How Affiliate Marketing Works

Interested in how some of the biggest social media influencers, bloggers, and streamers make money online but not sure how affiliate marketing works? You’re in the right place.

Affiliate marketing isn’t too complicated if you look at it from its basic premise:

  1. A company has a product or service
  2. A person partners with the company
  3. Sales generate income for both parties

It’s no different than recommending your favorite restaurant or a cool website. Except, if that person decides to visit and spend money then you get a kick-back (commission).

When you’re able to create an audience drawn by your passion for your niche or topic you’ll provide a helpful, referral service. Affiliating yourself with respectable brands provides a reward for your hard work and passion.

How Affiliate Marketing Works – A Quick Overview

  1. Affiliate marketing is promoting other people’s products in exchange for a commission
  2. Affiliate programs and networks offer different types of product, services, and promotions
  3. Affiliate campaigns are created and paired with relevant content to improve awareness and sales
  4. Affiliate managers work with you to improve conversions (sales) and to adhere to guidelines

First, let’s examine the finer details of affiliate marketing. Then, go how it works so you can get a better understanding how your favorite content creators are using this wonderful money-making opportunity to build businesses and/or add to their income streams.


What is Affiliate Marketing?

There are a couple main parts of affiliate marketing:

  • The Merchant – The company that’s providing a product or service
  • The Affiliate – The person doing the promotion
  • The Program – The arrangement affiliates make with the merchant (and vice versa)
  • The Network – The collection of programs with unique tools for tracking and promotion

Joining an affiliate program is free (never pay to join!) since you’re trading your time and reach to an audience in exchange for a commission. The commission rates depend on the program with many often being 5-10% of the total sale with others upward of 75%+!

How Affiliate Marketing Works

Within the affiliate networks and programs, you’ll discover and qualify offers based on performance and how well they match with your audience.

These links do not increase the total price of what’s being promoted.

The links will continue to generate a passive income for the longevity of the program, offer demand, and if your content remains visible to your community.

You can take a proactive approach to affiliate marketing by doing campaigns.

This flips the process into being active meaning you’re out there promoting affiliate products in real-time whether that’s sending recommendations to your social media followers, email list, or linking directly to the offer when someone asks for a suggestion.


If there’s a need for a product and you find a good offer, then you’ll earn a percentage of the sale. The person is happy to get a helpful product – you get a cut – and the company makes a profit without the additional work of sales and marketing.


How Content Creators are Using Affiliate Marketing to Make Money Online

Did you know some of your favorite content creators are using affiliate marketing?

Sometimes it’s subtle while other times it’s quite apparent – it’s one of those things that becomes obvious once you know what and how affiliate marketing works.


The most common way people use affiliate links is by adding it to keywords in their blogs…


You’ll find them embedded in a YouTube video description…


Sometimes they appear on social media shares…


Or, some like to make shop pages…


The links fit anywhere a normal anchor link would go. But, in this case, the traffic is tracked by a network or software and the content creator gets a cut. You probably have plenty of products around your home that came about as a recommendation after watching a cool YouTube video – it’s very likely they sent you to the site through their affiliate link!

I know, it almost feels like they duped you but that’s not the case.

You felt the suggestion had clout.

The content creator is an influencer – they know their stuff – so their recommendation made sense. You picked up the product and it was so! You got value out of it.

Turn the tables.

What if you were the one now promoting something from your online efforts? That’s it! Now you’re getting it – you’re thinking about getting into affiliate marketing!


How Affiliate Marketing Works: A Real Example using Amazon Associates

Want me to show you how easy it is to start affiliate marketing?

I’m an affiliate of Amazon Associates.

I got into this a couple years ago when I was first starting because:

  1. It’s the largest e-commerce portal with just about every type of item imaginable
  2. It has brand recognition so it’s easy to get people to the site
  3. It rewards you for the total purchase which often leads to sales for products you didn’t promote

I love Amazon Associates because it’s extremely simple and shows a perfect explanation of how affiliate programs work. It’s a program everyone should use when getting into this because you’re bound to find items worth promoting (and when creating related products to create a tiered pricing strategy).

Step 1: Sign up for Amazon Associates

Like many affiliate programs, you’ll have to include your contact details, payment options, and tax information. This is income generation, after all, which means you’ll pay taxes.

You’ll link up other basic info like campaign name and website.

It’s all pretty straight-forward (you shouldn’t have any trouble with the details).

Step 2: Find a product to sell

I recommend (for the sake of keeping this easy) to search for a product you either use or think your audience could really enjoy based on what you would buy.

For this example – I’m selecting a video course about Photoshop because I want to include this on one of my YouTube videos showing graphic design.

Step 3: Grab the affiliate link

Go to the product page.

On top of Amazon, you’ll see the Amazon Associates Sitestripe which gives you the basic tools for creating affiliate links to the page.

Step 4: Promote

I have a video sharing how to create ebook covers using Photoshop and InDesign which I think is a perfect match for an ebook about learning Photoshop. I add this to the video description and for the sake of keeping everything good, I let my viewers know it’s an affiliate link.

Again – You MUST disclosure your affiliate relationship with the business and program else you could find yourself facing some nasty FTC fines!

You can use affiliate marketing in all sorts of ways:

  • Social shares
  • Blog content
  • Direct links

Get creative and find those opportunities (just make sure you stay on the good side of affiliate marketing). Not so hard, is it? You can do this same process for other affiliate networks that’ll match the type of topics you’re talking about on social or with your site!


Final Words on the Workings of Affiliate Marketing

Affiliate marketing is easily one of the coolest ways to make money online because it removes the high costs of developing a product or service. Plus, you can integrate it with a lot of the activities you’re already doing whether it’s blogging or being active on social media.

You get to promote products and/or services you enjoy (or fit well).

It’s a win/win for both affiliate and business.

Hopefully, this post helped clarify how affiliate marketing works and gives you plenty of excitement to explore it as one of your online money-making efforts.

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