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Earn Passive Income with Affiliate Marketing

1 Way to Earn Truly Passive Income from Your Blog

I love blogging. I love writing. I love interacting with readers. I love researching topics I enjoy writing about. But, in order for me to continue the privilege of blogging for a living, I must earn money from my blogs … more than a few bucks a day from ads.

After being a full time blogger for more than 1 year, I’ve tested and tried many ways to monetize my blogs without harming the user-experience. In fact, my aim with monetizing my blog is to do so in a way that actually enhances my readers’ experience.

In addition to my love for writing and researching, I was attracted to becoming a full time blogger by the opportunity of earning passive income. This pursuit was more elusive than I expected when starting out. However, in time I’ve discovered a truly powerful and simple method of earning truly passive income from my blogs.

What is “truly passive” income?

Truly passive income is earning revenue without investing ongoing resources (time and/or money). You no doubt have heard about affiliate marketing, Adsense and selling products.

Recurring Commission Products = Truly Passive Income

One not-so-common, but incredibly effective method for generating truly passive income from your blog is promoting or selling products that generate recurring revenue. The product(s) you sell or promote as an affiliate are products that you must love, you use, and that you know your readers both need and want. That’s a tall order, but when you find the right recurring commission product, you can, in time, build up a truly passive income.

I only promote as an affiliate. I don’t sell a recurring sales product. Therefore, I had to find just the right products for my audience. It wasn’t easy and it took several months testing and trying products until I found the perfect options for my readers. However, am I ever glad I put in the effort, because in the end, the products I promote are loved by my readers, convert well and pay very generous recurring commissions.

3 Types of recurring commission products

1.  Subscription Products

More and more software is sold as a subscription model instead of a one-time fee for download. The latest software is hosted on the merchant’s website (called cloud or SAAS software) and customers log in to their account to use the software. Not only does this offer a hassle-free solution for customers, but it generates consistent recurring commissions for the merchants.

The good news is that some cloud software merchants offer affiliate programs where they’ll pay affiliates a percentage of ALL the revenue generated from a referral. This means the affiliate earns a percentage of each month’s subscription fees.

Another subscription product are membership websites. These are websites that charge customers each month in order for them to continue having access to the site. Arguably, cloud software is a form of this, but in this sense I’m referring to content-based and social-based membership sites. Generally, these types of membership sites have a higher churn rate than cloud software.

A key advantage about cloud software is that it generally has a lower churn rate than the other types of recurring commission products set out below. What this means is that customers remain customers for a longer time meaning you earn commissions for a longer time.

2.  Lifetime Commission Products

I promote several lifetime commission products. what this means is that if a referral buys products over and over from a merchant, you continue earning commissions. This model is a little different than cloud software because lifetime commissions MAY be earned. In other words, referrals may or may not buy again and again.

Examples of common lifetime commission products are supplements. Often people buy a bottle every month, which means as long as the affiliate program offers lifetime commissions, the affiliate earns commissions on all future sales.

3.  Tier 2 Commission Programs

Tier 2 commission programs is when you refer other affiliates to promote a product and the referring affiliate earns a percentage of all sales generated by the referred affiliate.

I don’t pursue this form of recurring commission model, but if you do this well, you can generate excellent passive income. The big downside to this model is you don’t have much control because it’s up to the affiliates you refer to actually sell the product. Most won’t ever make a sale, so much effort results in no revenue. Another downside is that you are creating competition for yourself. Tier 2 commissions are lower than tier 1, so any sale earned by a referred affiliate is a tier 1 sale you don’t earn.

That said, if you have an audience of affiliate marketers, especially email readers or loyal blog readers, you can quickly and with little effort, inspire many affiliates to promote a product from which you’ll earn commissions from their efforts.

My Focus

The lion’s share of my recurring revenue is from promoting cloud or SAAS software.

The key is promoting the right software to the right audience who truly need it and will benefit from it. When you do this, you’ll be able to easily generate sales, recurring income and please your readers. In time you’ll build up an excellent passive income.

Set It On Autopilot

In order for recurring commissions to be truly passive and grow each month, you must set up a sale process, also referred to as a sales funnel, that will generate more new sales each month than the number of referrals who stop using the product. I do this via my blog and my blog’s e-newsletter. Basically, I publish a well-regarded blog that serves a very narrow business industry. I offer a suite of great free products for anyone who signs up to my e-newsletter. I then mention the software in my email messages, using examples, content and tips as ways to explain how the software can work for them.

Now that my blog is very well established and attracts consistent and targeted traffic each month, I generate more and more sales which slowly, but surely increases my passive income. I still add posts to this blog, but sometimes I don’t do so for months, yet sales continue at roughly the same pace. I only publish new posts when I have something worth sharing with my readers.

