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Question
Dear sir,

Yesterday I was searching on internet marketing and I stumbled upon a forum thread about affiliate marketing. The man who created the thread said, and I quote:

"On the other hand, the second option, affiliate marketing, can be done without spending anything, except for maybe a cheap domain name to forward it to your links and you can promote those links for free."

I'm new to affiliate marketing so forgive me if this sounds stupid, but how can someone make money online without actually creating a website like this guy says? Wouldn't you need to create a website to promote the product on it? What does he mean by forwarding the domain? I just don't understand what this man is saying. You can read the whole post yourself at the thread below (post #9):

http://www.warriorforum.com/warrior-forum-classified-ads/802758-make-money-onlin

I can ask the question there but it requires registration and I don't wish to join that forum.

Please help me understand.

- Mark

Answer
What is affiliate marketing and how does it work?
In a nutshell, you promote a service or product and get a commission from anyone who purchases it, through your unique affiliate link.

Affiliate marketing is a great way to monetize on your own website because itís a type of passive income where you can make money while you sleep. In the most simplest terms, affiliate marketing is just getting paid to promote a service or product to others.

What People Think
But itís a lot more then that, and a lot harder to be successful at. What most people think when it comes to affiliate marketing, is to just choose a whole bunch of products to promote, and then throw up a bunch of links on their website. The same thing goes with ads and trying to make money from using Google Adsense. If you take this approach, youíre not going to be so successful at affiliate marketing, unless of course youíre already an established brand or have a high volume of traffic going to your website already. But even then, if youíre not promoting the right products to the right audience, then your efforts can be useless.

EXAMPLE
I remember when I first tried out affiliate marketing through a dating site I once created. I didnít really know what I was doing, but I knew I wanted to promote some E-Books about dating and relationships. So, I signed up to their affiliate program and generated some banner ads to put up on my website. I waited a few weeks and made zero dollars. In fact, I barely even got any clicks, and got really frustrated. What was I doing wrong? I had a clean looking website with some great posts, but nobody was clicking on my banner ads. I started to lose hope, and my conclusion was affiliate marketing was fake and I could not make any real money from it.

Why do Affiliate Marketing?

When you have a website that talks about a specific niche or topic, you probably use certain tools and resources to help you in your goals. For example, I teach others how to start a website using WordPress, and one of the first steps is to purchase a good web-hosting service that provides a one-click WordPress install. I promote IX Webhosting, and Iím an affiliate of theirs. I back up their services and what they do, and share this with my readers and listeners. The best part about me promoting them, is that they reward me with a small commission.

If I were not an affiliate of theirs, then I would be losing out on some extra income whenever I promoted their service and somebody listened to me and took action. Itís just a great way to help others by introducing to them your recommend product, and getting a commission from it.

The Dark Side of Affiliate Marketing

Some people try to take advantage of affiliate marketing by doing some sneaky technique or even breaking the law. You want to avoid this route because itís not only bad for your own reputation but itís also bad for your audience. Iím talking about promoting shady products just to get a quick buck or hiding the fact that your links are affiliate links. Whenever you promote something as an affiliate, you legally have to state this somewhere, as a disclaimer on your website.

Remember, if you donít back up a product or service, then trying to promote it to others can come back to you in a bad way. Imagine buying a car from your friend who suggested it to you, but realized it was over-priced and not a good fit for you? And then you realize your friend only suggested it to you because he got a fat commission? Now imagine a stranger doing this to you, would you trust them anymore?

You can promote other peopleís products and services legally, and effectively.

Affiliate Process
The actual process of becoming an affiliate of some company and then promoting what they have is pretty simple:
1.Sign up for their affiliate program. Look for an ďaffiliateĒ link somewhere on the companies website (usually at the top or the bottom of the page).
2.Fill out their forms. They will ask you the basics, as well as your S.S.# and how you want to get paid.
3.You generate links and banners. You will choose from pre-made graphics and links to use. You have your own unique tracking link (usually places a cookie in users browsers).
4.You promote a product and get a commission. This is the harder part.

