How to Start an Affiliate Marketing Business

Disclosure: Our content is reader-supported, which means we earn commissions from links on Crazy Egg. Commissions do not affect our editorial evaluations or opinions.

Affiliate marketing has a definite allure. It’s a lucrative business that continues to generate income even when you’re off the clock. 

But it’s not the get-rich-quick strategy most dreamers think it is. There’s more to starting an affiliate marketing business than you may have previously thought.

But don’t worry. We’re here to teach you how to set up a promising affiliate marketing business and give you every chance to reach the success you desire.

Why Starting an Affiliate Marketing Business Is Worth It

Be Your Own Boss

We know it’s a little cliche at this point. But most people genuinely want the opportunity to be their own boss. A study of entrepreneur wellbeing across 82 countries showed that self-employment and providing employment to others have a positive influence on well-being and happiness.

And affiliate marketing is something you can do from anywhere in the world. You could be catching a train to Rome or spending time with the kids at the park while those dollars are rolling in. It’s an appealing lifestyle just for being location independent. 

A Wealth of Opportunities

Over 80% of advertisers use affiliate marketing programs. The industry is huge. For you, as an affiliate marketer, this means there are tons of brands to work with and tons of opportunities to make money. 

There are now affiliate programs in all sorts of niches too, from photography to online dating to tech. To give you an example, here’s a section of the categories available on an affiliate marketing network:

A list of categories available on the affiliate marketing network ShareASale

So no matter what your thing is, you have the opportunity to monetize your content. Or, if you’re coming at it from a purely business-focused standpoint, you can find a less saturated niche and dominate it.

Earning Potential

The earning potential for affiliate marketing is good. Some affiliates earn the big bucks. Adam Enfroy earned over $600,000 in affiliate revenue in 2020, for instance.

A screenshot from an article by Adam Enfroy with the words bolded, "In 2020, $601,698 was strictly from 100% passive affiliate revenue."

Bear in mind that affiliate marketing takes time and hard work, though. It’s not strictly a passive income. You have to draw traffic and build an audience that trusts your recommendations if you want to earn a solid income.

The Investment Needed to Start an Affiliate Marketing Business

Many people think they can simply share a link on Twitter and watch the dollars roll in. That’s not necessarily the case. According to PayScale, the average salary for an affiliate marketer is $53,167.

A screenshot from Payscale showing the average affiliate marketer salary at $53,167 a year

Digital marketer and affiliate Andrew Collins says, “Affiliate marketing isn’t about overnight success, to be honest. It might take a day, some months, or maybe years.” He explains that many might not earn a dime for six months, but go on to earn a ton as time passes and you build experience.

Affiliate marketing is certainly less of a time investment, however, than say creating a SaaS or DTC business. Essentially, you’re just in charge of marketing the product(s) and don’t have to worry about aspects such as customer support, development, and so on. 

The other good thing about affiliate marketing is that compared to other types of business, there are few expenses needed to get started. Experts estimate you’ll need just a few hundred dollars to cover costs such as web hosting. But it doesn’t cost anything to sign up for an affiliate program.

Perhaps the most complex, time-consuming step is forming your business legally. But that’s not exclusive to affiliate marketing. Every business has to do this. Thankfully, there are services like ZenBusiness that take the time and hassle out of the equation. ZenBusiness’s packages start at $49 plus state fees, which range from $50 to $520 depending on the state in which you form your business.

6 Steps to Start an Affiliate Marketing Business

Now, let’s get onto the good stuff. 

Here we’ll cover everything you need to know about starting an affiliate marketing business from researching your audience, to setting up a legit business, to growing a following that’ll earn you affiliate commissions.

#1 – Create a Business Plan

If you’re serious about starting your own business, you need to create some form of a plan, be it formal or informal. A good business plan lays out what you want to achieve, by when, and how you’re going to do it. 

Those are the essential points. And you’re more likely to achieve your goals with the process laid out in front of you.

It’s also vital you carry out lots of research in the planning stage. When you select your niche, you’ll need to learn as much as possible about your audience. What are their pain points? How can you help them? And, ultimately, how can you sell something to them that they want to buy?

With this information, you can position yourself as an expert in your niche and create the content that most appeals to your audience.

#2 – Select a Niche

When it comes to selecting a niche for your affiliate marketing company, it’s better to make it narrow. Affiliate marketing expert Pat Flynn says that all you need is 1,000 true fans within your niche that’ll buy what you’re selling. You’re more likely to profit from this approach than trying and failing to reach high numbers with a broad topic that’s already saturated.

Think of a narrow niche as a topic within a topic. So rather than creating a blog about business, you create a blog about running an eBay business, as in this example from Kathy Terrill:

Kathy Terrill's I Love To Be Selling website header

Remember though that you still need to pick a niche that can be lucrative for you. It can’t be so small that there isn’t an audience for it.

You can find a niche that’s on the up in terms of public interest using a tool such as Exploding Topics. For example, swiss cheese plants are hot right now:

A graph showing rising searches for swiss cheese plant

Or you can use Google Trends to find popular search terms and their levels of popularity over time. It’ll even show you related terms and queries which may give you ideas for narrower niches and/or products. Here are some related to the term “eco-friendly”:

Google Trends results for the word ecofriendly

It looks like lots of people have been searching for eco-friendly coffins over the past 12 months, for instance. Perhaps there’s an affiliate opportunity in that industry! 

