What is affiliate marketing?
An affiliate program allows individuals and businesses to earn additional revenue by recommending other businesses and products to their own audience. Usually organisations use an affiliate program to widen their reach in a market and develop brand stability. It's a form of indirect marketing where the goal is to appeal to a large group of audience with a broad message. There are three main parties involved in an affiliate program:
Brand - This is the owner of the program, and they incentivise affiliates to promote their brand.
Affiliate - The person who registers with a brand and its affiliate program. They earn a commission when someone purchases the brand's product or service using their unique link or code.
Consumer - The person who purchases from the recommended brand, ideally the affiliate's existing audience.
How affiliate programs work
Let's say you want to buy an air fryer. After some general searching, you land on a website that has a comprehensive comparison and reviews of the top five products in the market. Impressed with the information, you click a link on that website that leads you to Amazon where you place an order. That's an example of affiliate marketing. In this case, Amazon pays a commission to the website because you purchased through their referral link.
Affiliate marketers are legally required to indicate affiliate links on their website so that, as a consumer, you know they'll receive a commission. However, the exact specifications of payment varies from brand to brand.
Getting started with affiliate marketing
The most important part of an affiliate marketer's journey is choosing an ideal brand to work with. This choice depends on many things including industry, available products, brand reputation and policies, and commission rates.
If you're an affiliate marketer:
Search for programs in industries you're most familiar with. Having strong background knowledge about the industry and its audience will help you market the products more strategically. Most brands have online resources explaining their program, and once you sign up, you'll get access to a dedicated portal to manage your activities.
If you're a brand running an affiliate program:
You don't have to wait for affiliates to find you. Identify influential individuals and businesses such as thought leaders and industry analysts who resonate with your business and values. Reach out to them and establish a working relationship. In time, they can become your most popular affiliates.
A day in an affiliate marketer's life
Affiliate marketers generate interest, mainly through word of mouth. They create various forms of content to promote products, explaining their uses and encouraging their audience to purchase. Depending on the nature of the product, their content could be:
Long-form, such as blogs, reviews, product comparisons, and videos
Short-form social media content, such as Instagram Reels and posts, Facebook recommendations, and TikTok videos
Events, such as educational workshops and quick sales
All that said, you can be a successful affiliate marketer even if you don't have a website. Here's how.
How affiliate marketers get paid
Each affiliate marketer has a unique referral link or code that they can embed in their promotions. This helps brands associate every customer back to their referrer. How often affiliates get paid and for what depends on the brand's program guidelines. One brand might pay commissions for every purchase or registration made, whereas another may pay for every 50 leads. For example, an ecommerce vendor may have two categories within their program like so:
1. Affiliates who promote products get paid for every purchase made.
2. Affiliates who promote the vendor's blog will get paid for every lead who signs up for newsletters.
Fair business practices
Unsupervised affiliate programs can cause trouble. Since the majority of the messaging depends on the affiliates themselves, brands need to keep a close eye on their affiliates to ensure they don't violate any laws and regulations stated in the Australian Consumer Law.
Violations include, but are not limited to:
Providing misleading and false information about price, origin, and nature of products
Advertising products they don't sell
Listing false testimonials
Wrongly accepting payments
These practices may result in heavy penalties with fines up to A$220,000 for individuals and A$1.1 million for enterprises. Learn more about avoiding unfair business practices as outlined by the Australian Consumer Law.
We hope this post gives you an overview of how an affiliate marketer can earn and operate as a self-sustained business. If you have any more topics you'd like us to cover, leave a comment and we'll get on it right away!