So you've heard about affiliate marketing or maybe you already tried dabbling with it. But if you're like 97% of wannabe affiliates, then chances are you still have no idea what it really is, how to add it to your income strategy or probably have no results to show for all your hard work so far.

If that describes you, then this comprehensive guide is for you.  You’ll learn…

  • The different types of affiliate marketing and how to select the right one for you
  • What products and services have a higher profit margin and are high in demand
  • What marketing skills you need to master first to get faster results
  • PLUS: Common newbie mistakes and how to avoid them

What is Affiliate Marketing?

Affiliate marketing is an arrangement where a retailer pays you commissions when people you refer to their website make a purchase. As a thank you for your referral, they give you a piece of the profits.

There are MILLIONS of products and services you can promote and THOUSANDS of companies you can represent as an affiliate.

Some companies pay only 2 – 10% commissions and some pay 30 – 90% commissions.

It all depends on the type of products you choose to promote and how you promote them!

But first, you might be asking WHY?

Why would companies pay you affiliate commissions to promote their products and services when they can do that themselves?

That’s because companies would rather pay you for guaranteed sales rather than spending thousands of dollars on advertising that may or may not deliver results. As advertising costs continue to go up, more companies are turning to affiliate marketing to increase sales.

This means that anyone who is willing to be an affiliate and recommend products and services to their contacts, followers or clients, can get a commission when a sale takes place.

There are many opinions for and against affiliate marketing. Knowing your options before you start will help you decide if affiliate marketing is for you, how to use it to your advantage and how to choose what products and services to represent.

STEP 1: Know Your Options

Before we dive deeper into affiliate marketing, it’s important that you understand the different types of online business models. This will help you understand the pros and cons of affiliate marketing much better. It’ll also help you avoid common newbie mistakes.

Here are some typical ways people make money online:

Selling Services

With the Internet, you can now offer your services online. To do that, you need to have skills in an industry that allows you to work online. You can work as an employee, freelance contractor or start your own services business.

This is how most people on the planet make their income. They offer their services, skills and time in exchange for money.

With services, you’ll always be trading time for money. Which means, unless you’re working, you won’t get paid.

To increase your income with services, you’ll need to set up a business that sells other people’s time. This is how cleaning companies, construction, accountants, marketing agencies and similar companies make their money.

The owners create the company and hire other people who are willing to get paid less to do the job and they pocket the difference.

As the owners, their job is to focus on marketing and sales and get more clients.

But if they don’t know how to do any marketing, they become a victim of a company with low or no sales. That’s why most businesses fail and shut down. Because they don’t know how to get more clients to buy from them.

Selling Products

When you sell your time, you’re limited by the number of hours in a day. But when you sell products, there are no limits. The more products you have, the more you can sell.

What products you decide to sell and how you sell them, will have a huge difference on your income potential.

In general, there are three types of product categories you can tap into:

Physical Products

These are items like clothing, supplies, electronics, food, gadgets or other tangible items. This might seem like a great choice as we all use many of these items daily. BUT, they also require the biggest investment.

You see, every time you sell a product, you need to invest more money to make more products to sell.

The more you want to scale, the more you need to spend on inventory, packaging, storage facilities, shipping and handling and deal with refunds and returned items.

Unless you know how to make your own products, or have a budget to spend on wholesale and manufacturing, I recommend you leave physical products till last.

Why?

Because, unless you know how to market your products, you’re not likely to get many sales.

That’s the step many businesses miss. They think that if they build a store and list their products for sale, clients will flock to their store and buy from them right away.

But 99 out of a 100 that’s never the case.

You need to learn how to do marketing and attract the right clients to the right offers. That’s how you get more sales.

Before you start investing in products and inventory, you need to have a strong marketing strategy first.

Digital Products

Digital products include music, videos, stock photos, software, Apps and any other product that can be delivered digitally and doesn’t require shipping and handling.

If you’re an artist, designer, singer, musician or programmer, you can easily package your artwork, photos, music, songs and templates, and sell them online.

Sites like iStock.com, ShutterStock.com, iTunes.com, ThemeForest.net and other similar sites allow you to list and sell your products on their platform, even if you don’t have an online store yourself.

