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How to make money from affiliate marketing

5-minute read

How to make money from affiliate marketing
Conor Shilling

Conor Shilling

12 November 2021

Affiliate marketing is becoming increasingly popular, and not just with the world’s most famous social media influencers.

Read our in-depth guide to find out more about affiliate marketing for beginners, the best affiliate marketing examples, and the advertising rules you need to follow.

What is affiliate marketing?

The affiliate marketing meaning is simple – it’s a way of earning money by promoting a company’s products or services through your own platform, such as a social media account or blog.

It’s a low investment passive income stream, whereby you can earn a commission fee every time you drive a sale for the company you’re promoting.

Affiliate marketing sales are usually tracked by affiliate links or special discount codes.

How does affiliate marketing work?

Affiliate marketing helps companies promote their products and services to a wider audience through partners with influence and a large online audience.

There are three main parties involved in affiliate marketing:

  • the seller or creator of the product/service (sometimes known as the merchant)
  • the publisher who promotes the product/service (the affiliate)
  • the consumer who engages with the seller following their interaction with an affiliate

If you promote products through affiliate marketing, there are three ways you can earn revenue:

  • pay per sale – getting paid every time a consumer buys a product or service after clicking your linking or using your code
  • pay per lead – earning revenue by creating leads for the seller, such as consumers signing up for newsletters or downloading free guides
  • pay per click – getting paid for diverting traffic to the seller’s website

As an affiliate, you’ll usually get paid once you generate a certain number of sales, leads, or clicks.

How to start affiliate marketing

Affiliate marketing is a popular way of earning passive income and it often starts as a side hustle. However, that’s not to say being an affiliate marketer can’t be a full-time job.

Firstly, you’ll need to decide how you’re going to promote products and services. You could do it via your YouTube channel, social media platforms, blogs, email newsletters, or a combination of them all.

Next, you’ll need to find the products to promote to your audience. You could target individual companies or join an affiliate network.

An affiliate network matches marketers with products to promote. They allow affiliate marketers to sign up to advertising campaigns from a range of different companies.

If you choose to work with a network, make sure you’re happy with how it works and the commission on offer. Once you’ve signed up and been accepted to the network, you can add links and codes to your content to start generating revenue.

Affiliate marketing for beginners

Affiliate marketing is popular because you can get started quickly, work to your own schedule, and don’t have to get involved in things like customer service.

If you’re thinking about becoming an affiliate marketer, here are some key questions you should be asking yourself:

  • do you have a big enough audience to earn money?
  • do you have the influence to encourage people to buy products?
  • what type of products should you be promoting?
  • how are you going to promote the products?

How to make money from affiliate marketing

Affiliate marketing is performance-based, meaning there’s no limit to what you could earn but you’ll only get out what you put in.

If you’re going to make money from affiliate marketing, optimisation is crucial. For example, when creating blogs or videos you’ll need to include the right keywords to make sure your content shows up in search engine results.

Meanwhile, if you’re using social media, you’ll need to use tags effectively and learn about how you can use each platform’s algorithm to get seen by more people.

At the same time, maintaining your personal brand is key to building trust with your audience.

Affiliate marketing examples

Here’s an overview of some of the most popular types of affiliate marketing and what you need to consider.

Making money from blogs

Blogging is a successful way of making passive income through affiliate marketing. You can build up your own blog or buy existing ones and optimise them to attract more visitors.

As well as including affiliate links in your standard posts, you can also actively review products. If you get known for being an expert on a certain type of product, brands may start coming to you for reviews in exchange for an affiliate link.

To be a successful blogger, you need to create engaging content that builds authority and trust with your audience.

Affiliate marketing blogger

Affiliate marketing on YouTube

To make money on YouTube through affiliate marketing, you’ll need to attract subscribers to your channel and encourage them to watch your videos.

You can include affiliate links and discount codes in your descriptions, while also referencing them in your videos.

Read our comprehensive guide to making money on YouTube to get started.

Becoming a social media influencer

It takes time to become an established influencer, and you’ll need to build a personal connection with your followers.

Your campaigns will mainly be focused on platforms like Instagram and TikTok, but many influencers also use YouTube and blogs to promote affiliate products.

Influencer marketing campaigns are often developed around a niche, such as candle making or home baking.

These campaigns will usually include a combination of sponsored posts, including photos, videos, and livestreams.

Advertising rules

If you become an affiliate marketer, you’ll need to follow the code set out by the Committee of Advertising Practice (CAP), which is regulated by the Advertising Standards Authority (ASA).

There’s a full overview of the rules on the ASA website, but here’s a brief roundup of what you need to know:

  • there’s a difference between editorial and affiliate content – the rules only cover marketing content, but it’s important you make the distinction between what’s editorial and what’s promotional
  • affiliate marketing content must be clearly labelled – if you’re promoting products in videos, articles, or social media posts, it needs to be clearly labelled. For example, starting a social media caption with ‘#ad’
  • brands are also responsible if you break the rules – if you break the CAP code with your affiliate posts, the company you’re working for could also get in trouble with the ASA. If this happens, brands or networks may not want to work with you again in the future

It’s important to remember that the ASA and CAP guidance isn’t legal advice and you should get help from a legal professional if you think you may be breaking the law with your advertising.

Make sure you’re paying the right tax

The tax you need to pay all depends on whether you want affiliate marketing to become your main job or a side hustle.

If affiliate marketing is your main job, read our guide to self-employed income tax to find out how much tax you need to pay and when.

If affiliate marketing is a second job, you can earn up to £1,000 each year before you have to start paying tax. Read our guide to side hustle tax for a full overview.

Do affiliate marketers need business insurance?

If you become an affiliate marketer – either part-time or full-time – you’ll need to protect yourself against the risks that come with your work, such as damage to your equipment.

Our guide to business insurance explains everything you need to know about the type of cover you may need as an affiliate marketer.

Do you have any unanswered questions about affiliate marketing? Let us know in the comments below.

Photograph 1: ronstik/stock.adobe.com Photograph 2: Jacob Lund/stock.adobe.com

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We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

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