What Is Affiliate Marketing? Everything You Need to Know in 2023

Affiliate marketing is a great way to generate some additional income. You can become an affiliate marketer and recommend other brands, or you can start an affiliate program to start promoting your own existing brand.

This complete guide will walk you through how to become an affiliate marketer who promotes other brands. We’ll go over how to start making money in affiliate marketing, online marketing tips to help you succeed, and tricks to help you earn more money.

Smart entrepreneurs running a thriving business know there’s always more they can do to make that business grow. One way of taking things to the next level is by finding an alternate stream of income.

Table of contents

• What is affiliate marketing?
• How affiliate marketing works
• Types of affiliate marketing
• Pros and cons of affiliate marketing
• How do affiliate marketers make money?
• How to find affiliate programs?
• Tips to promote your affiliate offer
• Examples of successful affiliate marketers in India
• Affiliate marketing FAQ

What is affiliate marketing?

Affiliate marketing is a process where publishers earn a commission by using an affiliate link to promote a product or service made by another retailer or advertiser. The affiliate partner is rewarded a payout for providing a specific result to the retailer or advertiser.

Typically, the result is a sale. But some affiliate marketing programs can reward you for leads, free-trial users, clicks to a website, or getting downloads for an app.

Most affiliate programs are free to join, so you don’t have to worry about high startup costs. Done right, an effective affiliate marketing strategy can go from side hustle to profitable online business idea by netting you a healthy income.

How affiliate marketing works

Affiliate programs work by allowing individuals (affiliates) to promote and sell products or services of a company in exchange for a commission on each sale.  The affiliate earns a commission each time someone makes a purchase through the unique affiliate link associated with their recommendation.

Here’s how it works at a high level:

• An affiliate shows an ad or a link for Store Z on their website, blog, or social network.
• A customer clicks the unique affiliate link.
• The customer makes a purchase in Store Z.
• The affiliate network records the transaction.
• The purchase is confirmed by Store Z.
• The affiliate gets paid a monetary commission.

Commission rates for affiliate sales vary depending on the company and the offer. On the low end, you’ll earn about 5% of the sale, but with some arrangements, you can earn as much as 50%, usually when promoting a class or event. Some affiliate marketing programs provide a flat rate per sale instead of a percentage.

Types of affiliate marketing

Affiliates always carry a bit of mystery—you never know if the person has ever really used the product or if they are just promoting it for the money. Both cases still exist today.

It wasn’t until 2009 when renowned affiliate marketer Pat Flynn broke down the different types of affiliate marketers into three groups. Understanding these types of affiliate marketing can show you the different ways people make money online in this space, regardless of your moral compass.

1. Unattached affiliate marketing

The first type of affiliate marketing is referred to as “unattached,” or when you have no authority in the niche of the product you’re advertising, i.e., There’s no connection between you and the customer. This often involves running pay-per-click (PPC) advertising campaigns with the affiliate link and hoping people will click it, buy the product, and earn a commission.

Unattached affiliate marketing is attractive because you don’t need to do any legwork. Affiliate marketing businesses rely on reputation and trust with a target audience online. Some affiliate marketers don’t have the time or desire to build those relationships, so this type of marketing is their best option.

“Unattached affiliate marketing isn’t a genuine business model, it’s for people who just want to generate income,” explains Elise Dopson, founder of Sprocker Lovers. “Our focus for Sprocker Lovers is building community and providing free education around a particular niche first, which in our case is the sprocker spaniel dog breed, and selling second.” 

2. Related affiliate marketing

Related affiliate marketing is the practice of promoting products and services you don’t use but that are related to your niche. An affiliate marketer in this case has an audience, whether it’s through blogging, YouTube, or another channel. A related affiliate marketer also has influence, which makes them a trusted source for recommending products, even if they’ve never used them before.

While related affiliate marketing can generate more affiliate income, it comes with the risk of promoting something you’ve never tried before. It could be the worst product or service ever, and you wouldn’t even know. It only takes one bad recommendation to lose the trust of your audience. If you don’t have trust and transparency, it’ll be hard to build a sustainable affiliate marketing business.

3. Involved affiliate marketing

Involved affiliate marketing refers to only recommending products and services the affiliate marketer has used and truly believes in. “Involved affiliate marketing is the way forward,” says Elise. “It’s rooted in trust and authenticity, which is best for your audience and business.”

In this type of marketing, an affiliate marketer uses his or her influence to promote products and services that followers may actually need, instead of paying to get clicks on a banner ad. It takes more time to build this type of credibility with an audience, but it’s necessary for building a sustainable business.

