The internet offers unlimited possibilities to earn a living online. Upwork and Freelancers Union found that 35% of the American workforce did some freelance work in 2019. Moreover, 77% of them said technology made it easier to find freelance work.
Affiliate marketing is one of the ways to make money on the Internet. Affiliate marketing is supposed to produce passive income, but does it really work? Let’s take a closer look.
- In simple terms, affiliate marketing means selling goods and services from another person or company.
- Nine percent of the publishers surveyed generated more than $50,000 in affiliate income in 2016.
- Always remember that you are likely to earn more money with affiliate content that is similar to your own.
- Traditional advertising and selling your own products can help if affiliate revenue dries up.
Definition of affiliate marketing
In simple terms, affiliate marketing means selling goods and services from another person or company. It’s like a referral service. You set up a website or blog and join affiliate programs that are relevant to your audience. You can contact these programs through affiliate networks, which provide you with a link that you include on your site. When someone clicks on the link and buys the product, you get a portion of the sale as commission.
How much can you earn?
The affiliate marketing industry is growing exponentially. Statista reports that spending on affiliate marketing in the United States is expected to reach $8.2 billion by 2022. This is a significant increase from $5.4 billion in 2017 and $1.6 billion in 2010.
Another study from VigLink offers a closer look at how much income affiliate marketers make. According to the survey, 9% of publishers generated more than $50,000 in affiliate income in 2016. The majority of merchants — 65% — said they make between 5% and 20% of their annual revenue from affiliate marketing. The survey also showed a link between experience and revenue. Among the merchants with the highest revenue, 60% have been involved in affiliate marketing for five years or more.
The majority of merchants said they make between 5% and 20% of their annual revenue from affiliate marketing.
The biggest benefit of affiliate marketing is that you can earn more or less revenue from autopilot once you turn it on. All you need is a constant flow of traffic to your blog or website. However, there are some downsides.
If a business changes the terms of its affiliate program, your revenue may be directly affected. Joining the wrong companies can also cause problems. You won’t make money if your blog or website audience doesn’t feel compelled to buy their products or services. As affiliate marketing has grown, you will also have to face fierce competition from other marketers who are promoting the same products.
Finally, you will have to keep people coming to your website with new content.
Develop a successful affiliate marketing strategy
Affiliate marketing is relatively easy to get started with, but making sustainable income from affiliate programs is an entirely different game. If you are considering giving it a try, it is essential to lay the foundation first.
Start thinking about your audience. What types of goods and services do they want? What products are you currently using that you would feel comfortable recommending to your readers? You can always add links to any affiliate program on your site. However, it would be better if you stick with products related to your websites to increase your click-through rate and maintain your audience.
Next, find individual affiliate programs to compare their structures. You want to take into account factors such as the amount of commission and how often the company pays affiliates. Make sure you also understand any rules they impose on members of their affiliate networks. Always remember that you are likely to earn more money with affiliate content that is similar to your own.
Finally, be honest with your readers. Adding a disclosure to your blog posts or somewhere on your website lets them know that they may encounter affiliate links. This disclosure adds to your credibility, and is also required by the FTC’s Endorsement Guidelines.
Affiliate marketing can be lucrative, but it takes a commitment of time and money to make it a real business. Do thorough research before jumping on the affiliate marketing bandwagon.
Also, remember to avoid putting all of your eggs in one basket. If you are hoping to build a website to make money, then diversifying your sources of income is a smart move. Traditional advertising and selling your own products can help if affiliate revenue dries up.