value that they trust your recommendation, click on your link, and make a purchase.

What are the different ways to do affiliate marketing?

Affiliate Marketing With A Website (SEO)

This typically looks like the example shown previously…

We’re using the Amazon affiliate program as the example there, but many other companies have affiliate programs you can sign up for. (And nowadays most of them offer far higher commissions than Amazon!)

The main advantage of affiliate marketing with a website is that you can get a steady stream of free traffic from Google and other search engines. This is achieved by creating useful content and optimizing your website for search engines (SEO).

The downside of this approach is that it can take several months or even years for a new website to rank well in Google, and you’re at the mercy of search engine algorithm changes. Plus, you actually have to build the website (or buy an existing site) and keep it stocked with quality content.

• Affiliate marketing website examples + how much money they earn

Affiliate Marketing With A Profile (Influencers)

An example of this in action…

The above example is for a fashion influencer promoting Ralph Lauren on Instagram.

You could also do something like this with a profile or channel on…

• YouTube
• Pinterest
• Twitter
• Facebook
• TikTok

The more views and followers you rack up, the more clicks you are likely to get on your affiliate links, and the more money you can make 🤑

The advantage of this approach is that you can build up a steady stream of free traffic to your content, so long as you play nice with the algorithm of whatever platform you’re using. And setting up a profile is usually way easier than building your own website.

The downside is that it can take a ton of time and effort to build up and maintain a substantial following. You also have to keep up with any algorithm changes on the platform, and follow their rules so you don’t get kicked off.

Affiliate Marketing With Advertising (Paid Ads)

You may also hear this referred to as Pay-Per-Click or PPC affiliate marketing…

The above image uses Facebook ads as an example, but you can try this with any form of advertising that allows affiliate marketing.

The upside of this approach is that you don’t need to spend time building up a following and trying to generate free traffic. Instead, you simply buy your way in front of a target audience and try to convert them into buyers of whatever product you’re promoting.

The downside is that advertising costs money, so you usually need to spend quite a bit before you can earn a profit, if you can ever earn a profit at all. 

Affiliate marketing with paid ads used to be quite lucrative, but now you have people like Charles Ngo – who apparently earned $1 million in annual profit doing affiliate marketing this way – saying “it’s past its glory days.”

How much money can you make as an affiliate marketer?

The sad truth is that many people who try affiliate marketing make very little money from it. At the same time, it’s not uncommon for people to earn significant amounts of money via affiliate marketing.

For example:

• The aforementioned Charles Ngo reported earning $1 million in annual profit doing affiliate marketing with paid ads.
• Michelle Schroeder-Gardner consistently earns $50,000 per month in affiliate commissions from her finance and lifestyle blog.
• A blog about house plants (Succulents and Sunshine) earns about $5,500 per month in affiliate commissions.
• An affiliate website about personal finance (Money Saving Expert) sold for $134 million back in 2012.

For more details on those sites and many more, see my curated list of affiliate marketing website examples.

Is Affiliate Marketing Dead? Is it Dying?

People have been asking if affiliate marketing is dead or dying for more than a decade. Meanwhile many affiliate marketers continue to make good money. However, the affiliate marketing industry has certainly changed over the years.

Some prominent affiliate marketers have noted how affiliate marketing has changed over the years.

For example, aforementioned $1 million affiliate Charles Ngo recently noted…

Affiliate marketing isn’t dead yet, but it’s past its glory days. For the vast majority of people, it’s not worth entering the affiliate marketing industry in 2021.

Charles was referring specifically to the third type of affiliate marketing listed above – Affiliate Marketing With Advertising (Paid Ads) – and he gives several reasons for its decline.

The other types of affiliate marketing have also seen big changes.

Matt Giovanisci consistently earns $100,000+ per year from affiliate marketing via a website, but wrote in 2022…

Affiliate marketing is dying a slow and painful death. And I won’t be dragged down with it! … Affiliate marketing is dead to me. I’m no longer making it a priority in my business. And I want to share the reasons why.

Matt mainly decided to deprioritize affiliate marketing due to lack of control. 

Three of his biggest affiliate partners either slashed their rates or closed their affiliate programs in recent years, significantly hurting his revenue overnight each time 🤬

So he’s gradually been shifting focus to creating and selling his own digital and physical products. And it’s been working well: in 2021 he earned almost $450,000 from digital product sales alone.

However, in the podcast version of Matt’s blog post, he noted that affiliate marketing can still be a good way to start monetizing a website…

[Affiliate marketing] is dying, but it’s not dead. I think it’s a great way to get your feet wet in online business. You create a website, you don’t want to make a product right out of the gate because you don’t know what product to create but you know what to recommend. And so you recommend somebody else’s product and you see if it has legs. And if it does, then you create your own version, and you sell that.

I tend to agree.

