What is Affiliate marketing?
Affiliate marketing is a great way to generate additional income. You can become an affiliate marketer and recommend other brands, or you can start an affiliate program to promote your own brand.
With affiliate marketing, both brands and creators benefit. Brands get trusted referrals from relevant creators and access to new audiences. In turn, affiliates and creators make a commission on sales or other marketing actions resulting from the affiliate link.
This complete guide will walk you through how to become an affiliate marketer who promotes other brands. We’ll go over how to start making money with affiliate marketing, online marketing tips to set up a successful affiliate program, and best practices to help you earn more money.
This complete guide will walk you through how to become an affiliate marketer who promotes other brands. We’ll go over how to start making money with affiliate marketing, online marketing tips to set up a successful affiliate program, and best practices to help you earn more money.
What is affiliate marketing?
Affiliate marketing is a process where publishers earn a commission by promoting a product or service made by another retailer or advertiser using an affiliate link. The affiliate partner is rewarded a payout for providing a specific result to the retailer or advertiser.
Typically, affiliates are rewarded for a sale. But some affiliate marketing programs can reward you for leads, free-trial users, clicks to a website, or getting downloads for an app.
An affiliate network is a website that connects creators or influencers with different brands’ affiliate programs.
Many affiliate programs are free to join. Done right, an effective affiliate marketing strategy can go from side hustle to a profitable online business idea generating passive income.
Affiliate marketing is a process where publishers earn a commission by promoting a product or service made by another retailer or advertiser using an affiliate link. The affiliate partner is rewarded a payout for providing a specific result to the retailer or advertiser.
Typically, affiliates are rewarded for a sale. But some affiliate marketing programs can reward you for leads, free-trial users, clicks to a website, or getting downloads for an app.
An affiliate network is a website that connects creators or influencers with different brands’ affiliate programs.
Many affiliate programs are free to join. Done right, an effective affiliate marketing strategy can go from side hustle to a profitable online business idea generating passive income.
How affiliate marketing works
Affiliate programs work by allowing individuals or businesses (affiliates) to promote and sell products or services of a company in exchange for a commission on each sale. The affiliate earns a commission each time someone makes a purchase through the unique affiliate link associated with their recommendation.
Here’s how affiliate marketing works at a high level:
1.An affiliate shows an ad or a link for Store Z on their website, blog, or social network.
2.A customer clicks the unique affiliate link.
3.The customer makes a purchase in Store Z.
4.The affiliate network records the transaction.
5.The purchase is confirmed by Store Z.
6.The affiliate gets paid a monetary commission.
7.Commission rates for affiliate sales vary depending on the company and the offer. On the low end, you might earn about 5% of the sale, but with some arrangements, you can earn as much as 50% with high ticket affiliate programs. Some affiliate marketing programs provide a flat rate per sale instead of a percentage.
Affiliate programs work by allowing individuals or businesses (affiliates) to promote and sell products or services of a company in exchange for a commission on each sale. The affiliate earns a commission each time someone makes a purchase through the unique affiliate link associated with their recommendation.
Here’s how affiliate marketing works at a high level:
1.An affiliate shows an ad or a link for Store Z on their website, blog, or social network.
2.A customer clicks the unique affiliate link.
3.The customer makes a purchase in Store Z.
4.The affiliate network records the transaction.
5.The purchase is confirmed by Store Z.
6.The affiliate gets paid a monetary commission.
7.Commission rates for affiliate sales vary depending on the company and the offer. On the low end, you might earn about 5% of the sale, but with some arrangements, you can earn as much as 50% with high ticket affiliate programs. Some affiliate marketing programs provide a flat rate per sale instead of a percentage.
3 types of affiliate marketing
Affiliate marketer Pat Flynn breaks down the different types of affiliate marketers into three groups. Understanding these types of affiliate marketing arrangements can show you the different ways people make money online in this space.
Affiliate marketer Pat Flynn breaks down the different types of affiliate marketers into three groups. Understanding these types of affiliate marketing arrangements can show you the different ways people make money online in this space.
1. Unattached affiliate marketing
The first type of affiliate marketing is referred to as “unattached,” or when you have no authority in the niche of the product you’re advertising, i.e., There’s no connection between you and the customer. This often involves running pay-per-click (PPC) advertising campaigns with the affiliate link and hoping people will click it, buy the product, and earn a commission.
Unattached affiliate marketing is attractive because you don’t need to do any legwork. Affiliate marketing businesses rely on reputation and trust with a target audience online. Some affiliate marketers don’t have the time or desire to build those relationships, so this type of marketing is their best option.
“Unattached affiliate marketing isn’t a genuine business model—it’s for people who just want to generate income,” says Elise Dopson, founder of Sprocker Lovers.
2. Related affiliate marketing
Related affiliate marketing is the practice of promoting products and services you don’t use but that are related to your niche. An affiliate marketer in this case has an audience, whether it’s through blogging, YouTube, TikTok, or another channel. A related affiliate marketer also has influence, which makes them a trusted source for recommending products, even if they’ve never used them before.
While related affiliate marketing can generate more affiliate income, it comes with the risk of promoting something you’ve never tried before. It could be a poor product or service, and you wouldn’t know. It only takes one bad recommendation to lose the trust of your audience. If you don’t have trust and transparency, it’ll be hard to build a sustainable affiliate marketing business.
3. Involved affiliate marketing
Involved affiliate marketing refers to only recommending products and services the affiliate marketer has used and truly believes in. “Involved affiliate marketing is the way forward,” says Elise. “It’s rooted in trust and authenticity, which is best for your audience and business.”
In this type of marketing, an affiliate marketer uses his or her influence to promote products and services that followers may actually need, instead of paying to get clicks on a banner ad. It takes more time to build this type of credibility with an audience, but it’s necessary for building a sustainable business.
The first type of affiliate marketing is referred to as “unattached,” or when you have no authority in the niche of the product you’re advertising, i.e., There’s no connection between you and the customer. This often involves running pay-per-click (PPC) advertising campaigns with the affiliate link and hoping people will click it, buy the product, and earn a commission.
Unattached affiliate marketing is attractive because you don’t need to do any legwork. Affiliate marketing businesses rely on reputation and trust with a target audience online. Some affiliate marketers don’t have the time or desire to build those relationships, so this type of marketing is their best option.
“Unattached affiliate marketing isn’t a genuine business model—it’s for people who just want to generate income,” says Elise Dopson, founder of Sprocker Lovers.
2. Related affiliate marketing
Related affiliate marketing is the practice of promoting products and services you don’t use but that are related to your niche. An affiliate marketer in this case has an audience, whether it’s through blogging, YouTube, TikTok, or another channel. A related affiliate marketer also has influence, which makes them a trusted source for recommending products, even if they’ve never used them before.
While related affiliate marketing can generate more affiliate income, it comes with the risk of promoting something you’ve never tried before. It could be a poor product or service, and you wouldn’t know. It only takes one bad recommendation to lose the trust of your audience. If you don’t have trust and transparency, it’ll be hard to build a sustainable affiliate marketing business.
3. Involved affiliate marketing
Involved affiliate marketing refers to only recommending products and services the affiliate marketer has used and truly believes in. “Involved affiliate marketing is the way forward,” says Elise. “It’s rooted in trust and authenticity, which is best for your audience and business.”
In this type of marketing, an affiliate marketer uses his or her influence to promote products and services that followers may actually need, instead of paying to get clicks on a banner ad. It takes more time to build this type of credibility with an audience, but it’s necessary for building a sustainable business.
Affiliate marketing cons
Affiliate marketing also has a few disadvantages compared to other types of marketing campaigns. Before jumping in, let’s look at a few challenges you’ll face on your journey to affiliate marketing success.
Requires patience
Affiliate marketing is not a get-rich-quick scheme. It requires time and patience to grow an audience and gain influence.
You’ll want to test different channels to see which connect best with your audience. Research the most relevant and credible products to promote. Spend time blogging, publishing free content on social media, hosting virtual events, and doing other lead-generating activities on your marketing channels.
Commission-based
There’s no boss handing you a weekly paycheck as an affiliate marketer. Affiliate marketing programs work on a commission basis, whether you’re paid by lead, click, or sale.
Companies use a temporary browser cookie to track people’s actions from your content. When a desired action is taken by someone, you receive the payout.
No control over program
Affiliates must obey the rules set by a company for its affiliate program. You need to follow its guidelines for what you say and how you present its product or service. Competitors must follow the same recommendations, so you have to get creative to differentiate yourself from the crowd.
Why be an affiliate marketer?
Despite the cons listed above, affiliate marketing remains a popular passive income method for many entrepreneurs, creators, and established businesses.
Why? Here are two main reasons:
You can start an affiliate business with low overhead costs entirely on your own.
