What Is Affiliate Marketing? How It Works & How to Start

If you want to generate income online but do not have a product to sell, then affiliate marketing may be a great option for you.

With this marketing tactic, you are able to promote other people’s products in exchange for a commission.

In this guide, I will walk you through what affiliate marketing is, how it works, how affiliates get paid, how much you can earn, and how to get started.

What Is Affiliate Marketing?

Affiliate marketing is a type of marketing in which an individual or business markets another company’s products or services. In exchange, affiliates earn commissions for their work, bringing visitors and sales to the business.

It is similar to the commission a salesperson earns. However, affiliates do not work for the company whose products they are promoting.

Affiliates typically promote products through their website, blog, social media accounts, podcasts, or other online platforms. The company will track all the sales from the affiliate to credit them with the commission.

It is a performance-based model: the affiliate is paid only when their promotion produces a result, usually a sale.

The parties involved

Every affiliate transaction involves three parties, and often a fourth:

• The merchant (advertiser): The company that sells the product and runs the affiliate program, such as Amazon.
• The affiliate (publisher): The person or business that promotes the product to their audience, such as a blogger, YouTuber, or social media creator.
• The consumer: The person who clicks the affiliate link and buys the product.
• The affiliate network (optional): A platform that connects merchants and affiliates and handles tracking and payments.

How Does Affiliate Marketing Work?

Affiliate marketing starts when an affiliate joins a program and receives a unique link to promote. When a customer clicks this link and makes a purchase, the affiliate system records it, and the affiliate earns a commission.

The diagram below shows how affiliate marketing works in detail.

Here are the steps:

1. Add Affiliate Links To Your Online Platforms
2. Customer Clicks On Your Affiliate Link
3. Customer Visits The Merchant Site
4. The Customer Purchases From The Merchant
5. The Affiliate Tracking System Records The Purchase
6. The Company Confirms Purchase As a Valid Sale
7. You Are Credited The Transaction
8. You Receive a Commission

1. Add Affiliate Links To Your Online Platforms

Upon joining your program as an affiliate, the merchant’s software will generate a unique affiliate link for you to use.

Once you have this link, you can begin adding it to the places where you want to promote your content.

The most common places to promote affiliate products are websites, blogs, and social media profiles.

If you have a blog, you can place your links throughout your content. Or if you promote through social media you can create a sponsored post that includes the link.

2. Customer Clicks On Your Affiliate Link

As you start to bring visitors to your content, some of the users will click your affiliate links.

When they do, your affiliate links will create tracking cookies in the user’s browser. These are what allow the merchant to tell which (if any) affiliate helps bring in the customer.

The cookies are stored on the browser for a specified amount of time. For you to receive credit for the sale, the customer will need to complete their purchase before this time period expires.

Cookie windows range from 24 hours to 90 days or more, depending on the program.

For example, Amazon’s affiliate program uses a 24-hour cookie window (extended to 90 days if the customer adds the item to their cart), meaning you want to find visitors who are ready to buy.

3. Customer Visits The Merchant Site

After the customer clicks your link, they will be taken to the merchant’s website.

The type of page that they land on will depend on the business’ particular offering.

It may also be determined by your choice as some programs give affiliates multiple landing pages to choose from.

While on the page the customer will review the product to learn more about it.

4. The Customer Purchases From The Merchant

Once they have time to weigh their decision, some of the people who land on the merchant’s website will choose to complete their purchase.

There may be others who do not buy right away but eventually come back to complete their purchase.

5. The Affiliate Tracking System Records The Purchase

When the customer places their order, the affiliate tracking system will record all the details for the purchase.

It will also look to see which affiliate should be credited with the sale.

In a situation where the customer only clicked one affiliate link, this is easy to determine.

Things get more tricky if the customer clicked multiple links before buying. Affiliate programs use different attribution models to decide who gets the sale. A common attribution model is a last-click model.

With this model, whoever’s link was clicked most recently gets the sale. It is also common for programs to use a first-click model where the first affiliate that gets the person to the merchant site is credited.

6. The Company Confirms Purchase As a Valid Sale

Affiliate programs also review transactions to ensure that they are legitimate.

They need to take this step to make sure that you are not buying your own products or doing anything else dishonest.

For example, breaking the terms of the program by bidding on branded keywords in paid ad campaigns.