Elise explains that the involved approach makes advertising much easier for affiliate marketing partners: “You don’t have to hide behind expensive PPC ads and hope for clicks and sales. An organic Instagram Story or blog post about your experience with a product will go a long way.” Elise prefers this method because it’s honest and is “the only genuine way to become a trusted source on any topic.”

Involved affiliate marketing is the only genuine way to become a trusted source on any topic.

Pros and cons of affiliate marketing

Yes, affiliate marketing is worth it, given its growth in popularity. Statista estimates the affiliate marketing industry was worth $8.2 billion in 2022, up from $5.4 billion in 2017. It’s also a low- to no-cost business venture you can profit from immensely. But before diving in, consider the pros and cons of entering the affiliate marketing world.

Pros

While industry growth is a good indication of success, entrepreneurs also take this referral marketing route for a few other reasons.

Easy to execute

Your side of the equation involves simply handling the digital marketing side of building and selling a product. You don’t have to worry about the harder tasks, like developing, supporting, or fulfilling the offer.

Related Content:

• How to sell on Facebook
• How to sell on Instagram
• How to make money on Youtube

Low risk

Since there’s no cost to join affiliate programs, you can start making money with an established affiliate product or service without any upfront investment. Affiliate marketing can also generate relatively passive income through commission—the ideal money-making scenario. Though initially you’ll have to invest time creating traffic sources, your affiliate link can continue to deliver a steady paycheck.

Easy to scale

Successful affiliate marketing offers the potential to significantly scale your earnings without hiring extra help. You can introduce new products to your current audience and build campaigns for additional products while your existing work continues to generate affiliate revenue in the background.

Before you get too excited, know that great affiliate marketing is built on trust. While seemingly there are an endless number of products or services to promote, it’s best to only highlight those you personally use or would recommend. Even when a product interests you or fits within an existing hobby, becoming a great affiliate marketer for that product takes a lot of work.

Read more: The Beginner’s Guide to Setting Up an Affiliate Program for Your Shopify Store

Cons

Affiliate marketing also has a few disadvantages compared to other types of marketing campaigns. Before jumping in, let’s look at a few challenges you’ll face on your journey to affiliate marketing success.

Requires patience

Affiliate marketing is not a get-rich-quick scheme. It requires time and patience to grow an audience and gain influence.

You’ll want to test different channels to see which connect best with your audience. Research the most relevant and credible products to promote. Spend time blogging, publishing free content on social media, hosting virtual events, and doing other lead-generating activities on your marketing channels.

Commission-based

There’s no boss handing you a weekly paycheck as an affiliate marketer. Affiliate programs work on a commission basis, whether you’re paid by lead, click, or sale.

Companies use a temporary browser cookie to track people’s actions from your content. When a desired action is taken by someone, you receive the payout.

No control over program

Affiliates must obey the rules set by a company for their program. You need to follow their guidelines for what you say and how you present their product or service. Competitors must follow the same recommendations, so you have to get creative to differentiate yourself from the crowd.

How do affiliate marketers make money?

Affiliate marketing income spans a large spectrum. There are some affiliate marketers that will make a few hundred bucks per month and others that make six figures a year. The larger your following, the more money you can make as an affiliate marketer.

When you choose an affiliate program to promote, you’ll notice there are different payment models. Companies also call it a price model, payout model, conversion type, or another variation.

Regardless of the name, the payment model tells you what goals you will get paid for. If you’re promoting a software product, the action could be a free trial signup. For an affiliate marketer who promotes physical products, the goal will likely be a purchase.

Many programs run with last-click attribution, which means the affiliate who receives the last click before purchase gets 100% credit. However, this is changing, as programs improve attribution models and reporting. For example, you could share equal credit for a sale if there were multiple affiliates in a buyer’s conversion funnel.

Five common ways affiliates get paid include:

1. Pay per sale, where you earn a commission for each sale you make. It’s a common payout model for ecommerce offers.
2. Pay per action, which earns you a commission for a specific action. Many affiliate programs use this payout model because it’s broad and can be applied to different offers: a newsletter signup, a click, contact request, form submission, etc. 
3. Pay per install, where you are paid for every install generated from your website traffic. The goal of your content would be to promote mobile apps and software so that people download or install them
4. Pay per lead, which pays you every time someone signs up for something. It's a popular payout method because companies use it for sweepstakes, lead generation, and other types of offers. Cost per lead offers are common for beginners because it’s easier to generate leads than to sell products to an audience. 
5. Pay per click, a rare payout system where you earn commission on every click on your affiliate link. Pay per click programs are used by big merchants with a goal to build brand awareness. Customers don’t need to sign up or buy anything, just to visit the merchant’s website. 

