What is affiliate marketing and how does it work?

What Is Affiliate Marketing and How Does It Work? [Guide]

Monetizing your website and earning money while you sleep is possible with affiliate marketing. This proven business model offers a convenient and flexible way to generate passive income without the headaches of customer support, product creation, or warehousing.

The beauty in affiliate marketing lies mostly in its accessibility. Anyone with a website or social media presence can start earning commissions by promoting products they believe in! You don’t even need a website or social presence to get started. Just start with a website!

In this guide, I’ll break down exactly what affiliate marketing is, how affiliate programs work, and the step-by-step process to start earning commissions through your website.

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What is affiliate marketing?

Affiliate marketing is a performance-based marketing strategy where individuals earn commissions by promoting products or services. Affiliates use unique tracking links to direct traffic to a business’s website. When a sale or other conversion occurs, the affiliate receives a percentage of the revenue. Common platforms include Amazon Associates and ClickBank.

So, when a visitor comes to your website, clicks on your affiliate link, and purchases the product or service you’re promoting, you’ll receive a percentage of the profit.

Affiliate marketers make a commission for every product or service they help to sell.

How does affiliate marketing work?

Affiliate marketing operates on a revenue-sharing model. Here’s the basic process of how affiliate marketing works:

  1. You sign up for an affiliate program
  2. You receive a unique tracking link
  3. You promote products using your affiliate link
  4. A visitor clicks on your affiliate link
  5. The visitor makes a purchase (or completes another qualifying action)
  6. The merchant tracks this conversion through your affiliate ID
  7. You earn a commission on the sale

For example, if you run a fitness blog and join Amazon’s affiliate program, you might write an article about “Best Home Workout Equipment.” Within that article, you’d include your unique Amazon affiliate links to the products you’re recommending. When readers click those links and make purchases, you earn a percentage of each sale.

How are affiliate marketers paid?

While the standard payment model is commission on sales, there are a few different compensation structures in affiliate marketing:

Pay Per Sale (PPS) – The most common model, where you earn a percentage of the sale amount when someone purchases through your link.

Pay Per Click (PPC) – You get paid for driving traffic to the merchant’s website, regardless of whether a sale occurs.

Pay Per Lead (PPL) – You earn when visitors complete a specific action, such as signing up for a free trial, downloading an ebook, or joining an email list.

Commission rates vary widely depending on the industry, product price point, and program. Physical products typically offer commissions of 5-15%, while digital products and services can pay 30-50% or even more.

Payment thresholds and schedules differ between programs. Some pay monthly, others bi-weekly, and some only when you reach a certain earnings threshold (often $50 or $100).

Key Players in Affiliate Marketing

Understanding the different roles in the affiliate marketing ecosystem is crucial for success. Here are the main players involved:

Merchants (also known as Sellers or Retailers) – These are the product creators or service providers who allow affiliates to promote their offerings in exchange for commissions.

Affiliates – These are the marketers (like you) who promote merchant products through various channels such as blogs, social media, or email marketing.

Customers – These are the end consumers who discover products through your affiliate content, click on your affiliate links, and make purchases.

Affiliate Networks – These platforms connect merchants with affiliates, handling tracking, reporting, and payment processing. Popular networks include ShareASale, CJ Affiliate, and ClickBank.

What are the best niches for affiliate marketing?

Here are the best affiliate marketing niches, according to data from Authority Hacker:

Affiliate Marketing Income Table
Niche Average Monthly Income
Education & eLearning $15,551
Travel $13,847
Beauty & Skincare $12,475
Finance $9,296
Technology $7,418
Digital Marketing $7,217
Health & Fitness $7,194
E-commerce $5,967
Home & Garden $5,095
Sports & Outdoors $4,849
Entertainment $4,416
Food & Nutrition $3,015
Fashion $2,049
Personal Development $1,566
Parenting & Family $1,145
Arts & Crafts $1,041
Pets & Animals $920
Sustainability & Environment $555

How to Start Affiliate Marketing

Before you jump into affiliate marketing, it’s important to plan your journey ahead. For instance, do you need to create a website or research which affiliate programs you should join?

Rushing into these things can leave you overwhelmed, and you’ll end up promoting the wrong product to your audience, which will ultimately lead to poor results and low revenue.

how-affiliate-marketing-works

So, follow this proven 6-step method to start affiliate marketing.

Step 1: Find the Right Niche

electing the right niche is foundational to your affiliate marketing success. The ideal niche should:

  • Align with your interests or expertise
  • Have significant search volume (audience demand)
  • Feature products with decent commission rates
  • Have reasonable competition levels

I recommend following your genuine interests when selecting a niche. Why? Because creating consistent, high-quality content becomes much easier when you’re knowledgeable and passionate about the topic.

