M1.C2: How Affiliate Marketing Works
by Abhigyan
Imagine this: You’re reading a blog post about hiking gear.
The writer shares a personal story about trekking through muddy trails and how a specific pair of waterproof boots saved the day.
They include a link to the boots. Curious, you click the link, check out the product, and decide to buy it.
Behind the scenes, the blogger earns a small commission from your purchase, and you don’t pay anything extra.
That’s affiliate marketing in action.
But how does the company know the sale came from that blog?
What systems are tracking this exchange?
Let’s take a look behind the curtain and walk through how affiliate marketing works step by step.
Disclosure: Some of the links I share might be affiliate links. If you click on one and make a purchase, I may earn a small commission as a thank you. But don’t worry, it won’t cost you anything extra. I only recommend stuff I genuinely believe in. Your support helps me keep creating awesome content. You can read my full affiliate disclosure in my disclaimer page.
Before you can start earning commissions, you need to join an affiliate program.
This is similar to signing up for a membership or partnership with a company.
Most programs are free to join, but they do require some basic information such as your name, email, and where you plan to promote their products.
That might be a blog, YouTube channel, TikTok account, or Instagram page.
Once you’re approved, you’ll gain access to a dashboard where you can generate custom links, view marketing materials like banners, and track your earnings.
Some companies run their own affiliate programs, while others use third-party platforms to manage everything.
Step 2: Getting Your Unique Tracking Link
After joining the program, you’ll receive a personalized tracking link that connects your content to the company’s sales system.
This link contains a special code that identifies you as the affiliate responsible for referring the sale.
A typical link might look like this: www.brand.com/product?ref=YourName123.
That little snippet at the end—“ref=YourName123”—is what makes the magic happen.
It’s like your personal signature, silently working behind the scenes.
Every time someone clicks your link, the company’s system logs that activity.
It records who clicked, when they clicked, and what page they visited.
If that visitor makes a purchase, the system will be able to trace the sale back to you.
Step 3: Understanding Cookies
When someone clicks your affiliate link, a small file called a cookie is stored in their web browser.
This cookie acts as a digital footprint. It tells the merchant, “This person came from Sarah’s blog” or “This customer was referred by James’ YouTube video.”
Cookies have expiration dates, which vary depending on the affiliate program.
Some expire in 24 hours, while others remain active for 30, 60, or even 90 days.
That means you can still earn a commission even if the person doesn’t make a purchase right away.
For example, if someone clicks your link on April 1 but waits until April 15 to buy the product, you still get the credit—so long as the cookie hasn’t expired.
Step 4: The Customer Makes a Purchase
Let’s say someone finally makes a purchase through your link—a $100 coffee maker, for instance.
The company’s affiliate system checks the cookie data, verifies that the buyer was referred by you, and logs the transaction under your account.
At this stage, your commission is considered “pending.”
Most companies wait until the product’s return window has passed before confirming and releasing your earnings.
That delay helps protect the company from paying commissions on returned or canceled orders.
Once the return period ends and the customer keeps the product, your commission becomes official and moves one step closer to payout.
Step 5: Getting Paid
After your commissions are confirmed, the money is added to your affiliate account.
Most programs have a minimum payout threshold, such as $10, $25, or $50.
Once you meet that requirement, the program will process your payment.
The timing and method of payment varies. Amazon typically pays monthly, around 60 days after the end of the month in which the sale occurred.
Other programs might pay weekly, bi-weekly, or quarterly.
Payment methods can include PayPal, direct bank transfer, or even paper checks.
A few modern programs are beginning to offer cryptocurrency or gift cards as payment options as well.
It’s important to understand each program’s terms so you know when and how you’ll be compensated.
Types of Affiliate Links
Affiliate links aren’t all the same. Some are simple text links, like the kind you’d naturally include in a product review or blog article.
Others come in the form of banner ads—those rectangular images with product photos and slogans that you often see in blog sidebars or newsletters.
Then there are coupon links, which automatically apply a discount or promo code when clicked.
These are especially effective in niches like beauty, fashion, and wellness.
Deep links take users directly to specific product pages rather than the company’s homepage, which often improves conversions.
The type of link you use depends on where you’re sharing it and what feels natural for your audience.
Why Tracking Accuracy Matters
Tracking is the backbone of affiliate marketing. If your links don’t work, or if cookies aren’t properly placed, you could miss out on commissions.
Sometimes links break or expire. Other times, users may have ad blockers that prevent cookies from being stored.
Mobile browsers and redirects can also interfere with tracking.
That’s why it’s essential to test your links regularly.
Click them yourself, check them on both desktop and mobile devices, and use free tools like Weberlo or Pretty Links to monitor performance.
These tools can also make long, clunky URLs look clean and user-friendly, which boosts trust and click-through rates.
You should check out this list of free link tracking tools for affiliates.
Common Tracking Issues
Sometimes things go wrong with tracking, but most problems can be resolved.
One common issue is that cookies don’t “stick.” This might happen if the user clears their browser history or disables cookies entirely.
In that case, it can help to include a friendly reminder in your content, suggesting that users enable cookies to support your work.
Another problem arises when users apply coupon codes from third-party sites instead of the one you provided.
To avoid this, make your code visible and repeat it often—both in writing and in your videos or posts.
Redirect issues can also cause problems, especially if links behave differently on mobile.
Always test across multiple devices before publishing.
How to See What’s Working
Once you’re up and running, your affiliate dashboard becomes your best friend.
This is where you can view real-time data on your performance.
Most dashboards show how many people clicked your links, what they bought, how much revenue was generated, and what your current commission total is.
For example, if you see that your blog post about French presses led to ten sales last month, but your review of travel mugs didn’t generate any clicks, that’s a clear signal.
Focus your energy on content that performs. Over time, this data helps you refine your strategy and grow your affiliate income.
Affiliate Marketing on Different Platforms
Affiliate marketing works a little differently depending on where you’re promoting.
On blogs, you can weave affiliate links into long-form reviews, listicles, or tutorials.
YouTube creators often mention products during their videos and place links in the description below.
On Instagram, affiliates with more than 10,000 followers can use the “swipe up” feature in Stories, though most also link to products in their bio.
TikTok users generally point viewers to the link in their profile, often supported by verbal or on-screen calls to action.
Pinterest can also be an effective platform for affiliate links, particularly for niches like home decor, recipes, and fashion.
You can pin product images that lead directly to your blog or affiliate landing page.
How to Stay Out of Trouble
Affiliate marketing comes with responsibility, especially when it comes to transparency.
The Federal Trade Commission (FTC) requires you to disclose that you may earn a commission when people click your links.
This isn’t just a legal requirement—it’s also about building credibility.
On blog posts, a simple sentence at the top like “This post contains affiliate links. I may earn a small commission if you purchase through them, at no extra cost to you” is enough.
On YouTube, it helps to say it out loud in your video and include a written disclosure in the description.
On Instagram or TikTok, you can use clear tags like #affiliate or #ad.
Being upfront keeps your audience’s trust and helps you stay compliant with the law.
What’s Next?
Now that you know how the system works, it’s time to know about the advantages and challenges of affiliate marketing.
In the next chapter, we’ll learn the pros and cons for affiliate marketers and businesses.
We’ll explore the hidden wins and struggles of affiliate marketing—no sugarcoating, just real talk. Let’s go!
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Abhigyan Mahanta
Hi! I’m Abhigyan, a remote web developer and an affiliate blogger. I create beginner-friendly guides to help new affiliates get started and grow in affiliate marketing. I also share information on remote companies and interview preparation tips.
