How You Can Earn Passive Income With Affiliate Programs

Written by: David Scott

The rise of modern technology has opened doors for people that have never existed in the past. Every day people are able to generate additional income streams through a multitude of services or products related to the internet and social media platforms.

Traditional brick and mortar stores are quickly fading from mainstream commerce. E-commerce has taken over industries and has become the shopping style of choice amongst billions of individuals. Businesses are able to benefit from the immense reach the internet can provide them, but individuals can also benefit from companies looking to expand their reach. 

E-commerce is defined by site-traffic and customer behavior. Affiliate programs allow everyday people the ability to earn passive income by generating traffic and customers for online products, stores, and companies. 

Affiliate Program and Passive Income

Affiliate programs, also referred to as affiliate marketing or associate programs, is an advertising model where an online merchant website pays a third-party publisher to generate leads or traffic to the merchant’s products or services. Affiliates are known as the third-party publisher which generates traffic for an online retailer. Affiliates earn compensation based on a commission of how much traffic they are able to generate. This incentivizes affiliates to advertise the merchant to the best of their abilities. In affiliate programs, the greater the success of the employing online website, the greater the compensation of the affiliate. 

Compensation is awarded for providing a specific task for a retailer or advertiser. In most cases, the task is gaining a sale. In other instances, however, an affiliate may be compensated based on providing leads, clicks, free-trial users, or downloads. 

Affiliate marketing works by promoting a separate service or advertiser in your own website, blog, social media account, or podcast. Jeff Bezos at Amazon popularized affiliate marketing. He utilized affiliate marketing to generate traffic to Amazon by listing ads for books on websites with direct links to the Amazon website. Amazon found great success in this advertising model, and many companies have followed suit with the massive traction of e-commerce and social media. 

Passive income is income that is earned without actively completing work or a task to do so. Affiliate programs are an excellent source of passive income due to the nature of the advertising. Most affiliate marketing ads will be in the form of a link to the employing website. Affiliates can use their social media presence to market a company’s product and include a link for their followers to follow. As long as the link is active, affiliates can constantly earn passive income through commission. 

In conclusion, affiliate programs work as follows:

  • Affiliate promotes an advertisement or link for a website on their social media account, blog, or podcast
  • Customer clicks link unique to the affiliate
  • Customer purchases an item from the promoted website
  • Affiliate network records the transaction
  • Purchase is confirmed by the promoted website
  • Affiliate is compensated with commission on the sale

How to find the right companies?

Understanding your audience is the first, and most important, step in choosing a company to affiliate with. An affiliate’s compensation is directly related to their following’s tendency to pursue ads or links. By promoting products that align with the behaviors, wants, and tendencies of your audience and following, you can increase the chances of being a high earning affiliate. 

For example, if you run an Instagram page based on your car, running an affiliate ad for a cooking set would not be likely to perform well. Using the same scenario, if the affiliate with the car page advertised a car cleaning product, they improve their chances of their following purchasing a product and providing them commission. 

Another important factor to choosing which company to work with is being true to yourself as an individual. In order to be the best affiliate possible, affiliates must promote and advertise the products and services they are affiliated with to the best of their abilities. If an affiliate finds themself promoting a product that they know is mis advertised, low quality, or not their taste, it can be extremely difficult to promote the product without hesitation. 

Finding products and companies that you believe in allows you to put your all in promoting the website and generating traffic. Following this practice also shows your following that you are authentic and would not promote a product to them that you do not believe in yourself. 

Pros and Cons of Affiliate Programs

The internet is a housing space filled with passive income potential. Affiliate programs are an excellent revenue stream for those with a large social media or internet following. This aspect of affiliate programs is both a positive and a negative. 

Earning potential is in most cases capped by the reach of an affiliate. An affiliate with one million followers has a much larger reach than an affiliate with ten thousand followers. The affiliate with a larger following will likely earn more from affiliate marketing based on their heightened ability to drive customers to a sale. 

A disadvantage of affiliate programs is being at the mercy of your followers. An affiliate will make no money if their link or advertisement fails to generate any traffic. Affiliates which work extensively on promoting their affiliated products or services experience higher levels of internet traffic as a result of their ads.

Compensation can vary based on the required task, size of the following, and relationship with a company. On the low end, commission can be 5%. On the high end, affiliates promoting events or classes could earn a commission of up to 50%. Other affiliate marketers are simply paid a flat rate of money for each product sold as a result of their ad or link. 

The limitless potential of affiliate marketing often allures social media influencers, bloggers, or podcasters to generate passive income through affiliate programs. The larger the following affiliates amass, the larger their potential for earning is in affiliate marketing. Affiliates which know their audience, work at promoting a product, and believe in the product or service they are promoting can generate massive streams of revenue passively each day. 


  • A blog embeds links to products when the product name is written
  • Instagram influencer makes a post about a product with a call to action regarding a link on their account
  • Podcaster reads an advertisement for a product or service and directs the audience to a link in the description
  • Twitter influencer replies to their own viral tweet with a link to a product or service for internet traffic to click on

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