For example, rather than targeting broad categories like “food” or “technology,” narrow down to specific niches like “keto diet recipes” or “WordPress plugins for small businesses.”

To validate your niche, use keyword research tools like Semrush to check search volumes:

keyword research overview semrush

Tools like Semrush show you the search volume for keywords, which tells you how many people are looking for the search term each month. It also provides information about the competition level through keyword difficulty.

Another way of finding your niche is by looking at affiliate network websites (like ShareASale or CJ Affiliate). They list different merchants in various categories. You can work your way backward by exploring categories with many merchants, and then selecting a niche that’s right for you.

Step 2: Create an Affiliate Website

After finding a niche you’re interested in, it’s time to create a website if you don’t have one already. You can start building a website in no time these days.

Once you’ve identified your niche, you’ll need to build a website if you don’t already have one. Your website will serve as your primary platform for content publishing and affiliate promotion.

Here are the essential components you’ll need:

As you’re filling your website with content, there are some important pages that you need to have a successful affiliate site. That includes:

  • About Us – Tell a little about yourself and let your audience get to know you
  • Disclaimer – Since you’ll be using affiliates to earn money from your site, many affiliate agreements require you to use a disclaimer so that your readers know you’re going to earn a commission if they click.
  • Contact Us – Provide a contact us form where people can get in touch with you
  • Privacy Policy – It’s important to disclose how you’ll be collecting and using your visitors’ information in order to comply with privacy laws
  • Terms of Service – Tell your visitors about trademarks and copyrights on your site

Pro Tip: Keep your startup costs low by following my guide on how much it costs to build a website. Many successful affiliate marketers start with less than $100 in initial investment.

Step 3: Choose Products to Sell

With your website ready, it’s time to select products that align with your niche and audience needs. There are two primary approaches to finding affiliate offers:

Direct Merchant Programs – Many companies run their own affiliate programs. For example, if you use MonsterInsights for WordPress analytics, you can join our affiliate program and earn by recommending the plugin to your readers.

affiliate-programs

Affiliate Networks – These platforms connect you with thousands of potential merchants. Popular networks include:

  • Amazon Associates
  • ShareASale
  • CJ Affiliate
  • ClickBank
  • Awin

I recommend starting with 3-5 quality products rather than promoting dozens of random items. By focusing on a few excellent offers, you can create more in-depth, valuable content around them.

Setting up an Amazon Affiliates shop? Here’s an Amazon Affiliates link tracking guide.

Or, there are other affiliate networks you can select like ClickBank, ShareASale, and more.

Step 4: Produce High-Quality Content

Content is the engine that drives affiliate marketing success. Without compelling, valuable content, even the best affiliate products won’t generate great commissions.

Your content should accomplish a few different critical goals at once:

  • Provide real value to your audience beyond simple product pitches
  • Address specific problems or questions your readers are searching for
  • Establish your authority and trustworthiness in your niche
  • Naturally incorporate affiliate recommendations without feeling forced

When creating content that converts, aim for an approach that feels like helpful advice from a knowledgeable friend rather than an obvious sales pitch. Share your personal experiences with products, be transparent about pros and cons, and don’t shy away from mentioning alternatives when appropriate.

Most effective content types for affiliate marketing:

  • Product reviews and comparisons – Detailed analyses that help readers make informed buying decisions
  • Best-of lists – Curated collections like “10 Best Running Shoes for Flat Feet” that attract high-intent searchers
  • Tutorial guides – Practical how-to content that naturally incorporates affiliate products as part of the solution
  • Resource pages – Evergreen reference points featuring your top recommendations in one convenient location

Finding fresh content ideas requires doing some great research. Here are a few things to try:

  1. Competitor Analysis – Study what’s already ranking well in your niche to identify gaps and opportunities
  2. Google Alerts – Set up notifications for trending topics with Google Alerts in your niche to stay current
  3. Keyword Research – Discover high-intent search terms that indicate commercial interest
  4. Community Research – Explore forums like Reddit and Quora to identify common questions and pain points

Pro Tip: Quality always trumps quantity in affiliate content marketing. One thoroughly researched, comprehensive guide will generally outperform several rushed, shallow articles in both traffic and conversion metrics.

As you develop your content calendar, aim for a mix of timely, trend-based content and evergreen pieces that will continue driving traffic and commissions for years to come. I’ve found that updating and refreshing older content regularly can also breathe new life into established pieces, improving their search rankings and conversion potential.

Remember that the most successful affiliate content addresses a specific need and naturally guides readers toward a product that genuinely helps solve their problem. When you consistently deliver this kind of value, you build the trust that forms the foundation of affiliate marketing success.

Step 5: Drive Traffic to Your Site

Creating great content is just the beginning. You need to attract visitors to your affiliate site through various traffic sources:

Search Engine Optimization (SEO) – Optimize your content to rank in Google search results. Organic visibility can make or break your affiliate site!

