How to Start a Used Car Dealership: A Definitive Guide
September 3, 2020
September 3, 2020
If your love for used cars ranks above enthusiast, it may be time to take things to the next level.
Ever thought about owning your own dealership? We’re going to tell you how! Our exclusive interview with Carlos Becerra of Imports & Classics helped reveal the details on starting a used car dealership.
As Carlos explains, starting a car dealership takes some investment in time and money. However, with the right location and a passion for the car business, you can be successful in the industry.
Follow this guide and you’ll be well on your way to becoming your region’s top car dealer.
Carlos had been an entrepreneur his entire life before he even got into the classic car business. He didn’t grow up with a lot and when he wanted something, his parents encouraged him to ask, “How are you going to get it?”
As Carlos said, “At some point, everybody needs to make a decision. And he made that decision at a very young age.”
While his friends were probably playing video games, Carlos was selling berries on the side of the road from fifth grade through high school. He was smart with his money and saved up enough to purchase his first car.
Watch the full interview with Carlos here:
If you’re entering into the dealership of cars, then you too will need to make some decisions about the course of your life. That means getting into the entrepreneurial mindset.
You alone will be responsible for your business and its success. It’s not a decision to be taken lightly, but remember, the rewards have no ceiling. And ultimately, you are in control your time.
To help with your mindset, here’s a list of essays from Paul Graham that are focused on entrepreneurship. He has helped fund over 800 startups over the course of his career. Ever heard of Reddit, Airbnb, Stripe, and Dropbox?
If you don’t want to build from the ground up, find active listings near you, and buy a dealership that’s already operational.
If you’re starting a used car business, you better like being around cars. But it’s not enough to just love cars, you have to know about how the car business works.
Carlos gained his knowledge of the industry by flipping cars. After selling his first car, he went to auctions to find cars that would sell for a profit and upgraded to classic cars. If you have the liquid capital to do this, it can be a great way to gain knowledge of the car business.
It helps if you have some base knowledge of how to value a car. Here are some resources to get you started:
But if you’re new to the industry, consider some training courses from an accredited institution like the National Automobile Dealers Association or find a job at a local car dealership to get some experience with how car dealerships work.
The U.S. Bureau of Labor Statistics ranks automotive salespeople under the retail sales workers classification, and within that class, automotive dealers have the highest median hourly wage of all retail sales workers.
You can work hard at this position and be one of the highest paid retail workers in the U.S. job market! Which is good because you’ll need that capital and skills like accounting, sales negotiation, social media and web management, finance, and more when you start your used car business.
These are all skills that fall into the entrepreneurial mindset.
Like any business, you’ll need some capital to get things started, and a used car dealership has a lot of startup costs associated. It’s important to get everything organized before you begin.
There are many aspects to think about when opening up a used car dealership, so let’s break it down step by step based on Carlos’ plan. However, we won’t sugarcoat it. The simple answer is that used car businesses cost anywhere from $50k to $500k (even for a small operation) based on your location and business plan.
Here’s a list of startup costs:
These three startup costs are the inescapable fees associated with any auto dealership and the most important to ensure you’re running a legal operation.
Complete your business registration at the federal and state levels. The fees vary from state to state based on the type of business you want to create (limited partnership, sole proprietorship, limited liability company, or corporation). It’s best to work with an accountant to find the best option.
Next, to get your auto dealership license, every state requires that you have an auto dealer bond. This is a type of surety bond that protects customers from fraud and the amount differs by state ($30k in Washington, $25k in Texas, $100k in Arizona).
Last, you’ll need an auto dealership license from the state in which you’ll be doing business. The costs vary by state, and in some states, like Washington, costs can run over $1,000 after completing the required training courses.
In this guide, we’re not talking about full-on restoration work like Carlos does at his garage. However, any used car dealing business will need to account for maintenance or low-level restoration work associated with the inventory. It’s a cost that’s commonly underestimated, so don’t make that mistake.
Think of it this way, AAA averages the annual maintenance cost of owning a used car at $792 per year ($66 per month). While you won’t be using a car at a consumer level, you will need to maintain the vehicle until you sell it and factor that cost into your business plan.
If you can do the work yourself, you’ll save a lot of money in the long run.
Other ongoing costs associated with the car dealership business:
Once you have your initial costs figured into your business plan, it’s time to do the hard work that could make or break your business. You need to understand your market and factor that into your business plan before making any investment into the business.
You can determine your market by several factors like:
You also need to factor in your own referrals from friends, relatives, and perhaps former colleagues if you’ve been in the auto business for a while.