Unless your work is exceptional, you’re going to be facing a lot of competition. You need to create something that resonates with the public so you can sell in large volumes.

The beauty of digital products is that you only need to create them once and they can easily be duplicated at a low cost. This means you can create the product once, and sell it over and over again!

Information Products

Information products are a new category that’s taking over the market. They include any product that’s meant for educational purposes.

Digital information products can be online training videos, apps or eBooks.

Physical information products can be printed books, textbooks or information delivered on DVD or USB drives. They can also be delivered as part of a service, like online coaching, consulting, membership sites, and webinars or even live training events.

Just like physical and digital products, you need to know how to market your training programs or you won’t get many sales.

What Does This Mean to You?

If you already have a business, then you might be very familiar with the common problems most businesses face. But if you have no business experience yet, then here are a few things you might encounter.

  • Research and Development: In business, you’ll need to conduct some research and development time. That’s when you find out what the market needs and you figure out a solution to solve that problem.
  • Create a Solution: Next you need to figure out how to make that solution, manufacture it or find it somewhere from a wholesale supplier.
  • Investing: Next you need to invest a large amount of time and/or money to either create or acquire the products and scale your business. Because the more you plan to sell, the more money you need to buy new inventory.
  • Setup Shop: Next you need to either create an online store or set up shop in your local area.
  • Collect Payment: Then you need to apply for a merchant account so you can accept payment.
  • Storage Facility: If you’re dealing with physical products, you’ll need some sort of storage facility, unless you want to join the home business owners who turn their homes into a storage facility.
  • Shipping and Handling: When someone buys from you, you’ll have to physically wrap up the product and ship it. Or you can hire staff to do that for you.
  • Customer Support: If your customers have any issues or questions about their purchases, then you need to provide customer support. They need someone they can call or email 24/7.
  • Refunds & Returns: If your customers don’t like the product and decide to return it, you’ll have to deal with refunds and returned items.
  • Marketing & Sales: In addition to all that work, you need to figure out how to do marketing and sales to attract and retain the right clients and customers. To make an income, you need sales. To get sales, you need marketing.

What if we eliminated all the extra hard work and all you had to focus on is Marketing?

Would that make your life easier?

Well that’s what affiliate marketing is all about.

STEP 2: Increase Your Income with Affiliate Marketing

Now that you know your options for making money online, you can see why I LOVE affiliate marketing.

With affiliate marketing, your focus is on marketing… something you need to do no matter what type of business model you choose.

SERVICES PRODUCTS AFFILIATE MARKETING
Create or sources your own
products & services
YES YES NO
Setup your own merchant accounts to collect payment YES YES NO
Deal with storage, shipping & handling NO YES NO
Provide customer support YES YES NO
Manage marketing campaigns to match your audience with the right offers and get more sales! YES YES YES

As you can see in the table above, affiliate marketing requires the least amount of work.

Just focus on marketing!

In a way, affiliate marketing is a type of performance-based marketing that involves three parties: the product owner, the affiliate and the consumer.

Product Owner (Advertiser): The product owner is usually referred to as the advertiser. That’s a person or a company that wants their products or services advertised so they can get more sales. It’s the advertiser who pays other people a referral fee every time they generate a sale directly or indirectly. So, if you have a product or a service yourself that you want others to promote on your behalf, then you would be the advertiser.

Affiliate (Publisher): The affiliate is usually referred to as the publisher. That’s the person or company that publishes advertising either online or offline to help the product owner get more sales. If you don’t have your own products and services to promote, you can promote other people’s products and services and earn a commission every time a sales transaction takes place.

If you have your own products, you can get affiliates to promote them for you and you only pay them when they generate a sale. This is much more affordable than hiring a full-time sales person that you pay by the hour. It’s also much better than spending thousands of dollars on advertising when you’re not sure if anyone will buy or not.

Consumer: The consumer is the person or entity that buys the product or service.

When a consumer makes a purchase, a conversion takes place. If you’re the affiliate who referred or sold the company’s product or service to that consumer, you get a commission as payment for your efforts.

