Affiliate Marketing For Beginners
Investing Simple is affiliated with Affiliate Marketing Champ by Odi Productions.
Recently, I had the pleasure of spending some time in beautiful San Diego California where I met up with a number of different YouTubers and online entrepreneurs. While I was there, I spent a lot of time talking with Odi aka “ODi Productions” on YouTube.
Odi is an affiliate marketer, and he has been doing this for around 6 years. One of the most interesting things I noticed about Odi while I was on this trip was how little he actually did. Now I am not saying that he is lazy, but he has a business model that most people would call perfect. Odi is able to work when he wants to, and on the days he does not work the money continues to flow in.
While the other entrepreneurs I was meeting with scrambled to put out fires, Odi just watched us while eating a pack of Gushers. On that day alone, Odi made $1,397 in passive income.
A few of us convinced Odi to start a series on YouTube where he shows people exactly what he is doing in a given day and how much money he is making. It is honestly hard to believe that you can make $1,000 a day doing next to nothing. Odi started this series, dubbed “Real Passive Income” the following day.
Here is Episode 1 of Real Passive Income…
Before we go any further, let’s go ahead and cover the very basics for those who are completely new to all of this.
“Passive Income” – Income from a source where the earner is not actively involved.
I’m actually not a huge fan of this definition. It makes it seem like the earner was never involved with this source of income. It also gives people the unrealistic expectation that income is earned from doing absolutely nothing. Yes, Odi did nothing on a given day and made over $1,000. But what is important is what Odi spent the last 6 years doing.
My favorite definition of passive income is that it is income from your past efforts. Odi earned that money on that particular day from the hard work he had done in previous years. It is unrealistic to expect to be paid money having done absolutely nothing in the first place. Passive income requires a lot of upfront effort.
“Affiliate Marketing” – Commission is paid to affiliates for bringing in business.
As an affiliate, you are working with other people and businesses. You are bringing them valuable traffic and customers and in return they pay you a commission on the sale. While the interest in affiliate marketing has grown significantly in recent years, it is actually a relatively old business model.
Have you ever made a recommendation to someone and they followed up with it and made a purchase or became a client of a medical professional? You were actually an affiliate marketer. Hopefully you got paid!
That is essentially what an affiliate marketer does. They make recommendations. The internet has made affiliate marketing a lot easier, because now instead of worrying about discount codes or name dropping we have tracking links. A tracking link has a tracking cookie which keeps track of the traffic to a site and retains it.
This might seem complicated, but don’t worry it will all make sense shortly!
Each tracking cookie has a cookie duration. This tells you how long the affiliate action is valid for. For some affiliate programs, this is 24 hours. For others, this could be 365 days or a lifetime.
Take the Amazon Associates affiliate program for example. The cookie duration for this affiliate program is 24 hours. If someone visits Amazon from your site and makes a purchase within 24 hours, you get credit even if they left the site in the meantime.
In a nutshell, that is exactly what people like Odi are doing. They are getting paid for recommendations. The difference between Odi and most people doing this is that Odi is REALLY good at it.
While I was with Odi, we sat down and recorded three videos together to teach others some of the basics of affiliate marketing. I am going to include those videos in this article as well as a summary of what was discussed below each video. At the end of the video, Odi mentions a free course that he offers on affiliate marketing. I will include a link to his free course at the bottom of each video.
VIDEO 1: How To Earn PASSIVE INCOME With Affiliate Marketing In 2019
Odi was born and raised in San Diego. He is currently 25 years old. When he was 19 years old, he was starting college and like many people he was looking at different ways of making money online.
Odi attributes a lot of his success to a book called The Millionaire Fastlane by Mj DeMarco. This changed Odi’s mindset and made him realize that working for every dollar that you earn was a losing strategy. As soon as he learned that trading his time for money was a losing game, he started looking for ways to make passive income.
“Active Income” – Income earned by performing a service.
Most people are only earning active income. Typically, this is the income from your job. It can also be the income from your business if you are simply a technician working in the business (reference to The E Myth).
Here are the main problems with earning active income…
- You only earn money while you are active. If this is a 9 to 5 job, you earn money for 8 hours and for the other 16 hours you earn nothing.
- Most people who earn active income earn it from one source. If that source goes away (aka you lose your job) you stop earning income.
- Most people want to stop working eventually. When you do that, you will stop earning income if you never build passive income streams.
- Active income typically ties you down to one location and requires you to work when it is convenient for your boss, not you.