These elements help to determine the clients you want to do business with when you open. The U.S. Small Business Administration has great resources to help businesses determine their market.
It’s the due diligence you would conduct for opening any type of business, and knowing your market will help you choose a niche. Here are some examples:
Your niche will help you choose a location.
It’s the first rule of real estate, and it’s one of the biggest costs you’ll figure into your business plan.
Based on your market, you want to be sure that your location can support your business. That means it is affordable and visible. Often, dealerships open near one another in direct competition because it gives customers the opportunity to quickly shop for the vehicle of their choice.
We posed the question to Carlos: So if we were to open up a dealership across the street, what would you do? His response was,
Starting a used car dealership from home is one way to avoid a lot of startup and operational costs. It’s certainly possible and many used car dealers are based from home.
Carlos started this way with an online based classic car business where he stored the cars in his mother’s driveway. He said,
However, you need to check your state and local laws (city and county) on storing used cars.
Also, a serious online and social media presence is necessary to be successful without a physical location. If you’re not up to speed on current SEO and web marketing trends, you need to hire a highly capable webmaster and marketing team.
Otherwise, you may want to consider buying a business with an established online following.
In our interview with Carlos, he explained that you need to be very careful about what you buy and that your target demographic would probably differ completely from his. It’s all based on location.
Carlos explained about his region:
Some questions you can ask when choosing your inventory:
It’s up to you to determine what sells very well in your region and to your target market. Edmunds Industry Insights is a great resource for statistical information to help you figure it out.
Researching local car selling marketplaces online can also help you determine what’s selling on the market.
It takes a lot of effort to find cars to resell on the retail market for a profit. Because of this, most dealers get their inventory from dealer-only auction companies.
The auctions are one of the major reasons (aside from selling multiple cars per year legally) that you’ll need your dealer license. Here’s a list of the top dealer-only auction companies in the U.S.:
But don’t limit yourself to dealer-only auctions. There are several great auto auction sites out there where you can find great deals on used cars that can be sold for a profit.
We can talk about startup costs, location, and inventory all day, but to come up with the funds to get things rolling, you’ll need a solid business plan.
For any business to be successful, you need to have a solid business plan to start. It’s also essential if you plan to apply for a business loan to get your dealership off the ground. Make sure your plan includes the following items:
And even if you don’t plan to apply for outside funding, a business plan is necessary to owning a car dealership. It provides the vision and structure your business needs to be successful. Without a plan, a business is destined to fail.
Learning how to open a car dealership is hard enough on its own but opening one with no money will be even more difficult. However, it’s not impossible.
Your business plan is the key tool you’ll use to pitch to potential investors and financial lenders. Just know that most lenders require a business to be established and in business for several years before they’ll lend money.
It is possible, with good credit, to get a credit card with a 0% introductory rate. In Step 4 of our article on how to open a gym, we explain how entrepreneur Jake Brog leveraged his credit to launch a successful gym business.
With that, you could fund a small inventory (1 – 2 vehicles) and pay off the credit card debt before accruing any interest charges. It’s a risk, but with a great business plan, the payoff could be rewarding and help jump-start your dealership.
However, most car dealerships start the way Carlos began his: with money from his own pocket.
When figuring out how to start a car dealership, you must quickly establish the financial goals for the business.
Buying a car and selling it for a profit is great, but your dealership needs to do it at a high volume to cover the costs of the business and make money. As Carlos said,
Figuring out your volume is all contingent on your financial goals. If you’re a small, one person dealership, with little overhead, your volume could easily be only three to four cars per month to cover your expenses and make a decent profit.
However, as you grow your operation, your volume will need to increase to sustain your business. Look at Carlos’ goal:
The quick answer is yes—if you have a good business plan and knowledge of the industry, car dealerships are a profitable venture. In fact, the Cox Automotive Market Insight Report recently confirmed that the gross profit margin of used cars is now nearly double that of new ones, which is great news for used car dealerships.
Auto industry leaders like Edmunds are putting out great press for independent used car lots, which is helping to drive up sales nationally.
How much you make is up to you!
It’s hard to pinpoint exactly how much used car dealers make. Comparably puts the average between $18,902 to $495,413, which is a tremendous gap.
Remember that in entrepreneurial ventures, you get out of the business what you put into the business. As Carlos said in the interview,
Used car dealers may have had a bad reputation in the past, but because of the internet, that sentiment is rapidly changing. Successful car dealerships need referrals, and good reviews if they want to stay in business.