For me, I chose Audible as one of my services I wanted to promote, because I truly believe in audiobooks and have purchased many for myself. I think itís important to read books and if youíre on-the-go you should still be able to learn through listening. So, I chose Audible and to become an affiliate I not only needed to fill out a bunch of things, but I needed to also explain what my website / podcast was about, and also needed to submit an application to be reviewed by them.

Audible.com goes through Commission Junction (a type of website service that has a network of other affiliate programs) to handle their affiliate program. The advantage of this for me was that I could also promote other things through Commission Junction since they have a whole database of products and services to meet my needs.

Best Way to Start Affiliate Marketing
Before you start promoting other products, ask yourself which products do I believe in and want to share with others? If you have a niche site or idea already, revolve your affiliate products from that, and not the other way around. Donít choose an affiliate program because the commission is high and then try to make a website around that. Always put your audience first, because at the end of the day, itís your behind that is on the line when you try to promote that weird product.

How to Be Successful at Affiliate Marketing

One of things that I want to make clear is that you need lots of traffic or most importantly targeted traffic to your website to be successful with affiliate marketing. What I mean is, the more people visiting and seeing your web site with affiliate links, the higher the chance of you getting a commission from someone clicking using one of your affiliate links! But also, itís not just how much traffic you get, but how much targeted traffic you have. If you have just 100 visitors a day but most of them really like what you do and what you promote, youíll make more money from that group, than having 100,000 visitors a day who arenít interested at all.

Share your story or experience about the affiliate product to show your audience you know about this. If they see that you know about what youíre promoting, theyíll be more likely to use your affiliate link and become a customer. This goes back to my first story I mentioned here, and that was that I was trying to promote a product that Iíve never used or would care to buy myself. I just knew others should buy it so I could make some easy money. It didnít work out as planned.

One great tip Iíve gotten from other online entrepreneurs and web owners who use affiliate marketing as one of their sources of income is to have a ďResourcesĒ page on your website and share with everyone your affiliate links. You need to add a disclaimer here stating that you promote these products and services and at no additional cost to them, you get a small commission as a gift for recommending it. Youíd be surprised at how many people donít know what an affiliate link is, but since youíve gained their trust they are willing to help you out too.

How Do You Get Paid?

Depending on your affiliate program that youíre in, you would get paid differently. Most programs though give you the options of either receiving the money through direct deposit (my choice), through checks that you get in the mail, or through some other means like ďcreditĒ to use on their own products. Iím an affiliate of Themeforest.net and whenever somebody purchases something, I get a commission and I can either ďcash outĒ and get the money after a certain amount has accumulated, or I can instantly use my money as credits to buy something on their website.

Some affiliate programs pay you a commission once, and usually thatís when they first sign-up for their service, or when they buy a product. But some other affiliate programs like Aweber pays you not only upon someone signing up, but also monthly through a reoccurring bonus. Sounds awesome, right?

Do keep in mind that most affiliate programs only pay you after you surpass a certain dollar amount threshold.

How Do I Know Iím Getting Paid?

Usually what happens is when somebody clicks on your banner ad or link, a browser cookie is saved on their computer so they know who referred that potential customer. They do this through a unique tracking ID or URL. But I also know that some websites not only save cookies, but they also look at the persons IP Address to identify them. You can look more into this if you want on a per-affiliate program basis, but in general, stick with the auto-generated unique link that they gave you, and use that.

You will know when you get paid by an email, and you can also check your stats by logging into their affiliate program admin section. Here you should be able to see how many people clicked on your links, on what day, and if any actually went through and purchased your promoted product.

Do I Have To  Pay Taxes?

If you make any money online you do need to pay taxes. Whether or not the company or affiliate program thatís paying you has given you a 1099 form, you still need to state how much you earned. No matter how you make money online, you are required to report your earnings to the IRS.

Even if you donít have an official company, or an actual business license, you as an individual need to report your earnings. This is not at all any legal or professional advice, but this is through my experience and what I know. You need to talk to your tax preparer person if you have any questions.