- Only one source of active income can be earned at a time. You can’t be in two different places at once!
Personally, I learned similar lessons from the book Rich Dad, Poor Dad by Robert Kiyosaki. (And yes, these are affiliate links! Once you get started with affiliate marketing, you will learn that every penny counts.)
Odi learned this lesson about earning active income at 19 and I learned this lesson at 20. Odi and I are very grateful that we were exposed to this important lesson early on in life. Most people never learn about the downside of actively working for every dollar they earn, aka earning active income.
Once Odi learned about this, he started looking to create automated systems that would run on their own once they were set up. Online businesses allow you to create systems that work without you working actively on them. For example, if you create a digital product like an ebook, you only have to make it once. After that, it can generate income for years to follow.
Once Odi got this idea in his head, he became obsessed with earning passive income and decided to learn more about affiliate marketing. At that point, he stumbled upon someone named Pat Flynn. Pat has a blog called Smart Passive Income where he talks about everything related to passive income, including affiliate marketing.
What you will find when educating yourself about passive income is that the methods for earning passive income differ in terms of the work involved. Some business models are more passive than others. The most passive method for earning income is dividends. You simply invest your money into a collection of stocks that pay dividends and the money comes in on a regular basis.
There is one HUGE problem with earning passive income from dividends and that is the fact that it takes money to make money. As a young person especially, you do not have a lot of money sitting around. What you do have, in most cases, is time. Affiliate marketing is very time consuming at first, but once you get the ball rolling it can be extremely passive.
In my opinion, affiliate marketing is the second most passive form of earning income next to earning income from dividend stocks.
When Odi was first exploring the idea of having an online business, he looked at ecommerce as well. The main problem he saw with ecommerce was that he was limited to restrictions working with physical products. For example, if you are selling products on Amazon and you run out of inventory, you are stuck waiting for another shipment from overseas.
With digital products, there is no inventory and there are no restrictions. Odi learned about how Pat Flynn was earning money as an affiliate for web hosting services and email marketing software. In a nutshell, Pat Flynn was getting paid A LOT for posting links.
Most of the biggest companies in the world today use affiliate marketing. One of the largest and most well known affiliate programs is Amazon Associates. Beyond that, most other companies have programs as well.
Search “COMPANY affiliate program” in Google to see for yourself!
Odi loves the business model of affiliate marketing because it is a win-win-win. As an affiliate, you get to promote real products and services that you love and use everyday. For example, if you are a fan of Bose headphones or speakers you can join their affiliate program and earn commission on sales of these products you love.
Bose wins because they are selling more products.
You win as the affiliate because you earned a commission.
The buyer wins because they get to enjoy a great product.
One of the problems Odi has with other businesses out there is that you are selling cheap products. For example, with dropshipping you are selling products from China. If you are doing it right, you are buying the products, taking your own photos and warehousing them here in the United States. Unfortunately, a lot of people are simply dropshipping out of China which makes for a very poor customer experience. The shipping time is often weeks, not days and the quality control is non existent. As the dropshipper, you have no idea what the product is like if you have never put your hands on it.
MYTH: “Affiliate marketing is too saturated.”
Affiliate marketing can never truly be saturated, meaning it can never be too late to get started. At the end of the day, it is just a form of marketing that can be applied to any niche out there. Even if you are working in one niche, you can pivot into something else entirely if it is not working for you anymore. Once you learn the skills involved with affiliate marketing, the possibilities are endless.
Affiliate marketing is a very easy business model to get started with. You can start for free or even with as little as $100. Once you learn the marketing skills required to be successful with affiliate marketing, you can apply these elsewhere!
Because affiliate marketing is so passive, you can move on to other businesses as well in your spare time. For some people, this is a great option. Odi spends his spare time working on other businesses as well as making beats. For others, you are looking to free up your time so you can spend it elsewhere. Affiliate marketing is not the end all be all business model. For most people, it is just the beginning.
Odi’s first trial at affiliate marketing was a site called Recording Now that is still earning him income to this day. On this site, Odi reviewed headphones as well as other audio recording equipment. Odi earned money from this site by referring sales of these products to Amazon. By giving honest reviews of these headphones, he has helped people make a better informed decision about their purchase and earned a commission in the process.
Headphones are one of the higher commission products in the Amazon Associates program. Each product category has a different commission rate. Certain categories, like headphones, pay higher commissions. Amazon Associates is a good affiliate program for beginners because you can promote almost any product on Amazon, but the affiliate commission is actually lower than what most others pay.