Here are some key tips you can use to present great customer service before and after the sale:
Now that you know all of the basics on how to start a used car dealership, it’s time to get out there and start selling! It can be a tough industry to break into, but with determination and a good entrepreneurial mindset, you’ll be slinging used cars in no time. You might also find starting a rental company attractive if you like the idea of owning a dealership.
Can you think of any other aspects of opening a dealership or have valuable information to add?
Jake Pool
Have you ever wondered how to start a cleaning company? Cleaning businesses are some of the easiest businesses to start, but some people would prefer to just manage the business, not do the actual cleaning. Here, we explain how to start a remote house cleaning business without needing to do any cleaning yourself.
We talked to Neel Parekh, who started MaidThis in 2013. He built his remote cleaning concept into a company that makes over $166K per month and offers franchises to help small business owners do the same. The best part? He did this while traveling for 5+ years and to over 50 countries.
We’ll share his story about how to start a remote cleaning company, plus tons of great marketing tips and systems advice.
[su_note note_color="#dbeafc"]
You’ll learn everything you need to know about starting a remote service business, including:
Get ready to learn how to start a remote cleaning business.
A remote cleaning business is a cleaning company where the owner performs marketing, human resources, and administrative functions of the business from anywhere in the world while outsourcing or hiring local workers to perform the cleaning for customers.
Effectively, you’ll start a cleaning business without cleaning.
Three criteria have to be met for any business to be run remotely:
Neel told us:
[su_quote] This makes service businesses ideal for remote jobs.[/su_quote]
Check out our interview with Neel to learn about remote business success stories.
[su_youtube url="https://www.youtube.com/watch?v=kVyLriqFVdc&t=860s"]He has a special offer for UpFlip members to get $6,000 in credit when they start a MaidThis franchise.
Keep reading to get great remote business ideas.
Remote businesses normally fall into two categories:
A successful online business can be created using online business ideas like an:
In addition to a remote cleaning business, you might consider other popular remote businesses like eCommerce, human resources, and accounting.
Check out our blog about online businesses for more remote business ideas.
You can use Neel’s strategies for service businesses like:
Learn about other service business ideas.
Starting remote businesses is all about creating systems that make it easier for you to run your own business from anywhere in the world. The process of starting a remote cleaning business will include:
Neel told us:
[su_quote]I didn’t have a mentor, so I was scared to quit my day job when I hit my freedom number. I cushioned my bank account and wish I had just dove in faster.[/su_quote]
Keep reading for more information about creating a remote business model.
There are plenty of people who have business ideas but never turn them into a profitable business. Your chances of success are much higher if you research what other businesses in the industry do and where there are gaps in the industry.
A remote cleaning business might want to use social media and Google to find locations that have higher population-to-cleaning business ratios.
In our research about the best small-town businesses, we found that locations with more than 416 people per cleaning business tend to be the best places to open a cleaning company.
You also want to understand what marketing strategy, pricing, and services competitors offer. Learn more about market research.
Every successful business idea needs a business plan. Given we’re talking about a business model that can be run from anywhere in the world, you need to focus on systems.
You’ll want to include the answers to questions like:
Neel told us a remote cleaning business has low startup costs.
[su_quote]I probably spent under $1,000. You just need internet connection, a WordPress website, and a computer. You can grow from there.[/su_quote]
Pro Tip: If you want to grow faster, consider joining a system where a lot of the work is already done for you, like MaidThis Franchise.
You’ll need some systems to run a successful remote business including a(n):
Neel told us:
[su_quote]Basically anything you don’t want to do, or don’t know how to, outsource it.[/su_quote]
You might need translation services if your internet business idea involves providing services in a foreign country or contracting or hiring cleaners whose first language is different than yours.
The best thing about a MaidThis franchise is that they provide aspiring entrepreneurs with everything they need to run a fully remote business.
You’ll need a website and customer relationship management system to operate any remote business. Neel told us:
[su_quote]Just get a $100 WordPress template and then build from there when you first start.[/su_quote]
At a minimum, your remote cleaning business website will need to include:
Check out the MaidThis website for more information on how they approach each of these.
Some useful resources for building a remote cleaning business website include:
Your customer relationship management system is a database and interface that helps you easily manage everything going on with your company. Each CRM works slightly differently, but you’ll need a CRM that either includes or connects to your:
Many systems include easy integrations with commonly used providers.
Any of these should provide the functionality you need, but each works differently, so check out the demos to decide which you like best.
You’ll need a payment processor to charge your cleaning customers and pay cleaners. Most businesses use Stripe because it is easy to use and integrations are normally built into other software.
Payment processors normally charge a fee based on the value of the transaction PLUS a per-transaction fee. In addition, they may also charge a monthly fee.