Affiliate marketing lets creators generate extra income from their talents.
1. Start a business on a budget
For affiliate marketers, there’s no need to produce products, handle shipping and fulfillment, or manage the many complicated administrative tasks that come with setting up a retail store.
Instead, you can run a whole business by focusing purely on marketing. So, while costs are involved (for example, you may need to buy apps and software to help create online content), the overall expenses for affiliate marketers are lower than for other types of ecommerce models.
That makes affiliate marketing an attractive option if you’re looking for low-cost startup ideas or ways to make money from home.
2. Monetize your talents
Affiliate marketing also allows people to generate income from their existing skills. That might mean applying your content marketing, search engine optimization, or social media influencer abilities to promote the products of an affiliate partner.
Or, you can use affiliate links to support your podcast, YouTube channel, or blog. By partnering with relevant brands, creators can expose their audiences to products of genuine interest. For example, a podcast that interviews people about their wellness lifestyles could become an affiliate partner for a vitamin supplement, a meditation app, or a luxury mattress.
Who should be an affiliate marketer?
If you can learn the following core skills, then affiliate marketing could be a lucrative career choice. To excel at affiliate marketing, you’ll need to be able to:
Create engaging content that persuades customers to click through to partner websites
Optimize a website to rank for relevant keywords in search engines
Develop a strategy for choosing affiliate partners and products
Negotiate better affiliate commissions based on your success
Long story short, affiliate marketing is one of the most accessible ecommerce business models around. If you can make intelligent choices about your product niche and affiliate partners—and then create exciting content that attracts customers—affiliate marketing can bring you significant income.
How do affiliate marketers make money?
Affiliate marketing income spans a large spectrum. There are some affiliate marketers who make a few hundred dollars per month and others that make six figures a year. The larger your following, the more money you can make as an affiliate marketer.
Compensation software company Payscale reports that the average annual salary of an affiliate marketer is more than $55,000, based on over 7,000 salary profiles, with many affiliate marketers earning significantly more.
Affiliate marketing payment models
When you choose an affiliate program to promote, you’ll notice there are different payment models. Companies may also call it a price model, payout model, conversion type, or another variation.
Regardless of the name, the payment model tells you what goals you will get paid for. If you’re promoting a software product, the action could be a free trial signup. For an affiliate marketer who promotes physical products, the goal will likely be a purchase.
Many affiliate marketing programs run with last-click marketing attribution, which means the affiliate who receives the last click before purchase gets 100% credit. However, this is changing, as affiliate programs improve attribution models and reporting. For example, you could share equal credit for a sale if there were multiple affiliates in a buyer’s conversion funnel.
Five common ways affiliates get paid include:
1. Pay per sale, where you earn a commission for each sale you make. It’s a common payout model for ecommerce offers.
2. Pay per action, which earns you a commission for a specific action. Many affiliate programs use this payout model because it’s broad and can be applied to different offers: a newsletter signup, a click, contact request, form submission, etc.
3. Pay per install, where you are paid for every install generated from your website traffic. The goal of your content would be to promote mobile apps and software so that people download or install them.
4. Pay per lead, which pays you every time someone signs up for something. It’s a popular payout method because companies use it for sweepstakes, lead generation, and other types of offers. Cost per lead offers are common for beginners because it’s easier to generate leads than to sell products to an audience.
5. Pay per click, a rare payout system where you earn commission on every click on your affiliate link. A pay-per-click affiliate program may be used by big merchants with a goal to build brand awareness. Customers don’t need to sign up or buy anything, just to visit the merchant’s website. 
How much you make depends on your affiliate niche. For example, research conducted by Shopify in 2021* found that the highest average commission rate ($70.99) was for business-related programs, while books and media and clothing categories earned just over $6 per commission. The maximum average commission we found was around $289.06 per sale.
Affiliate marketing also has a few disadvantages compared to other types of marketing campaigns. Before jumping in, let’s look at a few challenges you’ll face on your journey to affiliate marketing success.
Requires patience
Affiliate marketing is not a get-rich-quick scheme. It requires time and patience to grow an audience and gain influence.
You’ll want to test different channels to see which connect best with your audience. Research the most relevant and credible products to promote. Spend time blogging, publishing free content on social media, hosting virtual events, and doing other lead-generating activities on your marketing channels.
Commission-based
There’s no boss handing you a weekly paycheck as an affiliate marketer. Affiliate marketing programs work on a commission basis, whether you’re paid by lead, click, or sale.
