How much money can you make with affiliate marketing?

How much money can you make with affiliate marketing?

Your earning potential with affiliate marketing is uncapped. Earnings with affiliate marketing depends on the size of your audience, conversions, and commission rates. Adjusting any of these variables will impact the size of your earnings.

Imagine, waking up every morning and your phone is full of notifications. Each notification says, “Congratulations, You helped make a sale for $137.”

You’ve barely woken up and have already made 10 sales. Fortunately, in your sleepiness you can still do the math. You’re starting the day out with $1,370 heading towards your bank account!

Don’t be fooled, it takes effort to get to this point. 

The important thing is that you can get to this point, or better! Luckily for you, I’m going to show you how much money you can make with affiliate marketing.

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How much money can you make with affiliate marketing?

Most beginners in affiliate marketing earn less than $20,000 per year. With some experience, nearly half of affiliate marketers earn under $100,000 per year. A select number of affiliate marketers are able to earn over $1,000,000 per year.

Affiliate marketing takes time to build to a full-time income. You need to practice patience when building your affiliate marketing income.

How much you earn depends on the size of your audience, conversions, and commission rates. Adjusting any one of these factors will impact your earnings.

Your audience should be your first focus. Essentially, your audience is the number of people you can sell a product to. Most affiliate marketers try and skip building an audience, because they want to earn money. 

Remember, you can’t sell to an empty room. Build your audience first and then focus on monetizing.

Conversion rates can make or break your business. You could sell a $100 to 1% of your audience or a $15 product to 10% of your audience. The $15 product performs better because it converts better.

Commission rates are your share of a product sale. You could sell a $100 product at a 10% commission and receive $10. However, you could switch to a similar product with the same conversion rate, but it offers a 40% commission. Now, you’re making $40 per sale instead of $10.

Therefore, keep in mind Profit = Audience size * Conversion rate * Commission received.

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How much money can you make as an Amazon affiliate?

Amazon generally pays between 1-5% in commission depending on the product category. Unfortunately, your efforts would be better suited promoting other affiliate programs because of Amazon associate’s low commissions. To make matters worse, Amazon continues to cut commission rates.

Look at it this way, you’re building an affiliate marketing business. You refer Amazon $1,000 worth of business and only get a measly $50 at best. 

I would much rather promote a different program which gives 20-50% in commission. Now, $1,000 worth of business is worth $200-$500.

You also need to partner with trustworthy affiliate programs. After all, you are trying to build a reliable income stream. You wouldn’t want to build a full-time income, quit your job, and then have commission rates cut.

Unfortunately, Amazon isn’t a trustworth program. Amazon cut commission rates in half during the middle of Covid-19. Some affiliate marketers lost half of their income at a time when they needed it most.

Here’s a video from Income School which discusses why you should avoid Amazon associates.

How long does it take to make money with affiliate marketing?

At a minimum, it usually takes two years to build up affiliate marketing income to be a full-time income. How long it takes depends on the quality and quantity of content you provide. You will need to focus on commission rates, conversions, and building your audience.

When building an online income, the amount of work and the speed at which it’s done is all that matters. Fortunately, producing online content allows your efforts to build using the principles of compound interest.

Compound interest is when your work you did years ago are still earning results. You continue to produce work while your past work is still producing.

For example, you might write a blog post which continues to earn you $10 per month. You write 10 more blog posts which have similar results. Now, you’re earning $110 per month from work you’ve already done.

Zach from Four Pillar Freedom is very familiar with the concept of compound interest in digital marketing. His online business is making him more money in the last six months than the last three years combined!

Four Pillar Freedom online earnings in compound interest

With compounding income, your earnings are pennies in the beginning. However, consistent effort starts to yield huge results!

How do affiliate marketers make money for beginners?

Affiliate marketers make money by promoting a product through content. Help people solve a problem, but offer a product as part of the solution. When your product is relevant to the solution, it’s easy to make sales.

The first step is to find a product to promote. Ask yourself, who needs this product and what are they searching for to find this product? Next, create helpful content around the product and offer it as a solution.

You want to make sure you highlight the benefits of the product. Give the reader or content consumer a reason to buy the product.

Remember, the product needs to be relevant to the problem. If I’m searching for “how to relieve lower back pain,” am I going to buy a book? Probably not. I’d be more likely to buy Icy Hot or a handheld massager.

The more people searching for a solution, the higher your profit potential. 

YouTube marketing vs. blogging: Which is more profitable for affiliate marketers?

YouTube is more profitable when it comes to affiliate marketing. You can still make good money as a blogger who promotes affiliate marketing, but YouTube converts better. YouTube tends to build more trust, because you can build a loyal audience who craves your content.

A YouTube video allows me to understand who you are. I can see your face and you’re keeping me entertained with amazing content. When you have a product, I’m more likely to buy from you because you’ve established trust.

Funny enough, Income School did a video on YouTube Marketing vs Blogging. They surveyed bloggers and YouTubers and broke down income. YouTube tends to make more money in affiliate sales or info products.

Where can I find affiliate products as a beginner?

Affiliate networks, like ShareASale, are the easiest places for beginners to find affiliate products. An affiliate network brings together multiple companies on one website, so it’s easy to browse. You can also visit a company’s website to see if they offer an affiliate product.

Networks like ShareASale make it easy for affiliate marketers to make money. You can see the commission and conversion rates before you decide to promote a product. Therefore, you won’t be wasting your time promoting products that won’t sell.

ShareASale conversion rates

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Summary: How much money can you make with affiliate marketing?

As you can see, your earnings potential is uncapped when it comes to affiliate marketing. Half of affiliate marketers earn less than $100,000 per year. However, experienced marketers can earn over $1,000,000 per year.

Your audience, conversion rates, and commission rates affect your profitability. You need an audience to sell products to. It may be more effective to promote low-cost, but high converting products. Focus on products which share more of the profit with you.

To start affiliate marketing, find a product and create content around the product which solves a person’s problem. Highlight the benefits of purchasing the product. The more people searching for a solution, the greater chance of profitability.

YouTube tends to sell more affiliate products than blogging. However, you can still make good money with blogging. When selling products, it’s all about the trust you build with your audience.

Affiliate networks are the easiest place to find products to promote. Alternatively, you can visit a company’s website to see if they offer an affiliate program.

John is the founder of TightFist Finance and an expert in the field of personal finance. John has studied personal finance for over 10 years and has used his knowledge to pay down debt, grow his investment portfolio, and launch a financial based business. He is committed to sharing content related to personal finance based on his experience in his career, investing, and path towards reaching financial independence.