Affiliate Marketing: What It Is and How It Works

Affiliate marketing has become a multibillion-dollar industry, with brands investing roughly $12 billion in creator partnerships in 2025. Content creators—from bloggers and podcasters to social media influencers—partner with brands to earn commissions on sales they generate, while brands tap into motivated audiences they might not otherwise reach.

Whether you’re a creator looking to monetize your content, an entrepreneur exploring online business ideas, or a merchant ready to build an affiliate program, this guide explains how affiliate marketing works and how to succeed.

What is affiliate marketing?

Affiliate marketing is a performance-based marketing model where creators and publishers earn commissions by promoting products or services. Affiliates receive a unique tracking link and earn a percentage of sales when customers purchase through that link.

Affiliate commissions can also be earned for other actions beyond purchases, including free-trial signups, app downloads, or form submissions. The tracking technology embedded in affiliate links ensures attribution so affiliates get credit for the sales they generate.

How affiliate marketing works

The affiliate marketing process involves key players working together:

• The merchant (advertiser): The business or brand selling products or services.
• The affiliate (publisher): The content creator or marketer promoting products.
• The customer: The person who clicks affiliate links and makes purchases.
• The affiliate network (optional): A platform connecting merchants with affiliates and handling tracking, reporting, and payments.

Here’s how a typical transaction flows:

1. A merchant creates an affiliate program and sets commission rates.
2. An affiliate joins the program and receives unique tracking links.
3. The affiliate creates content featuring those products and includes their links.
4. A potential customer clicks the affiliate link, which stores a tracking cookie in their browser.
5. If the customer makes a purchase within the cookie duration window, the affiliate earns a commission.
6. The merchant pays the affiliate based on the agreed payment model.

For example, if you’re a gardening blogger and join the affiliate program for a gardening supply company, you might write a product review featuring your unique affiliate link. When readers click your link and purchase from the company, you earn a percentage of that sale—often 5% to 30%, depending on the program.

Social commerce and affiliate marketing

Social media platforms have integrated shopping features that simplify affiliate marketing. TikTok Shop, Instagram Shopping, Pinterest Shopping, and YouTube Shopping let affiliates tag products directly in their content, making it easier for followers to buy without leaving the app.

This integration reduces friction in the buyer’s journey. Rather than clicking out to a website, customers can complete purchases within their favorite social platforms where they’re already engaged with content.

Cross-platform affiliate marketing integration

Successful affiliates often use affiliate program platforms and networks like Shopify Collabs to manage relationships with multiple brands from one dashboard. These networks can be used to automate commission tracking, generate affiliate links, and track performance analytics across all partnerships.

Three types of affiliate marketing

Pat Flynn, founder of Smart Passive Income, categorizes affiliate marketing into three types based on the affiliate’s relationship with the products they promote:

1. Unattached affiliate marketing

Unattached affiliates have no connection to the products they promote. They run paid ads or SEO campaigns to drive traffic to affiliate links, without using or endorsing products personally.

This approach requires minimal effort but often generates the lowest conversion rates because there’s no trust or authority behind the recommendations. Think of generic “best product” review sites that rank anything without genuine expertise or experience.

2. Related affiliate marketing

Related affiliates promote products in their niche but haven’t personally used them. A fitness influencer might promote workout equipment they haven’t tried, or a tech blogger might recommend software they haven’t tested.

This middle ground leverages existing audience trust in the affiliate’s expertise, even when specific product experience is missing. It works when the affiliate’s niche authority transfers to their recommendations.

3. Involved affiliate marketing

Involved affiliates only promote products they’ve personally used and genuinely recommend. This is the most authentic approach—you’ve tested the product, experienced its benefits, and can share honest insights with your audience.

For example, Outdoor Gear Lab is an affiliate publisher that’s built a reputation for in-depth outdoor gear reviews. Its team tests products extensively, creating detailed comparisons that help customers make informed decisions.

This authenticity builds trust and typically generates the highest conversion rates—but requires more time and investment in actually using products before promoting them.

How affiliate marketers make money (and how much)

Affiliate income varies widely based on niche, audience size, content quality, and promotional strategies. Understanding payment models and realistic earning potential helps set appropriate expectations.

Affiliate payment models

Affiliate programs compensate creators using several common models:

• Pay-per-sale (PPS): Earn a percentage of each sale. Example: 10% commission on a $100 product = $10.
• Pay-per-click (PPC): Earn money when someone clicks your affiliate link, regardless of whether they purchase.
• Pay-per-lead (PPL): Earn when someone completes a specific action like signing up for a free trial.
• Pay-per-install (PPI): Earn when someone downloads and installs an app or software.
• Recurring commissions: Earn ongoing commissions for subscription products.