You might also consider options like:
View the table below for a quick overview of the differences between each.
Company Name | Percentage | Per-Transaction Fee | Other Fees |
Stripe | 2.9% | 30 cents | Additional fees depending on services |
Helcim | Interchange Plus (Normally 1.94% to 2.51%) | Interchange Plus
(Normally 8 to 25 cents) |
Each card provider has their own fees they charge for in-person or keyed payments. |
Square | 2.9% (2.6% with higher plans) | 30 cents online or 10 cents in person | The $79 monthly plan will save your online business money if you make over $27K per month, but Helcim and Stax are still less expensive. |
Stax | Interchange | Interchange | $99 a month |
As you can see, there are some details that make it harder to compare payment processors than some other systems, but in most scenarios, Helcim will save you money.
If the vast majority of your payments are in-person Visa payments and your transactions amount to almost exactly $250K or $500K per year, you may be able to save even more with Stax tiered plans.
Pro Tip: One money-saving trick is to make sure that your online business uses technologies to qualify for lower “card-present” fees.
You’ll need to create a business structure, get any business licenses you need, and get a business bank account to run a remote business idea legally. Let’s look at how to accomplish each of these.
Small business ideas can make up to $600 before you need to start reporting the income on your taxes. Most business owners start a Limited Liability Company (LLC) and file taxes as an S-Corp.
First, you’ll need to check the USPTO and the Secretary of State website in the location you want to register to make sure the name for your remote business is available. If the name is available, apply for an Employer Identification Number (EIN) and save it somewhere safe.
Then apply for an LLC on your Secretary of State website. We walk you through an example of what the application looks like in this blog.
Next you’ll need to fill out Form 8832 and Form 2553 with the IRS to opt into the S-Corp tax structure, which provides benefits to LLCs like:
There are plenty of other business structures for online business ideas, but this is one of the best.
You will probably need business licenses in the location(s) where you operate your remote business. This could include tax permits, local business licenses, and other requirements.
Make sure to check with your local authorities or a business law attorney to ensure you comply with all local laws. Each location is different, so you may need someone who has familiarity with multiple locations or specializes in helping unique online businesses.
You’ll need a business bank account to make your remote business easier to manage. In addition, a business bank account protects the limited liability status of a company because it keeps personal and business finances separate.
There are many available business bank accounts, and which one you choose will depend on your small business needs and structure. At the time of writing, I recommend Live Oak Bank because it
Learn more about opening a business bank account.
You’ll need small business insurance coverage in case anything goes wrong on the job. You’ll want to consider getting a Business Owners Policy (BOP) that covers:
Check out Simply Business to get quotes from 16 of America’s best business insurance companies.
You’ll need to have some contracts prepared before you hire cleaners to work for your remote cleaning business. You’ll need an employment agreement that covers:
Let’s look at each of these in more detail to help you understand how to manage employee or contractor relationships.
You’ll want to define whether the cleaners you hire are employees or subcontractors. Many remote businesses will consider all people who work with them as subcontractors, but you have to be careful.
Cristobal Mondragon classified all his employees as independent contractors and that resulted in a hefty fine.
Ultimately, your remote house cleaning business is a digital marketing business that provides cleaners. That means the maids and housekeepers count as independent contractors, but the IRS suggests requesting a ruling for positions you routinely need to fill to verify if the workers are actually employees or subcontractors.
Try out our cleaning business course
Want to get all the templates, workflows, and systems that Chris uses to make $5,800 per day? Check out our free cleaning business course!
A remote cleaning business start-up will probably want noncompete clauses when they hire employees or subcontractors. Remote working may need terms like:
“The subcontractor/employee agrees that all clients are clients of [Company Name]. Performing any work for the clients except through [Company Name] is a violation of the services agreement and will result in the termination of the contract and pursuit of loss income at the rate of $[Amount].”
The paragraph above is just an example. Consult with an attorney or human resource specialist to get a noncompete agreement that is legal in each location where your business operates.
You’ll want to specify how you will pay your cleaning people. Many business owners find that pay-for-performance is the best business model to align unique online business ideas with the employees’ interests. This payment model may mean paying them:
Neel told us:
[su_quote]I pay my cleaners $25 for each person who provides a review after they cleaned their house. This encourages them to ask for reviews and helps us build faster business growth.[/su_quote]
Your virtual business should add terms that protect against items broken or otherwise damaged by your employees. These terms may require subcontractors to carry small business insurance or specify that employees may be responsible for the cost of the replacement up to a certain amount.
Make sure to get legal advice to establish what is legal in the locations you serve.
