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Affiliate Marketing Explained: What is it? How Does it Work? How do you Make Money?

Affiliate Marketing.
What is Affiliate Marketing?
How does Affiliate Marketing work?
How to make money with Affiliate Marketing?

I’m going to cover all these questions and more in today’s post.

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If you prefer watching your content as opposed to reading it, here is our affiliate marketing- what is it video:

Affiliate marketing is awesome when you do it right, but what is it exactly and how do you make money with affiliate marketing?

To understand how it works, let’s take a step back and look at how straight commission works in a sales job, then we’ll discuss what affiliate marketing is and what the differences are.

There are all types of businesses that pay straight commissions to salespeople.

There used to be door to door sales of vacuums and encyclopedia’s, these were straight commission gigs.

The salespeople would go door to door and only get paid when they made sales.

No sales… no pay.

Fast forward to the modern era and many industries still pay a straight commission for sales with no base salary… for example insurance sales, financial services, and real estate.

Yes, more often than not.. your quote unquote “financial advisor” is just a glorified salesperson.

Believe it or not, he or she typically gets a commission for each recommendation they make that you decide to go with.


I know, right?… the dirty little secrets of the financial world your financial advisor doesn’t want you to know about.

Anyway, why are we talking about commission and sales when this topic is affiliate marketing.

It’s because affiliate marketing works in a very similar way except everything is done online.

If you become an affiliate for a company, they will pay you a straight commission for each product sold by you or your website, youtube channel, etc.

The biggest difference between affiliate sales and old fashioned sales is that instead of going to people and trying to make a sale, people find you online and if they buy something they like, you get a commission.

People can find you anywhere…. your website, your podcast, your social media account, or even your YouTube videos (which is my favorite method of getting affiliate sales).

So How does Affiliate Marketing work?

You’re probably thinking… Okay, it’s intriguing… but how does it work exactly.

Here’s the 10,000 foot overview.

Step 1: You sign up to be an affiliate with a company.

Step 2: You generate custom URL’s or website links that go to specific products and services.

Step 3: You put these links into your content such as your blog, YouTube channel, social media, etc. and any clicks or sales from these links are tracked back to you.

Step 4: You’re paid commission for the sales that come from your links.

It’s that simple.

But simple doesn’t mean easy.

You’ve got to drive traffic to those links by creating content.

This is called content marketing or attraction marketing.

Most people are doing content marketing wrong, If you’re interested in that topic, check out this video to make sure you’re doing it right because most people are NOT.

Most people are spending time doing the wrong things.

Anywho, I digress.

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How to Make Money with Affiliate Marketing

Let’s get back to affiliate marketing and how to make money with affiliate marketing.

Before we go into exactly how to make the most money, I want you to understand just how powerful this business model is.

There are so many benefits to building an affiliate marketing business.

For one thing, unlike a salesperson, you can promote as many affiliate products and programs as you want.

If you’re a traditional sales rep for a specific company, you’re limited to only selling their products.

With affiliate marketing, you can be an affiliate for Amazon, Target, ClickBank, and many others all at the same time.

You’re not limited to one company.

Another huge benefit is that affiliate marketing allows you to leverage your time and your reach and make passive income.

A salesperson can typically meet with only 1 person (or just a few people) at a time.

With online marketing, there’s no limit to how many people can view your content at one time.

For example, my blog, my email list, and my YouTube channel gets my message and my affiliate products in front of over 20,000 people per month!

That doesn’t happen by accident though, you’ve got to be doing you content marketing right to reach that many people on autopilot.

Here’s a video I did on how to do that part right (if you’re so inclined):

Back to affiliate marketing…. My affiliate sales alone currently make me over $1,000 per month in passive income.

And I’m a small-time tiny weeny itsy bitsy little creator.

Imagine what my reach and income will be 10 years from now if I keep producing content.

There is no way I could do a sales presentation to 20,000 per month if I wasn’t leveraging the internet.

