Affiliate marketing is one of the best online business models for generating passive income. The concept is simple - you promote products or services from various companies and earn a commission when someone purchases through your affiliate link.
It provides the flexibility to work from anywhere in the world with just a laptop and internet connection. Once you build your affiliate assets like websites, YouTube channels, email lists etc, they can run on autopilot and earn you commissions while you sleep.
But like any business, it takes time and effort to build. Many beginners give up too soon because they expect to see quick results without putting in the work.
In this guide, you’ll learn:
- Exactly what is affiliate marketing and how it works
- The step-by-step process to start your affiliate business from scratch
- How to choose a profitable niche and affiliate programs
- Tips to build traffic and generate sales as a beginner
- Realistic income expectations for your first few months
- Pros and cons to consider before getting started
Plus much more insider advice to start a successful affiliate marketing business as a complete beginner!
What is Affiliate Marketing?
Affiliate marketing is a popular online business model where you earn commissions by promoting products or services from a company.
As an affiliate, you’ll get a unique link or ID to track sales that come through your promotions. When someone makes a purchase using your affiliate link, you earn a percentage of that sale as commission.
For example, let’s say you promote VPN software from NordVPN as an affiliate. They offer commissions of up to 70% on signups.
You share your affiliate link on your website, YouTube, social media etc. Someone clicks your link, signs up for NordVPN and you earn $105 commission on that sale.
The company handles product fulfillment, customer service etc while you simply focus on driving targeted traffic and sales through promotions.
This ability to earn commissions passively on autopilot makes affiliate marketing appealing for many people. Let’s take a closer look at how affiliate marketing works step-by-step:
How Does Affiliate Marketing Work?
Here are the main steps involved:
Find affiliate programs to promote
Get approval and unique affiliate link
Promote affiliate products
Visitor clicks your affiliate link
Visitor makes a purchase
You earn commission
First, you need to find relevant affiliate programs that pay commissions for the promotion of their products.
There are affiliate networks like ShareASale ↗ or Impact ↗ that have thousands of affiliate programs across different niches.
You can apply to join these affiliate programs for free. Once approved, you’ll get access to affiliate links, banners, and other promo material.
Next, you need to drive targeted traffic to your affiliate links using different strategies like search engine optimization, social media marketing, email marketing etc.
When a visitor clicks your affiliate link and completes the desired action like making a purchase, downloading an app or filling out a lead form, you earn a commission.
The commission structures are different for each affiliate program. Some pay per sale, some pay per lead generated, some pay recurring commissions etc.
Most programs have minimum payout thresholds like $50 before you can request a payout. The earnings directly get credited to your affiliate account when you hit the threshold for withdrawal.
As you can see, affiliate marketing provides a way to monetize your existing audience and also acquire new traffic sources. Next, let’s go through the step-by-step process to start your affiliate marketing business from scratch.
How to Start Your Affiliate Marketing Business
Here is an overview of the key steps beginners need to take:
1. Choose a Profitable Niche
The niche you pick plays a big role in determining your earning potential as an affiliate.
Some niches have much higher paying affiliate programs and buyer intent than others. Make sure to choose a niche you’re genuinely interested in as well.
For beginners, some good niches to consider include:
Wealth/personal finance - Products like investing platforms, trading courses, money management tools etc. Tend to have buyers with high lifetime value.
Software - Includes sub-niches like VPN, email marketing, project management, cloud storage software etc. Recurring subscription commissions.
Online courses & education - Fastest growing sub-niche is courses teaching digital skills like coding, marketing, design etc. Good for referral commissions.
Health/fitness - Diet plans, workout programs, supplements etc. Huge market potential.
Travel - Airline booking offers, hotel comparison sites, travel deals etc. Massive target audience.
Make sure to do keyword research to assess search volume and competition before finalizing your niche. Some tools you can use include Google’s Keyword Planner, SEMRush, Ahrefs etc.
2. Find Relevant Affiliate Programs
Once your niche is selected, find affiliate programs that match it. Use affiliate networks like ShareASale, Impact, CJ Affiliate, Rakuten etc to find programs.
You want to look for programs that offer:
- High commission rates - Look for at least 30% per sale commission
- Recurring commissions - Get paid repeatedly for ongoing customer subscriptions
- High ticket products - Bigger commissions for promoting premium courses & software
- Good cookie duration - Cookie period of at least 30 days to get credit for conversions
- High demand offers - Promote products people actually want and need
Make a list of your top 10-15 affiliate program picks to apply for approval. Having a diverse portfolio of programs ensures consistent income even if some products underperform.
