Affiliate marketing is often portrayed as a very lucrative and low-effort way to make lots of money quickly.
When the idea of lots of money quickly comes up, your first reaction is, “is affiliate marketing legit?”
Affiliate marketing is indeed legit. There are thousands if not more online businesses that thrive on affiliate marketing and make upwards of 5 and 6 figures per month. You can also get started with affiliate marketing.
Unfortunately, many scams, poor-quality courses, and books out there try to sell you a dream to make a quick buck.
Affiliate marketing is legit, but it’s also hard work. After all, money rarely comes easy!
If you do the work and have a bit of luck on your side, you can grow an affiliate marketing business and make it relatively passive, achieving the dream of being able to make money in your sleep!
What Is Affiliate Marketing?
In affiliate marketing, third parties promote a company’s product or service for them. Every time the referral results in a sale, the company compensates them, usually by a percentage of the sale.
Here’s the “official” definition according to Investopedia:
Affiliate marketing is an advertising model in which a company compensates third-party publishers to generate traffic or leads to the company’s products and services. The third-party publishers are affiliates, and the commission fee incentivizes them to find ways to promote the company.
You can think of affiliate programs as referral perks.
If you’ve used apps like Dropbox or Coinbase, you’re prompted with ways to refer friends and earn some credits/receive something.
Affiliate marketing is very similar, except instead of you referring one or two friends, affiliates generally refer a LOT more people thanks to their existing audience.
How does affiliate marketing work?
Affiliate marketers make money by leveraging their existing audience and promoting their products and services.
One of the biggest affiliate marketing companies in the world is The WireCutter by The New York Times.
If you’ve ever been to The WireCutter, you’ll see that they provide links to buy the products they review.
When you click on one of their links, you’re taken to Amazon.com or another online store and the link places a small bit of tracking code in your browser. This is how the merchant knows that you came to their site through The Wirecutter.
Now, if you make a purchase from Amazon, Amazon gives a percentage of the sale to The WireCutter for referring you to them.
But what if you don’t make the purchase right away, and come back and buy a few days later?
Depending on the merchant the website is working with, the tracking code remains active for a number of days. Usually, it’s 30, but in some cases it can be a little less or more.
So as long as the code is active, if you go back to Amazon within 30 days to make your purchase, Amazon will attribute it to The WireCutter and give them a percentage of the sale.
If you had your own website or YouTube channel and promoted products through it, the process would be the same.
You’d promote products using a special kind of link, and you’d get a percentage of any sales you referred.
So is Affiliate Marketing Legit?
Affiliate marketing is legit.
Essentially, affiliate marketing is you as an affiliate marketer helping someone make a purchase decision.
Let’s say you were an expert at making croissants(which are notoriously difficult to make).
You have a website or YouTube channel where you teach people how to make croissants, and you have a decent-sized following that appreciates the content you create.
When someone from your audience wants to buy a dough sheeter or a good oven to bake pastries, they’d trust what you would have to say, right?
That’s affiliate marketing in a nutshell.
So instead of asking around randomly for product recommendations, what do most people do nowadays?
They search for recommendations on Google or YouTube!
If you can provide the best quality recommendations to people looking for that information, you can generate affiliate commissions.
Is it Possible to Make Money From Affiliate Marketing?
According to stats put up by SimilarWeb, affiliate marketing generates between 5 to 25% of all revenue for some of the biggest retailers in the world.
In just the USA, affiliate marketing is responsible for 16% of all ecommerce sales.
In 2021, the estimated size of the US ecommerce market was $767 BILLION. By 2025, it’s expected to reach $1.3 TRILLION.
16% of $767 billion is around $122 billion dollars!
Thousands of companies across every industry you can imagine have affiliate and referral programs.
The most popular(and one of the oldest) affiliate programs in the world is the Amazon affiliate program. Many other big box stores and smaller retailers have their own affiliate programs as well.
Credit card companies, companies in finance, travel, SAAS, and more have their own affiliate programs as well.