There are a number of pros of working with the Amazon Associates program…
- Chances are, most people are already a customer of Amazon.
- The buyer likely has a lot of trust for the Amazon platform.
- The buyer likely has stored payment information and can purchase with the click of a button.
If you refer sales to a site people are not familiar with, the trust will be significantly lower and the customer will likely have to manually fill out the payment information. These factors will lower your conversion rate.
If you are looking to make explosive income with affiliate marketing, you will have to find affiliate programs outside of Amazon Associates and establish affiliate relationships directly with companies. Even if a company does not have an affiliate program, you should reach out to them to see if they would offer you a personal one.
At the end of the day, as an honest affiliate marketer you need to be most concerned with the consumer getting the right product. On his site, Odi did not simply give the most expensive headphones the best review. While this would likely result in higher commissions, it would be dishonest and he would lose the trust of his customers.
Odi has a natural interest in music, as he produces his own beats on the side as a hobby. This is a passion of his.
Odi did not simply pick the headphone niche because it was profitable. He picked this niche because he had a natural interest in the product. If you do not have a natural interest in your niche, you will burn out. Building up an affiliate blog takes a lot of work, and you need to stay interested and engaged through the process. Odi believes in starting with passion.
“The reason why you are looking to make money is to live a certain lifestyle. If you are doing something that you do not enjoy each day, that is not a good lifestyle choice. This will more than likely result in a burn out.” – Odi
This headphone blog was what got Odi started with and hooked on affiliate marketing. It is not what made him the most money, but it got the gears turning for him. Odi was able to scale this blog up to a full time income which allowed him to drop out of UCLA to spend his time building other passive income streams through affiliate marketing.
The fatal mistake people make when getting started with affiliate marketing is overestimating what is possible in the short term and underestimating what is possible in the long term. Odi did not make any money from his blog for the first year, but he loved what he was doing so he kept at it. You cannot expect to get rich quick with affiliate marketing.
VIDEO 2: How Odi Productions Makes $1,000+ A DAY With Affiliate Marketing [EARNINGS PROOF]
There are a lot of people out there claiming to be making $100 or $1,000 a day doing something, but very few are willing to let you take a look at the numbers. On top of that, a lot of people are just showing you revenue and not the actual profit of the business. Three of the most popular online businesses right now are affiliate marketing, dropshipping and Amazon FBA.
In Real Passive Income, Odi mentions that he has a 90% profit margin on the numbers you are seeing here. Odi spends a very limited amount of money on ad spend. Other than that, it is pure profit. Odi spends about $80 to $100 a day on ads.
Here is a comparison of the margins of these three businesses…
Affiliate Marketing = 90% or more ($0.90+ out of every $1 is profit)
Amazon FBA = 40% ($0.40 out of every $1 is profit)
Dropshipping = 25% ($0.25 out of every $1 is profit)
Affiliate marketing is one of the highest profit margin online businesses. Understand that when you see people showing revenue numbers for Amazon FBA and dropshipping that they are only earning a small portion as profit.
Here is a comparison of $10,000 earned across each business…
Affiliate Marketing = $9,000 profit or more ($1,000 expenses)
Amazon FBA = $4,000 profit ($6,000 expenses)
Dropshipping = $2,500 profit ($7,500 expenses)
Odi typically does not share much about his earnings with affiliate marketing, because at the end of the day it isn’t anyones business. Odi agreed to share some earnings figures with us to be as honest and transparent as possible.
Odi has been earning over $1,000 a day in profit from affiliate marketing for close to 3 years now. In total, he has been involved with affiliate marketing for a total of 6 years as he started while he was in college. Odi has had consistent success with affiliate marketing and this has not been a flash in the pan success online. It is rare to see this level of consistency with any online business.
12:33am Affiliate Commission #1: $150
Odi received an email regarding this affiliate commission in the middle of the night. He was literally making money while he was asleep. Most affiliate marketing programs send you emails each time you earn a commission.
2:26am Affiliate Commission #2: $750
Odi received his second affiliate commission of the day again before he got out of bed. In the middle of the night, he made $900 while he was asleep.
Yesterday 11:53am Affiliate Commission: $14,000 (Not counted towards total)
The most impressive commission shown was a payment from the past two weeks in the amount of $14,000. Odi earns $1,000 a day from this one affiliate income source alone. Odi mentioned to me that you really only need one good affiliate income source, but the more you have the better diversified you are.