3. Build Your Website
To promote affiliate offers, you need a platform to host your content. Your website will become the online hub for your affiliate business.
The most beginner friendly website builder recommended is WordPress.org. It’s easy to use, SEO-friendly and has thousands of designs and plugins.
Some other popular options include Squarespace, Wix and Webflow. Avoid free website builders like Weebly or Wix as they limit marketing features.
When setting up your site, focus on creating quality content around your niche that helps people. You can write “best of” articles, reviews of affiliate products, tutorials etc.
Make sure to optimize your website for conversions with clear calls-to-action, lead capture forms, site-wide tracking etc so you can monitor affiliate revenue generated.
4. Focus on SEO
One of the top strategies for driving free and consistent traffic from Google is search engine optimization (SEO).
It involves optimizing website content for target keywords so you rank higher in search results and get more visitors.
Conduct keyword research to find low competition keywords related to your offers and write optimized articles around them. Include keywords in titles, Meta descriptions, content, image alt text etc.
Other aspects like site speed, technical SEO, backlinks and user experience also impact search rankings.
It takes 3-6 months for a new site to start ranking so have patience. SEO traffic converts very well for affiliate marketers.
5. Leverage Social Media
Social platforms like Facebook, Instagram, Twitter, Pinterest etc are powerful traffic sources for affiliate marketers.
Over 4.5 billion people use social media worldwide. Identify 1-2 platforms most relevant for your target audience and create branded accounts.
Share affiliate links, promotions, discounts and content from your niche to engage followers. Run paid ads to affiliate offers as well.
Add social sharing buttons on your site to help content go viral. Participate in relevant groups/forums and provide value to build a following.
6. Use Email Marketing
Email marketing involves collecting leads through opt-in forms and sending them broadcasts like newsletters, promotions etc.
Segment your lists by interest and send targeted broadcasts when you have new offers to promote.
Send 2-4 emails per month and focus on delivering value - not just sales pitches. Share affiliate coupons, product launches, content etc via emails.
Popular email marketing platforms include ConvertKit, MailChimp, GetResponse etc.
7. Analyze Affiliate Earnings
A key aspect of running a successful affiliate business is tracking your campaigns to see what’s working.
When you join an affiliate program, you’ll get access to their affiliate dashboard that shows your clicks, impressions, conversions, commissions etc.
Use link tracking software like Voluum or Redtrack to track clicks from various traffic sources. Insert your affiliate links into landing pages and track conversion rates.
Analyzing this data will help you double down on high performing campaigns and cut out what doesn’t work.
Take time to test different affiliate products, landing pages, and promo angles to see what resonates most with your audience.
8. Outsource Complex Tasks
Focus on your core strengths and outsource tasks like technical work, content creation etc.
Hiring freelancers can help you scale the business faster. Some skills worth outsourcing include:
- Content writing
- Graphic design
- Web development
- Video creation
- Data entry
Verify freelancer skills and reviews before hiring. Start with fixed price projects vs hourly rates. Sites like Upwork, Fiverr, Freelancer make it easy to find experts.
9. Diversify Traffic Sources
Don’t rely solely on one traffic source like SEO or email marketing. Diversify across multiple channels to minimize risk.
Some additional traffic methods worth exploring include:
- Launching a YouTube channel
- Guest posting
- Influencer marketing
- Affiliate partnerships
- Pinterest marketing
- Podcast sponsorships
- Retargeting campaigns
Look for low hanging fruit opportunities to generate sales and scale up. For example, a YouTube video targeting a buyer keyword can get traction quickly vs months of SEO efforts.
Keep testing new traffic strategies and double down on what works. This diversification will help you build a sustainable business.
What is the Process to Earn Affiliate Commissions?
Now that you understand how to start an affiliate marketing business, let’s summarize the commission earning process:
Step 1 - Promote affiliate links
Use your website, emails, social media etc to promote affiliate offers. Make sure to disclose your relationship as per FTC guidelines.
Step 2 - Visitor clicks your affiliate link
When someone clicks your affiliate link, they’re identified as your referral for a certain cookie period.
Step 3 - Visitor takes action
If they make a purchase or complete the action you’re promoting within the cookie period, it’s attributed as your conversion.
Step 4 - You earn commission
When your referral completes the desired action, you earn an affiliate commission based on the terms of that program.
Step 5 - Commission processed
When you hit the minimum payout threshold, the affiliate network will process your payment so you can withdraw your earnings.