Typically, there is a set amount of time it will take the affiliate company to officially recognize the sale.

7. You Are Credited The Transaction

The transaction will be credited to your affiliate account after the merchant verifies the qualifying sale is legitimate.

The amount you earn will be based on the terms of your affiliate agreement. For example, if your terms state that you receive 10% of every sale and a customer buys a $100 item, you will receive $10.

You will likely have to wait until the scheduled commission payout to receive your funds. This will vary based on the program and can be anywhere from instant to 30 or 60 days.

8. You Receive a Commission

You will receive your commission payout once the affiliate merchant officially credits you with the sale.

Again, when the commission is paid out, it will depend on the particular affiliate program.

In addition to following a payment schedule, many programs have payment thresholds. If a program has a payment threshold, your commission balance must be equal or greater for you to receive payment. These thresholds usually aren’t too high. Amazon, for instance, has a $10 threshold.

Benefits of Affiliate Marketing

Here are some of the benefits of using affiliate marketing:

Easy to Start And Scale

Affiliate marketing is an attractive option for many as it is easy to start.

You do not have to go through the lengthy process of creating a product yourself.  As such, you can find success with affiliate marketing without being an expert in a particular niche.

With the ability to generate passive income over time, affiliate marketing is also highly scalable.

You do not need to worry about creating new products as your business grows. Nor do you need to handle post-sale customer service concerns. Once you grow your audience base, you can also find new products and services to promote to increase the lifetime value of your customers.

Passive Income

Affiliate marketing can provide a steady stream of passive income. By this, I mean you can set up your traffic sources once and continue to generate new sales as more users come through.

One of the most common ways to promote affiliate products is through a website with content such as blog posts.

These could be reviews in which you go through the pros and cons of an item for potential customers. Or it could be a how-to guide in which you add an affiliate link to a tool that would help the reader.

Once you create the content, you can employ search engine optimization (SEO) tactics to get the site to rank in Google’s search results.

When your pages get high enough in the rankings, you will get visits to your site and make affiliate sales.

Additionally, you can earn even more passive income from affiliate marketing if you get recurring commissions. Learn more using these resources:

Low Initial Costs

Affiliate marketing is a low-risk way to generate income online. The initial costs to set up your website and traffic sources are minimal compared to launching a product.

If certain products are not working with your audience, you can quickly pivot to begin promoting new items.

Easy For Everyone To Do

Like other ways of making money with digital marketing, affiliate marketing affords great flexibility. You can use affiliate marketing anywhere so long as you can access the internet.

Plus, you get the ability to work and promote your products independently.

Your affiliate program will undoubtedly have guidelines that you need to follow, but it is ultimately up to you how you choose to engage with your audience.

Win-Win For Affiliates And Companies

Affiliate marketing is equally beneficial to the companies creating the affiliate program.

One of the biggest advantages of running an affiliate program is the ability of the company to extend its reach. With it, businesses can access customers that they would have otherwise missed out on.

Plus, it takes time to build an audience of your own. Affiliates have their own platforms and active audiences. If their business is aligned with the merchant's, they quickly become a valuable traffic source.

Since affiliates are only paid for the value they bring (typically sales), there is no cost to this added marketing once the program is up and running.

How Much Money Can You Make With Affiliate Marketing?

How much money can you actually earn with affiliate marketing?

If we look at the commission rates for some popular programs, we can get a sense of how much you can make if you were to achieve a certain number of sales.

In this example, the commission rates are lower, so you need to get more sales to earn a good profit.

But, these types of items often convert better, meaning more people who click your link become customers.

Another Example

Let’s look at another example, specifically software as a service (SaaS) products such as web hosting, online course platforms, eCommerce platforms, or digital marketing tools.

These affiliate products will often pay more per sale. Some pay a lump sum upfront, while others offer recurring commissions.

For example, the Bluehost affiliate program pays $65 for each qualified web hosting sale. At that rate, 16 sales a month would earn you more than $1,000.

Your actual earnings depend on your niche, your traffic, and how well your audience trusts your recommendations. Most affiliates earn little in their first months, and income grows as their content and audience grow.

How Do Affiliates Get Paid?

Affiliates get paid a commission for the actions they generate, according to the terms of the program they join.

Your exact commissions vary depending on the specific products that you promote.