It’s risky to make affiliate marketing the core of your business for the long term. But it can be a great bridge to more advanced types of online business.

Also, with more people coming online and trying their hand at affiliate marketing over the years, it has inevitably become more competitive.

So if you want to build a successful affiliate marketing business nowadays, you’d better bring your A game.

Is the Amazon affiliate program any good?

The Amazon Associates program used to be great for affiliate marketers, as it was easy to sign up and there were endless products you could link to and earn from. But with Amazon having cut affiliate commission rates to the bone, nowadays it’s tough to make a lot of money with their program.

For example, the creator of a viral website lamented in March 2021 that he earned only $279 in 3 days from Amazon’s affiliate program, despite his one-page site getting millions of views…

Considering that in those 3 days the website had 2.7 million page views, I think it’s fair to say you’re not going to make your fortune from affiliate marketing links to books.

Granted: that site didn’t have great buyer intent and it’s unclear what kind of click-through rate the affiliate links were getting, but it’s a poor result nonetheless.

Another affiliate marketer reported in 2020 that cuts to Amazon’s affiliate commission rates meant a 60% drop in his revenue, amounting to an annual loss of $176,929.

So while you can still earn commissions via the Amazon Associates program, I wouldn’t recommend relying on it to build a successful affiliate marketing business.

Does affiliate marketing = passive income?

No. While affiliate marketing can lead to passive income, and affiliate marketing businesses tend to be quite scalable, it usually takes a TON of hard work and patience before affiliate marketers start earning a decent amount of passive income.

The journey of this Project 24 student is typical:

He worked his tail off and even hired some writers, yet only earned ~$4000 in his first year as an affiliate marketer.

The good news is that his income is steadily trending upwards 📈

I wouldn’t be surprised if his site was pulling in $3000/month after another year, and far more beyond that.

As you can see from my curated list of affiliate marketing websites, it’s entirely possible for mature affiliate sites to earn $10,000’s or even $100,000’s per month. 

That’s when the passive income dream becomes real.

But it usually takes several years to get to that point.

Should I start an affiliate marketing business?

If you are brand new to making money online, I would NOT recommend affiliate marketing as your first business.

You are far more likely to earn a living online in the next 3-6 months via freelancing or a remote job.

Whereas with affiliate marketing, it’s rare to be earning a living from it within 12 months. Most people should expect to invest 2 years in building up an affiliate marketing business before it provides them with a full-time income.

You might succeed much faster if you do affiliate marketing with paid ads, but this is more risky and requires you to spend a significant amount on ads up front.

If you are brand new to working online, here’s the most reliable path to affiliate marketing success:

• Learn skills related to affiliate marketing
  Like web development, SEO, project management, blogging, copywriting, etc. Look for free training on YouTube or cheap courses on Udemy.
• Develop your skill(s) via freelancing or a remote job
  Start with a low rate if you have to. Work with other people on real projects. This will accelerate your learning and you’ll be earning while you learn.
• Increase your income from freelancing or remote work
  As your skills improve, you can charge more for your services. Aim to earn a full-time income while working only 20 hours a week.
• Start your own affiliate marketing business
  You should now have the time, money and skills to make it happen. Keep working your 20 hours a week and build up your affiliate marketing business on the side. Invest in good training. Go all-in once you start generating significant and consistent affiliate income.

Should I start an affiliate site from scratch or buy an existing site / domain?

This depends on what your goals are and what resources you have available. Generally speaking, starting with an existing site or aged domain will get you ranking and earning much faster.

However, finding a good deal on a site or domain is a skill in itself. You have to be able to properly evaluate the asset you’re buying. And ideally you’d then be able to take that asset and increase the monthly revenue without too much trouble.

If you don’t know what you’re doing, this can be a quick way to lose a chunk of money 😫

As a general rule: 

• If you have lots of time but little money, start a site from scratch.
• If you have lots of money but little time, you may want to buy an existing site / domain.

For more on this topic, check out our Website Flipping Starter Guide.

There you’ll find lots of info about buying and growing existing sites, where to find the best deals, how much you should invest, etc.

What is the best affiliate marketing training?

Below are my picks, based on the 500+ hours I’ve personally spent buying, researching and testing a bunch of AM courses.

• Full list of best affiliate marketing courses

How can I learn affiliate marketing for free?

Check out my list of free affiliate marketing resources here.

What kind of online business is affiliate marketing?

Here’s how affiliate marketing businesses fit into our online business framework:

• Referral (Level 3)
  This would be a niche affiliate site, or a business running paid ads to affiliate offers. Little audience building here. The goal is to quickly convert cold traffic to affiliate commissions.
• Authority (Level 4)
  Once you have a significant number of followers or subscribers, you become an authority business. Think of established brands or influencers, recommending third-party products/services and earning a commission for each sale.