In addition, you’ll need cleaning contracts for your clients. Many residential home cleaners do not use contracts, but Airbnb cleaners may.
Neel explained how he finds remote employees:
[su_quote] I’m looking for three main things when hiring people:
He went on to explain that Facebook Marketplace and Craigslist are great places to find employees without spending a lot on hiring. Once you have eligible candidates, Neel told us:
[su_quote]We use an automated five-step recruiting process. That includes:
One of the benefits of buying a MaidThis franchise is you get to skip a lot of the mistakes most people experience as they learn how to build a remote cleaning business.
In addition to all the other support and resources, you’ll get access to MaidThis’s detailed standard operating procedures, which are over 1,000 pages long. Find out why in the video below.
In-person businesses like cleaning companies rely on customer service from remote teams. You’ll want to make sure every in-person worker has a clean background. That means you’ll need to conduct a background check.
You can consider companies like
UpFlip Cautionary Tale
I have a lot of experience with Checkr background checks because they were run on me for multiple employers. I used to move approximately once per year to go experience new places.
My background checks would ALWAYS take at least a week because they had to check seven jurisdictions. Meanwhile, my significant other’s background checks almost always come back instantaneously.
The other scenario that commonly holds up background checks is criminal charges that don’t necessarily convert easily from one state to another. For instance, Nevada gross misdemeanors are often considered felonies because other states don’t have gross misdemeanors, and they are only available as plea bargains in Nevada.
If you need someone fast, ask screening questions like:
These two questions will let you know if screening the applicant will take longer than normal.
You’ll need to provide new hire paperwork before managing remote employees in the U.S.
Remote work in other countries may have different requirements. When working remotely, always consult with someone familiar with the laws in the country where the remote team works. Learn more about hiring.
Some resources that you can use for hiring include:
A remote cleaning business will need to use a combination of digital marketing and “boots-on-the-ground” marketing.
Neel loves talking about marketing. He gave us input on how much you should spend to get unique online business ideas to start making money.
To most effectively start a great online business idea, you’ll want to spend 15 to 20% of your desired revenue on a combination of digital and print marketing. Neel told us:
[su_quote]We spend about 5% of revenue on marketing. When you first start, I recommend 15 to 20% of your spending on marketing because once you get a client, it’s pretty easy to keep them.[/su_quote]
As your marketing strategy helps you reach your desired revenue, you can reduce your marketing to maintain revenue and increase profits.
The best business ideas can fall flat if you don’t market them right and find the right clients. You’ll want to use digital marketing skills like:
Neel explained how to start a remote house cleaning company and get ahead of the competition fast.
[su_quote]If you answer the call, we close 60% of requests, but if we don’t answer, we only close 16%. So we use a call agency and an automated text messaging system to follow up if we miss the call.[/su_quote]
MaidThis also uses an online booking system to provide potential clients another booking option.
In addition, any time they clean a home, they’ll send postcards to the five houses on either side of it. Neel told us:
[su_quote]If someone in a neighborhood is our client, their neighbors are probably our target audience.[/su_quote]
Neel explained what to include in your calls:
[su_quote]When someone calls, we ask them something like, ‘Do you want weekly, bi-weekly, or monthly cleanings?’ Note we don’t offer them a one-time cleaning.[/su_quote]
Neel also uses automated marketing tools and funnels to help book customers more regularly.
[su_quote]When a client hasn’t requested their home cleaned recently, they’ll send an automated text message. They even have a one-click brownie-sending service (yes, he sends baked goods) to help encourage return customers.[/su_quote]
Customer reviews are crucial to work remotely. You’ll want to provide great customer service. Then you want to encourage the cleaner to ask for a review because in-person meetings tend to create a better relationship than remote interactions. Neel told us:
[su_quote]Make sure your cleaners ask for reviews because the customer is more likely to review when they ask. We give the cleaners a $25 bonus for every review they get.[/su_quote]
Neel went on to explain:
[su_quote]After each cleaning, we’ll request an automated review that takes about 10 seconds for the customer to review us.[/su_quote]
You can also minimize bad reviews in the business world. Neel shared his secret:
[su_quote]When you get a bad review, call them and offer to send someone over for a complimentary recleaning.[/su_quote]
There are some useful marketing tools that small business owners use to market their companies:
Next we’ll discuss some of the frequently asked questions about remote businesses.
Still considering whether a remote cleaning business is for you? We’ll answer some of the commonly asked questions about companies that work remotely including:
There are plenty of companies that are fully remote, but some of the best small business ideas that you can operate from your own home (or anywhere in the world, like Neel does) include:
“Remote-first” companies prioritize remote work over in-person jobs. These companies are often similar to fully remote businesses, but they still maintain an office for when people need to get together to achieve their organizational goals.
