What Is Affiliate Marketing? (Simple & Complete Explanation)


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What is affiliate marketing?

In this video I tell you everything you need to know about affiliate marketing to help you understand it like the back of your hand.

We then switch over to a screenshare as we delve into a little more detail with affiliate marketing and I show you how it works in the real world.

So let’s get straight into it!

Affiliate marketing is quite simply a process where you make money (commissions) by referring buyers to sellers. That’s really it.

So if your friend is selling a laptop for $100 and asks you to help him and you agree, you have just become an “affiliate” for your friend so to speak.

Your friend can pay you a fixed amount or a percentage amount commission for helping him find a buyer.

So affiliate marketing benefits both buyers and sellers.

In this example, it benefits you friend because:

✔ your friend doesn’t have to go out and look for a buyer, and
✔ your friend only pays IF he finds a buyer. In other words, your friend doesn’t have to pay a marketing team a fixed amount each month with no guaranteed sales. Your friend will only pay you the portion of the profits he makes – so if there is no buyer, he pays absolutely nothing.

In this example, YOU (as the affiliate) benefit because:

✔ you don’t have to carry any inventory costs – you simply find buyers and tell them to message your friend and your friend sells them from there.

Also, your friend allowed you to be an “affiliate” and agreed to pay you a commission if you found a buyer. He therefore had an “affiliate program” open.

In the real world, the same thing happens with most of the companies in the world, even the largest ones you can think of like Walmart, Amazon, Nike, and so on.

They too have “affiliate programs” open which allows YOU to sign up and promote their products. If you refer buyers to their products, YOU will make a commission, easy as that.

Taking Amazon as an example, you can sign up to their affiliate program and promote any of the products they have available.

👉 Amazon Associates (affiliate program) signup:

Once you sign up, simply select the product or products you want to promote, copy your affiliate link, and you are ready to now promote this link anywhere.

If someone clicks on YOUR link, YOU will make a commission. Know anyone interested in some Amazon products? 😉

Now Amazon does pay slightly lower commission rates. To see the percentage commissions that they pay out, check out this link:

👉 Amazon Associates commission rates:

So it pays anywhere from 1-10% commission rates, which is pretty low for a $15 product for example.

That being said, the numbers DO add up, and the Amazon affiliate program has an awesome perk that allows you to get credit for ANY Amazon item you sell as long as the buyer clicks through to Amazon via YOUR link.

You might still want something that pays a little higher and that’s understandable.

If you just head over to Google and type in “top affiliate networks”, you will see a list of dozens if not hundreds of different affiliate programs you can sign up for.

ClickBank I would say is the most popular and easiest affiliate program to get into, so if you are looking for 50-75% commission rates, this is the perfect network for you to start with.

👉 ClickBank affiliate network signup:

Some of their products are online-based and it’s a bit harder to sell them since they don’t have that Amazon reputation and might be newer on the market and so on.. which is why they are paying higher commission rates in the first place.

However depending on your business model, you might find it more lucrative to find a good product that matches your niche with ClickBank that pays out a higher commission rate than Amazon does.

But there is one other thing you can do with affiliate marketing where it’s even more appealing than the high commission payout rates we just went over.

With affiliate marketing, you can promote products that pay a monthly recurring revenue if you can get clients that stay on the corresponding subscription plan.

For example Unbounce or ClickFunnels, which are online software that allow you to build out landing pages, will pay out up to 40% recurring revenue for every client that you refer that stays on the plan.

If you get someone to sign up for the ClickFunnels $97/month plan, you’ll get paid $38.80 USD/month for every month that client stays signed up.

Their next plan starts at $297/month, so if you get just 30 people to sign up for this plan, you’ll be making $3,540/month on autopilot… nothing else required of you.

That’s it!

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