In fact, some of the most lucrative programs are in finance and software. Web hosting and VPNs tend to be very high-paying, as are finance and education programs.
The affiliate marketing pie is definitely big enough, and capturing a small(microscopic even) piece of the pie is very achievable indeed.
What kind of business does affiliate marketing?
Big media sites
Large media companies like The New York Times, CNET, Forbes, and the like all participate in affiliate marketing. Chances are, if you’ve ever searched for recommendations on things like headphones, refrigerators, mobile phones, or the like, you’ll have encountered an article on one of these big sites.
While it makes sense for CNET to talk about mobile phones, it doesn’t make quite as much sense for Forbes or CNN to talk about beauty products.
…But this is Google in the 2020s and bigger media sites are ranking for nearly everything under the sun. As a result, these companies are probably pulling in the lion’s share of the $100+ billion dollars generated through affiliate marketing.
Still, there are medium and smaller sites out there that are still doing pretty well.
Small and medium content/niche sites
For some products and informational searches, smaller sites are still doing pretty well.
These sites are often run by a single person or a small team of individuals.
Additionally, they’re usually laser-focused, at least in the beginning.
An archery blog may specialize in compound bows, or an audiophile blog may specialize in noise-canceling headphones.
Most of these sites work with Amazon as their main affiliate program, but ever since Amazon significantly reduced their affiliate commissions back in 2020, many site owners are moving away from Amazon toward other better-paying programs.
Some niche site owners manage to successfully grow their sites into larger content sites that cover a wider range of topics as they gain more authority and trust.
If you’re looking to get into affiliate marketing, this is probably where you’ll start. Remember, every big site out there today once started as a small site!
It’s all about consistency and dedication.
Lifestyle bloggers run smaller-sized websites much like niche sites, except lifestyle blogs are usually much more vague in their branding.
A lifestyle blog will usually have a brand around a person or a story.
Whereas niche sites usually only write about their particular niche, lifestyle blogs will have product recommendations as well as personal stories and thoughts.
Mommy blogs and travel blogs are great examples of this kind of website.
These guys extensively promote products and services through their content, and so make up a big chunk of affiliate marketers.
Even this site could be considered a lifestyle blog to some extent.
I eat, sleep, and breathe online marketing and business building, so that’s all I talk about here. In addition, I occasionally promote some tools and products that I feel are useful for folks looking to build their own business.
The key difference between niche sites and lifestyle blogs is that lifestyle blogs have more of a dedicated audience than niche sites, where people may only interact with the site one or two times and never go back again.
Comparison shopping and coupon apps like Honey are also affiliates! When an app like Honey finds you a coupon and saves you some money on a purchase, they’re pushing you toward completing a purchase you may have had second thoughts about otherwise!
Some SAAS services also cross-promote through integrations. For example, Jasper.ai and SurferSEO are integrated with one another, but you have to subscribe to each one individually. It’s highly likely that both services are affiliates for one another.
Social media influencers and YouTubers
YouTubers and social media influencers have a huge sway on people’s buying decisions.
If Marques Brownlee likes a certain product he reviews and his 10+ million subscribers watch the video, it’s highly likely that many of them will go ahead and buy.
Additionally, many YouTubers have a fixed video description where they list all the gear that they use. These links are usually affiliate links.
Social media personalities also have a lot of influence on their followers. If you were into fitness and working out and you followed a fitness guru, you’d probably trust their recommendations.
Many real-life influencers like Tony Robbins command crowds in the thousands, and they’re definitely using affiliate marketing when they promote any product or service.
Examples of successful Affiliate Marketers
Matt Diggity is one of the best-known names in affiliate marketing. He has a very data-driven approach to SEO and methodically ranks his websites for competitive keywords.
Adam Enfroy started his blog back in 2019 and has since grown it to over $300,000 per month in revenue. He has a more unconventional approach to affiliate marketing that most others but what he’s doing seems to be working since he’s ranking for extremely competitive terms and making a lot of money doing so!
Patt Flynn from SmartPassiveIncome.com is one of the oldest names in affiliate marketing. He’s been building his own affiliate businesses and helping others build their own affiliate business.
Mushfiq Sarker has taken affiliate marketing to a different level by finding affiliate businesses, optimizing them, and flipping them.
Mushfiq has flipped over 200 businesses and writes about his experience and projects at The Website Flip.
The dark side of affiliate marketing
Because of the massive earning potential of affiliate marketing, there are unscrupulous individuals and companies out there looking to make a quick buck off of someone’s hopes and dreams.
Here are some red flags to look out for:
You have to pay to become an affiliate
Any affiliate marketing program worth its salt will let you join for free.
Sure, some programs may have strict rules for joining, like meeting a certain traffic threshold or a manual review of your promotional channels, but affiliate programs will not have fees to join.
That’s because the merchant/agency expects to derive revenue from the referrals you send anyway, so why should you pay money to someone who is supposed to pay you?
If an affiliate program promises the moon and asks you to pay to join, their main revenue source is YOU, not the sale of their products and services.
Courses that promise easy money
As I’m sure you’ve realized by now, affiliate marketing is hard work. Sadly, there is no such thing as easy money in this world, so if you come across a course that promises you’ll start making hundreds or thousands of dollars with little to no effort, stay away.
These courses are usually designed to suck you in and then mooch even more revenue off of you through upsells from inside the course.
I’m a member of many affiliate marketing courses. Out of the many, these really stand out:
- The Authority Site System by Authority Hackers
- The Affiliate Lab by Matt Diggity
- Blog Growth Engine by Adam Enfroy
These courses are not cheap, but they go really in-depth about the work you need to put in and take you step-by-step from a total beginner to an affiliate marketing champion. They also have active and helpful communities.
Just being a member of the community is worth the price of the courses alone.
Cheap and easy solutions
On the product side of things, you’ve probably come across a lot of products and services that promise to solve a pressing problem without any extra effort on your part.
These products are super common in niches like finance, dating, and weight loss.
In many cases, the products or services are bogus/repackaged products that are hyped up and sold through massive affiliate networks.
If anything sounds too good to be true, it probably is.
How to Get Started With Affiliate Marketing
To get started with affiliate marketing, you need to figure out the audience you want to target. Often, people start with things they themselves are knowledgeable about or have expertise in.
Many hobbies/passions/skills have lots of associated products or services.
Many people are very open to niches and do market research to find suitable niches or verticals to pursue.
When deciding on a niche or vertical, there are two important considerations:
Are there enough people interested in this topic?
Are there enough products and/or services I can promote, and is it worth my time?
The last question is very important. Affiliate commissions are usually 10% or lower, so you want to think about promoting products that are relatively high-ticket.
The sweet spot is $100 to $500, though many affiliates do very well promoting very high-end luxury items.
Naturally, you’ll see less volume the higher the price is.
Doing some basic Googling can help you ascertain the variety of products and services available in a particular niche.
You then have to figure out if there is an audience.
You can do keyword research using free tools like UberSuggest or paid tools like Ahrefs to determine the number of monthly searches and traffic potential for various keywords.
You can also use these tools to find new keywords in your niche.
If you determine there is enough volume for you to have a big enough piece of the pie, you can think about the medium through which you’ll promote these products and services.
Building a website
Building a website is a fairly simple process. You need a domain name, some web hosting, and a Content Management System (CMS) like WordPress.
(This site is also built on WordPress).
Most hosting providers are one-stop shops where you can register a domain, get hosting, and set up WordPress within minutes.
Once you have a basic website up, the challenging part awaits: creating content.
Based on your keyword research, you’ll need to decide which topics to write articles about.
Searching for those keywords in Google will give you an idea of what kind of articles Google is looking to show for a particular search query. Your job is to follow the same pattern and do a better job of providing that information.
Rinse and repeat for all of your keywords, promote your site through link building, and you’ll start to see traffic come in.
Building a YouTube channel
The other main approach that you can use is to build a YouTube channel.
YouTube’s algorithm is fairly simple: you need to create engaging content and you need to create it regularly.