Caution

The greatest caution to be aware of is the potential for merchants to end recurring commissions.  You could invest a lot of time and money in campaigns only to have the merchant you promote stop recurring commissions, go out of business or lower commissions.  However, this should not affect past efforts, which is good if you’ve built up a decent number of referrals generating you recurring commissions.

If this happens to you, chances are there’s a competing product that offers recurring commissions that you can promote.

Be Patient

Building up truly passive income via recurring commission products takes time. It took me more than 12 months to earn my first 4-figure check. However over the subsequent 12 months, my monthly earnings tripled again, resulting in a recurring income that is higher than the average income in the USA … and that’s from just one product.

You must also be patient in finding the right product. Be sure to use, love and know the product. Don’t promote garbage. Promote only the best that your audience will love and actually need. When you do this, you not only build a long-term business, but you build great relationships with your readers.

Note, B2Web is not the blog to which I reference above, so you won’t find examples of what I set out above.

Jon Dykstra publishes B2Web which is all about affiliate marketing and building WordPress websites. B2Web offers several free resources including how to build profitable review websites, the passive income guide and the popular local affiliate marketing guide.

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{ 31 comments… add one }

  • Miki November 7, 2013, 6:15 am

    Thank you for sharing this information. The information was very helpful and saved a lot of my time.
    Miki recently posted..Building An Authority WebsiteMy Profile

  • Tarence Wade September 27, 2013, 3:59 am

    Simple and effective. You just need to understand that small things can grow big over time.

  • Des September 2, 2013, 1:16 am

    I liked the detailed analysis of income producing ideas for your blog. I agree you shouldn’t focus just on recurring income but sprinkle these type of offers with normal affiliate offers.
    Try and place as much emphasis on interesting content and the sales will follow.

  • Tarence Wade August 19, 2013, 5:25 am

    An interesting list. I am familiar with some of them, and any of those you mention that I know of are very worthwhile. I guess I will have to do more research to find out about the others

  • Jafar Dhada
    Twitter:
    July 30, 2013, 1:29 pm

    Thank you very much for describing really nice way to passive income!

    Well put article!

  • Vishnu July 29, 2013, 7:03 am

    Thanks for the information regarding best ways to earn money..Truly effective ways..I am using few among the one you told.

  • Paul Barnett June 29, 2013, 4:19 am

    I like how you give away free stuff and then do the promotion in the email sequence itself. This is the true way to constant passive profits. Thanks for sharing.
    Paul Barnett recently posted..My Recent InterviewMy Profile

  • Jake C April 27, 2013, 1:07 pm

    I don’t have much experience with affiliate marketing and I would love to get started, but not yet. I feel like affiliate marketing is an advanced way of earning passive income and shouldn’t be recommended for beginners. Revenue share websites will help you learn how passive income works, how sporadic it can really be and how to gain traffic and increase SEO. The payouts aren’t as great but the experience is rich.

  • Brian Couch March 24, 2013, 11:45 pm

    These is very informative post and I admired you Jon. I love reading your post and I know you have so many leanings already being a blogger. Hope to see more post coming from you.

    God Bless.

  • Maketta March 23, 2013, 9:31 am

    Hello Jon,

    I like how you broke down the different affiliate program options and showed which ones work the best. I agree that affiliate marketing is a great way to make money online especially with a blog.

  • Enstine Muki
    Twitter:
    March 22, 2013, 3:39 am

    I totally agree with you Jon. Some weeks back, I posted on my blog on this subject. Recurring payments are best ways to assure a steady flow of passive income online

  • Lei Broch March 20, 2013, 11:09 pm

    Thank you for sharing your thoughts on how bloggers could generate more income out of blogging. It is a great strategy that you make sure that you are selling the right product to the right people who needs it.

  • JamesW
    Twitter:
    March 19, 2013, 6:31 pm

    Great post Jon, one of the best ways to make full time income with blogging is to have a product of your own. Create it and sell it, the audience you already have on the blog can be a great boost for the financial freedom, it doesn’t matter in which niche you are in.

    thanks for sharing
    JamesW recently posted..Great Tips For Starting Out As Your Own BossMy Profile

  • Dev March 19, 2013, 4:32 pm

    i am very impressed about your blog …it gives much information …… thanks again …

  • Elisabeth March 19, 2013, 2:05 pm

    That sounds really cool, does anybody have an exact advice, when is a blog ready for some affiliate sales? I mean, which level of a daily traffic is good enough to sell products through the blog?

    • Jon
      Twitter:
      March 19, 2013, 5:59 pm

      Hey Elisabeth,

      Some people recommend waiting until you have 20, 50 or 100 daily visitors. My approach is to add affiliate links to select articles where appropriate on day 1. The reason for this is because I’m lazy and don’t like going back to published articles/posts and adding affiliate links.