How much you make depends on your affiliate niche. For example, research conducted by Shopify in 2021* found that the highest average commission rate ($70.99) was for business-related programs, while books and media and clothing categories earned just over $6 per commission. The maximum average commission we found was around $289.06 per sale.

How to find affiliate programs?

If you’re wondering how to get your feet wet in affiliate marketing, you’ve got a few options. Not every company offers affiliate programs—some businesses manage their own affiliate programs while others use an affiliate network.

An easy way to find affiliate programs is to visit an affiliate marketplace or platform. Browse your niche to find top-performing affiliate platforms. Here are some of the most popular ones in India:

• AffiliateFuture
• Admitad
• ClickBank
• vCommission
• ShareASale

Another option is to visit the websites of the products and services you use and like, to see if they have an affiliate program. Brands like Juicy Chemistry, selling organic skincare products have their own affiliate programs up and running. So if you are a user of their products or knowledgeable about skincare in general, this affiliate opportunity might be right up your alley.

Source: Juicy Chemistry

You also can take a more direct approach. Reach out to the owner of a great product you come across and see if they offer an affiliate marketing program. If they don’t, they might be happy to set up an arrangement with you, such as presenting you with a unique coupon code to share with your followers. The best deals often are found when you’re the first to inquire and have a relevant distribution channel, such as approaching the seller of a new fitness product if you’re a health and wellness blogger.

Affiliate marketing programs will have terms of service you need to follow, so read the fine print carefully. For example, your link usually will have a cookie with a specified timeframe, and some programs don’t allow you to purchase pay-per-click ads using the product or company’s name.

Choosing your first affiliate program

As you brainstorm products or browse through affiliate platforms, the most important criteria to keep in mind is that the product/service should be aligned with your audience, or the audience you hope to build. Ask yourself, is it something your target audience would find valuable? Does it fit with your area of expertise?

A food blogger probably wouldn’t promote beauty products, for example. A wide range of other products would make more sense, such as cookware, meal kits, gourmet ingredients, or even aprons.

Also, make sure the product or service you’re promoting is a fit for the platform you’re promoting it on. For example, home decor and clothing are well suited to image-heavy platforms like Instagram.

However, if you’re promoting purchases that need a more in-depth assessment, like software, your review may convert better on longer-form content platforms, like a blog or YouTube.

Which platforms to use for affiliate marketing?

There are several platforms to earn money through affiliate marketing, some of them are listed below:

• Your own website or blog
• Instagram
• YouTube
• Twitter
• Facebook
• LinkedIn
• Reddit
• Email

While any platform could be used for sharing your affiliate marketing links or codes, it’s useful to determine which platforms are the easiest to reach your largest audience with uncompromised trust, and where they are most likely to buy the products you are marketing.

For example, if you write well and have an audience seeking newsletters, email and your own blog may work out the best for you. Business products may be the easiest to market on Linkedin. If you have a large number of followers on Instagram, that should be the best place to begin. However, there’s no reason to limit yourself to any single platform.

Tips to promote your affiliate offer

 Source (DUE)

As mentioned earlier, affiliate marketing revenue eventually can become a form of passive income, but you still have to do some heavy lifting up front. The success of your program will depend on the quality of your recommendation.

To make a convincing recommendation, it’s best to get personal. Share your experience in your blog, social media post, or video. If you’re writing a personal review, give a candid opinion based on your experience with and knowledge of the product. The more open you are, the more authentic you will be.

However, that alone is not enough. Take into consideration the tips below while promoting your affiliate offer.

1. Build trust
2. Talk to a product expert
3. Create a product tutorial
4. Find relevant search terms
5. Consider your angle
6. Set your distribution strategy
7. Try offering a bonus
8. Keep things legal and above board
9. Display your affiliate links/codes prominently 

1. Build trust

People will be more comfortable following your advice if they feel they can trust you. Trust is a key factor in your affiliate marketing efforts, because people need to trust you enough to act on your recommendations. The level of trust you’ll need to make affiliate sales depends on your industry and the products you’re recommending—for example, it takes more trust to be an effective affiliate for a INR 3,000 course, than it does for a t-shirt that costs a few hundred rupees.

Building trust, however, is something that happens over a period of time. So, if you’re new to creating content for affiliate marketing, don’t expect success overnight. And more importantly, don’t be disheartened or impatient with your project to make affiliate marketing work for you. Patience, persistence and consistency are your allies in building trust.