Besides that, I’m an introvert and I don’t want to be the pushy sales guy.

With affiliate marketing, it’s all about the numbers and exponential growth.

People buy if they like you and they want the product.
It’s that simple.
They don’t buy if they don’t want the product… no pressure.

Just mention the link or embed it in your content and your viewers will buy it IF they want it.

The last benefit of affiliate marketing that you may not have ever thought about is… hmm… what should I call it.

The power to pivot?

Maybe it’s easier to explain than create a word for…

Let’s suppose you build a bunch of content around your passion which happens to be underwater basket-weaving.

When people consume your content they’re encouraged to learn underwater basket weaving by purchasing a $99 online program that teaches it to them and….

You guessed it, that is your affiliate link and you get $50 per sale.


Say you’re making 100 sales a month, which is $5,000 and living large.

All is good.

Then the unthinkable happens.

The company goes out of business or stops paying affiliate commissions.

Your income goes to zero overnight.

It’s like you just got fired.

In the real world, if you lost your job you’d go get another job.

In the affiliate marketing space, if you’ve built it right, you simply find another similar product to promote and swap out the links.

Your traffic to your content is still there.

You just lost your revenue.

Once you swap the links out you are back in business.

That is what I mean by the ability to pivot, or swap-ability, or flexibility.

That’s the foundation of affiliate marketing and how to make money with affiliate marketing.

The key is to make sure you’re doing it right or it could be problematic.

For example, I promote a high ticket program that teaches people to flip vacant land for large profits.

I promote it primarily through my real estate investing videos.

There are many different programs that teach this skill out there on the market.

The one I promote just happens to be my favorite and the one I originally learned from.

I could say in my videos “I’ll put a link in the description to the XYZ program if you want to learn how to flip land”.

That would be great except if I have 20 videos promoting the XYZ program and in 5 years they stop paying affiliate commissions… I’d be up the creek without a paddle.

So instead I can say something like, “If you want to how to do land flipping, I’ll put a link in the description to the program we recommend”.

Now, if XYZ company goes out of business, I simply swap the link out to a different program.

Of course,  you want to make sure it’s a good program you’re promoting but my point is you’ve got to create your online business for longevity and have a plan for shifts in the marketplace.

Okay, now we get to dive into the good stuff… the fun stuff!

The Best Affiliate Marketing Programs / Types of Affiliate Marketing

I try to save the best stuff for last to reward those who stick with me.

So let’s get to it.

How much can you make doing affiliate marketing and what affiliate marketing programs should you focus on for the biggest income?

There are hundreds, if not thousands of affiliate programs out there, it can be overwhelming to know where to start.

To help you out, I’m going to share what has worked and what has not worked for me.

I’m not a guru but maybe I’m a few steps in front of you and can make your journey a little easier.

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Affiliate Marketing Experience #1:

Let me start by telling you what to be careful of.

New Software as a service affiliate programs have NOT been good to me.

I have promoted different online software programs for keyword research and other software type programs.

Usually, these companies were fairly well known and offering awesome compensation for finding customers.

Some of them offered 80% recurring commission.

That meant that for every customer I found, I got 80% commission and since the customers paid a monthly fee, I got 80% every month.

So if the program was $100 per month, I got $80.

Sounds fantastic, right?

It was fantastic… until it wasn’t.

I had multiple affiliate companies like this just stop paying affiliate commissions and basically say “we did away with that program”.

So basically, they made big promises of hefty commission to recruit thousands of online marketers to promote their software.

Then, after they got to the number of customers they wanted, they stopped paying affiliate commission and just kept 100% of the revenue.

I don’t care how you slice it… that’s wrong.

So I stopped promoting software as a service type companies because after a few of them did this to me I realized it must be a normal thing in that particular sector of business.

That’s also when I learned to keep my verbal cues general and not promote a specific company such as “XYZ company”.

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Experience #2: The Amazon Affiliate Program

My next experience with affiliate marketing is being an affiliate or partner for amazon.