Whether you run online store ideas or want to start a remote business sanitizing company, there are benefits to remote work for many business owners, companies, and remote employees , including:
There are also many reasons why you might not want to run a remote business.
There are numerous reasons why companies might not want to allow remote work, including:
You can learn more about Neel and MaidThis on the following sites:
We’ve explained how to start a remote cleaning company, shared other online business ideas that can be run remotely, and provided advice from a highly successful business owner about how to start a cleaning business without cleaning.
Now it’s up to you. Will you put in the time and energy it takes to create the systems you need to build a business you can run from anywhere in the world?
Are you struggling to monetize your digital assets? We’ll show you how to start affiliate marketing.
We talked with SEO guru Matt Diggity, who started Lead Spring in 2009 and has turned his affiliate marketing business into a $5 million-per-year revenue-generating machine. He told us:
[su_quote]I fell in love with it because it appeals to the gamer in me.[/su_quote]
We’ll share the best affiliate marketing strategies for search engine optimization and affiliate marketing to improve your own website revenue by discussing:
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According to Matt, affiliate marketing is:
[su_quote]Getting people to buy products and earning a commission. You recommend a product using an affiliate link, the company tracks actions with a cookie, and when they buy something, you earn a commission.[/su_quote]
Matt explains that he uses search engine optimization to generate traffic and earn money from affiliate links.
Search engine optimization is focused on creating content that is valuable to users by focusing your writing on information that people regularly search for. Matt explained that SEO focuses on two main aspects:
Yes, affiliate marketing works. While Matt is a rarity in the industry, plenty of affiliate marketers earn the equivalent of a full-time employee, and many more bring in enough with affiliate links for affiliate marketing to be a profitable side hustle.
Matt explains that you’ll need to perform the following tasks to start affiliate marketing:
He’s oversimplified affiliate marketing a little, though. If you’re an absolute beginner in the affiliate marketing world, you’ll want to:
Select an affiliate niche that interests you and has a demand for products or services. Your passion and knowledge about your niche simplifies content creation and creates a better connection with your target audience.
Check out our content on business ideas to find an industry you’d like to choose as your affiliate niche. An online business will normally work best. People who sell courses online almost always have affiliate programs as do many online stores.
Affiliate marketers have opportunities in every industry. Affiliate sales tend to be the best in the following industries, though:
Once you’ve chosen a niche, it’s time to find different affiliate programs.
Once you’ve identified your affiliate niche, look for affiliate marketing products you want to market.
Some popular affiliate networks and platforms include:
Keep reading to learn more about each of these affiliate product platforms.
Just go to Amazon Associate Central and apply. Amazon Associates offers 1% to 20% commission on purchases.
Join CJ to get access to top affiliate programs like Google Workspace, GoDaddy, NameCheap, Quickbooks, and Simply Business.
We use impact.com to refer people to companies like Divvy, SEMrush, Canva, and Credit Karma.
FlexOffers has over 10,000 affiliate product offers to apply for, including Nike, Hulu, Samsung, and Microsoft.
Audible Affiliates earn $15 per user by referring new members to the audiobook site.
ShareASale offers its own affiliate link you can use to refer both merchants and other people who want to get into the affiliate marketing industry. They also offer other programs like WP Engine, Gusto accounting software, and other high-ticket affiliate programs.
PartnerStack is an affiliate marketing network with companies like AirDNA and SurferSEO. Apply on the ParnerStack affiliate site.
Rakuten Advertising has partners like Hilton, JanSport (backpacks), and One-Travel. Go to their website to apply to share affiliate links from Rakuten.
You can join eBay’s affiliate program by going to eBay’s Partner Network website. We link to their Getting Started tutorial so you can learn more about it before signing up for the affiliate marketing program that makes between 1% and 6% on most sales.
Shopify affiliates gain access to a content gallery created to help affiliates succeed in affiliate marketing. You get $25 to $500 per item sold based on the location and paid package the user signs up for. There’s a catch, though. It’s invite only. Learn more.
WordPress (WP) Engine offers a generous affiliate program based on the higher of $200 per purchase or the first month’s costs. They also offer a 35% commission on StudioPress, a growing collection of responsive, SEO-optimized WordPress templates. Apply to become a WP Engine affiliate.
Use the affiliate program to refer new buyers to freelancer platform Fiverr and receive $15 to $150 depending on what jobs they commission. Plus, the hybrid model offers 10% revenue share. This is a great affiliate program for B2B affiliates because almost every company could use some extra help occasionally.
