What is Affiliate Marketing ? Definition and FAQ

Affiliate marketing is the most profitable way to make money online. Want to understand what is Affiliate marketing? Keep reading to learn everything about this popular passive income method.

Whenever I publish my income report or share how I earn money with my blog, I often use the term “affiliate marketing”. Bloggers and internet marketers who have been into online marketing for years are familiar with affiliate marketing, and also with the fact that it is the most lucrative way to earn money online.



In this article, I will share the basics of affiliate marketing and all the details you need to know in order to understand how affiliate marketing works.

What is affiliate marketing and how does it work?

Affiliate marketing is one of the oldest forms of marketing wherein you refer someone to any online product and when that person buys the product based on your recommendation, you receive a commission. This commission varies from $1 to $10,000 depending on what product you are promoting.

Here is how affiliate marketing works in 4 simple steps:

  1. You join an affiliate program (Here is a list to get started)
  2. You pick a product to promote (You will get a unique affiliate link)
  3. You share the link via Social media, Blog, YouTube videos, Facebook ads or any other form
  4. When someone makes a purchase, you earn a handsome affiliate commission.

The various stages of affiliate marketing

So, in simple words:

Many online companies who sell products such as shoes, web-hosting spaces, or some other service, usually offer an affiliate program. You can simply sign up for the program and get your unique tracking link. Now, whenever you are writing about their product, you can simply use this special tracking affiliate link to recommend the company’s site.

If your readers buy anything, you will get a commission.

Every affiliate program has a set TOS. For example, many of them offer a 60-day cookie period, which means that if a visitor uses your special affiliate link to land on the sales page of the site and buys something within the next 60 days, you will be entitled to the sale’s commission.

Affiliate marketing terms

Here are some of the common terms associated with affiliate marketing:

  • Affiliates: Publishers like you and me who are using affiliate program links to promote and make sales.
  • Affiliate marketplace: There are many marketplaces like Shareasale, CJ, and Clickbank. These work as central databases for affiliate programs in different niches.
  • Affiliate software: Software used by companies to create an affiliate program for their product.
  • Example: iDevaffiliate.
  • Affiliate link: Special tracking link offered by your affiliate program to track the progress of your affiliate promotion.
  • Affiliate ID: Similar to the affiliate link, but many affiliate programs offer a unique ID which you can add to any page of the product site.
  • Payment mode: Different affiliate programs offer different methods of payment.
  • Example: Cheque, wire transfer, PayPal, and others.
  • Affiliate Manager/OPM: Many companies have dedicated affiliate managers to help publishers earn more by giving them optimization tips.
  • Commission percentage/amount: The amount or percentage you will be receiving in affiliate income from every sale.
  • 2-tier affiliate marketing: This is a great way of making money from an affiliate program. With this method, you recommend that others join affiliate programs, and you receive a commission when a sub-affiliate makes a sale (similar to MLM or multi-level marketing). This income is also known as a sub-affiliate commission.
  • Landing pages: A unique product sales or demo page used for the purpose of increasing sales. Most of the programs that you will be promoting have many landing pages, and you can run A/B testing to see which pages convert best for you.
  • Custom affiliate income/account: Unlike a generic affiliate account, many companies offer custom affiliate income to people making the most affiliate sales for them.
  • Link clocking: Most of the affiliate tracking links are ugly. Using a link clocking technique like URL shorteners, Thirsty Affiliates, etc., you can turn ugly links into links that can be read and understood by your readers.
  • Custom coupons: Many programs allow affiliates to create custom coupons which are also used to track sales. Custom discount coupons help you to increase affiliate sales as well.

For companies offering an affiliate program, this is one of the best ways to receive free promotion, thus saving substantially on advertising.

For example, whenever you see coupons or discount links, most of the time these are affiliate links, and when you make a purchase, webmasters make money.

Affiliate Marketing: FAQ

At this point, you should have a basic understanding of what affiliate marketing is and how it works.

Now, let me answer some of the common questions asked by webmasters and marketers about affiliate marketing:

How much money you can make as an affiliate marketer?

“Limitless”.

There are affiliate marketers who are making millions of dollars a month via affiliate marketing. I personally make more than $30000/month from Affiliate marketing. Below you could see a screenshot of my earnings from one such affiliate program:

The various stages of affiliate marketing

The key here is how you are approaching the whole process. Are you using a blog or using PPC to market affiliate products. The one that I have been using from past 10 years, is via blogging. This has been the most effective one so far.

Is it important to have a blog for affiliate promotion?

Not necessarily, but a blog is really the best promotional tool. With that said, you can always use methods such as PPC or advertising to promote a product. This is more like hit-and-run affiliate marketing, however. The best way to make the most out of your affiliate marketing opportunities is to have a blog and use it for hard and soft promotion. Learn how to start a blog here.

How much does it cost to join an affiliate program?

There is no charge for joining an affiliate program, however, your total cost depends on what promotion technique you are using. For example, a blog post doesn’t cost a dime, but PPC marketing, email marketing, and advertising come with various price tags.

What qualifications do I need to become an affiliate marketer?

There is literally no qualification required to become an affiliate marketer, though having good copywriting skills and marketing skills will be an added advantage.

Is affiliate marketing harmful or illegal?

No, it is neither harmful nor illegal, as you will simply be using the affiliate link provided to you rather than a direct link to link to any site.

How do I find an affiliate link for any product?

Not all companies offer an affiliate program, of course, but for those that do offer affiliate programs, you can check their website for related information. When searching, be sure to check the company’s FAQ page if they have one.

Another way to find this information is to do a simple Google search. For example, one could place the following phrase into Google Search: “(product name) + affiliate program”. (Replace “product name” with the name of the product you are promoting.) There is an interesting chrome addon called Affilitizer is available which makes this process easy.

This should bring you to a landing page. Many companies use an affiliate marketplace like ShareASale, CJ, or Clickbank. These are free to use and you can create a free account.

How do I find new products to promote?

Affiliate marketplaces such as those mentioned above are the best places to start your affiliate marketing research. You can browse your niche and see the top performing affiliate programs.

Alternatively, you can keep an eye on blogs in your niche and see which products they are promoting and what methods they are using.

Affiliate marketing and AdSense: Can we use both?

Yes, you can use both as affiliate marketing does not violate any AdSense TOS. In fact, for me, affiliate marketing works better than Adsense, and that is one reason you see fewer AdSense ads here at Dollarmind



Here at Dollarmind, I and many guest authors have covered some of the best guides to help you to understand in depth about getting started, and some of the pros and cons. Here is a list from our affiliate marketing archive which will help you to get started:

I would also highly recommend you purchase ShoutMeLoud’s The Affiliate Marketing eBook. This a comprehensive guide on getting started with affiliate marketing.

I hope this beginner’s guide to affiliate marketing will help you get started. If you have any additional questions, feel free to ask me in the comments section below.

Be sure to join my email newsletter to get more similar tips and updates.

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