If you’re the product owner, you’ll pay the affiliate a certain percentage of the sale as a thank you for delivering the paying customer. So, you’re paying for a guaranteed sale rather than spending money on advertising that may or may not deliver results.

That’s why vendors LOVE affiliates. And that’s why people who don’t want to be bothered with creating their own products and services LOVE Affiliate Marketing!

It’s like having business partners WITHOUT all the complicated legal paperwork.

Tracking Sales

At this point you might be wondering how do companies know who generated the sale so they can pay them a commission?

This tracking is done by a unique affiliate link that they give to each affiliate.

An affiliate link would look something like this:

https://www.website.com/aff_c?offer_id=1321&aff_id=9006&source=blog

offer_id refers to the product number.

aff_id is a unique affiliate id so the company knows who sent the referral to them.

source can also be used to help you track which page the lead came from. In the example above you can see the source is a blog post.

As you can see the link is too long and would be hard to remember. You can still use it on your website, blogs and online ads as most people will usually click on the link.  A better option would be to hyperlink words like “CLICK HERE” or create a button or an image ad to point users to your affiliate offer. Or, you can also use link shortening services, tracking services and other redirect tools to make the link easier to remember.

For example, you can purchase a web domain name and have it redirect to your affiliate link. This will make your links shorter and easier for your followers to remember. Even if you don’t have a website yet, it will seem like you do.

Your affiliate link will look like www.yourcustomdomain.com.

If you have a website or blog already, you can use pages on your sites to redirect to your affiliate links.

E.g. www.yourwebsite.com/productname can be customized to link directly to your affiliate offer. This will look much more professional than having a long affiliate link with odd numbers and characters.

You might also use URL shortening tools and tracking services to help you make your links shorter.

Advantages and Disadvantages of Affiliate Marketing

Nothing is perfect and neither is affiliate marketing.

As an affiliate, you have the following advantages:

  • You don’t have to create your own products.
  • You don’t have to buy and store products.
  • You don’t have to worry about payment processing, shipping and handling or customer support. The merchant (product owner) takes care of that.
  • The business model is simple to set up, even for newbies.
  • The start-up cost is incredibly low.
  • The program can easily be scaled up.
  • You can operate your business from anywhere in the world and work as much as you like. There are no set hours. The program continues to work and generates an income even while you sleep.
  • You’re not bound by any minimum monthly sales.
  • You can do this as a full-time or side income without quitting your job or other business obligations.

Once your affiliate links are set up, they require less time and effort on your part. When you have a proper setup, and represent several companies and products as an affiliate, you’ll find that there’s a lot of money to be made. It’s just a matter of doing it right, being patient and giving it sufficient time to build momentum.

Some of the disadvantages and pitfalls that new affiliates face includes:

  • You only get paid when the sale takes place and usually only on the items sold during that initial transaction.
  • You need to keep spending time and money generating new traffic and finding new prospects, or the money stops coming in.
  • The companies you represent can change or suspend the affiliate program at any time. They may also choose to pay you less commission per sale without any prior notification. You’re playing by their rules.
  • Your web pages and web advertising might be affected with new rules and regulations from Google and other search engines or by social media channel updates. The new rules can limit the number of people who can see your pages and suggestions. Some channels are starting to get tough on affiliate marketers and blocking ads that promote affiliate programs directly.
  • Advertising costs can go up fast especially as the days of free social media promotions are coming to an end.
  • You need to find new offers constantly to stay current. If you’re always promoting the same products, they’ll quickly become outdated.
  • The customer doesn’t belong to you. You’re only referring people and not building a relationship with long-term benefits, as is the case if you’re selling directly from your own business.

As you can see, most of the disadvantages are really about marketing. That’s where most new affiliate marketers fail.

Just because you signed up to an affiliate program and started using your affiliate links doesn’t mean that you’ll get sales.

You still need to have marketing and sales skills to attract the right clients to the right solutions.

In the next three steps, you’ll find out why your success depends on the type of products you choose and how you promote them!

STEP 3: Select the Right Affiliate Products

Choosing the right affiliate products will have a huge difference on your income.

In general, its best to pick products that fit your area of expertise or complement some solutions you already provide.

People buy from people. To get more sales, you need to build a trust factor and help your followers see you as an expert in one area. That’s called a “Niche.”

For example, if you’re a graphic designer but start promoting vitamins on your graphic design website, no one will take you seriously. But if you’re a fitness instructor and you promote vitamins and nutritional supplements, then your followers are more likely to consider your recommendations.

You’ll find thousands of products to represent by going to affiliate networks like C.J. (Formerly known as Commission Junction), Rakuten LinkShare, ClickBank, J.V. Zoo, Affiliate.com, ShareSale and many more…

Each network represents different brands and types of products.

You can also join the Amazon.com, Etsy.com or eBay.com affiliate programs and promote products listed on the platforms even if you don’t have any products yourself!

To choose the right offers and networks, you need to first ask yourself…

  • What problems do you want to solve in the marketplace?
  • What is your area of expertise that you want to represent and recommend solutions around?

I love this quote that says:

“If you can describe your prospects’ problems better than they can, they’ll immediately assume you have a solution.”

To get more sales, you need to choose products that solve a problem you can articulate!

To help you decide, ask yourself: “what do you want to be known for in the marketplace?”

Pick products and services that fit your area of focus and that help solve problems you understand and can articulate.

If you’re not sure what that is right now, that’s OK.

You can always start by promoting information products that you enjoyed and learned from. Your honest reviews and personal experiences of products you purchased and enjoyed will help you get more sales.

I love business and marketing and that is why I focus on promoting training products that teach affiliate marketing, online business and other digital marketing strategies.

Commission Structures

In general, you’ll find that sites that focus on physical products will pay out the least commissions. For example, Amazon only pays out between 2-10% commissions.

That’s because every time the vendor sells a product, they have to invest more time and money to make a new one. The cost to operate a business that sells physical products is very high. So, they can only pay you low commissions.

 

PHYSICAL
PRODUCTS
DIGITAL
PRODUCTS
INFORMATION
PRODUCTS
2-15% 5-50% 10-90%

 

That’s why I like digital and information products more.

With digital products, you create the product once and can sell it over and over again. That’s why digital product creators can afford to pay much higher commissions. If they sell 1 or over a million products, it doesn’t matter. The product is digital and already created. There’s minimal reproduction cost.

If the product is delivered online, then there are no storage or shipping costs to deal with! All this contributes to a lower cost of business operations.

A lower cost of business operations, means that companies can now spend more on marketing and can afford to pay you more as an affiliate.

If you’re new to the online business world, I would recommend you start with information products related to business and marketing. Information products pay the highest commissions and if you pick training on subjects you want to learn anyway, then you can earn while you learn.

Every time you learn something new about marketing and online marketing, you can go and practice using the same products you’re learning from.

Once you know how to do online marketing properly, you can expand your reach and promote other products and services.

What Is High-Ticket Affiliate Marketing and Why You Need to Know About It

One of the disadvantages of traditional affiliate marketing is that you only get paid on front-end sales.

Front-end sales are usually low-ticket items.  They’re called front-end as they are the first type of products people usually buy.

Back-end refers to subsequent sales made by the same client.

For example, if you refer a customer and they buy a $100 product, depending on which site you sent them to, your commissions will be anywhere from 2-50%. On rare occasions, some programs will offer you more on front-end sales, but for the sake of this example let’s go by what most programs offer, which is usually 2-50%. This would translate to about $2-$50 in commission.

When you start marketing online, you’ll quickly realize that it costs money to drive traffic to your websites and marking pages. You’ll have to either pay money to advertise or pay with your time by creating content to attract visitors to your offers.

Making low-ticket commissions isn’t going to cut it for you unless you’re selling in HUGE volumes. Unless you’re an online celebrity with a large following of people who buy based on your advice, you won’t make enough money to survive.

To get higher commissions, you need to promote high-ticket products. High-ticket, usually refers to products that are a $1,000 or more.

For example, if you’re referring your customers to a product that costs $2,000 and you’re getting 50% commissions, then you’ll get paid $1,000 if a sale takes place. Nice! Now we’re talking!

Higher commissions mean you don’t need as many sales to make a comfortable income from your business each month.

Companies that use this business model have been around for a while, but hardly any affiliates know about them because High-Ticket product offers are not listed on affiliate network sites.

Understand Cookies and How They Work

In addition to the commissions, there are few other differences.

With traditional affiliate marketing, your affiliate link is only valid for 30 – 90 days at most. That means if your followers click on your affiliate link but don’t buy right away, your link will be still be honored for 30 – 90 days as long as your followers don’t click on someone else’s links before they buy.

In the industry, we call that “Cookie Life”. Cookie refers to a small code that is placed on the user’s computer once they click on an affiliate link.

Let’s say you’re promoting a product from an affiliate network that pays between 2-10%. Your followers might not buy right away, but the site you’re promoting will honor your affiliate link if your followers return within 90 days and buy something.

If they return one year from now, your links will no longer be valid, even if they already bought something based on your recommendation in the past. That’s because the cookie life would have expired.

The rules are even more complicated with Amazon.com. Technically they will only honor your links for 24 hours.

The 90-day cookie life applies if your followers add products to the cart and don’t buy right away. If they add products to their cart and buy with 90 days, then you still get the commission.

Another sneaky rule is that once your leads make a purchase, the cookie is reset. So, if they return within the next 24 hours and make another purchase on Amazon, you don’t get a commission.

With high-ticket affiliate marketing, the customer is tied to you. This means that no matter what they buy in the future, you still get the commissions even if they don’t click on your affiliate links ever again!!!

AFFILIATE MARKETING HIGH-TICKET AFFILIATE MARKETING
2 – 50% Commissions 30 – 90% Commissions
30 – 90-day Cookie Life Lifetime Cookie
Reward Programs

Why is this important?

Because repeat business is the key to any successful business!

It’s so much easier to sell to existing customers than to go out and find new customers. Plus, repeat customers are more likely to buy higher priced items each time they make a new purchase.

Once they trust you and the companies you’re promoting, they’re more likely to check your sites and links before making any other purchases in the same category.

We call that the “Customer Lifetime Value” (CLV). That is the amount of money a customer is likely to spend with you long term.

When you hear of “super affiliates” making millions of dollars online, chances are they’re tapping into the high-ticket affiliate marketing model.

Some companies are starting to expand and offer High-Ticket programs to their affiliates.

All you have to focus on as an affiliate, is send traffic to a low-ticket item, like a $20 product, and then the phone sales team of the company you’re promoting, will follow up with the customers and offer them many other solutions that cost anywhere from $197 to $50,000 and much more. When a sale takes place, you get a commission on the sale no matter what the customer buys in the future.

That can easily translate to thousands of dollars in commissions per sale… all for sending leads to a low ticket offer of just $20.

Of course, not everyone will buy subsequent products, but chances are if someone is interested in the front-end product from a company, they’ll also be interested in other products in the same category… if not now, maybe in the future.

To tap into High-Ticket affiliate marketing programs, you might have to pay a membership fee or a licensing agreement with a vendor. In return for your investment and dedication to their products, they’ll unlock your access to High-Ticket commissions. Otherwise they’re really under no obligation to share the commissions with you.

Is This a Scam?

The unexpected costs of High-Ticket Affiliate Marketing programs are why some people start flagging them as scams, and begin to question why they should be active members to receive the back-end and reoccurring commissions.

But think about it. If you used a car salesman to help you with a car purchase and they got a commission on the sale, does that mean that they should get commissions on any future cars you buy even if they were not working for that dealership anymore? Of course not!

But if they were still working at the same dealership and you visited that location several years down the line and bought another car from them, then they’ll get the commission.

It’s the same online. These companies are sharing the repeat and reoccurring commissions with you as a reward for your loyalty to their company by keeping your membership active. They’re under no legal obligation to pay you any future commissions. They’re using this setup as an incentive to keep you as a member and encourage you to recommend their products and services to new clients.

To build a thriving online business, always promote products you use, believe in or trust. If you start promoting products only based on the commissions they pay, no one will take you seriously anymore.