As far as tax write-offs, since youíre now an online entrepreneur of whatever company or made-up entity you have, you may be eligible to get a tax write-off. Again, you first need to speak to a tax professional to really know what you can and cannot do. My advice though, is to keep track of how much you make through affiliate marketing, as well as how much youíve spent all together on your online business and website.

Dontís for Affiliate Marketing
ēDonít just put up affiliate links because you can. You need to understand why, and how youíre going to do this.
ēDonít expect any clicks, if you donít have traffic to begin with! New websites, Iím talking to you!
ēDonít just use colorful banner ads everywhere and anywhere. Instead, use banners only when necessary, and remember that links are very effective.
ēDonít promote products or services you would not use yourself. If you canít back it up, then donít try to convince others. Itís bad business.
ēDonít do it for the money, do it to truly help your visitors.
ēDonít promote products or services that have nothing to do with your niche or website.
ēDonít hide the fact that you have affiliate links, legally you must have a disclaimer somewhere on your website.

Doís for Affiliate Marketing
ēDo research first and figure out which products or services you want to promote.
ēDo promote products and services that you use and know a lot about.
ēDo let others know about your affiliate links.
ēDo share with others and offer help when they use your affiliate products.
ēDo provide tutorials or a behind-the-scenes look at the affiliate products you promote.

Resources To Consider
I hope that this info has been helpful to you, even if it just served as a reference to understand what it is in general. Thereís many other ways to make money with your website, but affiliate marketing is one way that I favor. Itís a simple concept, but still takes some skill to be successful at.

Hereís just a few links of some affiliate programs that you may want to look at:
https://affiliate-program.amazon.com/
http://www.cj.com/
http://www.clickbank.com/
http://www.google.com/ads/affiliatenetwork/
http://www.affiliate.com/

Many products and services have their own affiliate program, so start there. Ever since I became an affiliate marketer, Iíve noticed that many companies have a program themselves! For instance, Netflix has their won affiliate program, but I would have never guessed!
- See more at: http://www.markammay.com/012-what-is-affiliate-marketing-and-how-does-it-work/#s

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Affiliate Marketing
Affiliate Marketing is a popular method of promoting web businesses in which an affiliate is rewarded for every visitor, subscriber and/or customer provided through his efforts. It is a modern variation of the practice of paying finder's-fees for the introduction of new clients to a business. Compensation may be made based on a certain value for each visit (Pay-per-click), registrant (Pay-per-lead), or a commission for each customer or sale (Pay-per-Sale).
The most attractive aspect of affiliate marketing, from the merchant's viewpoint, is that no payment is due to an affiliate until results are realized.
Some e-commerce sites, such as Amazon.com run their own affiliate programs while other e-commerce vendors use third party services provided by intermediaries like CommissionJunction.com, and LinkShare.com to track traffic or sales that are referred from affiliates. Some businesses owe much of their growth and success to this marketing technique.
Merchants who are considering adding an affiliate strategy to their online sales channel should research the different technological solutions available to them. Some types of affiliate management solutions include: standalone software, hosted services, shopping carts with affiliate features, and third party affiliate networks.
In its early days many internet users held negative opinions of affiliate marketing due to the tendency of affiliates to use spam to promote the programs in which they were enrolled. As affiliate marketing has matured many affiliate merchants have refined their terms and conditions to prohibit affiliates from spamming.
Currently there is much debate around the affiliate practice of Spamdexing and many affiliates have converted from sending email spam to creating large volumes of autogenerated webpages each devoted to different niche keywords as a way of SEOing their sites with the search engines. This is sometimes referred to as spamming the search engine results.
Other contributors answers:
ē   There are 10,000's of companies on the Internet that are willing to pay a performance-based commission if you can drive sales to their websites by promoting their products and services. To do this you join the "affiliate programs" run by these companies.

Your job as an "affiliate" is to be the middleman between online consumers and merchant' products. By aligning consumers with the products they are looking for, you get a commission for every sale from the merchant through an Affiliate Program.

