So, let’s get a little more technical, shall we? How precisely does affiliate marketing work and why would a creator ever be happy to give away so much of their own profits?
First, let’s consider the type of content you are going to be selling. To many marketers, affiliate products will be digital products. There are plenty more options, which we will explore in other articles. But for now, that’s what we’ll focus on. That means things like eBooks, like online courses and like presentations.
Digital products are immediately a good choice for selling online because they have zero overheads and no ‘COGs’ (this is a business term meaning ‘Cost Of Goods Sold’. That means that the creator doesn’t have to pay out at all for each sale and they can instead just make profit and share that profit. It also means they never had to invest large amounts of money upfront and they don’t have to handle delivery either.
So, the creator likely made this digital product themselves using Word or a camera, or perhaps they outsourced the creation to someone else. Either way, they will have built this ebook or course with the intention of selling it for profit.
Then the creator will probably have begun selling said product from their website or from a random page online. They’ll try to drive as much traffic as they possibly can to their website in order to encourage people to buy from them and thus they’ll have their own passive income stream.
But there’s only so much promotion that one person can do and eventually their well is going to run dry. That is when a creator might start looking for affiliates to work with to help them promote their products.
The product creator is thus willing to offer affiliates like us 70% and above because they want to incentivize us to sell their products. They also want to encourage us to sell their products rather than the products that other creators are offering affiliate programs for.
While the creator will now only make 30% on their sales, this is still 30% more than they would have made on those sales otherwise – because they wouldn’t have exited.
And if that seller can attract thousands of people to their books with a legion of online marketers, they’ll be making gigantic profits and much more than they could on their own.
In short, this is a win/win situation. The creator gets a thousands more sales by encouraging marketers to work with them and the
affiliate get to sell a product as though it were their own and keep most of the profits! They can make just as much money as they would from their own ebook or course, but without having to develop one and take that huge gamble.
Specifically, the way this process actually works is via the use of ‘affiliate links’ which in turn work via cookies.
When you find an affiliate product you want to promote, you will be given an affiliate link and this is what you need to include on your sales page and in your blog posts.
When a buyer clicks on your affiliate link, they will first be redirected to another page on the web. Here, a cookie will be stored on their computer which will identify them as having come from you. Now, when they buy something from that store, they will be recorded as being ‘one of yours’ and the commission will be added to your total for you to withdraw at some point in the future.
For you it’s simple: promote the product and provide the link. That’s all there is to it!