      With respect to when you’ll generate sales, that could be from the first visitor or never. It all depends on the trust level and traffic. Some affiliate commissions are earned by luck and others are earned based on your recommendation.
      Jon recently posted..My OMG Machines Review Reveals $9,339.69 In Profit in 3 Months [Screenshots and Video Provided]My Profile

  • Rinkesh March 19, 2013, 5:00 am

    I’ve recently started to promote and affiliate product. I am keeping my fingers crossed and hope that things will turn in my favor soon. However, there is an element of doubt as I have read that earning passive income through affiliate marketing is not that easy as it looks like.

  • Nikki March 18, 2013, 4:57 pm

    When I started out blogging, I did so for the earning potential. After selecting a niche, I came to grips with the fact that I’d never earn a fully passive income. Not because I can’t put in the time. Not because there’s not a need for my website. Not because I’m no good at writing. But because I’ll never be able to completely put my website on the backburner. I happened to choose a niche that requires someone with a passion for it. And that’s not a problem at all to me. I love what I do to help people.

    But it’s nice to know that I can still make more than what I’d expected by following your advice here. I’m really selective about the things I promote to my audience. There may not be a lot of affiliate products I want to market, but I’ll know which ones are good money makers when I see them now. So thanks for sharing!
    Nikki recently posted..Propel Your Company with Small Business Accounting SoftwareMy Profile

  • Yasir Khan March 17, 2013, 7:53 pm

    Generating passive income streams from your blog is a great way to supplement your online activities. Blogs are a great way to promote and market your websites and products and so giving them unique and informative content will surely help you make money online.

  • Vivek
    Twitter:
    March 17, 2013, 9:00 am

    Promoting subscription based products can truly help you make passive income. I love to promote hosting services, email marketing services and wordpress themes.
    Vivek recently posted..Verify Google Authorship Markup : Your Picture In SERPMy Profile

  • Phil March 16, 2013, 6:04 pm

    Finding ways to earn a passive income online is much easier these days than back in early 2000. There are dozens of opportunities to choose from. You just have to know where to look or know the right people who can provide that information in their newsletters.

    Here’s a quick way to get started earning your first passive income stream.

  • vicky March 16, 2013, 1:37 pm

    Hi Jon,

    As a new blogger, I am still learning and in the development phase. As any blogger, I also dream of getting passive income from my blog. I loved your passionate way of writing and the way you explained that we should only promote a product which we have tested, used and love it. This is so true because if we are not 100% committed to that product, we cannot expect our readers to show that commitment for it. It might be early for me as I still have to research and test a product before I promote it, but as you said I think only then I can be confident of promoting it on my site. These recurring income products are great option and I still have to figure out which one would suit me the best. Your review was very valuable. Nice share. :)

  • Rashmi Sinha March 16, 2013, 12:39 pm

    I second your thought process. if you want to make blogging your profession, you need to take a more holistic approach to get those dollar bills pouring in.

    Thanks for this insight. Great post as always!!

  • Tayyab March 16, 2013, 12:22 pm

    affiliate marketing is the best,strong and fast way to earn money from your blog but you have to be patient and to do lot of hard work for that.

  • Adam March 16, 2013, 5:55 am

    Great post Jon, really glad you mentioned the tiered affiliate programs because these can be really powerful and is something I am planning on focusing on in the future.

  • himanshu March 16, 2013, 4:44 am

    I have started my blog with adsense account but due to low cpc rate,i was not earning well.Now iam promoting wp themes and plugins and earning little more than my adsense incomes.Affiliate Marketing is best option to earn money fast and safe.Really a good article to monetize any blog.Thanks for writing this article for us.

  • King March 16, 2013, 4:37 am

    I agree with your concept of truly passive income, like you say in the article the real success of affiliate turns out to be true only when the marketer is able to transform the product he/she recommends into sales and there the real catch of promotion happens..

  • Koj March 16, 2013, 1:08 am

    Yes Jon you are very correct to say that every bloggers would love to earn some money from their blog. I too would like to do so. And if it is passive income, I’ll just say wow!!. And HarkunWar, I’d remember that I will not end up blogging until I make the best out of it.
    Koj recently posted..How My Girl Friend Helped Me to Rank No.1 on Google.My Profile

  • Harkunwar Singh March 16, 2013, 1:03 am

    Without income, every blogger starts to loose interest. I was on the verge of finishing my blogging career and my income started to come and I came back the game of blogging.
    Most of the time our first blog fails to reach the top as we have no experience and moves on ahead very slowly. Once we have the experience and we get to know A to Z of blogging then the powerful income starts to come and makes us delightful.

  • Bob March 15, 2013, 11:48 pm

    Wow this was highly useful, thanks Jon. I think a lot of people fail at your last point, which is not being patient. A lot of people expect overnight success. Whether that literally means overnight, in a day, a week, or a month. I’ve been doing this for a year too now, and my income has increased 100%, but I also took too long of a break. Just imagine if I was consistent and kept it going (like I am now), that 100% increase could be 1000%! The beauty of the online blogging business!

    Thanks for the great info.

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