Affiliate Marketing is a great opportunity to earn money online as well as have the freedom of owning your own business and working at home with next to nothing in start up costs but it takes hard work and it is not a get rich quick scheme.
You find people who are interested in a certain type of product or service in a certain type of market online. Then you recommend different products to them. If they should buy those products based on your recommendation, the merchant who is selling those products will give you a cut of the sale. You need two things - an affiliate (review) website, and an affiliate link (that's what you're going to be using to drive traffic to people's programs).

That's the basic concept of how affiliate marketing works.   
ē   Affiliate marketing is a web-based marketing practice in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate's marketing efforts.

Affiliate marketing used to be a cottage industry that has grown fast in the last couple years.
In the mid-90's Amazon.com pioneered the idea by enabling Web site owners to link to their books and earn a commission if someone clicks over from their Web site to Amazon and buys the book. The original idea on the "above-the-ground Internet" was introduced by CDNow in 1994, two years before the Amazon Associate Program was launched. Adult websites used affiliate marketing methods to promote their businesses even before CDNow.
Now almost every large e-commerce site has some sort of affiliate program. Offering commissions and incentives for other Web site owners to promote your product or service is a fast and inexpensive way to grow an online business.
ē   Affiliate receive commissions for every customer they refer to a merchant who makes a purchase. Usually affiliate marketing is conducted via a venue such as a niche website, where you focus your attention to a certain part of the population, a niche, this could be anything from golf to acne medicine to weight loss.

If you are looking for a great work at home career, you can become an Affiliate, Internet Marketer.

Affiliate Internet marketers are people who promote and market other business on the internet. When a sale is made, a commission is paid to the affiliate marketer.

Depending on the company, commissions can range from 10%-60%. The marketers that do well, make very comfortable incomes and have are very successful with their work at home career.

You as an Affiliate Marketer promote the other business by writing articles for blogs, making simple websites that provide consumers information, and even making referral videos and posting them on Youtube!

Affiliate marketing, in my opinion, is the ultimate work at home career as it is not a system, or cheesy Multilevel Marketing scheme.

Almost any business that sells goods and services offers some sort of referral/affiliate system. If you look at the bottom of most websites, you will see a link for "webmasters" or "affiliates", click this link and the company will provide you with a special link that is specific to you. When a consumer clicks on your link and is taken to the companies website and buys from that company, your link is tracked and the commission for the sale goes to you. Check out Amazon.com's program it's one of the largest. There are 1000's more though!

Promoting business is relatively easy, although there are better ways to do it that yield better results for you.

There are a websites that instructs people how to build a work at home career, although sadly, a good number of them are scams.
I hope this helps you find and build a successful work at home career!
ē   Affiliate Marketing is an online activity that allows any individual to promote a merchant's product to receive a commission on the sale the product. The individual joins a merchant or small business owner's affiliate program for free and receives a special hyperlink with the affiliate's ID.

The affiliate will proceed to advertise the product in a number of ways, mostly online, by writing articles about the product, creating a blog around the topic or "niche" related to the product, posting a classified ad, or pay to advertise the product.
Affiliate IDs can be quite lengthy and hard for customers to remember. Often times an affiliate will promote a product with banners or "anchor" text. Banners were once very popular in the past, but their overuse drove customers to ignore them. They are used less often today. Text links with "anchor" text are more popular and blend nicely into written content such as articles or blog posts.
For example:
Joe's affiliate link promoting a weightloss ebook is: http://weightlossebook.joe123.com.
This would clearly stand out in an article. Instead, Joe writes:
Did you know you can lose weight in just 30 days?
Joe highlights the word "weight", clicks on the hyperlink icon (or types in HTML code), then types in the URL space: http://weightlossebook.joe123.com.
The word "weight" will be highlighted. A reader can click on that word to be led directly to the ebook sales page. If the person likes what he reads and decides to buy, Joe will receive a commission for selling that ebook.
If Joe is able to get several people to buy through his affiliate link, then he can earn hundreds, if not thousands, of dollars. This is one of the main reasons why affiliate marketing is gaining popularity. It's low overhead costs and ability to maximize profits make it a very lucrative home business.
You can make money with affiliate marketing. You have to know the rules of the game, so to speak. You have to pick a product that is already doing well. You can go to clickbank.com and cj.com to find products that are popular. You can either write your product better or just become an affiliate of that product.