(No time specified) Affiliate Commission #3: $497
This particular affiliate program does not specify when a commission is received. This is the ClickFunnels affiliate dashboard and Odi earned this commission by referring a sale to a digital product.
In total, Odi earned $1,397 for the day in passive income. This does not represent the total earnings for Odi. This is only the portion that is passive. Odi also earns income selling his own online course Affiliate Marketing Champ as well as from his other business ventures.
It is really hard to believe how passive affiliate marketing can be until you see it firsthand. Odi spent the day with me cruising around in his dream car, a twin turbo Lamborghini (video included below). We met up at a fellow entrepreneurs house, recorded a few videos and then had lunch. After that, Odi dropped me off and the day was complete. Odi did not put any effort towards these three income sources but they continued to churn out money.
Here is Odi’s car…
Each of these three sources of income shown in this video are typically over the $10,000 mark each month. Odi mentions that he is earning closer to $2,000 a day from these products on an average day. In terms of expenses, Odi is spending about $20 to $30 a day on each in ad spend.
Odi typically sees a 96% profit margin with his business. This is primarily due to the fact that as an affiliate you are not touching any products. The reason why the margins are lower for dropshipping and Amazon FBA is because you have to fulfill orders and in some cases touch the actual products. It is very uncommon to find a dropshipper with a 90% profit margin or more.
With affiliate marketing, your operating costs do not increase based on the volume of sales. Let’s say you have an affiliate blog and these are your expenses for the business.
Web Hosting = $10 a month
Domain Name = $1 a month
Ad Spend = $600 a month
Your total expenses or operating costs are $611 a month. Let’s say your blog reviews peer to peer lending sites, and each referral earns you a $50 commission.
January = 120 referrals, $6,000 revenue – $611 expenses
PROFIT = $5,389 (90% profit margin)
February = 133 referrals, $6,650 revenue – $611 expenses
PROFIT = $6,039 (91% profit margin)
March = 129 referrals, $6,450 revenue – $611 expenses
PROFIT = $5,839 (91% profit margin)
Assuming the ad spend stays the same, the operating expenses of an affiliate marketing business are constant. It does not matter how many referrals you earn commission on, it does not change your expenses. There are very few businesses out there that operate in this way. If you have more sales with a dropshipping or Amazon FBA business, you are buying more inventory and your expenses grow with sales.
Affiliate marketing is one of the most lean business models out there…
- You don’t touch any inventory.
- You don’t ship or warehouse anything.
- You don’t have employees unless you want them.
- You don’t handle any customer service questions.
- Your operating expenses are constant and do not grow with sales.
As mentioned earlier, Odi has been extremely consistent with his online business. This has not been a flash in the pan success for him. Odi has been earning $1,000 a day in profit or more for close to 3 years.
THE TRUTH: How To Be Successful With Affiliate Marketing
Odi has been extremely successful with affiliate marketing by establishing brands around his affiliate platforms. By doing so, he is able to become a credible and authoritative source for valuable information. This type of reputation comes slowly over time. By establishing a brand and building trust and authority, you have staying power in the market you are serving. This is a major reason why Odi has had continued success with affiliate marketing. If you do not establish brands with your sites or platforms, your audience will not be loyal to them.
The number one lesson Odi teaches to his students is to give value at the core of everything you do. The goal is not to make money. The goal is to add a tremendous amount of value and bring the customer through your purchasing experience.
Odi was a customer of all of these headphones before he began writing articles about them on his blog. He understood what the customer journey was like and was able to offer the audience tremendous value. In doing so, he established trust and rapport with the audience. This is absolutely essential if you are looking to have long term success with affiliate marketing.
Add value first. Money is the after thought.
Odi went from making $0 a day to $1,000 a day with affiliate marketing over the course of 3 years. While this does not seem like a long time, it is important to realize that Odi spent a long time earning next to nothing for his efforts. This again is why Odi tells his students to start with passion.
From age 19 to 20, Odi did not earn a single cent from his online business efforts. He was going through a trial and error process trying to find a business model he wanted to run with. Odi had a lot of failed attempts in this stage, but he learned something from each mistake.
In year 2, Odi began to earn money but it was nothing to brag about. At that point in time, he was making around $20 to $30 a month. This was exciting however because this was a proof of concept that his business actually worked. All he had to do was scale it.
“The first sale is always the hardest. Once you can see that it is possible, sparks fly and your imagination starts running wild.” – Odi
These are the kinds of results you can see when you dedicate years of your life to something, not just days. Odi’s success with affiliate marketing is not typical, as most people give up early on. You need to see the long term vision.
