There are 2 basic types of online stores...
- Ecommerce Stores - Any store where customers "check out" on your site and pay you for the products or services they buy.
- Affiliate Product Stores - A store where customers learn about products but can't actually purchase them. Instead, customers click a button/link (which contains affiliate tracking code) that takes them to a different website to actually purchase the products/services.
In Chapter 2 of our training course, we discuss the PROs and CONs of each store type. (Go read that chapter if you aren't sure which type of store you'd like to build yet.) But, if you've decided you're going the affiliate product store route, this blog post basically replaces all of Chapter 3 for you. Once you've completed the steps outlined here, you can skip directly to Chapter 4.
How Affiliate Marketing Works
If you choose to become an affiliate for another retailer, you won't actually buy any products (aka inventory) from a supplier & then resell them to customers. Your site will just be an informational site where customers can find & learn about products. If they want to purchase a product, they'll click a link (which contains a nifty "tracking code") and be taken to the retailer's site to actually make the purchase. And, when a customer you send to their site buys something (which is easily tracked thanks to that "tracking code"), you earn an affiliate-commission.
The beautiful part about being an affiliate is that you never deal with customers or payments or processing orders. The retailer gets to do all that. You just send potential customers their way (completely washing your hands of them) and collect your commission check each month. No replying to customer inquiries. No collecting payments. No processing orders. No dealing with follow-up questions/issues from customers. Your affiliate commission percentage will no-doubt be less than your profit-margin would be as a reseller (someone who buys & then resells products), but your site will be much easier to run.
Affiliate Terms to Know & Things to Consider
- Affiliate commission percentage - Some programs have a "tiered" commission structure, meaning the percentage commission you earn is scaled up at higher volume levels (i.e. you earn 6% if you generate less than $1,000 of sales per month and 8% if you generate more than $1,000 of sales per month).
- Cost to join - Most affiliate programs are free to join (there are very few instances where you should have to pay to become an affiliate).
- How often you're paid - It's very common for you to have to meet an earnings threshold (i.e. accrued commission of at least $100) before the retailer issues you a payment (monthly payments are quite common).
- Tracking cookie - This refers to the amount of time that can elapse between a) the customer clicking the affiliate link on your site, and b) the customer placing an order at the retailer site and you still get credit for generating the sale (30+ days is common).
- Affiliate program - Some retailers operate their own internal affiliate program, but most retailers use a large affiliate program such as JVZoo, CommissionJunction (CJ), ShareASale (SAS) or others.
How to Find Affiliate Programs in Your Niche
Before you can sign up for an affiliate program, you need to find one. (Yes, you can call me "Captain Obvious" if you'd like.) Finding affiliate programs in your niche is really simple, but since I do sometimes go by "Captain Obvious", I'll line out the steps anyway...
- Do a Google search for your main keyword phrase(s). (If necessary, you can add the words 'affiliate program' at the end, but you likely won't need to do this.)
- Visit each of the top 5-10 ranking sites.
- Scroll to the footer section at the bottom of the page & look for a link to 'Affiliates' or 'Affiliate Program' or 'Partner with Us'.
- Read up on the program & make note of the key features of the program: affiliate commission, tracking cookie length, minimum payout amount, etc. You may want to create a simple spreadsheet to compare the different programs you find.
Once you've identified a handful of possible affiliate programs, decide which one(s) you want to join and apply. For some affiliate programs, you'll automatically be accepted instantaneously. For others, you might have to wait a couple days for a human to "review" your application & manually approve it. But it's very rare for an affiliate application to be rejected.
Amazon Affiliate Program
We can't talk about affiliate programs without mentioning the Amazon affiliate program. If you're going the affiliate route, Amazon very well might be the way to go. First off, Amazon offers absolutely everything under the sun! If you're struggling to find retailers in your niche that have affiliate programs (unlikely), Amazon is a great fall-back plan.
But it should probably be more than a back-up plan. Amazon's commission percentages aren't "amazing" compared to other affiliate programs you may find (you can check them out here), but Amazon has something going for it that very few other retailers will ... You'll earn a commission on anything customers purchase at Amazon (and they sell everything!), not just the product you sent them there to view (as long as the "tracking cookie" is still active). So if someone who clicks a link for a $100 vacuum cleaner ends up buying a $1,500 3D TV instead, you'll earn a commission on the TV they bought! Not a bad gig at all!
Another sweet thing about the Amazon affiliate program is that there are some very slick "widgets" and "apps" and "plugins" out there (whatever the heck you want to call them!) that make it very easy to auto-insert Amazon products into your site AND keep them updated over time. For example, if the price or stock status on Amazon changes, your site will be updated automatically. You won't find that kind of automation with other affiliate programs (although, in fairness, the prices aren't nearly as likely to change very often like they are with Amazon).
If you choose to go the Amazon route, check out our How to Build an Amazon Affiliate Store guide.
Check Out How Easy It Is!
A while back, we signed up for a free Amazon affiliate account. Then we just logged into our account and, using Amazon's tools, grabbed the URL for the following link (which you'll see contains our unique "tracking cookie" and will give us credit for the sales generated) …
Notice the &tag=storecoach-20 portion of the URL (at the very end). This is our tracking cookie... it's what tells Amazon that we referred the person who places an order so we get credit for the sale.
Obviously, you wouldn't actually show big, ugly links like this on your site. You'd have the product images and/or 'Buy Now' buttons be the links to Amazon. We've just shown you the actual hyperlink text to illustrate how the tracking cookie is "embedded" into the links you'll have on your affiliate site.
To-Do List Before Proceeding to Phase 2
- Explore potential affiliate programs within your niche (also consider Amazon)
- Apply to become an affiliate
- Login & become familiar with the affiliate interface and product offering
- Proceed directly to Chapter 4 (you're now done with Chapter 3)