Companies use a temporary browser cookie to track people’s actions from your content. When a desired action is taken by someone, you receive the payout.
No control over program
Affiliates must obey the rules set by a company for its affiliate program. You need to follow its guidelines for what you say and how you present its product or service. Competitors must follow the same recommendations, so you have to get creative to differentiate yourself from the crowd.
Why be an affiliate marketer?
Despite the cons listed above, affiliate marketing remains a popular passive income method for many entrepreneurs, creators, and established businesses.
Why? Here are two main reasons:
You can start an affiliate business with low overhead costs entirely on your own.
Affiliate marketing lets creators generate extra income from their talents.
1. Start a business on a budget
For affiliate marketers, there’s no need to produce products, handle shipping and fulfillment, or manage the many complicated administrative tasks that come with setting up a retail store.
Instead, you can run a whole business by focusing purely on marketing. So, while costs are involved (for example, you may need to buy apps and software to help create online content), the overall expenses for affiliate marketers are lower than for other types of ecommerce models.
That makes affiliate marketing an attractive option if you’re looking for low-cost startup ideas or ways to make money from home.
2. Monetize your talents
Affiliate marketing also allows people to generate income from their existing skills. That might mean applying your content marketing, search engine optimization, or social media influencer abilities to promote the products of an affiliate partner.
Or, you can use affiliate links to support your podcast, YouTube channel, or blog. By partnering with relevant brands, creators can expose their audiences to products of genuine interest. For example, a podcast that interviews people about their wellness lifestyles could become an affiliate partner for a vitamin supplement, a meditation app, or a luxury mattress.
Who should be an affiliate marketer?
If you can learn the following core skills, then affiliate marketing could be a lucrative career choice. To excel at affiliate marketing, you’ll need to be able to:
Create engaging content that persuades customers to click through to partner websites
Optimize a website to rank for relevant keywords in search engines
Develop a strategy for choosing affiliate partners and products
Negotiate better affiliate commissions based on your success
Long story short, affiliate marketing is one of the most accessible ecommerce business models around. If you can make intelligent choices about your product niche and affiliate partners—and then create exciting content that attracts customers—affiliate marketing can bring you significant income.
How do affiliate marketers make money?
Affiliate marketing income spans a large spectrum. There are some affiliate marketers who make a few hundred dollars per month and others that make six figures a year. The larger your following, the more money you can make as an affiliate marketer.
Compensation software company Payscale reports that the average annual salary of an affiliate marketer is more than $55,000, based on over 7,000 salary profiles, with many affiliate marketers earning significantly more.
Affiliate marketing payment models
When you choose an affiliate program to promote, you’ll notice there are different payment models. Companies may also call it a price model, payout model, conversion type, or another variation.
Regardless of the name, the payment model tells you what goals you will get paid for. If you’re promoting a software product, the action could be a free trial signup. For an affiliate marketer who promotes physical products, the goal will likely be a purchase.
Many affiliate marketing programs run with last-click marketing attribution, which means the affiliate who receives the last click before purchase gets 100% credit. However, this is changing, as affiliate programs improve attribution models and reporting. For example, you could share equal credit for a sale if there were multiple affiliates in a buyer’s conversion funnel.
Five common ways affiliates get paid include:
1. Pay per sale, where you earn a commission for each sale you make. It’s a common payout model for ecommerce offers.
2. Pay per action, which earns you a commission for a specific action. Many affiliate programs use this payout model because it’s broad and can be applied to different offers: a newsletter signup, a click, contact request, form submission, etc.
3. Pay per install, where you are paid for every install generated from your website traffic. The goal of your content would be to promote mobile apps and software so that people download or install them.
4. Pay per lead, which pays you every time someone signs up for something. It’s a popular payout method because companies use it for sweepstakes, lead generation, and other types of offers. Cost per lead offers are common for beginners because it’s easier to generate leads than to sell products to an audience.
5. Pay per click, a rare payout system where you earn commission on every click on your affiliate link. A pay-per-click affiliate program may be used by big merchants with a goal to build brand awareness. Customers don’t need to sign up or buy anything, just to visit the merchant’s website. 
How much you make depends on your affiliate niche. For example, research conducted by Shopify in 2021* found that the highest average commission rate ($70.99) was for business-related programs, while books and media and clothing categories earned just over $6 per commission. The maximum average commission we found was around $289.06 per sale.