What Is Affiliate Marketing, and How Can It Help Your Small Business?

Affiliate marketing is incredibly popular right now, as many retailers are implementing programs that let you make money by promoting their products. This system can be a great way for small-business owners and creators to earn money on the side, especially if you have a large audience who trusts your recommendations.

What is affiliate marketing?

Affiliate marketing is an online sales tactic where retailers allow people to earn a commission for recommending their products. One popular affiliate program is available through giant online retailer Amazon. If a blogger or influencer promotes an Amazon product and you buy it via their unique affiliate link, the blogger will get a kickback of the sale, often up to 10 percent.

However, this amount can vary widely. It could be a percentage of the product’s price, ranging anywhere from 1 percent to 50 percent or more, according to Shopify, or it also could be a fixed rate. Affiliates most commonly get paid when someone purchases a product through their link, but some arrangements also pay per lead or even per click.

Pros and cons of affiliate marketing

There are several benefits to becoming an affiliate marketer. As such, you can do the following:

  • Generate a passive income
  • Get started quickly at little cost
  • See significant profits and success with your fan base

However, there are downsides, as well. Be aware that affiliate marketing:

  • Does not guarantee you’ll make money
  • Exists in a competitive field — LiveChat says 84 percent of publishers use affiliate marketing to boost their revenue
  • Looks “spammy” if you promote affiliate links too frequently

How to choose an affiliate marketing program

If you’ve decided to try your hand at affiliate marketing, you’ll need to choose a program to join or product to promote. In general, you’ll want to choose items relevant to your brand. If you’re a painter, you’ll likely do better at promoting art supplies than random electronics.

Keep in mind that not all affiliate programs are worth it — if you’re spending hours crafting blog posts only to earn a tiny commission per purchase, that’s not a smart use of your time and resources. As such, you’ll want to ensure whatever program you choose will pay a fair amount per transaction. This could mean selling a high-priced product and earning a lower percentage. For example, promoting a $1,000 TV and earning 15 percent commission will bring in $150 per sale. Not bad!

If you’re going to promote lower-priced items, however, you’ll want to look for larger commissions — earning 15 percent on a $5 item will only earn you 75 cents. It’s often beneficial to set a minimum commission for yourself. For instance, Affilorama recommends you aim to earn at least $40 per transaction to make it worth your while.

How to use affiliate links in your content

One of the most common ways to promote affiliate links is with blog posts. You might consider creating a roundup of your favorite work supplies or writing a review of a product you use frequently. This allows you to provide compelling evidence on why your readers should buy the product.

When crafting content to promote affiliate links, the Federal Trade Commission requires you to provide a disclosure saying you earn a commission when people purchase items through your links. It can be something as simple as: “This site contains affiliate links to products. We may receive a commission for purchases made through these links.” However it’s phrased, it needs to be visible on the page where the link is included.

If affiliate marketing works for your website and audience, it can provide a nice income boost for you or your business. Determine your minimum commission, and get started finding your first partner.

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Camryn Rabideau

Camryn Rabideau is freelance writer specializing in digital lifestyle content, ranging from pop culture to smart home technology. Camryn has contributed to popular media sites such as InStyle, Taste of Home, Martha Stewart, Food52, USA Today, The Spruce and more.

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