Affiliate Marketing Q&A Series: What is affiliate marketing?

One of the more frequent terms that pop up when searching for ways to make money on the Internet is Affiliate Marketing. But, what exactly is affiliate marketing and how can it help you create a thriving and profitable business?

In this series, we’ll get “back to basics” and answer the most commonly asked questions about affiliate marketing. By the end of the series, you’ll be able to make an informed decision about whether affiliate marketing is something you’d like to try your hand at as an online business model or possibly add as an additional stream of income to your current business.

As a side note: If you already have a business that sells products or services, keep reading because adding an affiliate program to your business can be a great source of income too. We’ll talk more about that side of things in future posts.

Let’s get started with the first 3 most commonly asked questions about affiliate marketing!

Definition of Affiliate Marketing

Q: What IS affiliate marketing?

A: Affiliate marketing as defined by Wikipedia.com:

Affiliate marketing is a marketing practice in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate’s marketing efforts.

Now, I don’t know about you, but when I first read that definition, I wasn’t exactly impressed. After all, it uses the word “affiliates” in the definition. Now isn’t that what you want to know – what an affiliate is? Yeah, didn’t make me think “Woo hoo! I get it now. I want to do THAT to make money!”

You can certainly read more about affiliate marketing at the Wikipedia website if you want.

I’ll save you the trouble, because although it isn’t rocket science it can be overwhelming and really doesn’t tell you in easy to understand terms exactly what affiliate marketing is. Here we go – the Arika Lewis version of affiliate marketing defined! ;)

Affiliate marketing is the process of referring others to a product or service and being paid for your efforts.

A great example that I’ve found most people can quickly and easily relate to is a car salesman. Now, if when you think of a car salesman you think pushy, rude, and only in it for the commission, clear your mind. For this example we’re going use a good guy car salesman (yes, they do exist I promise). Our car salesman is more concerned with you than the money he’ll put in his pocket. Now, if you just can’t get past the icky feeling, think “real estate agent” as you read the next few paragraphs. ;o)

When you go to a dealership to purchase a new car, you’re normally greeted by a salesperson. He or she will do their best to answer your questions, show you the car including its features, engine, warranty, and even let you test drive it. Once you decide on the vehicle you want to buy, they will then walk you through all the paperwork, getting financing, taking your down payment, trade-in and everything else involved in the process – from start to finish. Once the deal has been made and you’ve driven off the lot with your new car, the dealership receives the sticker price of the car.

But, what about the sales person who worked with you all afternoon? He listened to your needs, recommended the car that you fell in love with and are not sporting around town in. What does he get out of the deal? After all, he did all the work – he should get something for his efforts, right? Not to worry, he will receive a percentage of the sales price of the car you just bought. This is known as a commission.

Affiliate marketing is the same thing, only in this particular case the affiliate is doing the referring and on the Internet.

Making Money as an Affiliate Marketer

Q: How exactly do you make money as an affiliate?

A: We touched on the answer to this question in the previous question. When you (the affiliate) refer someone to a product (or service) and that person makes a purchase, you receive a commission on the sale.

However, there is more to it than that. After all, how can a company know for sure that you are the one who sent this person to their website since you’re not there to tell them and the person buying may not even know your name?

When you sign up to become an affiliate with a company or individual, you’ll receive a special link (your affiliate link) that is embedded with a tracking code to let the affiliate program owner identify you among other affiliates and their own marketing methods.

Whenever you use this special affiliate link to refer someone to the company’s website, the person’s visit is tracked to you via that special code. There are various software programs that make this possible and the process is beyond the scope of this post (but will be a topic for future posts). For now, just remember that visitors to the website are tracked back to you from this special code within your affiliate link.

Whenever someone who uses your link purchases something from the company’s website you are credited for the sale and receive some sort of payment. Here are a few of the more common types of affiliate payments:

  • Sales Percentage – This method is the most common form of payment to affiliates. Example: For every sale you refer as an affiliate, you’ll earn 50% of the total sales price. You refer $50 worth of sales and we’ll pay you $25. Percentages vary and are set by the company or individual who runs the affiliate program. They can vary from as little as 5% all the way to 100%.
  • Pre-set dollar amount – This type of commission is not extremely common, but it is out there. Specific dollar amounts could include things such as: For every $5 worth of product sales you refer to us, we’ll pay you $1 or a flat $20/sale.
  • Credits – Some sites pay their affiliates in credits that can be used for future purchases. An example of this would be receiving 1 credit for every dollar’s worth of product sales you refer.

Proof Affiliate Marketing is Real

Q: There are a ton of get rich quick schemes online. Is Affiliate Marketing a legitimate way to make money?

A: Yes, absolutely! Affiliate Marketing is a valid and legal way to earn money (and when done right, earn a nice living) on the Internet.

Of course that’s the short and easy answer, I know. If I were to guess, you’re probably thinking (or if you’re like me saying out loud) something like:

“Whatever…that’s what they all say. Prove it to me, Arika.”

Wait! Don’t click that little X in the top right corner without reading further. I’m going to tell you WHY affiliate marketing is legit!

There are many differences between affiliate marketing and scams. Here are 5 of the biggies.

  1. No layout of cash to get started. – Find products/services you want to promote, check for an affiliate program, sign up and begin promoting.
  2. You decide. – You control what products you promote. If you don’t like it or it doesn’t fit with your website or audience, skip it.
  3. Credibility. – Legit affiliate programs will have others who are promoting their products and services.
  4. You actually have to WORK! – No promises of making a 6 figure income without doing any work.
  5. With affiliate networks such as Clickbank, Commission Junction, Share A Sale, and others, it’s easy to get started with well known, reputable companies who have been around and have a reputation of paying their affiliates – on time every time.

If that isn’t enough reason, I encourage you to research further. Visit sites like the networks mentioned above and Shawn Collins’ Affiliate Tip site. Do all the investigating it takes so that you feel comfortable with the fact that Affiliate Marketing is a REAL way to make money.

And, to show you proof, here is a screenshot from one of my very own affiliate accounts. This is my commission summary from promoting EasyPLR.com for one month. (Note: this is just one of the many affiliate programs that I am signed up for.)

This was a summary report for the entire month of September 2008. Just one email I sent to my customers actually resulted in the majority of those sales.

How I Generated Affiliate Sales:

I sent an email to my list of customers with my affiliate link in it. You’ll see that my customers clicked my link 23 (CLK) times. Those 23 clicks resulted in 38 sales (Tier 1 Referred Sales).

This particular program pays 50% commission on all sales, which if you take a look at the Product Sale Commissions column you can figure that I sent this company $330.66 in sales in September. I received (Paid Commissions) $165.33 for my work.

Now, I’ll show you the proof that I actually RECEIVED that money. Here’s a screenshot of the actual deposit into my Paypal account.

As I said before, this is mostly just one promotion of my link and one program I promoted in that month. You can rest assured that Affiliate Marketing is in fact a genuine way to make money on the Internet.

I’ll be back soon to answer a few more FAQ’s about affiliate marketing basics. In the meantime, if you have questions of your own please leave them in the comments section and I’ll be sure to answer them for you.


Arika Lewis

If you’d like to learn more about affiliate marketing with the use of PLR content, I invite you to join me at PLRArsenal.com where I share lots of free information on using PLR as an affiliate marketer, including new PLR announcements and sales. See you there!

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30 Responses to Affiliate Marketing Q&A Series: What is affiliate marketing?
  1. LaTara Ham-Ying
    September 9, 2010 | 4:26 pm

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  18. Terrinda S. Davidson
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