Affiliate arbitrage

What is affiliate arbitrage?

Affiliate arbitrage is a business model where a marketer leverages paid traffic to make affiliate commissions. For example, marketers create a marketing campaign on Google Ads, Bing Ads, and Facebook Ads to send leads to a sales funnel. Depending on the commission, conversion rate, and advertising cost, affiliates can get a positive ROI.

What is affiliate arbitrage

Affiliate arbitrage combines two profitable business models: Affiliate marketing and arbitrage. The ability to drive targeted traffic to an offer without relying on search engine ranking has benefits and drawbacks. It requires a good understanding of the chosen advertising platform and some money to invest.

How to start an affiliate arbitrage business in 10 steps

Consider your background, knowledge, hobbies, and expectations to help you pick a niche. Look for products with high demand or/and low competition. It could be affiliate offers with a proven track record or new emerging products from reliable vendors. 

Consider using Google Trends or keyword research tools to identify popular topics. Here is a step-by-step tutorial on how to do affiliate marketing with paid traffic:

  1. Niche selection: Choose a niche you are interested in with a market demand. You can use tools like Buzzsumo to see what’s popular based on social shares. Google Trends and Keyword Planner allow you to validate search volume.
  2. Pick a product: Look for products or services that will bring real value to your audience. Identify what problems your offer may solve. Determine if what you recommend can generate impulse purchases or if it is a high-ticket product that requires more effort to convert leads into a buyer.
  3. Join an affiliate network or apply directly for an affiliate program: Look for affiliate marketing networks in your niche and compare the types of products, commissions, and payment methods. Most companies offering an affiliate program will add a link in the footer of their website, or you can search on Google. 
  4. Create a website: Plan your affiliate site, choose a domain name, buy and set up web hosting, customize your site, and install relevant plugins. Most affiliate programs require you to have a live website.
  5. Create a landing page: Visitors will land on your landing page or a squeeze page after clicking on your ad. It should be designed for conversion. You can use an all-in-one marketing platform like GetResponse and Aweber to create your landing page and for email marketing.
  6. Build an automated email sequence: Build an email list and create an automatic email sequence to nurture leads and convert them into customers.
  7. Create ad campaigns: Create ad campaigns using paid traffic sources like Google Ads, Facebook Ads, or Bing Ads. Use relevant keywords to target the right audience. Implement copywriting techniques to write good ad copy and use click-worthy visuals.
  8. Monitor conversion and update ads (consider A/B testing): Monitor your ad campaigns and track your conversions. Use A/B testing to optimize your ads and improve your conversion rate.
  9. Launch retargeting campaigns: Retargeting campaigns allow you to target people who have already visited your website or landing page. This can help increase your conversion rate and lower costs.
  10. Stop non-performing ads and scale: Stop running non-performing ads and invest to scale your successful campaigns. Increase your budget and expand your reach to maximize profits.

Affiliate marketing is a straightforward business model but can be a complex process because you need to master many skills to be successful.  

How to choose a paid traffic source for your affiliate marketing campaign

Selecting the right paid traffic source for your affiliate marketing campaign can be a crucial decision that can impact the growth of your business. Here are some factors to consider when choosing a paid traffic source:

  1. Target audience: Know the demographics and interests of your target audience to pick a paid traffic source that can reach them effectively.
  2. Budget: Evaluate how much you will spend on paid traffic and choose a source that fits your budget.
  3. Conversion rate: Look for a paid traffic source with a high conversion rate for your niche.
  4. Competition: Consider the level of competition in your niche and choose a paid traffic source that can help you stand out.
  5. Ad format: Choose a paid traffic source that offers ad formats suitable for your affiliate marketing campaign.
  6. Reputation: Look for a paid traffic source that has a good reputation and is known for delivering quality traffic.
  7. Analytics: Choose a paid traffic source that provides detailed analytics and tracking to help you measure the success of your campaign.
  8. Legal disclaimers and guidelines: You should follow trademark policies and guidelines when engaging in affiliate marketing. It includes avoiding trademark infringement, affiliate disclaimers, and creating genuine content sites.

It’s essential to choose a paid traffic source that aligns with all previous expectations. Additionally, you may need extra cash flow to test different paid traffic sources and analyze the results to determine which source works best for your business. 

Paid traffic can give faster results than search, referral, and direct traffic. However, it requires close monitoring. You usually need between 200 and 1,000 clicks before you know if your advertising campaign will be profitable. 

Top paid traffic sources suitable for affiliate marketing

The best-paid traffic sources for affiliate marketers include search engine advertising and interruption marketing via various formats: video ads on YouTube, image ads on Facebook, App Install Ads via Google, and Microsoft Audience Ads through Bing.

Advertising Platforms for affiliate marketing

Here are some popular paid traffic sources suitable for affiliate marketing:

  1. Google and Bing Ads: Bing Ads and Google Ads are the most trusted paid traffic sources for affiliate marketing. You can target specific keywords and demographics to reach your target audience. Both platforms have promotions allowing you to get $100-$500 in free ad credit when you spend a certain amount on your first campaign.
  2. Social media paid ads: Social media platforms like Meta, TikTok, Twitter, LinkedIn, Snapchat, and Instagram offer paid advertising options that can be used for affiliate marketing.
  3. Mobile advertising: Mobile advertising is another effective paid traffic source for affiliate marketing. It includes in-app ads, mobile web ads, and mobile video ads.
  4. Video ads: Video advertising is a great way to promote affiliate products. Platforms like YouTube and Vimeo offer paid advertising options suitable for affiliate marketing.
  5. Native advertising: Native ads are paid advertising that blends in with the content of the website or app it appears on. It can be an effective way to promote affiliate products without being too intrusive. Outbrain and Taboola are two popular platforms where you can leverage native ads to generate consistent affiliate revenue.
  6. Solo ads: solo ads allow you to tap into email lists in exchange for a flat fee. It is a controversial traffic source, but if done right, it can provide great results. 