2. Talk to a product expert

An option you can explore in terms of your content is interviewing others who use the product or service, or even interviewing the person who makes or sells it. Authentic experience of a product’s user, and the expertise of a product expert, both add a weight of meaning to your recommendations.

This can give your recommendation more depth, creating a narrative for your audience. And if done well, they will increasingly seek your content to discover or learn about new products.

3. Create a product tutorial

While your success with affiliate marketing can depend on the overall size of your following, another way to drive higher-converting traffic is by providing a tutorial on the offer. Moreover, people often perform “how to” searches on Google, such as “how to save money for college” or “how to decorate a laundry room.” If you offer a tutorial that solves a searcher’s problem and clearly showcases the value of the product, your referrals will make more sense in context and you’ll provide the customer with a stronger incentive to purchase the product you’re recommending.

4. Find relevant search terms

If you’re promoting an offer through a blog post or YouTube, research which keywords someone might use in a search engine to find an answer to a related problem. Google Ads Keyword Planner is a good tool that can help with identifying and targeting the right keywords and phrases. (It’s free to use, but you’ll need to create an account.)

5. Consider your angle

Depending on your offer, figure out how much energy you should invest in instructional or tutorial content, which is often a natural lead-in to someone trying a product for themselves. For example, you could record a video of yourself using and getting the most out of a physical product, or showing off the benefits of a digital product, like software. It helps audiences catch a glimpse of the product's utility before making a purchase.

Unboxing posts are popular, so if you receive the product in the mail, document your experience opening it up.

6. Set your distribution strategy

Once you’ve created your promotional content, share it on your website or social media platforms to let network effects take over. If you have an email list, you can create an email marketing campaign. And be sure to have an affiliate marketing hub on your website with a resources page where you share a quick list of all of the tools you use and love.

7. Try offering a bonus

Sometimes marketers promote their affiliate programs by offering bonuses to anyone who purchases the offer. For example, you could give a free ebook you wrote to any follower who makes a purchase. Promotions like this encourage customers to buy by sweetening the deal. It is especially persuasive if the bonus you offer is something you normally sell, because then shoppers can see its actual monetary value right on your site.

Sometimes if you have the right audience and great engagement, you can strike a deal with the promoting brand to offer an exclusive bonus for your audiences. This is often a win-win for both you and the brand, since you get to incentivise your audience to purchase through your links for exclusive offers, and the brands get to target their discounts more effectively to the right audience.

ShoutMeLoud, a blog that earns a good share through affiliate marketing promotes such an exclusive offer with SEMRush, the SEO tool, as seen in the image below:

Source: SEMRush

The most common bonus programs seen in India are coupons, free trials, product giveaways or extra discounts for a service/ products purchased with the affiliate links. 

8. Keep things legal and above board

According to ASCI (The Advertising Standards Council Of India) Guidelines, there are some duties that need to be fulfilled when you’re doing affiliate marketing like the use of a disclosure label.

(source: Buzzfeed)

A disclosure is required for all brand promotions if there is any material connection between both the entities. In the case of affiliate marketing, your content contains a hyperlink or discount code, where you get paid for every ‘clickthrough’ and sale that can be traced back to your content. Therefore you must use a disclosure label.

Even if you put links in your content for your family brand it’s necessary that you disclose it. If you’re promoting something at your own expense and there is no material exchange of any kind with the brand you are choosing to talk about, no disclosure is necessary.

All disclosures you make must be prominently visible in a way that it can’t be missed. While ASCI, as a matter of principle, does not impose penalties and fines, it may escalate non-compliant cases to the government and sector regulators to protect consumer rights.

The guidelines are designed to help the affiliates work collaboratively and communicate effectively and responsibly with the industry. This protects the consumers from being misled and thereby protects the long term interests of the affiliates and the industry.

While this may sound foreboding, maintaining such transparency will further earn your audience’s trust in the long run.

9. Display your affiliate links/codes prominently

Where and how you feature your affiliate links and codes in your content must be carefully thought through. While it’s important not to seem pushy, it’s vital that an interested user does not miss them. Below are a few general tips you could put into practice in your affiliate marketing campaigns.

• Use call-to-action (CTA) buttons wherever possible

CTA buttons encourage better conversions than URLs displayed within your website or blog.

• Cloak your links

Turn “randomaffiliateprogram.com/?clickid=abc12345” into “yourwebsite.com/product-name” with tools like Prettylinks. Lengthy urls not only take up real estate in your content with meaningless hashes, but also seem inherently suspicious. Also, you now have the opportunity to convert the link into an asset that reflects your brand.