Companies come and go. The only thing you can hold on to is your name, your brand and your reputation. Protect your reputation and only offer products you researched and believe in.

STEP 4: Create Passive and Residual Income with Affiliate Marketing

Getting your first commission online is one of the most exciting and memorable experiences. Because once you get that first sale, you have proven to yourself that it can be done.

If you did it once, you can do it again.

What is more exciting than your first sale is getting repeat sales on autopilot. That is referred to as passive and residual income.

Passive income is generated from business activities or investments in which you’re not actively involved. Even though you’re not actively working, you still need to make an investment to set that income in motion. Once the systems are in place, you can practically make money while you sleep, with minimal effort and supervision. But you still need to keep an eye on the processes and make minor adjustments and tweaks once in a while.

Residual income refers to recurring payments that you receive long after the initial sale is made, usually in specific amounts and at regular intervals.

This could include royalties from intellectual property like books, movies, apps, games, songs and inventions. Or licensing agreements that give you a percentage of specific sales even if you’re no longer involved in the process. This also includes commissions on affiliate programs that generate monthly membership payments!

When you look at these definitions, you can see that residual income can be called passive income under most conditions, but the reverse is never the case. That’s why sometimes they’re used interchangeably even though they do have some differences.

Thanks to High-Ticket affiliate marketing programs and products that operate on a membership model, you can now generate passive and residual income online even if you don’t have any products yourself.

In step 3, you learned about High-Ticket affiliate marketing and why it’s better than traditional affiliate marketing programs. In short… the customer is tied to you for life. No matter what they buy in the future, you still get the commission.

Let me tell you, getting unexpected sales on auto-pilot is an amazing feeling. Especially when you were not involved in the follow-up and sales process.

Membership Programs and Residual Income

Membership programs are even more exciting. They’re also referred to as “continuity affiliate programs” because they provide continuous commissions month after month.

Marketing and business automation programs like Aweber, LeadPages, ClickFunnels, WPegnine, Kartra and Quickbooks operate on a monthly or annual membership plan. They’re business services and tools that any business needs for continued success. This means that once a customer signs up for one of these programs, they’re not likely to cancel because they need that service on an ongoing basis.

As they make their monthly or annual payments, you get your monthly or annual commissions like clockwork. All you had to do was promote these services to your followers.  Once a sale takes place, you keep getting reoccurring commissions from the same customers as long as they are paying their membership fees!

Passive and residual income are the best. You know that your hard work setting up the marketing funnels and affiliate links will pay for many years to come.

If you want to increase your online income, then make sure to include High-Ticket affiliate marketing and continuity programs to your online income strategy!

STEP 5: Promote Your Affiliate Offers the Right Way

There’s a popular term in business that says, “the money is in the list” …that’s your email list—the one that has your subscribers’ names and contact emails.

Why?

Because the more people you have on your email list, the higher the possibility that some of them will make a purchase. That’s why to be truly successful as an affiliate marketer, one of the first things you need to master is how to effectively build and grow a responsive email list.

Your email list is the most valuable asset you have. It’s a list of subscribers that willingly gave you their name and email address in exchange for some information or offer you presented. That offer is called a “lead magnet”.

A lead magnet could be a report, eBook, a check list of your top resources, a webinar, a free video training series, recordings of an event… or anything that provides your leads with valuable tips and advice.

A responsive email list, means it’s a list of subscribers that open your follow-up emails and broadcast announcements on a regular basis.

On average, about 5 – 25% of subscribers will open and read your emails. The open rate will depend on the email subject and how relevant it is to each reader. That’s why it’s important to keep emailing your list on a regular basis and build a relationship with them.

Keep your follow-up emails related to the same niche or category of information your followers subscribed for. Sticking to one subject matter and providing solutions, tips, motivation, product reviews and recommendations, will position you as an expert in their eyes. But if you start talking about unrelated topics and solutions, they’ll flag your emails as spam and quickly unsubscribe.

When setting up your lead magnets and email lists, make sure you’re following the industry rules and regulations and only email people who asked to be on your list.