The best-paid traffic sources for your affiliate marketing business will depend on your specific industry, target audience, budget, and other elements depending on the brands you promote. 

What are the advantages and disadvantages of using paid traffic sources for affiliate marketing? 

Advantages of using paid traffic sources for affiliate marketing:

  • Fast results: Paid traffic sources can provide quick results, helping you reach your target audience quickly.
  • Precise targeting: Paid traffic sources allow you to target specific demographics, interests, and locations to reach your ideal audience.
  • On-demand impressions and clicks: Paid traffic sources can generate clicks and conversions anytime. This allows marketers to test any products without delay.
  • Niche audiences and retargeting: Paid and organic traffic sources let you reach niche audiences. However, paid advertising allows high-converting retargeting campaigns.

Disadvantages of using paid traffic sources for affiliate marketing:

  • Costs: Paid traffic sources can be expensive, and the costs can add up quickly if you’re not a savvy marketer.
  • Risks: There are risks involved with using paid traffic sources, such as bots, click fraud and scams.
  • Competition: Paid traffic sources can be competitive, and you need to learn how to stand out.
  • Limited time span: With paid ads, the traffic stops once you stop advertising. You need to build an email list to create a sustainable business using.  

Overall, using paid traffic sources for affiliate marketing can be beneficial if done correctly. Weight the pros and cons to decide which traffic source is best for your affiliate arbitrage business.

Examples of popular affiliate networks to find beginner-friendly affiliate programs

You often need to join an affiliate network to access some affiliate programs. Here is a table including some of the most popular affiliate networks and a brief description:

Affiliate NetworkDescription
Amazon AssociatesOne of the largest affiliate networks, offering thousands of products to promote and earn a commission for each purchase.
ShareASaleA popular affiliate network with over 4,500 merchants offering a variety of products and services.
AwinAn affiliate network with over 13,000 merchants offering a wide range of products and services.
Rakuten AdvertisingAn affiliate network with a focus on performance marketing and access to a variety of merchants.
CJ AffiliateAn affiliate network with a large pool of brands and offers to choose from.
ClickBankAn affiliate network with a focus on digital products and high commissions. You will also find some high-converting supplements and health products.
PeerflyAn affiliate network with a variety of products and services to promote.
Avangate Affiliate NetworkAn affiliate network with a focus on software and digital products.
PartnerizeAn affiliate network with a variety of merchants and products to promote.
Digistore24A well-known online sales platform, including a large affiliate marketplace with over 8,000 products in 44 niches.

Some affiliate networks like ClickBank are not accessible in all countries, while others may require marketers to have an established online presence or followers.

Image of popular Affiliate Networks: Amazon assocites, ClickBank, Awin, JVZoo.

What are the best tools for affiliate arbitrage?

Here is a table including valuable tools for affiliate arbitrage and their usage:

Here is a table including useful tools for affiliate arbitrage and their usage:

ToolUsage
SiteGround & WPXWeb hosting services for creating and managing websites
WordPressContent management system for creating and managing websites
GetResponse & AweberEmail marketing tools for creating and managing email campaigns
Taboola & OutbrainNative advertising platforms for promoting content and driving traffic to websites
Google Ads and other ad platformsPay-per-click advertising platforms for promoting products and services
ChatGPTAI-powered chatbot for customer support and engagement
AI WisemindAI-powered tool for analyzing and optimizing website content
CanvaGraphic design tool for creating visual content
GrammarlyWriting assistant tool for checking grammar, spelling, and punctuation

Affiliate arbitrage requires combining many pieces and a Standard Operating Process to automate tasks. It would help if you had tools for ideations, keywords and topics validation, content creation, ads creation, and many other helpful resources. 

Conclusion

Affiliate arbitrage is a lucrative strategy for generating income online. While arbitrage capitalizes on price discrepancies across different platforms, affiliate arbitrage focuses on conversion rates and return on investment of ad campaigns. 

It can help you reach potential customers quickly and generate profits within a few days. However, it can also be expensive, risky, and competitive. It’s essential to choose the right paid traffic source for your business and set clear goals. 


Best Ideas For Arbitrage Businesses

Arbitrage Business Ideas

Discover the top ideas to create your arbitrage business. You can start with no money or buy investing depending on the opportunities.
Read More
Media arbitrage

media arbitrage

In marketing, people often interchange the phases of traffic arbitrage, media arbitrage, and ad arbitrage to refer to purchasing traffic from …
Read More
Arbitrage Business Ideas That Work

Arbitrage Business Ideas

In this article, I share some of the best arbitrage business ideas. Some require an up-front investment, but others are for beginners looking for a side hustle. There are numerous ways to make money as a middleman.
Read More
SourceMogul versus Tactical Arbitrage

Source Mogul vs. Tactical Arbitrage

SourceMogul and Tactical Arbitrage facilitate online Arbitrage with high-performing sourcing software. But each platform has a specific way to help you find the best products to sell on Amazon and other marketplaces.
Read More
Wholesale vs Retail

Wholesale vs. Retail

Wholesale and retail differ in many ways, but both play crucial roles in bringing products from manufacturers to end users.
Read More
SaaS Arbitrage

SaaS arbitrage

What is SaaS Arbitrage? How exactly does software-as-a-service works and why can the arbitrage model help you build a no-code SaaS?
Read More