What is affiliate marketing?

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

Typically, affiliates are rewarded for 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.

An affiliate network is a website that connects creators or influencers with different brands’ affiliate programs.

Many affiliate programs are free to join. Done right, an effective affiliate marketing strategy can go from side hustle to a profitable online business idea generating passive income.

How affiliate marketing works

Affiliate programs work by allowing individuals or businesses (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 affiliate marketing 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 might earn about 5% of the sale, but with some arrangements, you can earn as much as 50% with high ticket affiliate programs. Some affiliate marketing programs provide a flat rate per sale instead of a percentage, read more to learn how to suceed at affiliate marketing.

3 types of affiliate marketing

Affiliate marketer Pat Flynn breaks down the different types of affiliate marketers into three groups. Understanding these types of affiliate marketing arrangements can show you the different ways people make money online in this space.

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,” says Elise Dopson, founder of Sprocker Lovers.

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, TikTok, 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 a poor product or service, and you wouldn’t 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.

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

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.”