Cash Cow

How Affiliate Programs Work (and Why I Use ‘Em)

Once I wore this really cool shirt. A friend complimented me on it and I volunteered, “I got it at the Gap just last week! It’s probably still there if you wanted to get one, too.”

And then, just like that, my friend and I were shirt twinsies and we lived happily ever after.

Now wouldn’t it be great if I got a kickback for sending my friend to the Gap? Heck yes it would!

If you’ve been wondering how affiliate programs work or what it even is, I’d like to share a few quick things I’ve learned on my own affiliate journey.

The Definition

Affiliate marketing is a type of performance-based marketing in which a business rewards affiliates for each visitor or customer brought about by the affiliate’s own marketing efforts. (~Wikipedia)

The translation? As an affiliate, you can make commissions on products sold through links on your website.

The Players

  1. The Merchant – This is the retailer or business that sells a product.
  2. The Affiliate – This is the person who will promote the merchant’s products on their own site.
  3. The Customer – This is the person that clicks through the affiliate’s link and buys a product from the merchant.
  4. The Network – This is the “clearing house” or entity that manages clicks and payouts.

Here’s a terrible graphic I made to represent the process:

How Affiliate Programs Work
Customer visits the Affiliate’s web site and sees an interesting link.
Customer clicks link and makes a purchase from the Merchant.
Network (not shown) pays the affiliate.

The Process

There are a lot of websites (especially around web products/services) that offer affiliate programs. The quickest way to find out whether a particular merchant has an affiliate program is to Google “[merchant name] affiliate program.” You could also just visit the merchant’s website and scroll down to the bottom and check for a tiny “Affiliates” link. 🙂

Once you’ve identified an affiliate program you’d like to join, you fill out an application and wait for approval. After that you set up your account with the affiliate network and specify your payment preference. You may also be asked to fill out a W-9, which is legit as they’re going to be paying you money.

The Potential (to Make Money)

Let’s be frank. Nobody retires off of affiliate income. It’s not a magical cash cow. Even so, it’s nice to have a few extra bucks roll in!

While you could be an affiliate for any old thing, my preference is to only offer affiliate links for products I personally use and strongly recommend.
I write a lot of tutorials and “how-tos” for specific products on my blog, so it’s pretty natural to include affiliate links to those products in my posts. After all, I’m going to talk about the things I like anyway, so it’s an added bonus to get paid a little for doing it. I should also mention that unless you publish content regularly and have a decent readership, your odds of getting affiliate link click-thrus and purchases are probably low.
I’m nowhere near paying my mortgage with affiliate income, but it offers a predictable stream of cash that I use to fund my love of premium themes and plugins (you know, nerd toys).

Interested in how you can run a successful affiliate program without being all used car salesman-ish? This article is for you.

The Disclosure Disclaimer

The Federal Trade commission has weighed in how affiliate programs work. The Cliff Notes version says that affiliates need to disclose when they’re using affiliate links in order to protect consumers.

I think it’s a good rule and there are plenty of ways you can be compliant without sounding like a drone.

Here’s a good article if you want to know more on disclosure:

Are You Disclosing? What You Need to Know about FTC Rules and Social Media

Go Make Some Money

I’d love to hear your experience good or bad with affiliate programs. Leave a comment and let me know what’s worked for you!

7 thoughts on “How Affiliate Programs Work (and Why I Use ‘Em)”

  1. Ah, clever girl! Extra insight is always good… Unless it’s knowing what your mother in law really thinks of you, in which case the extra insight is not good. 😉

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  4. Hey Carrie,

    Who doesn’t want a burrito? 🙂 Do you have any recommendations on the best themes or plugins affiliate programs? You mentioned it, but didn’t mention any specific. I only know about Envato and Elegant at the moment which both are very popular.

    Best Regards,

    Tyler Odin

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