Is affiliate marketing still relevant in 2021, and how does it work?
So, what is meant by affiliate marketing, anyways?
If you find yourself reading this because you’re looking for a way to generate passive income through affiliate marketing, you’re not the first and won’t be the last.
Perhaps you have some digital marketing experience, or have dabbled a bit in SEO or PPC and want to test your knowledge on your own site. Or you’re a business owner with a new product you know people would buy if you could promote it within the right audience.
This article will specifically focus on affiliate marketing from the perspective of the marketer or partner, and not the merchant.
I want you to learn enough about affiliate marketing within this guide to feel comfortable enough to take your first steps into the affiliate marketing world and feel motivated enough to, at the minimum, start your website or idea.
What is affiliate marketing about?
Affiliate marketing is all about promoting, featuring, or simply listing another company or brand’s product, service, or offering and receiving a share of the sale.
Some companies will only pay you if a “conversion”, or sale, is made. Others will pay you for sign ups, demo requests, or per X page views. The compensation model will vary across the board and be completely up to the merchant.
Most affiliate marketing programs use a revenue share model, and will pass on a percentage of the final sale price. This can be anywhere between 1% up to 80% or even 90% depending on the product.
What is EPC in affiliate marketing?
EPC stands for “Earnings Per Click” and is a common way to refer to how much money an affiliate merchant can potentially make you, depending on how much traffic you send to the site.
How is EPC earnings calculated?
To see what the average EPC is, the total revenue generated is divided by the total number of clicks, and then multiplied by 100. This will provide you with the EPC per 100 clicks on average.
What is CPA in affiliate marketing?
CPA means “Cost Per Acquisition” and is sometimes referred to as “Cost Per Action” depending on the merchant or partner. CPA marketing means you are paid a certain amount whenever a specific action is taken or a sale is made.
For example, if you have a CPA of $20 per conversion set with a partner, everytime someone purchases the products after being sent through your site, you will be paid $20.
If you made 10 sales, you would receive $20.
What is revenue share in affiliate marketing?
Revenue Share, or “RevShare” is a very common way affiliates can earn money. When dealing with revenue sharing, you are going to be offered a percentage of the sale.
For example, if you have a RevShare agreement of 20% and a user makes a $100 purchase, you receive $20. If another user makes a $200 purchase, you would receive $40 and so-on.
CPA vs RevShare
So, if you get into affiliate marketing, which should you pick?
Honestly, when you are first getting started, you should go for whatever is available and get as many accounts created as you can.
Once you start making money and see good performance, then you can go back and negotiate with your affiliate merchants for better rates based on real data.
If you are given the option to choose between CPA and RevShare, I would always recommend going with CPA. This is mainly because it is a guaranteed amount, and can be easily negotiated.
Benefits of CPA
One of the benefits of a guaranteed CPA is that you can estimate your payments based on conversion rates and previous data. When dealing with RevShare, many variables will impact your monthly payments.
Drawbacks of RevShare
One of the biggest drawbacks of RevShare is if the merchant or partner decides to run special promotions, which happens often, your revenue is impacted heavily.
For example, if you receive a RevShare of 50% on a $100 product, and they decide to run a 30 day promotion at 50% off, and users have coupon codes for an additional 10% off, you are now suddenly only making less than $25 per sale.
If you had a CPA agreement of $50 per sale, then it would not matter what promotions are running, your revenue would not be impacted, and most likely increase due to the special offer running.
What is CPI in affiliate marketing?
CPI stands for “Cost Per Install” and is most often used for software affiliates, or app installs. CPI is most often used for mobile affiliate marketing.
What is CPS in affiliate marketing?
CPS means “Cost Per Sale” and is very similar to CPA, meaning an amount is paid whenever a sale is made.
What is the difference between affiliate marketing and dropshipping?
Affiliate marketing does not require you to stock inventory, or even manage a warehouse / factory that ships items. Affiliate marketing entails promoting products without being a part of the company or ordering and fulfillment process.
When you get into dropshipping you enter an entirely new arena.
Dropshipping involves finding a manufacturer or supplier and promoting specific products that will then be shipped to the user after purchasing.
This allows people to manager websites with online stores while never having to physically stock or manage inventory.
Dropshipping is a good way to make money, but it is incredibly difficult to find high-quality suppliers that are dependable and affordable to work with. If you are just getting started with affiliate marketing, I recommend not starting with dropshipping as your first attempt.
What does an affiliate marketer do?
Still interested in getting into affiliate marketing? Well, what you would be doing at home would not be much different than what an affiliate marketer would do in their actual job.
Affiliate marketing managers are in charge of managing affiliate relationships, checking pricing and deals to make sure that what they are promoting is still accurate and not outdated, and finding new opportunities.
When you are producing content for a website or blog with a goal to make money, you have to make sure you are doing your due diligence and writing about topics that have a potential to earn revenue.
A big part of being an affiliate marketer is finding those opportunities, or “niche” topic areas to exploit and being creating quality content for.
How much money can you make as an affiliate marketer?
When it comes to income, the sky is the limit for affiliate marketers. I have found that what you put in is what you get out.
Initially I did not take the websites I was creating too seriously, and would often delay publishing new content. Once I got started on a routine of regularly publishing content based on in-depth keyword research the results came shortly after.
If you put in minimal effort and get a few pages to rank well, you will most likely make a few hundred dollars per month.
If you commit to an editorial calendar or topic rollout, find specific categories and sub-topics within your main website theme to write long-form content about that answers real user queries, you could be looking at several thousands of dollars per month, or even per day.
How much do affiliate links pay?
When you become an “affiliate” for a product, brand, or service, you will receive an affiliate “link” to use to promote on your site.
Sometimes you will receive a “code” to use instead of a link that users can enter on the checkout page, and once it is used you are paid a commission.
Affiliate links pay depending on the agreement you have in place with the merchant, and pricing will vary depending on the industry or platform you are using.
Is affiliate marketing worth doing?
As of writing this in January, 2021 affiliate marketing is still a viable option to either generate a passive side-income, or to eventually fully support you financially.
The level of success you will have is completely dependent on the level of effort you put in throughout the process. If you can completely dedicate at least 1-2 hours per week to your project, you can get more done than you think.
The most important piece of the puzzle is passion. You need to be passionate about the topic or theme your website is about or you will eventually get bored or burnt out.
If your one goal is to make money, then affiliate marketing is not the best way to go unless you can pair your efforts with PPC and a decent monthly budget in ad-spend.
Building up an affiliate marketing website organically over time to rank well for major keywords takes time, and many affiliate sites do not begin earning money until at least 6 – 12 months have passed.
Can you get rich with affiliate marketing?
The short answer to this question is yes. If you put in the hard work and dedicate real time to your project, you can start earning real money within a few years.
Closing thoughts – how to get started with affiliate marketing
I recommend creating a schedule where you dedicate a certain amount of hours every week to work on your project or idea.
Put all of your to-do items on a list, or write them on sticky-notes and put them on the wall. Each day, take one down and complete it.
You will be surprised how quickly each little action adds up over time and before you know it after 3-4 weeks, you will have dozens of tasks completed that seemed impossible to do before.