What is affiliate marketing and how does it work?

What can you find here?

Affiliate marketing is used to promote your products and/or services. Think of influencers, blog websites, YouTubers and many other types of promoters and ambassadors.

You have probably heard a lot about affiliate marketing, especially in recent months, when the Coronavirus pandemic has made many people work from home, looking for new alternatives to make money.

But its success is not new: in the last 10 years, the affiliate marketing industry has grown by at least 25% yearly.

Affiliate marketing is used to promote your products and/or services. Think of influencers, blog websites, YouTubers and many other types of promoters and ambassadors.

This marketing strategy is gaining ground. But how interesting is it for you to use this form of marketing?

Stay with us to better understand what is affiliate marketing and and how does it work?


What is Affiliate Marketing

What is affiliate marketing and how does it work?

Affiliate Marketing is the business relationship in which a person promotes a company’s product in exchange for a commission for the sale made.

Have you ever seen an ad like “Earn commission for selling our products”? So, this approach is quite common for companies that work with affiliate marketing in their marketing strategies.

Do you know those professionals known as commercial representatives who intermediate sales of one or several products, earning commissions for them?

So, the Affiliate plays the same role, promoting the products and services of a company and earning a part of the commission amount; the difference is that the entire process takes place online.

This type of business in digital format is not as recent as many think, and it was born there in 1996 with BeFree, LinkShare, and Amazon.

Amazon Associates, an affiliate platform owned by Jeff Bezos, was one of the most significant contributors to the brand’s tremendous growth.

Over time, we could see that it was not just Amazon that grew; affiliate marketing became a fever worldwide. Today, it is on the rise in Europe, with several advantages for companies, affiliates, and customers.


How affiliate marketing work?

How affiliate marketing work?

Affiliate marketing works from a relationship between info producers, affiliates, and customers. This commercial relationship can be compared with the commissioning system of physical stores, where a seller receives percentages for the sales intermediated by him in an establishment.

But we can say that applying this logic to the digital market has made this strategy scalable and much more profitable.

And to understand once and for all how it works, we can divide it into 5 steps. Follow:

  1. An info producer creates a digital product and promotes its launch using a platform that has an affiliate program.
  2. An affiliate checks the product, and the percentage offered as a commission joins it and starts to promote the link using digital marketing tools.
  3. A visitor to the affiliate page clicks on the disclosed link and purchases the info product.
  4. The platform that hosts the product recognizes the purchase made through the link.
  5. The info producer receives for the sale of his digital product, and his affiliate receives the percentage of the commission.
  6. In addition to social networks, setting up an email marketing strategy and creating a blog to publicize the info products you are affiliated with can be very effective in increasing the link projection and gaining more market space.


Is it wise for you as a webshop to use affiliate marketing?

SEO and SEA are often used to increase the number of visitors of the website. However, did you know that affiliate and/or influencer marketing is number 2 of the most effective marketing strategies? This puts this method of marketing after email marketing. So it is advisable to add affiliate marketing to your strategy!

Through affiliate marketing, you as a webshop owner can increase your reach and increase sales. Affiliates and/or influencers are ambassadors for your company. They bring your product or service to the attention of their followers and earn a commission per sale. The commission can be mutually agreed upon and is therefore different for each partnership. To realize as many sales as possible they can blog, build landing pages, place ads on their website and run other relevant social media campaigns.

The advantages of affiliate marketing

The advantages of affiliate marketing

No cure no pay

Yes, that sounds like music to our ears and is one of the main advantages of affiliate marketing. As an entrepreneur you only pay a commission when a sale is made. Doesn’t an affiliate make a sale? Then you have no costs.

In addition, the use of affiliates and influencers makes you independent. You create your own marketing channel, without being dependent on external advertising platforms such as Google, Facebook and Instagram.

Once you have set up many collaborations and these affiliates and influencers also regularly promote your business, this not only increases your brand awareness but also your revenue.


Low investment

You don’t need to invest a lot to start making your disclosures. For that reason, affiliate marketing can be a great way to get to know the market and gain an audience before creating your info product.


No need to create an info product

With the affiliation, you don’t have to wait to start undertaking in the digital market. After all, working as an affiliate, you don’t need to create an info product, as you will earn money promoting products from info producers who will pay you for each sale.

And the best part: you already know how much you will receive in advance because each info producer establishes the percentage automatically paid after the sale.

Thus, you can choose to disclose the info products that best fit your compensation goal.


In other words, what positive effects does affiliate marketing have?

  • You get more visitors to your web shop.
  • You realise more turnover.
  • Your customer base is expanded.
  • Your affiliates help you to improve your product and/or service, for the perfect offer to their target group.


The challenges of affiliate marketing


Difficult target group

Affiliates and influencers are tricky. Make clear agreements about the promotion they will do for your business. A commission per sale is often not the only thing they ask for, they also expect a free product. Make sure that they are not only after the free product and take a good inventory in advance of what the expectations of both parties are.


How do you know that an affiliate has made a sale?

Unique discount codes are often used to recognize whether an affiliate has made a sale. However, this is a lot of manual work. Not only do you have to report what has been sold yourself, but you also have to create the payments and credit invoices manually. Time consuming and labor intensive.

Make sure you work with an affiliate platform, which automates the tracking, management and payment of affiliates for you. Check out our Sir Filiate WooCommerce plugin, for more information on this.


Keep in touch with your affiliates

Affiliates and influencers are busy people. One minute you are opportune, the next they have forgotten about you. So make sure you check in with them once in a while, recommend new products and/or services to keep the promotion and relationship current. This takes a lot of time, but will give you the most benefits  in the long run.

Did you know that brands report an average return of 600% per affiliate? Often when an influencer promotes a product or service, we tend to share it on our own social media channels. Why? We want to show how modern we are and that we actually bought that product Pewdiepie recommended. Especially the distribution of content through small social media channels, provides a 600% return on investment.


Family, friends and acquaintances

Affiliates are therefore not only big influencers, but also small social media channels. Rewarding someone for suggesting family, friends and/or acquaintances can also be very effective. The circle of friends of a person not acting as an influencer is often closer and more effective than the following-base of a social media channel.


Determine your margin

Affiliate marketing is not right for every business. If you offer a product or service with little or no margin, it is not interesting for the affiliate. Of course they have to be able to earn something from it!



Affiliate and influencer marketing are on position 2 of most effective marketing strategies. Make sure you find a solution to the challenge, shrug it off and become successful in this marketing strategy. By doing so, your business will gain more brand awareness and make sales. I guess that’s worth the sweat and hard work? 😉

Want to apply and automate affiliate marketing in your WooCommerce webshop? Check out our Sir Filiate WooCommerce plugin, free to download and no monthly fees.

Now that you know what affiliate marketing is, what do you think about adding this tool to the promotion of your business or making money online with affiliate programs?

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Free Guide

How to create a WooCommerce store

In this guide, we will show you the exact steps to create your own WooCommerce store within 30 minutes