How Do Influencers Make Money?
In March of 2019 I spent every Wednesday answering follower’s Qs about the influencer industry via my Instagram Stories - saved to my Influencer Chat Highlight. Most questions were around making money, free product, legal disclosures, and blogger relationships. I’ve added them here and expanded on each to hopefully provide some insight into my business. Always happy to answer Qs - keep ‘em sliding into my DM’s @everydaypursuits.
The 411 on the Influencer Industry: how we make money, when do you have to disclose #ad, benefits, free travel, and more.
How Do Influencers Make Money?
There are 3 primary revenue streams:
Brand partnerships: brands pay us to be a brand spokesperson and/or create content for them. It can be anything from an IG story about their product, appearance at an event, IG post, blog post, or photos for their social channels. This is the primary revenue stream for most influencers in the fashion/lifestyle space.
Affiliates: commission on products YOU buy from links or widgets that I share. Think swipe up links on IG stories, shoppable widgets on my blog, and the Like.to.know.it App. While this can be a decent revenue stream, the % of commission we receive is quite small (keep scrolling for a breakdown) so unless an influencer has a very large audience with a high conversion rate this revenue stream can really ebb and flow.
Product lines: this is less frequent but we are seeing more and more influencers do either collaborative lines with brands ie: Sincerely Jules x Billabong + my upcoming L*Space x EDP collection (yay!) or people like We Wore What creating 100% their own swim or overall brands. Amber Fillerup’s Barefoot Blonde and Dae are a great examples as well.
Bonus: web ads for those influencers that still have blogs (not many of us) and also run display ads on them
What % do you get from affiliate links?
Affiliate links typically generate anywhere from 1-10% commission of the checkout value.
Affiliate link 411, especially as related to IG stories: IG is constantly limiting the cookie window for links. i.e. back in the day you clicked on something I shared and went back to it later that day to purchase and I got a commission. Now the window is said to be no more than 5 minutes long which means if you open it, get distracted at work and don’t buy it for a few hours later, I get $0. This has significantly curbed peoples’ income.
the simple math:
-1,000 followers swipe up on jeans that are $100
-Commission is 5%
-20 followers are actually going to buy
-Only 10 followers buy immediately
-Initial commission for me is $50, although I actually drove $100 worth if I got credit for all 20 purchases
-The catch: not everyone is going to keep. Return rates are high. Let’s say there’s a 20% return rate (industry average). That means of the 10, 2 people will return and my new commission is $40
-This is not paid to me until 90 - 180 days after the purchase
Keep in mind that $40 is POTENTIAL from 1,000 people swiping up. You have to have A LOT of followers for that to be the case. Especially because instagram's algorithm doesn’t show your content to everyone that follows, and not everyone that sees it will be interested in that product.
Long story short: affiliate revenue is great but unless you can drive HUGE volume (by either having a very large following or posting links ALL DAMN DAY) you’re not earning enough to live, pay out of pocket for benefits, and save for retirement. Especially with the unknown return rates and 90 - 180 day pay outs.
What makes you the most money?
Brand partnerships. I am being compensated for:
A DECADE of work I’ve put in to building a REAL follower base that trusts my honest opinion and product recommendations. That includes but is not limited to pushing out valuable organic content 24/7, 365 days a year, answering 300+ DM’s per day, and building a place where EDP babes and EDP mamas can come together to have a community.
Creating content that brands can utilize on their marketing channels that they would otherwise have to pay models, photographers, stylists, location fees, etc. to create for themselves.
My content is broken down like this: 97.5%= unsponsored, not compensated and 2.5%= paid. All of which I am very excited to share with you. And put the same effort into. But maybe something to think about next time you see a #ad - give it a like or a comment to say THANKS for the other 97.5% of free content you’re receiving throughout the year.
Do influencers get benefits? The 411 on how Insurance, 401ks, maternity leave work when you’re an influencer
What about benefits, #ad, free products, and all those trips?
I’m always so curious how freelancers handle retirement savings and healthcare.
Appreciate you thinking about that! We have no company to match retirement contributions, provide paid vacay, maternity leave, etc. My husband and I are both considered contractors and both pay out of pocket for insurance. In the grand scheme of things we are just freelancers and have similar worries/costs that other freelancers do.
Are there legalities around having to disclose if something is sponsored or an ad?
Yes, the FTC requires: Communicate in clear, unambiguous language. The FTC recommends terms such as “Advertisement”, “Paid Advertisement”, “Ad” or “Sponsored Advertising Content” rather than “Promoted” or “Presented By”, which can be misleading. That being said, social media is still considered a new space when it comes to regulation and there’s a lot of grey areas/lack of disclosure. There have been a few crackdowns in the past few years but it is not policed as heavily as you’d think. And a lot of influencers do not disclose as they should.
