Affiliate Marketing – Easiest way to Make Money Online

by Shabbir on September 9, 2010

Affiliate Marketing is one of the easiest ways to make money provided done in the right way. The reason I term it as easiest because of multiple reasons. One of the major reasons I think is – it allows you to focus on making sales and generating profit instead of focusing on building products from scratch and testing what works and what not. Apart from that any good product needs constant support but as an affiliate you do not need to hire people for help and support for the product you are promoting. This makes affiliate marketing one of the few ways to make money where you get the benefit of passive income i.e. income without much of an ongoing effort from your end.

First let us take a small example to understand better of what I have said above.

Let us take an example of Watch Manufacturer. We call him W. He has an established offline business where he produces world class watches and has lots of stores and service centres to sell those watches.

Now W decides to expand his business and decides to go online.

As expected W now consults an outsourcing company for his online presence. Let us call this company as O. This is where a second character comes into our scenario i.e. company O.

Company O provides complete online solutions at an affordable pricing and so O creates a great online store for W.

Now W has an online presence as per his requirement but to his surprise he does not see any sale coming from his online store and so he decides to get involve into marketing efforts of his online store.

W again visits some outsourcing company for his marketing needs to start his online marketing efforts. For simplicity we will use the same outsourcing company O. For online marketing efforts O uses CPC and CPM model to generate sale for W and this is where we have a new player in the scenario with companies like Google Adwords and other CPM networks. Call it G.

Slowly W realizes that online is no different from his traditional method of opening a store. So he thinks why not we allow people to resale our watches. W starts a profit sharing system where he shares percentage of profit with his resellers and this way affiliate marketers like me and you comes into the scenario.

Now W starts an online reselling and appoints platforms like CJ / ShareASale. Let us call them A. This now brings W’s product is the hands of millions of affiliate marketers and they start with their efforts.

Now what does affiliate marketers do? I will explain this in a simple 4 step process.

Step 1: Keyword Research

First step in any business should always be solid research and affiliate marketing is no difference but here research is not for the product itself (remember we have our job cut off as this is done by W) but here the research is mainly to understand the potential customer. Some affiliate marketers also go one step further to research what kind of offers or extra products added to main product make them more likely to buy the main product.

Step 2: Register keyword rich domain (or URL)

After the initial research, affiliates know what people may look for when buying W’s products and so the next step is to register a killer domain name with keywords in it. This domain name will form the base of online efforts. Better research means more ideas for keyword rich domain and this may eventually help more and more in the long run.

Step 3: Write a killer review (or a sales pitch)

After completing the tech stuff of getting a domain and hosting, you will need solid review (sales letter) about the product that drives the visitor through your funnel to a potential customer.

Final Step: Marketing

All set for your final step where you make people to visit the site and drive the sales. Expertise of the affiliate decides what he does next. If he is comfortable with organic SEO he may work on building links to the site and rank well in Google organic search results for the keywords. If he is a PPC guy he may throw in some bucks to G and work on creating an arbitrage. Some Affiliates may do both but in all the scenarios the ongoing efforts reduces drastically over time and passive income starts to tickle in.

Now let us analyze the complete example as to who makes what and how much.

W – Our watch maker holds the complete business of making the watches/distributing, selling providing support and service. He makes tons of money but the money also comes at a price of setting up the business. He has a million dollar investment for not only manufacturing but also stores in offline format and depending on the quality of his products he makes the profit.
O – Our outsourcing company does good job of creating an online presence for W and so makes the money doing the web design, development and may also get continuous flow of some small money in form of maintenance job. The better outsourcing company works the lesser chances are he may get maintenance job but then companies like O can capitalize on repeat work and referral work.
G – Our PPC provider yet again like W manages a giant system where user can come and advertise their products and service and make the billing and payment. Apart from that he also needs system to monitor click fraud and fraud prevention mechanisms to make his advertiser happy. Makes lot of money but needs a huge system to keep operating and supporting it.
A- Affiliate network like G have a giant system where affiliates and advertisers can work in a friendly environment. A may also handles all the hassles of moving the money from the advertisers to affiliates. This means apart from solid tracking mechanism they also need a constant support system to help publishers and advertisers with their queries and questions.
M – We the Affiliate Marketers who works on doing the research about what could work for W’s product and then setting up a system where W’s products are sold under our reseller account and get paid for. To help us further we have wonderful stats and tracking system in-front which can help us building on the arbitrage model.

Looking at the above scenario you will see that the easiest money is made by M who does the right research to drive sales. This not only concludes but also proves that if affiliate marketing is done in the right way it is one of the easiest ways to making money online.

I know this has become a bit lengthy than what I normally prefer but don’t let that come in your way to speak your heart out in comments below.

Tagged as: Affiliate Marketing, Make Money Online