VIDEO 3: How To Get Started With Affiliate Marketing With $100 OR LESS!
Affiliate marketing is a rare business because it does not require a lot of upfront capital. If you are spending a ton of money on your affiliate marketing business, you are probably doing something wrong. What it takes instead is an investment of your time. In this final video, Odi shares two methods on how you can get started with affiliate marketing.
Method #1: How To Start For FREE
When Odi got started with affiliate marketing, he followed this method and started for free. If he were to start over today, he would recommend creating a platform and that platform would be YouTube. This is one of the best platforms for affiliate marketing due to the long term content. It builds trust and rapport with your audience faster than anything else out there. What you are aiming to do with this channel is to become the authority in a certain niche.
Odi’s first affiliate marketing business was Recording Now. On this site, he created content and reviews around headphones and other studio gear. By sharing reviews and comparing different products, Odi established authority in this niche.
Odi earned affiliate commission from the Amazon Associates program from this blog. Amazon Associates is one of the easiest affiliate programs to get started with and it is completely free to join. Most affiliate programs are free to join.
By having the platform and the affiliate program, Odi was able to include purchase links for the products he was reviewing on his site. Each time someone made a purchase through his link on Amazon, he would earn a commission on that product. In his video reviews, he was including the link in the description below.
It is important to include a call to action to the audience as many of them are interested in supporting you as the creator. The viewer does not pay any more for the product by purchasing through your link. It is an easy way for them to give back to you as the content creator for taking the time to create the valuable content.
From a legality standpoint, you need to include a disclaimer somewhere that mentions you are earning affiliate commission. At the end of the day, transparency is the best strategy. Be honest with people about your use of affiliate links. By being transparent, it will actually help you because you become more trustworthy.
One of the coolest parts about earning commission through the Amazon Associates program is the fact that you can earn commission on products they purchase above and beyond what you referred them to.
For example, I have Amazon affiliate links on my YouTube channel. I recommend a lot of books and I include links to these books. Most of the time, the commission I am earning is not from these books. It is from the purchase of other items!
As you can see, I made a commission of…
- $1.60 selling a car diagnostic tool
- $1.40 selling a watch band strap
- $1.22 selling a beard trimmer
I have never talked about vehicle diagnostics, watches or male grooming on my channel. Once, I sold a $1,500 vacuum cleaner through my Amazon affiliate link. That earned me a commission of over $100.
Method #2: How To Start With $100
If you have $100 to invest in your affiliate marketing business, your best bet is to create your own website. These days, you do not need to do any coding or sophisticated web design because there are so many services out there that help you do this.
Odi recommends creating a self hosted WordPress website. (Like Investing Simple!)
A self hosted WordPress website means that you are hosting the website on a paid server. There are a number of different web hosts to choose from.
The main reason for doing this is because you do not want your viewers to see that you have a free website when you are trying to build a brand. This is a major turn off and it will severely impact your credibility. By paying for your own self hosted website, you have a much more professional appearance on the internet.
You want to purchase a custom domain as well. Once you have a standalone website, you want to make sure your branding is consistent across all of your different platforms. By establishing a brand, you are building credibility and authority in your niche.
Web hosting is very inexpensive. It should cost you around $50 a month and a lot of web hosts offer a free domain upon sign up. For a $100 investment, you can run a professional self hosted blog for 2 years. This is exactly how Odi started his first affiliate website.
After you have your site, it is up to you to create the content for your site. If you followed Odi’s advice and started with passion, it should be easy for you to create content because you are naturally interested in your niche. Remember, the number one rule with affiliate marketing is to add value first! Money is an afterthought or a byproduct of your efforts.
There are creative ways to get around the hurdles of creating original content and purchasing expensive equipment to review. If you have a well established blog that reviews products, people will likely be sending them to you for free left and right in hopes that you will review their product.
If you are trying to get a business off the ground with $100, you need to be as creative as possible and bootstrap.
I want to thank those of you who stayed to the very end of this article. For the 1% that decide to take action, I encourage you to follow up with me or Odi and share your experience with us. Remember, everyone starts at nothing and those who take action will get ahead. You might not slam it out of the park with your first attempt, but you will learn something from everything you do. Odi mentioned earlier that he had a number of failed businesses online before he had a successful one and he spent his first year spinning his tires and earning nothing at all.
If you are looking to learn more about Odi and affiliate marketing, I would recommend taking his free course and checking out his YouTube channel. I will provide links to both of these below!