Physical products usually pay low, single-digit percentages of the sales price, because those purchases are much more frequent. Digital products and software often pay much higher rates.

Some affiliate marketing programs pay a flat dollar amount instead of a percentage.

There are several types of commission models used by affiliate programs. These determine what actions earn a commission.

Per sale: With the Cost-per-sale (CPS) commission model, you receive a commission for each sale that comes from your affiliate link. This is the most common type of affiliate commission model.

When you promote this type of affiliate program, it is important to select products that convert well. Otherwise, you could generate consistent traffic but not have any revenue to show for it.

Per lead: Cost-per-lead (CPL) is a commission model in which you receive payment for every lead you bring to the business.

These leads could be someone who subscribes to an email newsletter or enrolls in a free trial for a product.

Your commission rates in a CPL program will typically be lower than those in a CPS program. But, it can be a good way to start making income as you will attract leads before sales.

CPS and CPL affiliate models usually follow a once-off payment model. This means you receive a single commission for the sale and do not earn any residual revenue.

Per click: Some affiliate programs use a cost-per-click (CPC) commission model. With this type of commission, you are paid each time someone clicks on one of your links to go to the merchant’s site.

Because clicks are far more common than leads or sales, the average payout is much lower.

This can still be an effective model for making money with affiliate marketing. You won’t need to worry as much about closing the deal, simply getting enough interest in the items to get a solid amount of clicks.

Recurring commissions: Recurring commissions pay affiliates ongoing commissions over time. They are often part of subscription products where the customer is repeatedly billed.

For example, a software product with a monthly membership fee. With this model, the affiliate continues earning income over time as long as the customer keeps their subscription active.

Payout schedules and methods: Commissions are usually paid on a fixed schedule, often monthly, after a validation period that covers returns and cancellations.

Most programs pay by direct deposit or PayPal, and some also offer checks or gift cards.

Many programs also set a minimum payment threshold. Your balance must reach it before you get paid, and it rolls over to the next payment period if it does not.

How To Start Affiliate Marketing

You can start affiliate marketing in five steps:

1. Choose a niche. Pick a topic you know or want to learn about, with products people actively buy. A focused niche makes it easier to build trust and choose relevant products.

2. Choose your platform. Decide where you will reach your audience: a blog or website, a YouTube channel, Instagram, TikTok, Pinterest, or an email newsletter. A website with search traffic is the most common option, but the best platform is the one your audience already uses.

3. Join affiliate programs. Look for programs from brands you would recommend anyway. You can join them directly (most companies link to their program in their website footer) or through an affiliate network. Amazon Associates is a common first program because it covers almost every niche.

4. Create helpful content. Write reviews, comparisons, tutorials, and guides that solve your audience’s problems, and add your affiliate links where they genuinely help the reader.

5. Disclose your affiliate links. Tell your audience that you may earn a commission. This is required by law in many countries (see below), and it builds trust.

Can you start affiliate marketing with no money? Yes. Most affiliate programs are free to join, and you can start on free platforms such as YouTube, Instagram, or Pinterest. A website costs a small amount for hosting and a domain, but it gives you a platform you own.

For the full process, read our step-by-step guide on how to start affiliate marketing, and these affiliate marketing tips for beginners.

How To Succeed With Affiliate Marketing?

So, while we can see that there is a lot of potential with affiliate marketing, there are still steps you will need to take to be successful.

Here are some tips to help you be a good affiliate marketer:

Focus on targeted traffic

To get sales, you need web traffic. Not just any traffic but targeted traffic. You need your products in front of people interested in buying them.

Before you select products to promote, you should make sure there is an active market for them.

You’ll then need to plan how to reach the ideal audience.

The best way to bring traffic to your products will depend on what you’re trying to sell. For some types of products, in-depth content will be most effective. For others, you may be able to use your social profiles to bring highly qualified visitors to your products.

Choose high-selling products

Many new affiliate marketers make the mistake of trying to sell anything when they start.

Instead, you want to choose items that are related to your niche but also that sell.

If the items you promote do not sell well, you will need to bring more traffic to your content to make money. You should carefully review the best solutions in your industry to ensure you present the best products to your customers.

Look for products with high commissions

Naturally, you want to sell products that reward you well for your efforts.

With high-commission products, you can earn a solid payout for each of your sales or leads.

The most profitable commissions are recurring commissions. These not only give you a source of passive income, but the sums of money they accumulate can add up rapidly.

Affiliate Disclosure: What the Rules Say

If you promote products as an affiliate, you need to tell your audience about it.

In the United States, the Federal Trade Commission (FTC) requires you to disclose any material connection with a brand you recommend, and an affiliate commission counts. Its Endorsement Guides say the disclosure must be clear and conspicuous.

In practice, that means:

• Place the disclosure close to the affiliate link or recommendation, not only in a footer or a separate page.
• Use plain language, such as “I earn a commission if you buy through this link.”
• On video and social media, say it in the video or caption itself and use the platform’s paid partnership tools where they exist.

Other countries have similar rules, such as the UK’s advertising codes. Disclosing is also good for business: honest recommendations are what make an audience trust you. Read more about whether affiliate marketing is legit and how to avoid scams.

Affiliate Marketing FAQ

Here are answers to the most common questions beginners have about affiliate marketing.

What Are The Three Types of Affiliate Marketing?

Affiliate marketing is commonly divided into three types, based on how connected the affiliate is to the product:

Unattached: The affiliate has no connection to the product or its niche, and has no audience authority on the topic. They typically run paid ads to affiliate links. It needs no expertise, but it is the hardest type to build trust with.

Related: The affiliate has an audience in a related niche and promotes products that fit it, without necessarily using them. For example, a fitness blogger promoting a sports nutrition brand.

Involved: The affiliate uses the product and recommends it from personal experience. This builds the most trust and is the most sustainable approach.

Affiliate marketing can also be seen from two sides: as an affiliate, you promote other people’s products, and as a merchant, you run a program where others promote yours. When people talk about affiliate marketing, they usually mean the affiliate side.

What Is An Affiliate Marketer?

An affiliate marketer is a person who promotes someone else’s products in exchange for a commission.

They are often a content producer that has an audience that they can use to share the company’s products.

What Is An Affiliate Merchant?

An affiliate merchant engages in the second type of affiliate marketing. They create an affiliate program along with their own products to be marketed in the program.

They then find affiliates to join the program and begin promoting their items.

When setting up an affiliate program, the merchant needs to implement a sales tracking system and a way to monitor affiliate results and commission payouts.

What Are Affiliate Marketing Programs?

Affiliate marketing programs are the systems used by merchants to run and manage their affiliate marketing strategy.

The foundation of any affiliate marketing program is the arrangement between the merchant and its affiliate.

In the arrangement, affiliate merchants and marketers come to terms with the specific details of their working relationship.

This includes what qualifies for commissions, how commissions are paid, how the affiliate is allowed to promote the products, and more.

The agreement's specifics are often determined by how many new customers the affiliate can bring to the business.

If the affiliate has a larger audience and can consistently drive more sales, the affiliate merchant may offer higher commissions.

Affiliate Program Examples

Amazon Associates is one of the most popular affiliate programs. As an Amazon affiliate, you get to promote the massive amount of products available in the Amazon catalog.

To enroll in the program, you need to have a qualifying website or mobile app.

Affiliates often use their websites to write dedicated product reviews or comparison roundups in which they break down multiple affiliate products.

What Are Affiliate Networks?

Affiliate networks serve as intermediaries between affiliate merchants and affiliates.

Networks will consolidate and manage multiple affiliate programs to benefit both affiliates and merchants.

When a merchant joins an affiliate network, they will provide the details for the program, and the network will use their system and tools to get the program set up.

The affiliate program is then available to affiliates that sign up for the network. Affiliate programs within a network can require approval. Or they can grant open access to anyone that is part of the network.

Networks can be an effective tool for affiliates looking to partner with several different merchants. With a network, you get a single place to track and monitor your campaigns without having to switch back and forth between different accounts.

Some of the largest affiliate networks include Awin (which absorbed ShareASale in 2025), CJ, Rakuten, and Impact. Between them, they list thousands of merchants and an extensive selection of affiliate products to promote.

While these networks offer tons of products, keep in mind that not all products will be worth promoting.

You’ll want to narrow your focus to a specific niche. And then the best products within that niche.

Conclusion

Affiliate marketing is an effective way to start making money online.

It won’t make you rich overnight. But if you find the right programs to join and take time to grow your audience, you can eventually build a consistent income stream.