What is Affiliate Marketing and How Does It Work?

What is Affiliate Marketing and How does It Work?

What is Affiliate Marketing and How Does It Work?
Learn the fundamental of affiliate marketing. So that you can start your affiliate marketing journey the right way.

If you are not a lazy blogger you should put your hands on affiliate marketing.

Affiliate marketing is a lucrative way to make money blogging.

Most of the bloggers don’t monetize their blog with affiliate marketing because it needs some works to do.

Monetizing a blog with advertising networks like Adsense is easy. But you need a lot of traffic to earn a handsome amount with advertising networks.

Affiliate marketing is useful for both small and large blogs. If you can do it correctly you can make a handsome amount every month.

In this post, I’ll discuss the basics of affiliate marketing. That is, “What is affiliate marketing and how does it work?”

What Is Affiliate Marketing?

In simple words, affiliate marketing is a process of marketing where you sell someone’s product and get a commission.

Creating a product takes time.

You first have to come up with the product idea.

Then, you have to research the market to justify the demand for the product.

Once you can ensure the product demand then you can go for creating the product.

This is a lot of work.

Creating a product itself is a hard process.

As a beginner, you may not want to take the load of that lots of work.

I’m not saying you should not create products. Creating products is a very nice thing.

What I’m trying to say is, as creating a product takes time, you should put your hands in affiliate marketing to make up the expenses of your blog and also get you motivated by earning some money blogging.

Once your blog will grow, you will be able to earn a huge amount of money through affiliate marketing.

So, what is affiliate marketing?

If you’ve used some products or services that you liked or enjoyed, you can recommend those to your readers.

If any of your readers buy that product through your recommendation, you will get a commission from the product seller.

This is affiliate marketing.

That’s simple.

What Parties Are Involved In Affiliate Marketing?

There are essentially three parties involved in affiliate marketing.

  1. Merchant
  2. Publisher, and
  3. Customer

There is also one more party that is “Affiliate Network”.

Parties Involved in Affiliate Marketing

Let’s discuss all the parties.

  • Merchant (Retailer/Brand/Advertiser):

The merchant is often the producer of the product and/or service you promote.

A merchant is also known as a retailer or a brand or an advertiser.

If you create a product and sell through affiliate marketing then you are a Merchant.

  • Publisher (Affiliate/Associate):

Who promotes someone else’s product and get a commission after selling is called a Publisher.

As bloggers, we promote someone else’s product through our blog. So, we are publishers.

The publisher is also known as the Affiliate or Associate.

  • Customer (blog readers):

Who buys the product is the customer.

In our case, our blog readers are our customers.

  • Affiliate Network:

An affiliate network is a marketplace where Merchants offer publishers to become an affiliate for their products.

As a publisher, you can sign up for affiliate networks to find the product you would like to promote.

An affiliate network is not an essential part of affiliate marketing.

But, it is good to have to mitigate the dispute between Merchants and Publishers. They also handle the payment for both Merchants and Publishers.

If you want to be a part of affiliate marketing, you have to be one of the above four parties.

As bloggers, we often want to be a publisher (An affiliate).

How Does Affiliate Marketing Work?

I think you already get the idea of how affiliate marketing works from the above discussion.

If we bring the above discussion in a place –

Merchants run an affiliate program for their products. You, as a publisher, sign up for the affiliate program and promote the product through your blog (or any platform). If you can successfully sell a product you will get a commission.

For example, Bluehost run an affiliate program for their hosting service.

You can become an affiliate for their program and promote their service through your blog.

If any of your readers buy their service through your promotion, you will get a commission.

Some Common Terms Used In Affiliate Marketing

To fully understand affiliate marketing, you need to be conversant with the following terms –

Affiliate program: A program run by the merchant to allow you becoming an affiliate.

You need to sign up for the program to promote their product or service.

Affiliate link: This is a unique link provided to you by the Merchant. It is used by the merchant to track the sales happened by your marketing effort.

You have to put this link where you want to promote the product.

Your affiliate commission will be calculated how many sales happened through this link.

Affiliate ID: This is your ID for a specific affiliate program. This ID is included in your affiliate link to track the sales referred by you.

But some merchants give a unique ID that you can use to promote any of their products.

Link clocking: After signing up for an affiliate program you will be given an affiliate link to promote the product. That link often looks ugly and contains numbers and/or special characters.

To turn that ugly link into nice and understandable, you can clock that.

You can use ThirstyAffiliates WordPress plugin for link cloaking.

Link cloaking is also useful for preventing commission hijacking.

Affiliate Marketplace: The Affiliate network is also called the affiliate marketplace. It works as a middleman to connect publishers with merchants.

Some of the most popular affiliate marketplaces are CJ affiliates, ShareASale, Amazon Associates.

Affiliate Product/service: The product you promote on your blog through an affiliate program is called the affiliate product.

You can promote an affiliate product by displaying a banner ad or text link on your blog.

Banner Ad: A graphical ad that you can display on your blog for promoting an affiliate product/service.

The code of the banner ad will be given by the merchant. You just need to copy the code and paste it into your blog.

Contextual Link: This is a text link. You can place this link within your blog content to promote an affiliate product/service.

Commission: If your readers buy something clicking on the banner ad or text link shown on your blog, the merchant will pay you a predetermined amount. That is called Commission or Affiliate Commission.

How Can You Use Affiliate Marketing As A Blogger?

You can use affiliate marketing in two ways as a blogger.

  • As an advertiser
  • As a publisher

If you have a product to sell, you can become an Advertiser in affiliate marketing.

If you don’t have any product or service to sell, you can become a Publisher (affiliate) to sell someone else’s product.

As a new blogger, we always prefer the later one.

How to Become An Affiliate?

First, you need to find a product to promote. Once you find a product, look for if they have an affiliate program for that product.

If you found an affiliate program for the product, sign up for that. Not all affiliate programs will accept you.

Once you are accepted into the affiliate program, you will be given an affiliate link and/or banner ad code to promote the product.

The next step is to link the product page from your blog post by using an affiliate link and/or showing the banner ad on your blog.

Can You Use Affiliate Marketing With Other Monetizing Methods Like Adsense?

Yes, you can use affiliate marketing with Adsense to monetize your blog.


In conclusion, I would like to say that using only one monetizing method will limit your earning potential.

Use a various monetizing method to earn most from your blog.

In the beginning, it may overwhelm you to monetize your blog with affiliate marketing. You just start practicing it. Believe me, you’ll love affiliate marketing someday.

Your Turn:

How do you monetize your blog?

Do you use affiliate marketing?

Please share in the comments below…

Editor’s Note: This post was originally published on Dec 2017 and has been updated for accuracy and comprehensiveness.

21 thoughts on “What is Affiliate Marketing and How does It Work?”


    Excellent post. Digital marketing is an amazing platform used by several people to earn good income. Many people are doing the digital marketing in their spare time and earning a handsome money. Digital marketing field provides us an opportunity to earn good commission just by selling the products. It requires a good marketing skills, knowledge and ideas along with hard-work. Monetization of blog is also crucial to start earning.

    Truly helpful post and thanks for sharing.

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