Many top affiliate programs combine models. Software-as-a-service (SaaS) companies often offer recurring commissions, while ecommerce brands typically use pay-per-sale.

How much can affiliate marketers make in 2025?

Income varies dramatically. Some affiliates earn a few hundred dollars monthly as a side hustle, while others build six-figure businesses.

According to Rewardful’s research, average affiliate commission rates vary by category:

• Fashion and apparel: 5%–15%
• Home and garden: 5%–10%
• Health and wellness: 10%–20%
• SaaS and software: 20%–70%
• Travel: 2%–10%
• Financial services: $10–$200+ per lead

Real-world success stories show the range of possibilities. A Reddit affiliate marketer documented growing their site from $267 per month to $21,853 per month over 19 months by focusing on a specific niche and creating high-quality SEO content. Another case study tracked an unnamed niche site scaling from $0 to $1,000 per month within 18 months.

Lauren Kleinman of Dream Day shared on the Shopify Masters podcast that brands without affiliate programs miss press opportunities, as many publishers prioritize brands offering 10% to 20% commissions.

Some niches naturally command higher commissions. Digital products like online courses, ebooks, and software typically offer 30% to 50% commissions because they have no production costs. Trending products can also generate quick wins if you catch them early in their life cycle.

Diversifying affiliate income streams

Experienced affiliates avoid relying on a single program or product. Noah Kagan of AppSumo explained on Shopify Masters how he started with a simple spreadsheet and Bitly links, then scaled affiliate marketing into a $1 million per month channel with a six-person team by diversifying partnerships and channels.

Similarly, Kevin Espiritu of Epic Gardening earns 90% of revenue from ecommerce but balances product promotions with educational content, maintaining audience trust while monetizing strategically. This approach—valuable content first, affiliate promotion second—builds sustainable income.

Pros and cons of affiliate marketing

Like any business model, affiliate marketing has distinct advantages and challenges worth considering before committing.

Affiliate marketing pros

Easy to execute

You don’t need to create products, manage inventory, handle customer service, or fulfill orders. Your focus is creating content and driving traffic—the merchant handles everything else.

Starting requires minimal technical skills. Create affiliate links, add them to your content, and you’re operational. Many affiliate programs provide promotional materials like banners, product images, and pre-written copy to simplify content creation.

Low investment and risk

Unlike starting an online store that requires inventory investment, affiliate marketing needs only a platform to publish content. A blog, YouTube channel, TikTok account, or email list can cost little to nothing to start.

If a product doesn’t sell well, you haven’t lost inventory—simply redirect efforts toward better-performing products or programs.

Ability to scale

Once you’ve created content with affiliate links, it can generate passive income. An SEO-optimized blog post or YouTube video can continue earning commissions months or years after publication.

You can also scale by promoting multiple products across different programs. As your audience grows, so does your earning potential. According to Business Insider, creators and affiliates drove 20% of US Cyber Monday revenue in 2024, up 7% year over year. 

Affiliate marketing cons

Takes time

Building an audience and earning significant affiliate income rarely happens overnight. Most successful affiliates spend six to 12 months creating content and growing traffic before seeing substantial returns.

SEO content takes time to rank in search results. Social media accounts require consistent posting to build followings. Email lists need nurturing. Patience and persistence are essential.

Limited control

You’re promoting someone else’s products, which means you’re subject to their business decisions. Merchants can change commission rates, discontinue programs, or modify product quality—all outside your control.

If a program shuts down, you lose that income stream. Diversifying across multiple programs mitigates this risk.

Navigating privacy regulations

Cookie tracking—the technology behind affiliate links—faces increasing restrictions. Privacy regulations like GDPR in Europe and CCPA in California affect how affiliate links track conversions. Browser changes (like Safari’s Intelligent Tracking Prevention) can shorten cookie duration windows, potentially reducing commission attribution.

Additionally, the Federal Trade Commission (FTC) requires affiliates to disclose their relationship with brands. You must clearly state when content includes affiliate links, typically with disclaimers like, “This post contains affiliate links. I earn a commission if you make a purchase.”

Who should become an affiliate marketer?

Affiliate marketing isn’t for everyone, but certain skills and circumstances make it an excellent fit.

You have access to an audience

The foundation of affiliate success is audience access. Whether you run a blog, YouTube channel, TikTok account, Instagram profile, or email newsletter, you need people who trust your recommendations.

If you’re building from zero, focus on a specific niche where you can establish authority with a smaller audience. Broad audiences are harder to monetize than dedicated niches (e.g., “fitness” versus “home workout equipment for busy parents”). A 2025 analysis found that brands are also collaborating with 33% more micro-influencers year over year.

