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We’re just now starting to meet the first generation of marketers that was raised in a world where affiliate sales existed.

The concept got its first major rollouts in the mid-1990s, when companies like PC Flowers & Gifts and CDNOW experimented with paying other, third-party websites for every customer that came and made a purchase via links on those businesses’ pages.
Now the idea seems incredibly basic. Amazon was an early adapter (in the days when it was still mostly a bookstore), which helped drive the model to prominence.

 

Affiliate Marketing Basics

Most internet users, even if they’ve never thought about doing it themselves, recognize the affiliate business model: one business (or individual), the “affiliate,” provides online content, and also provides links to an online brand or retailer. When a customer uses those links, and then makes a purchase from the retailer, either a fee or a percentage is paid to the referring affiliate.

The technique is popular enough — and the brands using it big enough — that there are also networks of professional bundlers and middlemen. Online businesses that rely heavily on affiliate fees may go through these, linking to any retailer that’s on the list, regardless of what their products are; these often generate the “clickbait” websites of Top 10 lists and “One Easy Tricks” filled with hyperlinks.

Entrepreneurs can take advantage of both sides of affiliate marketing, depending on their business model. A content provider can generate a little extra income, while a retailer can reach new customers.

 

Affiliate Marketing as an Affiliate

In theory, anyone can be an affiliate marketer. Like a lot of “anyone can” models, that generates a lot of people who do it badly, and barely make any money doing it.

To get a good contract with a reputable retailer — Amazon, for example — you’ll need to demonstrate a minimum level of traffic. Rates may also scale with traffic, so the more people are already looking at your site, the better the deal you can get when you go to sign up as an affiliate.

Some specialty retailers will individually vet affiliate sites for their content, both to make sure it’s appropriate and somehow related to their brand. Other, bigger retailers (again, like Amazon) won’t care what the content is so long as it’s legal. If you can write a blog about the classification of African snails and send people to Amazon to buy things, their theory goes, more power to you, and who cares if they’re buying snail-related products or not?

That said, the closer your content relates to potential customer needs, the better your links are likely to do. If you’re writing a home improvement article about fixing a toilet tank, for example, the people reading it probably need to replace something in their toilet tank. Providing the direct links to those parts would be a good strategy; providing links to pet food less so.

Unless you’re going all-in — becoming a professional affiliate marketer, essentially, with your whole work day dedicated to generating traffic and clicks — it’s best to view affiliate marketing as a useful bit of bonus income in an independent business model. Businesses that are already providing free, product-related content as part of their own strategy can easily pick up a few bucks from an affiliate program, but try to go too overboard and you quickly bog your viewers (and potential customers for your own products) down with too many irrelevant links and ads.

 

Affiliate Marketing as a Merchant

Any business with a web presence can theoretically become an affiliate marketer. But can online businesses use them to sell products? And more importantly, is it effective?

The simple answer is “yes.” The complex answer is “yes, sometimes, if you match your strategy to your business model and your likely customers.”

Here’s the short of it: blanket affiliate marketing, of the sort that Amazon and the big “bundler” companies do, is a volume game. If you need to sell a whole lot of relatively cheap products, and they’re basic goods rather than niche or specialty items, you can get a boost out of an affiliate program.

For most companies, however, it’s better to create direct, individual affiliate relationships with websites that you know reach your potential customers. An online tailored menswear company, for example, might approach fashion bloggers with an affiliate offer, skipping the middleman and making the arrangements directly.

Those will get less views total than buying a share of an affiliate bundler, but the viewers will be much more likely to click and buy. The affiliate also has more incentive to build content that frames your product well, since they’re not trying to appeal to as many people as possible.

Pick your battles carefully, in other words. Don’t jump into any old affiliate program on the market. You don’t have to start paying out unless the links bring in customers, but you can waste a lot of time setting up and overseeing affiliate links, and there’s no reason to go through the hassle if it’s not going to bring new customers in at a pretty reliable pace.