The great thing about this program is that you can promote virtually any product amazon offers (which is virtually any product).

You simply generate your unique affiliate link for that product and put it in your content.

When somebody clicks on it and orders, you get credit.

One good thing about being an Amazon affiliate is that if a customer clicks to Amazon through your link and then decides to buy something else, you’ll get credit for those sales as well.

Another good thing is the trust factor.

Most people have ordered from Amazon before, so they are psychologically predisposed to buy from Amazon again if it’s something they want.

There is virtually no buyers resistance like there would be if they were on a site they weren’t comfortable with.

The bad part is that Amazon only pays a 1-3% commission.

That means that for every $100 sold you will get $3.00.

It’s going to take a lot of traffic and a lot of sales to make some real money, which is fine.

You just need to know that ahead of time and be realistic about it going in.

I like to focus on products that are $50 or more so I can at least make $1.00 per sale.

That still doesn’t sound like much but if you make 20 sales a day automatically from content you produced a long time ago, that’s twenty bucks a day.

$20 bucks a day is $600 bucks a month.

$20 bucks is $20 bucks and $600 bucks is $600 bucks.

The Amazon affiliate program is a great way to start building passive income and a great tool to have at your disposal.

Here’s a link to an example of one of my most popular Amazon product review videos if you want to see how I do them.

Amazon is great.

But it’s not the best or fastest way to make big money with affiliate marketing.

I give you…

Experience #3: High Ticket Affiliate Marketing

This is exiting!

This is how you can make money quick enough to make a dent in your finances.

If you’re watching this video and you’ve made it to here, I assume you’re trying to make some extra money.

How much extra would it take to make life a little easier?

$200 per month?
$500 per month?
$1,000, $2,000… $5,000 per month?

The affiliate marketing strategy I’m about to show you can get you to those numbers relatively quickly.

So what is it?…It’s high ticket affiliate marketing.

Remember when I mentioned selling products that are $50 or more on amazon because 3% of $50 is much more than 3% of $10.

High ticket affiliate marketing takes this concept to a whole new level.

First, they are high priced (hence the term “high-ticket”).

$500, $1,000, $5,000, or even products costing $10,000 or more.

On top of the high price, since most of these products are delivered digitally in the form of a course or program, they can offer much more than a 1-3% commission.

Many of them offer 40-60% commission or more.

Let’s say you’re promoting an advanced course from the underwater basket weaving academy that sells for $2,000 and that pays a 50% commission.

That means for every sale you make, you’re going to make $1,000.

Of course, that’s a silly example but there are tons of products out there in this price range.

The best high-ticket programs are educational programs that can help a person fix something in their life, provide a solution, or teach them to do something.

Two of the most popular ones I promote are how to flip land and how to make money with affiliate marketing.

They are both high-ticket but they sell because they both have an expert who is teaching people how to do something that can earn them back more than the cost of the program.

So people see it as less of a straight purchase and more like an investment.

For example, the affiliate program I currently promote is about $1,000 to purchase.

However, I make over $1,000 per month doing affiliate marketing.

Do you see how it would be worth it to learn this skill and how it could pay for itself?

Or how about the land program we promote.

I think it’s currently $2,500 but I have made over $100,000 profit doing what that course taught me to do.

So that is how high-ticket affiliate marketing works.

The last and most exciting affiliate model is what I call stacked affiliate marketing.

It’s a bit more complex and you make less on the front end.

However, the business model itself allows for exponential growth and when combined with online marketing it’s a no brainer.

Plus, it’s more fulfilling than straight affiliate marketing because you get to work hand in hand with people to help them achieve their personal goals and change their lives for the better.

If you’re looking for a leveraged way to make income, consider working with us to build your own stacked affiliate marketing business.

Related Posts: 

How to Make Money on YouTube
Affiliate Marketing for Beginners

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God Bless,

Jason and Daniele
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