No matter which business model you choose to pursue now or in the future, if you have a growing list of followers and email subscribers, you can reach them at will to communicate your offers and value. And because they already have that relationship with you, they’re more likely to take your advice seriously and take action on your suggestions and recommendations.

Selling to your list will be so much easier than finding new prospects all the time. So, start your list today!

Getting More Sales with Social Media

You can use social media in a similar way. If you love to share updates and content on social media, you might soon find that you have a large following.

Providing consistent content will also create trust and a long-term relationship with your followers. This means that if you make affiliate product suggestions in your posts, they’re more likely to take your advice and make a purchase.

That’s how YouTube and Instagram celebrities make some of their money online. They have a lot of followers because they’re providing consistent content of value that is either in video or image format.

The more followers and subscribers they have on YouTube, the more money they get for video views and advertising. Once they reach a certain number of subscribers that are engaging with comments and likes, they might also be approached by companies that want their products featured on their channel. This allows them to get more money and perks as they become known as “influencers”.

The same rules a apply to any social media platform you choose.

When building your email list or social media followers, your goal is to be viewed as an influencer and have followers that are engaged with your content. The more engaged followers you have, the more sales you’re more likely to make.

Automate Your Marketing

To build your email list and provide ongoing content, you’ll need to have a funnel.

An Internet funnel is a marketing strategy that allows you to send online traffic to one of your lead magnets with the aim of getting their email contact information, developing a relationship with them and ultimately getting multiple and repeat sales over time.

As referenced earlier, a lead magnet is something you give in exchange for a name and email address. It’s called a lead magnet as it acts like a magnet attracting the right leads to your offers.

A lead magnet could be a report, eBook, a check list of your top resources, a webinar, a free video training series, recordings of an event… or anything that provides your leads with valuable tips and advice. Your lead magnet needs to address one of their problems that they want solved.

When someone signs up to your lead magnet, they will be added to your automated funnels

There are two types of funnels:

  • Marketing funnel
  • Sales funnel

A marketing funnel is often seen as an upside-down pyramid. At the top, you lead potential clients to your websites, opt-in pages or sales pages; in the middle of the funnel, you offer them valuable tips, content and services if they sign up to your email list.

As they go through the funnel and get more access to your valuable resources, they get to know you more, trust you and take action on your recommendations by making a sale.

Highly converting funnels are well thought out with the end user in mind. They offer a series of progressive solutions, and are systematized and automated with email and marketing automation tools like Aweber, Mail Chimp, Constant Contact and funnel creation tools like LeadPages, ClickFunnels and Kartra.

Consider the following from the Association of Professional Salesmen and the National Sales Executive Association. Their statistics show that most sales are made from the fifth through the twelfth contact!

Here is the data they have compiled about how contact sales are made:

  • 2% of sales are made on the 1st contact
  • 3% of sales are made on the 2nd contact
  • 5% of sales are made on the 3rd contact
  • 10% of sales are made on the 4th contact
  • 80% of sales are made on the 5th-12th contact!!

If you don’t have any means of capturing leads from your traffic, you’ll not be able to reach them again, which means you could be losing out on 98% of the sales.

If you’re spending money on that traffic, you might as well throw that money down the drain because you’ll never see it again.

Once your leads are subscribed to your email list, you’ll need to follow-up with a consistent means of communication offering more value, tips and resources. You could send them blog posts, related industry articles, videos, case studies, webinars or any other related content that allows them to see you as the solution provider to the problems they have.

If their problems are causing them severe pain, chances are they’ll make a quick purchase; if not, they might take weeks, months or even years before they buy from you.

It could be that they know they need a solution, but at present have other priorities they need to address. Your content needs to constantly educate them and remind them why they were searching for the solution in the first place.

You could also offer the occasional promotions and bonuses that might drive them to take action now, like reduced pricing or “buy one get one free” types of deals.

In marketing terms, they’re sometimes referred to as feeder products or “tripwire,” a term coined by Ryan Diess from a company called Digital Marketer. These one-time low priced deals are in a way tripping the leads to stop and take a closer look at the solutions you have to offer.