Take a look at the website and see if the sales page is any good. Create a squeeze page or a landing page to send prospects and not let them go directly to the sales page.

Post on forums, create your own blog and make comments on other people's blog. make sure you have a signature link that people can click on for more information in the forums.

There are some more specifics to this, but it can happen to you as it will happen to others. Article marketing is a key component of affiliate marketing success and affiliate earning potential.

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Beginners Guide: What is Affiliate Marketing?
Affiliate Marketing is an internet marketing channel in which advertisers (or companies who offer a product or service) pay publishers on a pay-for-performance basis. So unlike Google AdSense you donít earn anything for clicks. Youíre only paid for results which could be a sale or a lead (user fill a form and complete registration). In Affiliate Marketing as advertisers pays only for results its a win-win situation as they donít have to shell out large amount of money in Banner Advertising or Pay-Per-Click Networks like Google AdWords, Microsoft adCenter or Yahoo! Search Marketing where the results are not guaranteed.

Publisher (also known as an Affiliate, Associate, Partner) is an individual who advertise the products and services of a business (advertiser) in exchange for a commission on all qualified clicks/sales/leads. Publishers promotes the advertiser by displaying ads which can be in the form of banner ads (most common), text links (most effective), search box etc. Whenever a qualified lead/sale is generated the advertiser pays the publisher a commission which is often a percentage of the sale amount or can be a fixed amount.
Advertiser (Merchant)
Advertiser (also known as a Brand, Retailer, Merchant) is a company that sells a product or offers a service. They partner with publishers so as to generate more sales and leads. Advertisers prefer affiliates to market their products as they need to pay only for conversions Ė Clicks (Pay Per Click Ė PPC), Leads (Pay Per Lead or Action Ė PPL or PPA), Sales (Pay Per Sale Ė PPS) etc.
ē   Pay Per Click (PPC) Ė In Pay Per Click programs you get paid for all valid clicks that you generate regardless of leads/sales.
ē   Pay Per Lead (PPL) Ė In Pay Per Lead programs the advertiser pays you a commission (a fixed amount) for a qualified action which can be a short survey, free trial, install, sign up, online form submission etc. A perfect example of Pay Per Lead programs would be dating websites which usually pays for a free trial.
ē   Pay Per Sale (PPS) Ė In Pay Per Sale programs the advertiser pays you a percentage of all qualified sales. The most popular Pay Per Sale affiliate program is Amazon Associates where you can earn up to 15% depending upon the category of products.
Affiliate Network
An Affiliate Network (Commission Junction, ClickBank, Google Affiliate Network etc.) is a hub which connects the Advertisers and Publishers. The affiliate network have the tracking technology, reporting tools and manages the payments. Advertisers may choose an Affiliate Network(s) to manage their affiliate program or may use their own in-house affiliate network/platform.
You (affiliate) sign up for an advertiserís affiliate program, so that you get an affiliate link (a special URL which contains the username/id of the affiliate).
Whenever you mention the advertiser on your website you uses the affiliate link.
A customer visit your website and clicks on affiliate link to visit advertiserís website.
The advertiser drops a cookie to your customerís computer.
The customer orders something from the advertiserís website.
As the customer completes the checkout process, the advertiser checks the cookie on his/her computer.
The advertiser finds an affiliate cookie that belongs to you and credits you for the sale.
The advertiser updates the reports to shows all the clicks (traffic) and sales generated from your affiliate link.
Commissions are paid out Ė usually on a monthly basis Ė for all the leads/sales referred in the previous month depending upon advertiserís payment policy.
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