How does the whole PR package/gifting thing work? Also do you like it or over it?
90% of gifting is unsolicited (i.e. I’ve had no communication with the brand, who knows how they got my address, it just lands on my doorstep). Also, 99% of these gifts are beauty products (makeup, skincare, hair, nail polish, etc.)
10% are items I knew were coming because of either an upcoming collab or a brand has requested my address and told me to anticipate.
The “gifting” is very similar to OG magazine editors getting products sent to their office to try. Brands are just hoping we will put them into our “magazine” aka blog + social channels.
Something to keep in mind: Andy always explains my job to parents and friends as “Ashley runs a digital magazine. She writes and talks about products, clothes, experiences, ane travel that she loves.”
I love getting new products and sharing with you! However, is it overwhelming to get 15 face washes in one month? Yeah. The Cons:
It sometimes feels very wasteful (just the amount of boxes and packaging).
I can’t possibly try every product (I don’t have enough faces).
I miss the days when my house didn’t look like a Fedex warehouse.
The Pros:
I’ve discovered some Amazing products this way: all my lipsticks, Garnier Micellar water, Native Deodorant, Mara Beauty Oil, Shisiedo face masks, (the list goes on)
I am able to give products away to YOU, my sisters and friends.
And most importantly, everything else gets donated to Ronald McDonald house or Downtown Women’s Center.
Do influencers get free clothes?
How do you get free clothes if you’re an influencer?
Are a lot of your clothes free or very highly discounted?
I can’t speak for anyone else but most of my clothes are purchased. If myself or anyone is doing a sponsored collab with a brand (aka hashtag ad) you can assume the product is gifted + there is a cash exchange. Many influencers also rep free clothes (I definitely do but not as much as others). Outliers for me: swimsuits and hats. I always reach out to brands before trips because I know I’m going to be wearing them.
How do you afford all new things all the time?
I work really hard, 7 days a week, 365 days a year. There is truly never a day off.
Chances are it’s not new but I’m styling it differently or it’s the first time you’re seeing it.
I rent a TON of stuff from The Stylist LA
BUT something to keep in mind with the influencer world, a very dirty secret that some people participate in: buying and returning stuff ALL the time. I can 100% say I don’t do this primarily because I cannot imagine the boxes and I HATE the post office. But it’s rampant throughout influencer world. It’s definitely something to keep in mind, especially if you feel yourself comparing yourself to someone and thinking “how do they have all the things??”. Lots of factors to take into consideration…
We work our asses off and just like anyone else who has discretionary income we choose where and how to spend it. Unlike most people it also becomes public knowledge because it ultimately ends up on our platforms.
Clothes and beauty products are a cost of doing business for us.
There are sponsored/brand collab product.
There is free product.
There is discounted product.
There are “pulls” aka you can borrow from a brand or PR showroom to shoot and return the clothes
People are buying, shooting and returning. And there are brands who promote this as well (it’s not just influencers making that decision).
Our job is to share the fashion, beauty, travel, etc. so that you can have that digital friend to share how the jeans fit IRL or the low down on what has worked for acne. It’s not about how many pairs of jeans we have or how many expensive products are sitting in our bathroom.
Free influencer trips, how do they work?
Do influencers get paid to travel to all these locations and hotels?
99% do not get PAID to travel. People are getting comp’d travel: flights, hotels or experiences covered in exchange for content and sharing the trip with the audience they’ve built. It’s not a “free” vacay and it especially doesn’t pay rent/bills. Traveling is my passion! If I could travel the world all day everyday I would. But I wouldn’t see my husband and would have no $. I invest in traveling because it makes my heart happy AND I love sharing it with you in hopes that it might make you more comfortable to explore new places and different cultures.
The 411 on trips I’ve been on in the last year
Money coming out of my own pocket for the trip:
Haiti with Kintravel (I paid my way 100%) and organically shared my experience via blog posts + IG.
Tulum (for a friend’s wedding/Andy and I paid our way 100%) and created Tulum part 2 travel guide for you.
Merida, Mexico (a friend’s wedding/Andy and I paid our way 100%)
Colombia trip with El Camino Travel (I paid my way 100%) and organically shared my experience and tips via blog posts + IG.
Africa with Kintravel (Andy and I paid 100%) and organically shared via IG and three very detailed blog posts about prepping for Safari and our experience with tons of tips and insights.
Work trip/something comp’d:
Nashville - