How Does an Affiliate Makes Money

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Ok. So you did some research and found that people actually make money online through affiliate programs. Great, but you must be wandering how do they actually make money, right?

This article will help you to learn how affiliates actually make money.

There are many companies online who have products to sell. They have a great looking website and some traffic as well and yes some sales too. But what if they want to sell more. You know selling stuff online is different that selling it offline. In a store you need people to manage people. If suddenly you see thousands of people coming to your store to buy stuff, you will get afraid and close your shop isn’t it?

But online the story is very different. You don’t need people to talk to customers, you don’t need to spy them to see if someone is stealing stuff, or you don’t need security personals to manage people if someday you find a lot of customers coming to your shop. (Well even websites need security but that is a different topic. Website security is much cheaper though.) When its online everything is taken care of by the software programs. Right from showing products, prices and taking orders the website can bill and charge their customers credit cards as well. The only thing the online store owner needs to do after the sale is over to ship the products. Job done – keep the profits without even meeting their customers ever.

How sweet is that? If you have a business, won’t you want to sell your products online to make more sales?

Well every business owner wants to sell online. And that exactly is the problem. If everybody is selling stuff online the competition increases and when that happens the sales and the margins gets affected. On top of that there is a cost involved to get a visitor to their websites. All this eats into the merchants profits.

So essentially there is a limitation to bring in visitors, get the sales and make a profit. What happens if the same merchant recruits an army of people to market their products? What if they help him get the visitors and sales? The merchants profits increases. But why should people market merchants products or services? Of course they will not do this for free. The merchant will have to pay them to do this. This payment is based on a some percent of the sales which the marketing people bring. This may be 10% of the sale value or even 75% depending on the product. This exactly is what is known as Affiliate Marketing.

Anyone who takes a share of the sale for selling a product of a merchant online is an affiliate of that company. This is how an affiliate makes money.

However this is not easy. One company may have thousands of affiliates promoting its products online. Can you sense the competition? Merchants have nothing to lose. Why? They pay only if the affiliate bring in sales. Else the affiliate does not gets paid.

You must be thinking how this whole thing is tracked? Well technology has made this easy. Every affiliate gets a unique URL to promote. This unique URL has the id of that affiliate. If a sale is made the merchant can identify the affiliate through the id and send them payments.

There are many software available for affiliate tracking, and there are many affiliate broking companies as well called as affiliate networks who take care of tracking and sending payments. The merchants just needs to pay a fixed sum for maintenance and commission for the sales made to the broker. The broker then takes care of everything else. Read my article a guide to affiliate programs to understand better.

If you want to start your career as an affiliate you should register yourself first in some good genuine affiliate networks. Note: There are many affiliate network companies floating around online but not all of them are trust worthy. You should be very careful with whom you sign up as you are not directly signing up with a merchant. You have to be sure that if the sales are made by you then you should get paid. This is because you may have to spend money to get sales or you will have to put a lot of time to get a sale. And if you are not paid, you will get frustrated and demotivated. Which is exactly you do not want.

Many affiliates do not get paid even after they have made sales and therefore I am telling you to be careful. I myself have had bad experience with some companies and I don’t want you to experience the same.

I recommend the following companies only when you start your affiliate career. They are all free to join as affiliate. You can start advertising only if you get approved. Once you get some experience you can try other companies.

1. Never Blue – Most popular among affiliates. Has a lot of offers from lead generation to products. Timely payouts on the 15th of every month.

2. PeerFly – Lots of popular brands available like Dell, Best Buy, Net Flix, Johnsons, Target, BE Naughty etc. Offers net 30, net 15, and even weekly payments for top affiliates only.

3. Commission Junction – Thousands of quality companies here. One of the oldest networks for affiliates. Good for affiliates looking to promote web-hosting and domain registration companies, web & logo designs companies, finance companies etc. Pays out every month either through wire transfer or check. I haven’t experienced a single sale not being tracked. Very good customer service. Must try.

4. ClickBank – Great if you want to promote eBooks. Has only downloadable products though. Since the merchants enjoy a lot of margin here some merchants give 75% of the sales. You can also select products that are selling most (other networks do not say this). Monthly payments.

5. Amazon – Biggest online store for electronics, apparels, computers, books, software, accessories, shoes, jewelry, watches, tools, DVDs and more. You name it and you may find it here. You can sell whatever you want and make money. Amazon is a pretty big company and they are here to stay. Monthly payments.

The only thing I don’t like about Amazon is that its too crowded. You will get confused as there are millions of products to promote. But the benefit is that if you have a website that gets visitors looking for multiple things – you can send them to Amazon to chose their product and buy the one they want. You will get commission for any product your visitor buys.

Hope this will help you to get started in your affiliate carrier. I will be writing articles like this in future as well. You should therefore subscribe to my newsletter else you will lose valuable information that I will write in future.

Please ask anything that you want to know in the comments below.

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