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Affiliate marketing is a great way for small businesses to generate extra income. By partnering with an affiliate network, you can sell their products and services and receive a commission for every sale that your customers make. This commission can be used to help finance your own business, cover your expenses, or even save for a rainy day. There are many affiliate networks out there, so it's important to find one that is right for you. Many affiliate networks offer many different types of commission structures that are tailored to the requirements and needs of a business.

Once you join an affiliate program, you can begin sending traffic to the merchants product(s). When your customers click through and make a purchase, they will receive their commission. How often this occurs is up to the merchant – some may pay once per year while others might pay at least every 90 days (often called rolling commissions).

Affiliates always carry a bit of mystery—you never know if the person has ever really used the product, or if they are just promoting it for the money. Both cases still exist today.

Understanding the types of affiliate marketing can show you the different ways people make money online in this space, regardless of your moral compass.

The first type of affiliate marketing is referred to as “unattached,” or when you have no authority in the niche of the product you’re advertising. There is no connection between you and the customer. Often you are running pay-per-click advertising campaigns with your affiliate link and hoping people will click it, buy the product, and earn a commission. Unattached affiliate marketing is attractive because you don’t need to do any legwork. Affiliate marketing businesses rely on reputation and trust with a target audience online. Some don’t have the time or desire to build those relationships, so this type of marketing is their best option.

Related affiliate marketing is where you promote products and services you don’t use, but that are related to your niche. Affiliates in this case have an audience, whether it’s through blogging, YouTube, TikTok, or another channel. They have influence, which makes them a trusted source for recommending products, even if they’ve never used it before. The problem with related affiliate marketing is, do you want to promote something you’ve never tried before? It could be the worst product or service ever and you wouldn’t even know. It only takes one bad recommendation to lose the trust of your audience. If you don’t have trust and transparency, it’ll be hard to build a sustainable affiliate marketing business.

In this type of marketing, you use your influence to promote products and services that followers may actually need, instead of paying to get clicks on a banner ad. It takes more time to build this type of credibility with an audience, but it’s necessary to build a sustainable business. You don’t have to hide behind expensive PPC ads and hope for clicks and sales. An organic Instagram Story or blog post about your experience with a product will go a long way.

Shopify offers an affiliate program where entrepreneurs can refer merchants to the platform. It’s free to sign up. After a partner applies and gets approved, they receive a referral link. The partner goes and shares that link with their audiences. When someone signs up through the link for a paid Shopify plan, the affiliate partner earns a commission.

Pay per sale, where you earn a commission for each sale you make. It’s a common payout model for ecommerce offers.

Pay per action, which earns you a commission for a specific action. Many affiliate programs use this payout model because it’s broad and can be applied to different offers: a newsletter signup, a click, contact request, form submission, etc.

Pay per install, where you are paid for every install generated from your website traffic. The goal of your content would be to promote mobile apps and software so that people download or install them.

Pay per lead, which pays you every time someone signs up for something. It’s a popular payout method because companies use it for sweepstakes, lead generation, and other types of offers. Cost per lead offers are common for beginners because it’s easier to generate leads than to sell products to an audience.

Pay per click, a rare payout system where you earn commission on every click on your affiliate link. Pay per click programs are used by big merchants with a goal to build brand awareness. Customers don’t need to sign up or buy anything, just to visit the merchant’s website.

Affiliate marketing revenue eventually can become a form of passive income, but you still have to do some heavy lifting upfront. The success of your program will depend on the quality of your review.

To create a good review, it’s best to get personal. Share your experience in your blog, social media post, Instagram Story or YouTube video. If you’re writing a personal review, give a candid opinion based on your experience with and knowledge of the product. The more open you are, the more authentic you will be. People will be more comfortable following your advice if they feel they can trust you.

Trust is a key factor in your affiliate marketing efforts, because people need to trust you enough to act on your recommendations. The level of trust you’ll need to make affiliate sales depends on your industry and the products you’re recommending—for example, it takes more trust to be an effective affiliate for a $1,000 course than it does for a $20 t-shirt.