So in this video, I’m going to be explaining how the affiliate marketing industry works and exactly what affiliate marketing is. I’ll be finding terms for you, and I’ll be hoarding everything for you. Right on this whiteboard right here,
Affiliate marketing is a sort of jargon-filled, complicated industry. There are all these terms, advertiser, publisher, traffic source, etc. that have no meaning to people in normal daily life. But I’m going to attempt to really break things down for you in a way that you can understand, and I’m going to be using multiple examples and diagrams on this whiteboard to help you understand this territory. This will be especially interesting for you if you want to get into affiliate marketing. It’s a very lucrative world. I do affiliate marketing myself, and I run a multimillion-dollar business. I started earning millions of dollars in my young twenties, and you know. Hopefully, this will give you a good basis for understanding this industry. So the first thing you want to understand about affiliate marketing is what it is, it’s commission based marketing. It’s selling products on a commission only basis online.
Now it’s very similar to door to door salesmen or salespeople selling used cars or telemarketers. Basically, these are people that are calling you on the phone or that are going door to door. They’re selling the Encyclopedia Britannica. A hundred years ago now, these salespeople would say, hey, you could buy the Encyclopedia Britannica for your family. It’s a hundred bucks, and if they sold the Encyclopedia Britannica to you, $100 went to the company, and you know, maybe they pocketed $50 or something like that. Whatever it was, the company kept some money. A customer paid the money to make that happen. Same thing with selling cars. If you buy a car from a salesman on a lot for $1,000, maybe $800 of that is going to the car lot and $200 without us going to the salesperson and you know it came from the customer.
Now in affiliate marketing, it’s very similar. It’s almost the exact same thing. You have a company, you have a customer, and you have an affiliate. Now the company gives the product to the customer, and the customer gives the money to the company. The affiliates job is to connect the company with the customer. And in return, the company pays the affiliate some money, and the affiliate connects the customer with the company, right. So it’s a big triangle. You know, it’s a pyramid scheme. It’s a pyramid. It’s pyramids. No, it’s not a pyramid. It could turn it, and it’s different. It’s just basic commerce okay. It’s direct response sales. Now, what we call it in affiliate marketing, right? Is there are, companies has offered. That’s what we call the products that sell. So for instance, let’s say going back to the Encyclopedia Britannica example, the company that sold encyclopedia Britannica is, might have other things that the salesperson could sell.
The person they might have encyclopedia Britannica, they might also be selling tutoring services to help people’s children learn English or learn history. So, you know, like an actual service to help people, you know, learn more. A company can have multiple offers. They can have multiple products that they offer commissions on. Now, generally speaking, there are tens of thousands, if not millions of companies that have affiliate programs. It gets very complicated to find all of the different affiliate programs that somebody might want to market. So the way it works is we have what’s called affiliate networks. So what is often the case is an affiliate is working with an affiliate network. Now an example of an affiliate network is Clickbank sheriff’s sale, a van gate, Commission Junction. Amazon is an affiliate network. Walmart has an affiliate network. eBay has an affiliate network. Target has an affiliate network with lots of different products from lots of different sellers that you can earn a commission on.
So an affiliate might log into, let’s say Amazon, Amazon’s affiliate network, and they can find any product that they want and market all in one place. They can choose a lot of different ideas of products to market. Now again, the way affiliate is marketing to the customer is through what’s called a link or URL and in some other videos. If you want to learn the basics of how to do affiliate marketing. I’m going to have my assistant put up a card on this youtube video so you can go see my playlist on Youtube. My free course on how to do affiliate marketing, or you can subscribe to my channel, and you’ll get my free course on how to do affiliate marketing, but you’ll get a link, and you can advertise that link on Facebook posts on snap chat, on Instagram. You could put it on, you know, send it to somebody through text message.
You can send the link to somebody through email. It doesn’t really matter how you send the link out. You could put it on a postcard and mail it to somebody. It doesn’t matter. What matters is that somebody clicks on it. That’s how you connect people with these companies. Now, when a customer buys a product from one of the companies that you recommended, let’s say they bought a product on Amazon that you recommended they bought this book. What the affiliate network will do is they will pay you the money. So the customer pays the affiliate network. Let’s say $2 signs and affiliate network will pay you $1 sign so they get money and you get some of it you get. That’s your commission for making that connection.
Now, some examples of affiliate marketing companies to make it really dead easy in your mind are let’s say Expedia.com if you’ve ever booked a flight online and you’ve used Expedia, Priceline, Orbitz, or any of the other companies that you can book flights through. All of these companies are affiliate marketing companies. expedia.com does not own any airplanes. They don’t own any flight patterns. Expedia as an affiliate, you go to expedia.com, and you buy from one of the airlines. You are paying United or American Airlines some money and for making that connection for Expedia.com making that connection. They are getting a commission for connecting you with that flight.
Some more examples. It is the same logic with Airbnb or Uber. These are affiliate marketing companies. Airbnb does not own any hotels. Uber does not own any cars. What they are doing is they’re simply connecting you with somebody who is willing to rent out their place, or they’re connecting you with somebody who is willing to drive you someplace, and Uber or Airbnb is making a little commission on making that connection. Again, they don’t own any inventory. They are simply making a connection.
You can be an affiliate marketer, and all you need is a link to make that connection, and you can earn a bit of commission if somebody uses your service. Now, Uber does not earn any money if you don’t get a ride anywhere. That makes sense, right? If you just install the APP, Uber doesn’t make any money. Uber only makes money if you hire a driver to drive you somewhere, so that’s what affiliate marketing is in a nutshell. Now, I hope that explains things. It’s a bit of a complicated world, but it’s really easy when it comes down to it. You’re just making connections, and you’re getting commissions for helping make those purchases connections, just like Airbnb, just like Uber, just like hotels.com or cars.com or any of these other companies, Expedia. It’s a very simple industry.
Now, if you’re looking to learn more about affiliate marketing, that’s what my business is. I make a lot of money doing it, and I have a lot of friends all over the world doing it. It’s the easiest business to get started in. It requires no technical skills, no inventory, and allows you to live a life of freedom of location, of time. I wake up whenever I want and I can be wherever I want that my wife allows me to Now, but the point being, if you want to learn more about this, make sure you subscribe to my channel and hit that notification bell, and you’ll get a free course on how to get started with affiliate marketing. Now, if you liked this video as well, make sure to comment and tell me what would you like to learn about next and also push that like. But if this has been helpful for you in learning and in your journey in any way.
© Pendragon Labs LLC. 2019