How Affiliate Marketing Works
Affiliate marketing has made many online millionaires, and it’s no wonder why affiliate marketing remains the top choice of online business model.
From the diagram below, you can easily understand how affiliate marketing works.
As an affiliate marketer, you would simply ‘market or promote’ affiliate products or services from affiliate vendors.
First, you would need to request or apply for your affiliate link from the product vendors (or through affiliate networks or marketplaces).
Why Choose Affiliate Marketing
If you are looking for an opportunity to make money online, then you’d soon discover that affiliate marketing trumps many other online business models for the following reasons:
Low Startup Cost
There is no cost involved to apply to be an affiliate of a product or service.
Plus, you will not have to bother about creating your own product - research/development, production costs, logistics - storage, damages, shipping, etc.
High ROI
You would get high return on your marketing investment. By choosing to promote digital products, you can generate very high commissions, which can range from as little as 30%, right up to 100% for some front-end offers.
Low risk
Since there is no major investment needed to create a new product, you remove the risk of product failure.
Low ongoing cost
Apart from managing your own online assets and having useful online tools, there are no other major business expenses.
Targeted Traffic
With so many different affiliate products from various niches - you are able to choose and promote appropriate products to specific targeted traffic (audience).
Focus on One Task
All you need to do is marketing (promotion). You only need to drive buyers traffic to the vendors’ sales page and let the vendors do the selling.
Plus the vendors will also handle all post sales activities and customer service.
Maximise Your Online Income
For any marketing or promotion effort that you put in, you would want to generate the highest amount of commission possible.Â
These are my top 3 criteria for my affiliate product selection:
#1 : Digital before physical products
Physical products cost more to create - materials, production, packaging, all other logistics like storage, shipping, damages/returns - and therefore, the affiliate commissions are very low. For example, Amazon affiliates only get between 1-4% commissions.
Unlike physical products, digital products are created once (and then maintained by product vendors). Therefore, the they are able to offer very high affiliate commissions ranging from 30% - 70% and sometimes right up to 100% for front-end offers.
#2 : High-Ticket Items
As mentioned earlier, you'd want to maximise the profits generated from your marketing efforts.
Instead of promoting low-value products, wouldn't it be more effective and productive to promote higher-value products in order to generate higher commissions?
#3 : Recurring or Subscription Products
Promoting recurring- or subscription-based product can help ensure a more consistent monthly profits. For every buyer lead that buys such a product, you'd be able to generate recurring commissions from that one sale.
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