With passive income, you can build long-term wealth. However, this does not work without lifting a finger. Bamboo Productions/Getty Images
Affiliate marketing is a method to generate passive income.
A marketer promotes a merchant’s products or services and earns a predetermined commission based on the number of sales, customers, or visitors referred.
Neutral intermediary platforms help to establish contact between suitable advertising customers and advertising partners.
People dream of getting rich quick, ideally without having to work. A passive income should make this possible. This is money that you earn without having to actively work for it. So it differs from your regular income, for which you have to do physical or mental work as an employee or self-employed.
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It is often promised that you can make big bucks even while you sleep thanks to passive income. Unfortunately, you won’t be able to do this without any effort. Because at least in the beginning you have to invest some time and energy to build up the passive income at all. Only then does a certain automatism arise, which generates you a substantial additional income without constant effort. There are many ways to do this. One way to generate passive income is through affiliate marketing. We present that to you here.
What is affiliate marketing?
Affiliate marketing is a partnership between a provider (vendor or merchant) and a marketer (affiliate or publisher). In this form of marketing, a publisher promotes a vendor’s products or services and is then rewarded with a predetermined commission for the number of referred sales, customers, or visitors.
This cooperation is profitable for both sides. Thanks to this method, the marketing costs for the advertising company are very low and they reach exactly those customers who are actually interested in their product or service. Publishers, on the other hand, can easily generate passive income without incurring any upfront costs thanks to affiliate marketing.
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How Does Affiliate Marketing Work?
The technical basis for affiliate marketing is formed by links that take Internet users directly to the advertising company’s website. Publishers can integrate these links into their personal blog in the form of banners, for example. Each affiliate link contains a special code that uniquely identifies the publisher. With the help of these tracking links, retailers can see exactly who sent the customer to their online shop and calculate the commission on this basis.
Affiliates are paid either per click generated (pay-per-click), for each lead and subscriber submission (pay-per-lead), or for each sale made through the affiliate link (pay-per-sale). Mixed forms are also common. The goal of affiliate marketing is to get as many clicks and ultimately sales as possible.
How do you get started with affiliate marketing?
If you want to generate passive income through affiliate marketing, you have to meet a few requirements.
1. Choose platform
First you have to find a suitable platform on which to place your content and later also affiliate links. This can be your Instagram channel or your own blog, for example. Then you have to expand your range. The more followers you have, the more potential customers you can recruit for the dealers. And that means more money for you.
2. Create a basis of trust
In order for your followers to be willing to pay money for the products you promote, you must first create a basis of trust. To do this, you should present content on your platform that interests your target group and convinces internet users of you. You have the greatest chance of success if you focus on a niche.
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So instead of creating content on a big topic like “beauty products”, it can be helpful if you limit yourself to the nail polish category, for example. This is a great way to showcase your expertise and build a focused audience. It may also give you a higher search engine ranking.
3. Find partners
As soon as you have a larger number of followers, you can start with affiliate marketing. You can neutral intermediary platforms use that connect you with dealers. Networks like Awin are examples of this (belongs to Axel-Springer-Verlag like Business Insider), Digistore 24 or CJ Affiliate. Registration on such platforms is usually free and the networks ensure that your commission is correctly allocated via the tracking links.
Another option is to register for so-called in-house programs directly via the website of certain companies. You offer companies like Amazon or booking.com directly to advertise their products and services on your platform. In contrast to an intermediary platform, you have to go looking for a partner yourself. On the other hand, the commissions for in-house programs are often higher than for partnerships via affiliate networks.