• List all your affiliate offers in one place

This ensures that your audience can find and recover your offer whenever they are ready to make a purchase and increases the possibility of every visitor discovering something they link in a menu of products.

Source: Bloggerspassion

Bloggerspassion.com has ‘recommended tools’ displayed prominently on their homepage along with encouraging copy and CTA buttons for each.

• Use the properties of your platform to good effect

For an affiliate promotion on YouTube, links could be placed in your video description. However, you also have the option of placing them as annotations on-screen at strategic moments in your video and directing the viewer’s attention to the link through the content. On Instagram, you could place the links prominently in your bio, or have it as a highlight. Often, a single LinkTree link in your Instagram bio can be used to consolidate all your affiliate links in one place.

Use the tips outlined above to get started on your own affiliate marketing journey and grow your wealth. But before that, get inspired.

Examples of successful affiliate marketers in India

Looking at some of the individuals that actively earn from affiliate marketing will not only provide you with inspiration—as well as proof that this is a legit and lucrative revenue stream.

Although influencers earn through influencer marketing campaigns, the fact that they have a captive audience means that affiliate marketing can easily be leveraged into a steady revenue stream – Ankur Warikoo and Ajay Negar, to name a few. In the examples below, we exclude those who are Influencers in the traditional sense, even if they also earn through affiliate marketing.

Tanya Joseph

Tanya Joseph is a popular YouTuber with over 92K subscribers. Most of her content includes product recommendations and video tutorials of software products and tools, in the descriptions of which she places affiliate links. She even promotes her own affiliate marketing mentorship through a webinar.

Source: How You Can Generate $1,000's Online With This Simple 3 Step System

Harsh Agarwal

Source (wikibiostars)

Harsh Agarwal started his website ShoutMeLoud in 2008 to write blogs and his site gets around 1.5 crore visitors every day. He earns a major portion of his income, reportedly 15-20L per month, through affiliate marketing. He makes his affiliate disclosures quite clear on his posts.

Jyoti Chauhan 

Source (instagram)

Jyoti Chauhan runs a successful blog, UpdateLand since 2013, which includes in-depth product reviews, how-to guides and other search engine optimised content. UpdateLand receives over 5L monthly in traffic, and earns through affiliate marketing among other things as the disclosure on the website suggests. Her complete guide on Semrush traffic analytics tool is an example of affiliate marketing.

Source: Updateland

Anil Agarwal 

Source: Bloggerspassion

Anil Agarwal owns and runs a popular blog called BloggersPassion. In a blog post titled Bloggers Income Report January 2021: How Much Money Do Top Bloggers Make he has disclosed that he makes $10,844 (over INR 8L) per month in 2021 through affiliate products, direct advertising, and consulting. He has also posted a case study about how he made $16,433 (approx. INR 12.33L) through affiliate marketing in partnership with ShoutMeLoud’s Harsh Agarwal by promoting a single product.

Kiran Gundimi

Kiran Gundimi is a young Instagrammer producing content related to skincare, health, beauty and lifestyle. Even with a follower count under 4000, she successfully promotes products in her domain and earns through affiliate marketing. Her affiliate links are in her Highlights as well as consolidated in the Linktree URL in her bio.

Source: @KiranGundimi | Linktre 

The thing to note from the brief profiles of successful Indian affiliate marketers above is that each has eventually become a content creator in their own right, which allows them to branch out into other revenue streams like earning through Google AdSense and influencer marketing. It only proves that earning your audience's trust with quality content will open up your earning avenues eventually – and affiliate marketing is a great way to make a steady beginning.

Ready to get started with affiliate marketing?

Earning money with affiliate marketing programs can be a rewarding way to earn money online without taking on too much risk. All it will cost you is your time. By investing the hours upfront, you can continue to reap the rewards and turn it into a steady source of income, if not a business all by itself.

To get started, check out the Shopify Affiliate Program and sign up to help entrepreneurs discover Shopify, while you earn through the power of affiliate marketing. 

Click here to apply to the Shopify Affiliate Program.

*Methodology: 

Data gathered (program name, industry, average commission, average conversion rate) from an affiliate network site of 200 affiliate programs, 20 random programs each from 10 industries. The data comes from a seven-day measurement period (December 7–14, 2021).

Limitations include: 

Data is gathered only from one affiliate network site. Not all categories could be included because of lack of program availability and time constraints of data collection.