In many cases the tripwire will not generate a profit for your business. It could turn out to be what is referred to as a “loss leader.” That’s when you lose money on the sale knowing full well that once a lead buys from you once, there’s a very strong likelihood that they’ll buy again—so you’re willing to lose money on the first sale. They have overcome their initial fear of pulling out their credit card and making a purchase. By taking that action they have proved to themselves that they can trust you. Buying a second, third and fourth item from you is now a much easier process.

Once they make their first sale, they’ll now be in your sales funnel. Depending on the complexity of your solution, you could go on to offer them other low priced products that could act as a “funded proposal” or your primary offer that you wanted to sell them in the first place.

A funded proposal is a product item that generates enough cash flow to allow you to spend money on more traffic and more marketing activities to bring in new leads and clients. It does not provide enough revenue to generate any profits yet, but it’s still an important item of your funnel.

Your primary offer is your moneymaker. That’s the item you wanted them to buy all along. It has the most value and is typically a mid-range priced product that the users can afford and still provides you substantial profits.

As you build a stronger relationship with your customers you can start offering them High-Ticket items as back-end products. These items are usually in the thousands of dollars and provide you with the highest profit margins.

As you research more businesses, you’ll soon start to see a pattern. Successful businesses have a well-thought-out funnel, but businesses that struggle and eventually go bankrupt don’t.

Now that you know that the big profits are at the back-end, you’ll understand why many prefer to create their own products.

Remember; repeat business is the key to any successful business. If you have your own family of products starting with lower prices and progressively offering more advanced solutions and products at higher prices, then your income potential will increase dramatically.

Happy customers would much rather go back to a trusted vendor that they used in the past than take a chance on a new vendor they’ve never used before. If you own the product or the rights to the products, not only will your subsequent sales be much easier, but they’ll also generate a lot more income than the initial sale did.

That’s where most affiliate marketers go wrong. They spend their time and hard earned money advertising front-end affiliate offers directly instead of building their personal funnels first.

This is a marketing problem that most businesses face.

To increase your income with affiliate marketing, you too need to:

  • Improve your marketing skills
  • Learn how to build marketing funnels that allow you to grow your email list and social media followers
  • Have a tiered product mix with progressive prices that you offer to your list of followers

No matter business model you choose, you’re always in the marketing and sales business. The sooner you realize this and improve your skills in that department, the faster you’ll see your income skyrocket.

If adding affiliate marketing as an income strategy is important to you, then start by working on your marketing skills first!

What Next?

Affiliate marketing is one of the simplest ways to add products to your online income strategy. It’s also a great way to add passive and residual income. That’s why, I think it is one of the best places to start if you are a newbie to the online business world. As you increase in knowledge you can expand your reach and get into licensing, drop shipping or even having your own products.

What does this mean to you?

As I see it, there are two types of people. Those who take the time to educate themselves and take action and those who sit around waiting for others to tell them what to do.

The BIG question is which one are you?

To succeed with affiliate marketing and make a business-level income rather than earning like a commissioned sales person, you’ll need a few things:

  • Become a Marketing PRO: Focus your time, energy and resources on learning how to become a marketing pro… then outsource the rest. Once you know how to market and match the right leads with the right offers, you can excel in any business, no matter what you choose to offer!
  • Get Support! You don’t have to do this alone. Find online marketing training programs, coaches, mentors, communities and accountability partners to help you. The more support you have the more likely you are to stick to your goals.
  • Build a Following: Build your own list of followers and customers, and build a strong relationship with them before making any product recommendations. This could be with an email list, private membership site or simply having a following on social media.
  • Leverage High-Ticket affiliate Marketing Programs: Find high-ticket affiliate marketing programs that tag a customer to you for life. When your tagged customer buys something from the same company in the future, you’ll continue to earn commissions on the sales. This setup allows you to create passive income with affiliate marketing.
  • Tap Into Continuity Programs: Add monthly membership programs that pay out reoccurring commissions to your list of solutions. Passive and residual income are a great way to increase your income over time with the least amount of work.
  • Automate Your Customer Acquisition Process: Create automated marketing funnels that attract the right leads to your offers. This goes back to the point #1… make it your goal to become a marketing pro.

If you read this far, then you owe it to yourself to give affiliate marketing a try.

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