This entire process happens on autopilot. You can keep driving more traffic and generate commissions indefinitely with one campaign.
That’s the beauty of affiliate marketing - set up the system properly in the initial months and keep scaling it to earn passive income over the long-run.
How Much Money Can You Make with Affiliate Marketing?
Now for the question everyone wants to know - how much can you earn with affiliate marketing? Here are realistic expectations:
Within Your First Month
Don’t expect to make a full-time income within your first month starting out. Building an affiliate business takes consistency and patience.
On average, beginners earn anywhere from $0 to $500 in their first month.
Depending on the niche you pick and effort you put in, some beginners even cross $1000+ within a few weeks.
But starting out, focus less on income goals and more on providing value and building assets.
Within 6-12 Months
Give yourself at least 6-12 months to learn the ropes of affiliate marketing and optimize your campaigns.
During this stage, you’ll still be in the red or barely breaking even after covering your costs.
On average, you can expect to earn $500 - $2000 per month within your first year.
Again - results vary wildly based on your work ethic, niche selection and ability to reinvest profits into growth.
2-3 Years In
After the initial investment period of 1-2 years, your earnings start to compound if you play your cards right.
At this stage, you likely have multiple traffic sources bringing in sales on autopilot.
A reasonable income expectation after 2-3 years is anywhere from $5000 - $15,000+ per month. Some power affiliate marketers earn over 6-7 figure incomes.
But this level of success requires continuous learning and optimization over the years. Your income reflects the value you provide.
The affiliate marketing business model is scalable. As you gain more experience and assets, you can keep increasing your income provided you manage campaigns intelligently.
Affiliate Marketing Pros and Cons
Let’s summarize the main advantages and disadvantages of the affiliate marketing business model:
Affiliate Marketing Pros
Low startup costs - Can start with just a domain, hosting, website theme. Low overhead expenses overall.
Passive income potential - Earn commissions continually from old content and campaigns.
Performance-based - Only get paid commissions for sales generated vs a fixed salary.
Flexibility - Work remotely from anywhere with laptop and internet access.
Uncapped earning potential - No limits on how much you can potentially earn.
Affiliate Marketing Cons
Commissions fluctuate - Rates and payouts depend on the advertiser. Can’t control policy changes.
Delayed earnings - Takes consistent effort before seeing big paydays.
High failure rate - Over 90% of new affiliate marketers give up too soon. Requires perseverance.
Stiff competition - Popular niches have lots of marketers competing for traffic. Have to differentiate.
Policy compliance - Need to follow FTC disclosure guidelines and program policies.
As you can see, there are plenty of advantages with the affiliate model for earning income online passively. But you need realistic expectations and be willing to hustle at the start.
Is Affiliate Marketing Right For You?
So should you start an affiliate marketing business? Here are a few key considerations:
Your Commitment Level
How much time per week can you devote realistically? This will determine what’s achievable. You’ll need 10-30 hours a week early on.
Your Financial Situation
What’s your current income? Do you need fast results or have existing funds to reinvest over 6-12 months? Managing expectations is key.
Your Risk Appetite
Affiliate marketing has lower risk than other models but still requires perseverance. Are you willing to power through hurdles at the start?
Your Skills
Assess strengths like sales, writing, social media marketing, analytics etc. Outsource weak areas. Fit the model to your abilities.
If you have 10+ hours per week to invest, can sustain some initial losses, willing to learn constantly and optimize campaigns - affiliate marketing could be a great fit!
Getting Started with Affiliate Marketing - Your Next Steps
Here are some recommended next steps to kickstart your affiliate marketing business:
Research niches deeply and pick one that resonates
Check Google Trends and keyword tools to validate demand
Apply to relevant affiliate programs in the niche
Build your affiliate website and start creating content
Implement basic on-page SEO elements to get indexed
Create social media accounts to start building a following
Set up basic email list opt-in forms to capture leads
Track campaigns extensively to gather data and optimize
Reinvest early profits into growth - outsourcing, ads etc
Network with other affiliate marketers to learn and collaborate
Stay patient and focused on providing real value to your audience
Within 6-12 months, you’ll gain momentum and have a solid foundation for your business. Be consistent and keep scaling your assets and traffic over time.
Use this guide as a blueprint and take it one step at a time. Don’t overcomplicate the process initially.
The keys are picking a profitable niche, driving targeted traffic to affiliate offers and tracking everything to optimize results.
If you found this guide useful, please share it with anyone looking to start affiliate marketing. I hope it gives beginners a real blueprint to start seeing success. Feel free to reach out if you have any other questions!