#3 – Form Your Business

The first step in forming your business is to choose a business structure. Most affiliate marketing companies operate as a sole proprietorship, LLC, or corporation.

You don’t need to register as a sole proprietor which might be good when you’re starting out. But it also means that you’re personally liable if the business owes any debts for instance. 

Therefore, forming an LLC or corporation is the better option to keep your personal assets secure. A corporation offers higher levels of protection for its members and greater fringe benefits, but are more complex structures that require more record-keeping, reporting, and the like than an LLC.

An image showing the differences between an LLC and a Corporation
Image Source: MyCorporation.com

Thus, forming an LLC isn’t the only option but it’s the best option for starting an affiliate marketing business. If you’re not sure how to form a business legally, then a service such as ZenBusiness can do it for you.

In fact, the service will create your LLC in less than ten minutes so you can get your business off to a start quickly. ZenBusiness offers a range of further services that help with taxes, compliance, and more.

Zen Business features for forming your LLC and growing your business

Essentially, they deal with the bureaucratic stuff and this frees you up to focus on your audience and sales strategy.

#4 – Apply for Affiliate Programs

The easiest way to get started with affiliate marketing is to sign up for a few affiliate platforms. These act as the go-between for merchants and affiliates. 

Some examples are:

  • ShareASale – You’ll find 4,500+ big and small merchants, such as Reebok and Warby Parker, across a number of categories on this popular affiliate network.
  • CJ Affiliates – This is another large network that houses affiliate programs from 2,500+ small and large brands across a range of niches, e.g. Grammarly and GoPro.
  • Rakuten Advertising – This network doesn’t host as many programs as the other two but it does work with big names, such as Walmart and Papa John’s.

You simply go to the platform and search for topics to find a list of merchants within your niche. For example, when you type the keyword “careers” into ShareASale, merchants like these pop up:

Search for results for the word "career" in ShareASale

Then, you’ll need to submit an application to the merchant(s) in question. Bear in mind that while some allow everybody to sign up, for others you’ll have to wait until you’ve built up some traffic or a significant social media following before you can apply.

Furthermore, there may be some great affiliate opportunities from brands that don’t feature on platforms like the ones above. If there’s a particular brand you’d like to work with, you may need to use a Google search to find their affiliate program.

Fiverr, for instance, has a standalone affiliate platform:

Fiverr affiliate program landing page

#5 – Create Great Content

There are a few tried-and-tested types of content that affiliate marketers use to earn commissions. When you’re starting out, it’s a good idea to try different types of content and see what works best with your audience.

If you decide to set up a blog, you can create posts that cater to readers with so-called commercial intent, i.e. they’re in the process of researching what to buy. These are reviews, top product lists, and shopping guides. 

Here are some affiliate posts that fall into this category from BuzzFeed:

Buzzfeed affiliate posts

You can also create content that has informational intent, such as a guide or how-to post. You’ll simply need to integrate your affiliate recommendations within the post.

For example, in this how-to post from BloggingWizard, the author recommends using a particular software product within a step-by-step guide:

An example of BloggingWizard recommending a software product within a step-by-step guide

YouTube affiliates use similar types of content to promote products, although it’s in a video format. So to appeal to viewers with commercial intent, they might create product reviews or unboxing videos, like so:

A screenshot of a YouTube affiliate video for the brand HelloFresh

Or they may create informational videos such as tutorials that integrate affiliate products. Here’s a pride makeup tutorial from drag queen Kimora Blac:

Screenshot from Kimora Blac's video for pride month

Underneath the video, you see links along with affiliate codes for the beauty brands featured:

A screenshot of affiliate links underneath Kimora Blac's YouTube video

Whether you use a blog, YouTube, or other social media platforms to market affiliate products, remember to diversify your content. Not every post should contain affiliate links.

People get bored and move on when a channel is too sales-y. Or they may perceive your company as spammy and become weary of your recommendations.

So be sure to add some useful and/or ‘just because’ content to the mix.

#6 – Grow Your Following

There are two stages in growing a following for an affiliate marketing company. The first is to begin to drive traffic to your promotional channel or channels. The second is to nurture that traffic and turn visitors into fans.

To drive traffic to a blog, you may wish to use paid ads or SEO. You have to figure out what’s best in terms of the return on investment. Pay-per-click ads on Google, for instance, can be expensive. Yet it may be worthwhile if you promote high-ticket products.

SEO requires an ongoing time investment if you choose to optimize your website and content yourself. If not, you’ll need to outsource the work, for which costs vary.

To nurture and maintain a blog following over time, you should gather a list of email subscribers. This is because those that sign up are your most loyal followers and are most likely to buy from you. You can send out special offers from your affiliates via email campaigns as well as non-promotional content to keep fans loyal.

Next Steps

Now you have the building blocks to start your own successful affiliate marketing business. All that’s left to do is to get going with the research and planning phase.

It’s best to get the formalities out of the way early on, too. Check out our list of recommended business formation services. These fantastic companies relieve a lot of the pressure involved in forming a business legally and ensuring you comply with local and federal regulations.

Make your website better. Instantly.

Over 300,000 websites use Crazy Egg to improve what's working, fix what isn't and test new ideas.

Free 30-day Trial