ConvertKit is an email marketing tool that offers a 30% commission for the first 24 months. That means you can make between $2.90 and $18,720 per referral over the course of two years. Become a ConvertKit affiliate.
To become a Twitch affiliate, you’ll need to:
As long as you meet these requirements, you’ll be sent an email invite to join the Twitch affiliate program, which provides you with a penny for each reaction during streams, plus a percentage of ad revenue. Learn more about the Twitch affiliate program.
After you’ve found the best affiliate marketing programs for your affiliate niche, sign up for the affiliate programs you’ve chosen. Most affiliate programs are free to join, but some may have specific requirements or restrictions.
You’ll need to:
An affiliate marketing program is a structured arrangement established by a company or merchant to collaborate with individuals or entities (affiliates) who promote their products for a commission or referral fee. These programs are a popular form of online marketing where businesses leverage the efforts of affiliates to drive traffic, leads, and sales to their websites or offers.
Affiliate marketing programs benefit both merchants and affiliates. Merchants can expand their reach and boost sales without upfront advertising costs, while affiliates can earn commissions by promoting products or services they believe in or have expertise in.
It’s important for both merchants and affiliates to maintain transparency and ethical practices in affiliate marketing to build trust with customers and comply with regulations in their respective industries.
You’ll need a platform to promote affiliate products when you become an affiliate marketer. Consider running a blog, website, YouTube channel, social media profiles, or an email list. Anything that uses digital marketing will work as long as you have an audience.
There are a lot of people who create online courses then use affiliate marketing to sell other marketing automation tools that work well for eCommerce businesses. Choose the best platform to communicate with your target customers.
Visually interesting subjects will normally use video and image platforms like Instagram, YouTube, or TikTok. Meanwhile, writers might benefit more from blogs and Twitter.
Start creating valuable and engaging content related to your niche. This content can include articles, blog posts, product reviews, videos, podcasts, or social media posts. Your content should provide useful information, solve problems, or entertain your audience.
To create amazing content, you’ll need to:
Most affiliate marketing partners will go through three stages in their affiliate marketing journey:
Here’s what these affiliate marketing designations mean:
When you first get started you may not have any useful information to provide people and you’ll copy what others are doing. This is called unattached affiliate marketing, “zero-click,” or “linkless” affiliate marketing. These rely heavily on social media ads to build audiences.
Launch successful businesses and you will eventually develop the experience and authority to give others online marketing tips, at which point you’ll be more focused on the second type of affiliate marketing.
A related affiliate marketer focuses on products in their niche but hasn’t actually used them. It makes it hard to give a sincere review if you’ve never tested a product or service. Many customers see through this type of marketing as insincere and just trying to make a buck.
At least you’ve realized that you have to stay within your niche to participate in the best affiliate marketing programs available to affiliate marketers.
The third stage affiliate marketers will enter involves showing they have expertise in the niche and with the product. At this point, you should be eligible for the best affiliate programs. You may even be assigned a dedicated affiliate manager, which may also be called a dedicated account manager.
An affiliate marketer using involved affiliate marketing has experience with their suggestions. That means they are telling their audience that the product has improved their lives in some way. When you endorse something that doesn’t work, it can harm your reputation.
Affiliate marketers will normally find it difficult to jump to the final stage. Even if you are highly proficient at narrowing down your niche and you test the products, you won’t immediately be considered an expert. That means you’ll need some ads to expand your digital marketing chops.
As your online business grows and you become more of an authority, the need for paid ads may decrease and your testimonial will mean more because your audience knows you have the experience to judge the products.
Within your content, strategically insert affiliate links to the products or services you’re promoting. These links will include unique tracking codes that identify sales or leads generated through your referrals.
There are a few different ways to insert affiliate links. We’ll discuss:
Affiliate links are links with a unique URL that tracks when a user comes to a page through another company’s web assets. An affiliate link records specific data to track sales, including:
When a visitor goes to the web page through the affiliate link and buys something, the advertiser pays the affiliate a commission.
Affiliate programs function by enabling individuals, known as affiliates, to promote and sell a company’s products or services. In return, these affiliates receive a commission for each successful sale generated through the unique affiliate link associated with their endorsement.
Here’s an overview of how this process operates:
The commission rates for affiliate sales can vary widely based on the particular company and offer. Typically, commissions range from around 5% to 50%, particularly when promoting educational courses or events. Some affiliate marketing programs offer a fixed monetary amount per sale instead of a percentage-based commission.
