As I might have mentioned in previous posts, I work from my laptop, and can do so anywhere I have an internet connection. This is one of the pillars underlying my freedom (and happiness). Another is having very little ‘stuff’, as you can read about in this article on how to throw things away. I don’t think I ever mentioned what it is exactly that I do. I often get asked this question at parties, and in case you, the readers of my blog, are curious about it too, I’ll explain a little bit about it.
I have my own one-man internet business. The area that I work in is called affiliate marketing. Affiliate marketing is a form of marketing in which, if you’re a business owner, you don’t promote and sell your own products, but have someone else do that for you. The person (or business) who sells your products is an affiliate
Of course this service isn’t free. As a business owner you will have to pay your affiliates a commission, and usually a pretty hefty one. This can range from a few cents on small items with a high turnover to thousands of dollars on big ticket items like real estate. In percentages, think between 3% and 20% on physical items, and anywhere from 20% to 75% on things like software, e-books and online services (where the marginal cost to the seller is close to zero).
So why would the seller of a product choose to employ an affiliate at a high commission, rather than sell his own products and do his own marketing? The answer is that an affiliate often has access to customers that the seller doesn’t. She may know a specific language, or be able to appeal to a specific culture, or have some expertise for which potential customers come to her. In other words, she adds value between the seller and the customer, without which the customer would stay away.
Being an affiliate
I am such an affiliate. I own and manage a number of websites, aimed at selling other people’s products (or services). As a matter of fact, Two Bags and a Suitcase is one of the few websites that I have that are not an affiliate website*. For me affiliate marketing is a great business model, since I don’t have to deal with actual products, thus keeping my life hassle-free. For the businesses I work with it is also great, as they get access to clients that otherwise would have ignored them. Also, if I don’t get them any customers, they pay nothing (‘pay for performance’), so there is little risk involved for them.
There are, or course, other business models for online marketing, such as Google Adwords or fixed-fee banner placements. Or I could simply sell my expertise as a marketing consultant, rather than manage my own websites. What makes affiliate marketing a good choice? These are some of the advantages to being an affiliate.
- In affiliate marketing you get to cherry pick your website topics, or niches. You can write about something you like and about which you know a lot, and sell products that generate a good profit. For me retail finance has been a highly profitable niche.
- As an affiliate you can sell products to a highly targeted audience, which creates much more value than ‘generic’ online marketing. For example, if you have a website about sights in Budapest, you’d be much better off promoting Budapest hotel rooms than whatever ad Google Adwords decides to serve on your site.
- As an affiliate you get to really promote a product, rather than just mention it. If you’re good at sales, it means that you can sell more, and thus generate more money than if you just had a banner on your site.
- Affiliate marketing is infinitely scalable. If you get ten times as many visitors to your site, you make ten times as much money, without it costing you significantly more effort. If you work as a consultant or worse, an employee, for a company, it doesn’t matter how successful your initiatives are; you make just the same.
- As an affiliate you can be very flexible. You can work on one huge website or a thousand tiny ones. You can promote a single product or diversify among vendors (I would recommend the latter, in order not to become too dependent). If a hot topic suddenly arises, there is nothing that withholds you from capitalizing on it with a new site. Thinking about such possibilities is not only good for business, it’s also fun!
How you too can make money with affiliate marketing
So should you become an affiliate? Not necessarily, especially if you have already found another great way of making money while travelling. (I’d rather have you wouldn’t, as that means less competition for me! :)) But if you would like to give it a try, here’s how.
- Choose a topic to write about. It should be something you are interested in and know something about, though you don’t have to be an expert. There should be enough search volume and not too much competition (use the Google Adwords Keyword Planner to check). It should also be something that you could match up with a commercial product or service to sell.
- Find a vendor whose products you could sell on your site. Amazon.com has a lot of products, but offers rather low commissions. Dedicated affiliate networks like Commission Junction or ClickBank may have something suitable for your topic. Or you could try to negotiate a deal directly with a business in your niche. My own most profitable vendor has been Plus500, a CFD broker.
- Start building a website. These days you don’t need any programming skills to make your own website (though it is useful if you have some). I recommend using WordPress, or if you feel a little more adventurous Joomla!.
- Generate traffic to your website. Mention it to your friends, in social media, on blogs, and other places where people will see it. Use (white-hat) SEO techniques to optimize it for the search engines. (A good place to start is Moz.com’s beginner’s guide to SEO) Add more valuable content as time goes by.
This is, of course, a very short summary of how to make money with affiliate marketing. I could write ten articles about each of the four steps. I might just do that, at some point in the future. But if you are motivated and resourceful, you will be able to find a lot of what you need online. Becoming an affiliate is not as hard as most people think it is. Good luck!
* Though not-for-profit, this website does contain affiliate links, for example to Amazon.com. I hope that, given time, they will pay for the cost of maintaining the site. At the moment of writing they don’t. I stick to two important principles whenever I place affiliate links on this site:
- I will never promote something I don’t actually believe in; in other words, if I mention a product, it’s because I’m truly enthusiastic about it, not because I’m getting a commission.
- You will never pay more, or be in any other way disadvantaged, by clicking on one of my affiliate links rather than just surfing to a site directly. By clicking an affiliate link you support the site, without any cost to you.