YouTube is a lot more effort than a website.
While it’s comparatively easy to write or outsource 1-2 posts every week, you’ll need to produce at least 1 video every week(or with more frequency) to keep up with the algorithm.
Not only that, but your videos have to be engaging!
It’s natural that your earlier videos won’t be that professional unless you’re already a filmmaker, but the key is to keep it up.
The first few months are particularly difficult, because you’ll have to churn out lots of content and you won’t have much to show for it.
You’ll still need to target some keywords or audience because that will help your earlier videos get traction.
IT will be difficult to see growth if your videos are difficult to find!
You don’t need that much equipment to start a youtube channel.
You can film on your smartphone and edit your videos using a computer.
The only additional pieces of equipment I’d suggest picking up are a mic to capture cleaner audio, a tripod or stand to hold the camera or phone, and a ring light to get better shots.
How much does it cost to start affiliate marketing?
You can get started with affiliate marketing with less than $100 per year if you’re really bootstrapping. Then you scale up as you start seeing some revenue.
If you’re going the YouTube or social media route, chances are, you’re already quite active and have a following.
You can film and edit using your phone to create good-looking videos and start uploading.
If you go the website route, there are a few small costs to get started: you’ll need to buy a domain(around $10-15 for the first year depending on where you buy it) and hosting(around $5/month for inexpensive hosting).
Hypothetically, everything else can be found for free.
WordPress is free, as are many great themes.
You can do keyword research with the alphabet soup method without needing to use any expensive tools, and if you write the content yourself, there’s no cost there either.
Even promotion and link building can be free to a certain extent.
With both approaches, you’ll need to start investing some money when you decide to scale.
For YouTube, you’ll eventually need better camera gear and someone to help you edit and write scripts.
For a blog, you’ll eventually need someone to write content to better scale your publishing. You may also need someone to help with outreach.
Choosing affiliate programs
Which affiliate programs should you be a part of?
The easy answer: any company that’s relevant to your audience and willing to work with you!
Most bloggers and YouTubers get their start by working with the Amazon Associates program.
The beauty of Amazon’s program is (or at least was until they slashed their rates) that you got a commission for anything a customer bought after clicking your link.
Because Amazon has such a huge selection, most people ended up buying something or the other after visiting Amazon, so you’d always get small fish commissions along with the occasional bigger fish from your actual referred product.
Amazon is still worth keeping as a backup, but if you’re in a targeted niche, consider checking out affiliate programs for smaller merchants.
Here’s an example: I used to run a remote control drone website a few years ago. Very few people bought their gear from Amazon, and most people actually bought from a large Chinese website called Banggood and a few local websites in the United States.
At the site’s peak, I was making around $1500/month from both Banggood and the local retailer.
As you can see, in some cases, you’ll actually do better by working with merchants more specialized than Amazon.
Also, keep in mind that the higher the potential payout, the higher the competition will be.
It will also mean that the pie is much bigger, so even if you can get a small slice, you can still make some decent money!
Aside from Amazon, these are some of the biggest affiliate programs in the world and they work with thousands of merchants across a variety of industries:
Look for new and upcoming verticals
One way to be successful in affiliate marketing is to find industries that are new and gaining popularity.
For example, AI tools such as copywriters(Jasper.ai is a great example) and image generators did not exist a few years ago. This is a really new industry and ripe with opportunities to enter as there are not that many established players in the market.
On the other hand, if you wanted to promote something like coffee makers or refrigerators, you’d have your work cut out for you!
Conclusion: Is affiliate marketing worth it?
Affiliate marketing is booming in a growing industry.
There’s no doubt that more and more people are becoming aware of the opportunity that affiliate marketing presents, and there’s an increase in competition from both sides: big media companies are into it, as are individuals and smaller companies.
However, the proverbial pie seems to be getting bigger and bigger every year, and since new products and verticals are created every single year, there will always be an opportunity to be the first past the post and become established.
Affiliate marketing is definitely worth it if you’re willing to put in the time, effort, grind, and you have a little luck on your side!