You’re a content wizard

Affiliate marketing requires consistently creating valuable content. Whether writing blog posts, filming videos, or recording podcasts, you need skills to produce engaging material that goes viral and retains attention.

Strong content creation abilities let you scale your efforts across multiple platforms and formats, maximizing your affiliate reach.

You’re a trusted expert

Audiences buy from affiliates they trust. If you’re recognized as knowledgeable in your field—whether through professional experience, personal expertise, or demonstrated results—your recommendations carry weight.

A nutritionist promoting supplements, a photographer recommending camera gear, or a financial expert suggesting budgeting software all leverage existing credibility to drive affiliate conversions.

You run a newsletter or podcast

Email newsletters and podcasts create intimate connections with audiences. These formats typically generate higher engagement and trust than social media, making them powerful affiliate channels.

Podcasters can verbally recommend products with authentic enthusiasm. Newsletter writers can share detailed product experiences and personalized recommendations that feel like advice from a friend rather than an advertisement.

How to start affiliate marketing in 4 steps

Ready to begin? Follow these steps to launch your affiliate marketing efforts strategically.

1. Pick a channel and format

Choose a primary channel based on your strengths and where your target audience spends time:

• Blog: Best for SEO-focused content targeting specific search queries. Great for detailed product reviews, comparisons, and tutorials. Learn how to optimize blog content for search engines.
• YouTube: Perfect for product demonstrations, unboxing videos, and visual tutorials. Check out YouTube affiliate marketing strategies.
• Instagram: Works well for lifestyle products, fashion, beauty, and visually appealing items. Explore Instagram affiliate marketing tactics.
• TikTok: Ideal for short-form product showcases, trending content, and reaching younger audiences. Discover TikTok affiliate marketing tips.
• Pinterest: Effective for home décor, DIY projects, recipes, and aspirational content. Learn about Pinterest affiliate marketing.
• Email newsletter: Great for detailed recommendations and building long-term relationships with subscribers.

You can expand to multiple channels later, but focus on mastering one initially.

2. Determine your niche

Choose a specific niche rather than trying to cover everything. Narrow focus helps you:

• Build recognized expertise
• Create more targeted, relevant content
• Attract a loyal, engaged audience
• Face less competition than broad topics

Good niches balance passion, knowledge, and profitability. Ask yourself:

• What topics am I genuinely interested in?
• What do I have experience or expertise in?
• Are there affiliate programs with good commissions in this niche?
• Is there an audience actively searching for information on this topic?

Examples of popular affiliate marketing niches: sustainable fashion, smart home technology, outdoor adventure gear, productivity software, pet supplies, home fitness equipment.

3. Find an affiliate program

Look for affiliate programs that align with your niche and audience. Consider these factors:

• Commission structure: What percentage or flat fee do you earn per sale?
• Cookie duration: How long after someone clicks your link can they purchase and you still earn credit (30 to 90 days is standard)?
• Payment terms: When and how do you receive payment (monthly is common, with minimum payout thresholds)?
• Brand reputation: Is this a brand your audience will trust?
• Program support: Do they provide marketing materials, affiliate managers, and resources?

Where to find affiliate programs:

• Direct from brands: Many companies run in-house programs. Check “[brand name] affiliate program” in search engines.
• Affiliate networks: Platforms like ShareASale, CJ Affiliate, Impact, and Awin connect affiliates with multiple brands.
• Amazon Associates: The Amazon affiliate program offers easy entry with millions of products, though commission rates are typically lower (1% to10%).
• Platform-specific programs: TikTok Shop, YouTube Shopping, and Instagram Shopping offer built-in affiliate features.

4. Choose your first product

Start with products you’ve personally used and can authentically recommend. Choose items that:

• Solve specific problems your audience faces
• Fit naturally into your content strategy
• Offer reasonable commission rates
• Come from reputable brands you trust

Create content that provides genuine value beyond just promoting products. Product tutorials, comparison guides, and problem-solving content typically convert better than straightforward product pitches.

People frequently search for how-to guides, like “How to save money for college” or “How to decorate a laundry room.” By offering a tutorial that solves a searcher’s problem and clearly highlights a product’s value, your referrals provide a stronger incentive for the customer to purchase the product you’re recommending.

Product tutorials also make for great social media content. Grace & Kelly, for example, shared this video to teach followers how to use The Productivity Method, with a link to buy the planner through TikTok Shop. There’s a note below the video to show how commission is paid to the creator on any purchases they make.