Email MarketingBuild an email list to notify subscribers about new content and special affiliate offers.

Social Media – Share your content on platforms where your target audience spends time.

Paid Advertising – Consider using Google Ads or social media ads to drive targeted traffic, especially for high-commission products.

Step 6: Convert Your Visitors

The final step is optimizing your site to turn visitors into customers who click your affiliate links and make purchases. Here are a few proven conversion strategies you can try:

Use Countdown Timers

You can add a countdown timer on your website to create urgency. You could even test different affiliates in a floating bar countdown timer or popup to see which affiliate performs the best.

SeedProd countdown timer landing page

Use Social Proof

Using social proof is another way to help visitors complete a purchase. For example, you can show a recent sales notification popup with TrustPulse on your website to provide proof and boost your conversions.

Trustpulse example

Use Smart CTA Placement

Your call to action (CTA) placements throughout your content will also play an important role in converting users. You should add them where as many visitors as possible will see them.

A safe bet is to always add them near the top of the page. If your website is on WordPress, you can also install MonsterInsights to see your average scroll depth:

average scroll depth

For more ideas, check out our guide on 18 ways to make more money from your existing traffic.

Now that your affiliate marketing website is set up and you’ve got the basics of marketing down, you should track the performance of your affiliate links. By understanding which links get the most clicks and generate the most revenue, you can focus your efforts on what’s working.

The best tool to track your affiliate links is MonsterInsights. It’s the best Google Analytics plugin for WordPress and helps you easily measure how your affiliate marketing efforts are doing.

MonsterInsights Home Dashboard

Using MonsterInsights, you can track affiliate links super easily, and you don’t have to touch your Google Analytics code.

Once you’ve installed and configured MonsterInsights, you can view your affiliate link performance report right inside your WordPress dashboard:

affiliate-link-tracking-report

This report shows your best-performing affiliate links and their click counts, helping you identify which products resonate with your audience. At the same time, you’ll also get to know which affiliates don’t do as well, so you can either optimize them for better performance or replace them with other affiliates.

For a full tutorial on setting up your affiliate link tracking with MonsterInsights, check out How to Set Up Affiliate Link Tracking in WordPress.

Pro Tip: Managing multiple affiliate links across your site can be challenging. I recommend using PrettyLinks to transform long, unattractive affiliate URLs into clean, branded links. This plugin also centralizes link management, allowing you to update all instances of a link from one location.

That’s it!

I hope you found this guide to affiliate marketing helpful! If you’re ready to start your affiliate marketing journey, remember that consistency and providing genuine value to your audience are the keys to long-term success.

For a full affiliate marketing website tutorial, check out How to Create an Affiliate Marketing Website [WordPress].

Not using MonsterInsights yet? Get started today!

Finally, stay connected with us on YouTube for the latest Google Analytics and WordPress tips and tutorials.

Frequently Asked Questions

Is affiliate marketing worth it?

Yes, affiliate marketing remains highly profitable. The industry continues to grow, with Astute Analytics expecting the market size to double over the next few years, reaching nearly $40 billion by 2031. While competition has increased, so have the opportunities, especially in emerging niches and for content creators who focus on providing genuine value.

How much do affiliate marketers make?

Affiliate marketing income varies widely. According to Authority Hacker, average affiliate marketers make over $8,000 monthly and experienced marketers make nearly 10x more than beginners. Your earnings will depend on your niche, traffic volume, conversion rates, and the commission structure of your chosen programs.

How do I find good affiliate programs to join?

The best approach is to start with products you already use and trust. Search for “[product name] + affiliate program” to see if they offer one. You can also explore affiliate networks like ShareASale, CJ Affiliate, and Amazon Associates to discover programs in your niche. Evaluate programs based on commission rates, cookie duration, payment terms, and the quality of their products.

Do I need a website for affiliate marketing?

While a website is the most common platform for affiliate marketing, it’s not strictly necessary. Some affiliates successfully promote products through YouTube channels, Instagram accounts, or email newsletters. However, having your own website gives you more control, better tracking capabilities, and the ability to build a long-term asset that you own completely.

Is affiliate marketing passive income?

Affiliate marketing can become semi-passive over time, but it requires significant upfront work. Creating content, building an audience, and optimizing your strategy all demand active effort. Once established, some aspects become more automated, but regular maintenance and updates are still necessary for continued success.

How do I disclose affiliate relationships?

In most countries, including the US (per FTC guidelines), you must clearly disclose affiliate relationships to your audience. This typically means including a disclosure statement at the beginning of content with affiliate links, stating that you may earn a commission from purchases made through your links. Many affiliate programs also require these disclosures in their terms of service.

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