M2 - L2 - What is Affiliate Marketing?

In this lesson I want to cover exactly what affiliate marketing is.

Now it might seem like a basic lesson, but it’s super important. And the main reason why it’s important is that there are many different ways you can be successful with affiliate marketing.

So we need to cut through all the noise, and get a clear understanding of what our specific affiliate marketing strategy will be.

What's the ONE Thing you can do such that by doing it everything else will be easier or unnecessary?

– Gary W. Keller

Make affiliate marketing and the strategy I'm about to reveal your ONE Thing.

Focus entirely on this, and avoid all other distractions.

What is Affiliate Marketing?

Affiliate marketing is a business model which allows you to recommend someone else’s product and earn a commission when it’s sold. Your job is to presell customers about a product, and then connect them to where they can buy it. You can presell them on various online platforms such as a website or through social media.

If they purchase and you are shown to be the referrer, then you will earn a commission. This can be tracked through your unique affiliate link or a code the customer uses to purchase the product. The affiliate programs you work with will do all the tracking for you.

what is affiliate marketing diagram

My First Website Attempt (Fail)

My first website was wealthy-choices.com.

The headline was: Your Guide to Health Supplements and Optimal Health

Wow, talk about going after a HUGE topic right off the bat.

The site grew into a pretty good resource for health supplements. But I made a bunch of mistakes along the way, and it doesn’t exist anymore. I think I ended up making almost $3000 dollars one month.

Here are some screenshots:

I started this website because I was passionate about health and fitness back in college, and because I was involved with a MLM company called USANA.

Have you heard of Network Marketing, or Multi Level Marketing?

Yeah, well I got sucked into that.

In case you don’t know what it is, Network Marketing (MLM) a business model where you sell products and build a “downline”. It looks like a pyramid scheme, but in fairness, many companies require that you actually sell products to make money, so it’s not a scheme.

Amway is a big company you might have heard of.

MLM is basically a business in a box, and a lot of entrepreneurs get involved in hopes of creating a successful business. Most get involved with good intentions, and I certainly did.

I actually really liked the people who were involved in this business, because they were nice, passionate and had that entrepreneurial spirit!

The main problem for me is that I’m a total introvert!

I’m not going to go and talk to people in-person and sell them products, or try and recruit them for a business opportunity. Yuck!

I recruited zero people and made no money.

But I came up with a brilliant idea:

Instead of selling supplements to people face to face, I will just sell them online! And thus my health supplement website was born.

I eventually ran into another problem:

I wasn’t allowed to sell my MLM company's products on my website, or at least it wasn’t an easy process at all.

So this is how I stumbled on to affiliate marketing:

And this is what affiliate marketing is:

Recommending someone else’s products, and getting paid a commission for it.

I’m not going to build my own supplement company. I don't’ know how, and I don’t have the money for that.

But I can build a website and explain why Optimum 100% Whey Protein is my favorite brand right now, and recommend that you click here to buy it at BodyBuilding.com to save the most money.

See what I did there...

I just did affiliate marketing.

I recommended a product (Optimum 100% Whey Protein), and I told you where to click and go buy it (BodyBuilding.com).

BodyBuilding.com has what’s called an affiliate program:

If you have a website related to bodybuilding supplements you can recommend your website visitors to shop at their online store.

So if one of my website visitors buys a supplement from BodyBuilding.com based on my referral, then I get a commission.

So I don’t need to physically sell anything!

I just recommend my website visitors various products, and tell them where to buy them.

There are thousands of established businesses which sell health supplements, and many of them have affiliate programs.

My Second Attempt - The Power of Passive Income

After my first website failed, I didn't give up.

I started a second website about another topic I was interested in: Shaving.

So I registered the website electric-shaver-guide.com.

This site is actually still alive, and it still makes me money, but I made more bad mistakes with it.

I don’t work on this website anymore because I have a beard now, so I can’t really review electric shavers anymore, haha.

But the real reason is that I have several other more lucrative websites which I’m working on.

At the time of recording this, I have not updated the website in 4 years, and it still makes me thousands of dollars every year.

When it WORKS, affiliate marketing can be a great source of passive income.

I haven’t worked on this site in years and it still makes money every month.

The website makes money in the exact same way as I outlined in the first example:

I don’t own an electric shaver company. I would never go out and design a new shaver.

I just recommend the Braun Series 7 because it’s the best shaver for all skin types, and it offers the best value.

You can find a great deal on the Braun Series 7 at Amazon.com. Click here to see the latest price.

See what I did there...

I just did affiliate marketing again.

I recommended a product (Braun Series 7), and I told you where to click and go buy it (Amazon.com).

Amazon.com has one of the most popular affiliate programs for people like you and me:

You can build your own affiliate business around almost every single product that is sold on Amazon.

I was interested in electric shavers, so I started a website about them.

I offered really good value for people who were researching electric shavers. I reviewed them, I answered common questions, and I recommended my favorite brands and so on.

But I didn’t start my own electric shaver company.

I just recommend the best shaver on the market, the Braun Series 7, and I told people to buy it on Amazon. When they did, Amazon would give me a commission.

I built a useful website about electric shavers.

I have not touched it in years, and people still find it and listen to my recommendations.

And more importantly, Amazon still pays me commissions.

Success is stumbling from failure to failure with no loss of enthusiasm.

– Winston Churchill

More Examples of Affiliate Marketing in Action

The above examples are two of my very first businesses.

They are great examples for beginners:

Most people should start a website about a topic they love and are passionate about.

This is usually the best advice for beginners. It's what I did, and what so many others have done successfully.

But let's quickly look at a few more examples so you can see how big affiliate marketing is.

Let's do some searching on YouTube. Just search any type of product review.

You will find a ton of affiliate marketers!

If you scroll down to the YouTube description, what do you see?

Yep, those are affiliate links!

If someone watches my review, clicks that link to Amazon and purchases something, I get a commission.

You will find many marketers on YouTube who are using this business model to make money online.

If you click on the links in these video descriptions and make a purchase, the YouTuber will make a commission.

Big Companies & Affiliate Marketing!

Have you ever purchased something from a coupon code website? You know like Groupon or Retail Me Not.

Well these are big businesses who promote offers as affiliates.

You save 30% with a coupon code, and they earn a commission.

There are other huge businesses which have a team of writers and editors which make money with affiliate marketing.

The Wirecutter is just one example:

This website reviews various products and earn commissions when you purchase something based on their recommendations.

The Wirecutter was bought by the New York Times for 30 million dollars!

So in case you didn't know, a lot of people buy stuff online, and you can make a lot of money as an affiliate.

So What's the Next Step? How are YOU Going to Make Money With Affiliate Marketing?

The truth is, anyone can become a successful affiliate marketer.

You can pretty much build a business about any topic that sells a product or a service.

And remember:

You can start your online business from your personal computer in your basement.

I started in my parents' basement, and now I work from my own home office.

And if you do it right, you can make a lot of money which can become a very powerful passive income stream.

The challenge is doing it right without failing a bunch of times. But as we learned from Winston Churchill, if you do fail, just get back up and brush yourself off.

However, to drastically reduce our chance of failure, in the next lesson I'm going to reveal the exact strategy and platform you will be using to create your successful affiliate marketing business.

When you're ready, jump over to the next lesson!

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