How to join Shopify’s affiliate program

The Shopify Affiliate Program lets content creators, educators, and influencers earn commissions by referring new merchants to Shopify. Here’s how it works:

Affiliate criteria

Shopify seeks affiliates who:

• Have an established audience interested in ecommerce, entrepreneurship, or online business
• Create content on platforms like blogs, YouTube, social media, podcasts, or email newsletters
• Can provide value to entrepreneurs looking to start an online store

Application process

1. Visit shopify.com/affiliates.
2. Complete the application form with details about your audience and promotional strategies.
3. Wait for approval (typically within a few business days).

Impact

Once approved, you’ll access the program through Impact, an affiliate management platform where you’ll:

• Get your unique affiliate tracking links
• Access promotional materials (banners, logos, etc.)
• Monitor clicks, conversions, and earnings
• Request payouts

Once you’ve applied

If approved, you’ll earn commissions for referring new merchants to Shopify and when merchants subscribe to the POS Pro plan.

Shopify commission rates vary depending on the location of merchants referred.

Success strategies for Shopify affiliates

Successful Shopify affiliates typically:

• Create educational content teaching people how to dropship or make their first sale
• Produce case studies featuring successful Shopify merchants
• Develop step-by-step tutorials walking through Shopify features
• Share business ideas and strategies using Shopify as the recommended platform

Affiliate program examples

Looking for inspiration? Here are affiliate programs across different industries showing various commission structures and approaches.

Shopify

The Shopify Affiliate Program rewards partners for referring entrepreneurs to the platform. Affiliates earn up to $150 per referral, depending on the plan referred merchants subscribe to. The program suits content creators focused on ecommerce education, business strategy, and entrepreneurship.

Healthish

Healthish is a wellness brand selling water bottles and daily wellness trackers. Its affiliate program offers 10% commission on all sales with a 30-day cookie window. The program works well for health and wellness influencers, lifestyle bloggers, and fitness content creators.

Amazon Associates

Amazon Associates is one of the largest affiliate programs, providing access to millions of products. Commission rates vary by product category (1% to 10%), with a 24-hour cookie window. The program’s main advantage is product diversity, though commission rates are typically lower than specialized programs.

EcoFlow

EcoFlow manufactures portable power stations and solar generators. Its affiliate program offers 3% to 8% commissions depending on product category, with a 30-day cookie window. The program suits outdoor adventure creators, van life influencers, and sustainable living content producers.

Manduka

Manduka sells premium yoga mats and accessories, offering affiliates 10% commission with a 30-day cookie duration. The program is ideal for yoga instructors, fitness influencers, and wellness coaches who can authentically recommend high-quality yoga gear.

Good To-Go

Good To-Go produces gourmet dehydrated meals for outdoor enthusiasts. Its affiliate program offers 5% commission on sales with a 30-day cookie window. The program targets camping and backpacking content creators, outdoor bloggers, and adventure travel influencers.

Affiliate marketing mistakes to avoid

Even experienced marketers make mistakes that hurt their affiliate earnings. Avoid these common pitfalls:

Selling more than helping

The fastest way to lose audience trust is prioritizing commissions over genuinely helpful content. If every post feels like a sales pitch, readers will tune out.

Focus on solving problems first. Recommend products that genuinely address your audience’s needs, not just those with the highest commission rates. Your content should be valuable, even if readers never click an affiliate link.

Low-quality content

Thin, generic content doesn’t rank in search engines or engage audiences on social media. Avoid copying manufacturer descriptions or creating surface-level reviews without unique insights.

Invest time in creating comprehensive, well-researched content. Share personal experiences, conduct side-by-side comparisons, test products thoroughly, and provide actionable advice that demonstrates genuine expertise.

Poor SEO

If you’re relying on organic search traffic, ignoring SEO fundamentals limits your reach. Research keywords your target audience searches for, optimize title tags and headers, improve page load speed, and build quality backlinks.

Use SEO tools to identify opportunities and track rankings. Create content that answers specific search queries rather than generic topics everyone else covers.

A focus on desktop over mobile experience

More than 60% of web traffic comes from mobile devices. If your affiliate content isn’t optimized for mobile—slow loading times, difficult navigation, or broken layouts—you’re losing potential commissions.

Test your content on multiple devices. Ensure images load quickly, text is readable without zooming, and affiliate links are easy to click on touchscreens.

Noncompliance with privacy changes

Failing to comply with FTC disclosure requirements or privacy regulations can result in fines and loss of affiliate partnerships. Always disclose affiliate relationships clearly and conspicuously.

Stay informed about privacy changes affecting cookie tracking. Consider diversifying beyond cookie-based attribution by building email lists and using platform-specific affiliate tools with first-party tracking.