What is Affiliate Marketing and How Does it Work?

- What is affiliate marketing? How does it work? And how can you actually utilize it to make money online?

(upbeat music) (upbeat music) (upbeat music) (upbeat music) (upbeat music) Hey, this is Peng Joon here and in this series, that's right, it's not just the video, I decided to create an entire series 'cause after looking at many of your feedback, a constant question that we've been getting over and over again. How can I utilize affiliate marketing? How does it work?

How can I integrate it with social media and Facebook and YouTube? And how can I actually utilize it to get a part-time income? Turn that into full-time income?

Now in order for me to address all those questions, the questions that you guys have been asking, I decided to go real deep and this entire series, this is the start of the entire series. We're gonna cover from the ground up, get the right foundation, right basics, and you watch 'till the end, and in fact, if you watch the entire series, you will see exactly what I did. The mistakes that I made so that you don't have to make mistakes.

And why, by understanding these strategies, it will literally compress and avoid all of the mistakes that most people do. By the way, if you're new to the channel, my name is Peng Joon, I have been doing affiliate marketing for close to about 15 years now. In fact, the first ever product that I promoted, that was somebody else's product, which we'll talk about, which is basically affiliate marketing, was in the gaming space in the computer game space, which was literally the first market that I went into was in the World of Warcraft space.

So I want to start off by showing you, why is it important? Why is affiliate marketing such a crucial piece that you want to include as part of what you're doing right now, whether you're totally new to this, whether you've been trying to figure things out online, or even if you're an experienced online marketer, you'll be able to see why by understanding these concepts here today. It will be an absolute game changer.

So let's begin with what is affiliate marketing and why should you care? So let's begin with that. Now when it comes to affiliate marketing, here's the thing.

The biggest problem people face in the online world is always this. It's in product creation. They say things like, "Well, I understand that to make money online, "I need to sell something online.

"But I don't know how to create a product. "I'm not an expert. "I don't understand manufacturing, "and shipping and logistics and fulfillment, "and customer support.

"I don't want to deal with all of that. " Now what if affiliate marketing removes all those issues? Now, why affiliate marketing?

Because you don't have to deal with product creation, you don't have to deal with fulfillment, you don't have to deal with customers. And what if you only got paid by just referring people that buys another product? Now this product could be a physical product, could be a digital product, could be a service, could be a software.

In this entire series, we're also gonna make it tactical, which means it's not just gonna be theory because the truth is theory. This isn't gonna make a difference for you, but actual case studies, actual numbers. In fact, what you're seeing here is literally promoting a software that I didn't write or code.

You're gonna discover how I became a top affiliate for selling physical products, digital products. So let's dive straight into it. Okay.

And then we're gonna talk about how you can utilize this as well once you start getting some ideas. But let's start the foundation right. So going into my laptop right now, what I'm seeing in front of me is Amazon Associates.

So you probably know this, but Amazon is the world's largest marketplace, selling physical products. And Amazon over here, you can see that they have got many different categories, right? Digital fashion, shoes, jewelry, health and beauty, home kitchen.

And you'll notice that they all have a different percentage commission whenever you refer people that buy stuff on your platform. So depending on the category, so for example, things like groceries and fresh produce, the percentage is low. Why?

Because it's an easy sell for Amazon. Now, they periodically change the percentages. But the easier it is to sell, so like groceries, where they know that chances are, especially during when everybody's stuck at home, percentage is low.

Why? Because it's easy for them to move these type of products. However, you'll notice that you'll see like 10% on premium beauties like these type of products.

So it kind of ranges. Average, it's about 5%. And you'll see that physical products has got a lower commission compared to digital products.

So I'm going to walk you through a few different platforms and then show you like how can you actually start utilizing this as part of your business model. Or if you're new to this, how you can get started with a business in the world of affiliate marketing. Now so that's Amazon Prime platform, Amazon Associates.

The next platform is Clickbank. Now Clickbank is a digital marketplace where you can literally promote any type of digital products. So what are digital products?

They have some physical products today but Clickbank mainly specialize in digital. So what is digital? Digital is intangible products, things like eBooks, videos, membership sites, where they will pay you a commission whenever you refer people to buy stuff on the platform.

So the different categories, you'll see that whatever market you wanna go into, whether it's arts and entertainment, gambling, business, computer, cooking, games, green products, health and fitness. And if you were to click on any of these different categories, it drills down further. There's addiction, beauty, dental health, meditation, men's health.

So all these type of products, I'm gonna walk you through the different platforms first, especially if you're new to this, to start giving you ideas on what are other people's products that you could be promoting. So for example, if let's say you are an influencer on Instagram or you have a small following of 1000 people. And you're thinking of how to monetize a product, could be a digital product in the health and fitness space.

It could be a physical product if let's say you are a bodybuilder and you want people that follow you are into bodybuilding or want to look good, naked, and they want to get that six pack abs and be shredded for the summer. Okay, whatever it might be. So let's say you want to sell protein powder.

You could be referring people that buys protein powder on Amazon, where again, you get a commission whenever people buy stuff on Amazon. And the good news here is that Amazon would pay you, not based upon what you refer, but based on the total checkout of that person. So if you've ever shopped on Amazon, you know that Amazon has things like "People who bought this also bought this.

" So they have these type of cross-sells and up-sells. And they will pay you a commission, that referral fee, based on the total checkout value. So why affiliate marketing?

And that was literally what got me to fall in love with affiliate marketing. The first market that I was ever in, you've heard me talk about this was a World of Warcraft, there was this point in time when I built a small email list and I promoted this other guy that sold this eBook in World of Warcraft. There was two products, how to level up faster and how to make gold in World of Warcraft.

I've never played these games, it might not make sense to you. But that was what got me hooked into the world of affiliate marketing. I promoted these two products and started making good side income from it.

And I never looked back since. So affiliate marketing is a great way to start for those of you if you are thinking, "What if I'm in a market that is more service-based? " "What if I'm in a niche like travel?

" In whatever market you're in, one of the best ways is go to Google, type in the niche you're in. So for example, travel plus the words "affiliate program. " So if I were to type in "travel affiliate program," a quick research would show that, for example, Agoda has an affiliate program.

Each $200 booking gets you a commission rate of 5% that gets you $10 in commissions, right? There is booking. com, okay booking.

com. So there are all these different type of programs and chances are, you might have used booking. com or agoda.

com. And you can see from the page over here, so whatever it is, if you were to refer people that books hotels or flights, so now you don't have to come up with the product or the service. What you're merely doing is you are referring people that buy stuff on these platforms and whenever that sale happens, these platforms will pay you a commission.

So what if you're into trading? What if you're into like forex or stocks or anything like that? So same thing here, all I did was quick research.

Typed in "forex affiliate program. " And I can see that there are all these different platforms where they will pay you a commission, $1,000, $600, $800 $1,000, $600, $800 whenever you refer people that opens a forex or a trading account, where they might even have a rev share, which means every time they trade whenever they make money, they give you a percentage of it as well. Now I'm not a forex trader, there's a lot of these different platforms out there that will pay you a commission and even do a rev share with you if people continue to stay, continue trading on the platform.

So what does this mean? Now that we have established how affiliate marketing works, and why it's important, because it helps you overcome the problem of product creation, fulfillment, and shipping. Let's talk about the big picture of how it works and how we can start utilizing it from a big picture perspective.

So imagine this. So imagine right now, the different platforms that we've talked about, is for example, Amazon for physical products, it could be Clickbank for digital products. If let's say it was more of a service-based thing, so let's say if it's like Agoda or Tripadvisor, or let's say it is a specific software.

Again, I showed you like the different trading platforms, right. Now there are a lot of different softwares, not just for trading, but for Internet marketing that I utilize. We'll talk more about these.

But these are the two platforms, right? So these platforms, whether it's physical products, digital products, services or software, they will pay you a commission whenever you refer people that buy stuff on this platform. The question is, how can we start sending people over utilizing affiliate marketing?

And how do we actually build a business that starts off as perhaps a side income where you can earn I don't know $100 a day, but eventually becomes like a full-time thing, an actual career, an actual business. So to get started with this, then we need to understand the mechanics of how it works, how does it track. So if I were to go into any of these platforms and if I were to sign up as an affiliate, they would give me an affiliate link.

Now what an affiliate link is a code, a link that is customized specifically to me that nobody else in the world has. Let's take for example, let's say if I went to health and fitness in Clickbank. So I just logged into my Clickbank account.

You can create one for free and you will notice that whenever I go into the different categories, there's all these different products in here. Now on this video, we're gonna go through the big picture first before we dive into the little details. But any of these platforms will enable me to get a affiliate link.

So let's say I want to promote this diabetes product. Now, I'm not gonna go into whether this product is good, whether it sells well for the purpose of the context of this video. If I want to promote a product, all I need to do is click on promote, I'll type in my account username, I'll generate a link.

And you will see that this link here that Clickbank gives me, is unique to me. Now this link here, nobody in the world has except me. This is how Clickbank can track that I am the person can track that I am the person that is referring this sale and that I should be credited for this sale if somebody buys to my link.

If I were to take this link and I were to put it into a browser. Let me just copy this link. Okay, let me just copy this link, put this into the browser.

Okay, let's see what happens. So notice that it takes me to the webpage, which just happens to be diabetes freedom. And now there's a video that loads and once the sales video place, I'm guessing there will be a "Buy Now" button that will appear and if somebody buys, Clickbank will credit me with the sale.

Same thing for Amazon. Now looking at this sales video right now, just a quick side note, I don't know if this thing's legit. I stay away from these type of medical stuff because this especially is diabetes.

And a lot of like, for lack of a better word, a lot of douchebag marketers who don't know what they're doing. So you want to make sure you do due diligence, okay? But again, but that's how affiliate marketing works.

So same thing here, I could go to Amazon, sign up for an Amazon Associates account. Amazon will give me a link. And this link is unique to me, which is whenever I send people over, Amazon can track that I'm the person referring the sale.

This is from big picture perspective, how it works. So let's talk about then, how do you actually create income from this? So if you know that this is the big picture, how do you turn it into a business?

You turn it into a business by first adding one step before this step happens. You see, here's the first mistake people make. The first mistake people make is they take this link, and then they send people direct to these platforms.

If you want to understand what is the next mistake that most people make, is that they don't do this step. Do you know what this step is? To find out what this step is, That's when you need to watch the next video.

This is what affiliate marketing is and this is how it works. Now in terms of the setup, again, we're gonna go deep. You wanna make sure that first of all, number one, switch on the notification button.

Make sure you subscribe to the channel when we drop the next one. Make sure you let me know in the comments below what your biggest takeaway is and we'll be doing more videos based on what you want. This is Peng Joon and I will see you in the next video.