Go to the affiliate network that your affiliate program is on and go to the related affiliate marketing campaign. You should be able to see all your affiliate marketing campaigns in the affiliate dashboard like the one from CJ below.
Click on the one you want to add to your content. It will take you to a page that looks like this:
Then you’ll want to go to the links and sort them by the earnings per click (EPC). You can either choose a 7-day or 30-day EPC. You may also see EPC (100), which is earnings per 100 clicks. The higher the number the better as long as it is relevant to the content you create.
You’ll want to click Get code on the campaign you want to use. This will give you options like encrypted links, open in new window/tab, and whether to get HTML, JavaScript, or just the URL. Once you choose your settings, update the link and copy the code.
To create an affiliate ID, you will need three main parts:
UTM | Use | Example |
utm_source | Specify the site the link came from |
utm_source=Instagram |
utm_medium |
Categorize between social, email, organic, or paid traffic | utm_medium=paid |
utm_medium |
Tie the link to a specific promotion | utm_campaign=Course_beta_testing |
utm_medium |
Make it easy to track the keyword | utm_term=best_business_courses |
utm_medium |
Used for A/B testing | utm_content=link_1 and utm_content=link_2 |
That means you might have a link that looks like the one below:
Pro Tip: Want to take a deeper dive? You can learn more about building links from Google.
Amazon used to have numerous ways you could get affiliate links for a page including Native Shopping Ads, banners, and mobile popovers, but they recently discontinued support of everything except the “link to any page” setup.
With link to any page, you can link to:
You can also use the Idea Hub to get ideas that you could have success with. The mobile app also allows affiliates to share an affiliate link directly from the app with Mobile GetLink.
When we set up affiliate links, we use the following process:
Watch the video below for an example of how to do this in WordPress with Pretty Links.
[su_youtube url="https://youtu.be/3RAe15-1nBA"]It’s essential to be transparent with your audience about your affiliate marketing activities. To maintain trust and comply with FTC regulations, you must clearly disclose your affiliate relationship in your content using disclaimers or disclosures.
The way we approach this step is by posting a disclaimer at the top and bottom of each page that says:
"UpFlip earns commissions when you buy products using links on our website. You can learn more about our standards here."
Then in sections with affiliate marketing links, we add:
"This section includes affiliate links."
If you’re using WordPress, you can also make each link a sponsored link by clicking a setting on the link.
Again, these steps are needed to comply with the FTC regulations.
You have to drive traffic to your content to earn commissions. Utilize various marketing strategies like SEO, social media marketing, email marketing, paid advertising, and content promotion to attract visitors to your platform.
Use analytics tools and affiliate dashboards to monitor your performance and track clicks, conversions, and earnings. This data will help you refine your strategy and focus on what works best.
Continually analyze and optimize your affiliate marketing strategy. Test different promotional techniques, track your results, and make adjustments to improve conversion rates and maximize your earnings.
Once you’ve established a successful affiliate marketing strategy in one niche, consider expanding to other niches or products to diversify your income streams.
Be aware of legal and ethical guidelines related to affiliate marketing in your region. You’ll need to comply with the FTC guidelines in the United States and ensure your marketing practices are ethical and transparent.
Nearly 59% of affiliate marketers have not monetized within their first year. You can expect the following breakdown for affiliate marketing earners:
This section includes affiliate links.
The best affiliate program will depend on what kind of content you are creating. Sites like Amazon are easy to work with for first-time affiliate marketers but don’t pay that well.
Meanwhile, insurance companies and online courses tend to have amazing affiliate incentives and are some of the best affiliate programs to earn money with.
Remember, affiliate marketing won’t create a sustainable income overnight. Success typically comes from consistent, high-quality content creation, effective promotion, and a deep understanding of your audience and niche. Be patient and persistent, and over time, you can potentially earn a steady income through affiliate marketing.
My personal favorite recommendations for affiliate programs are:
Most people would say that Amazon is the place, but Mat Diggity disagrees. He told us:
[su_quote]I strongly disagree. Everyone is using Amazon affiliate marketing and the margins are crap.[/su_quote]
Matt recommends ShareASale or Impact.
We’ve provided the information for you to monetize your content. What kind of content do you create and how will you start earning affiliate revenue?
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Wondering “What podcast should I listen to?” Naturally, we’re proud of the content our super savvy team creates, so we’re introducing the UpFlip podcast first in our list of great podcasts, followed by other options that ought to be on your radar.
Honestly, that depends on the business owner. These 65 podcasts are the most popular across the top podcast services and are our top choices for their content and entertainment value, too. There are tons of great business podcasts out there, though.
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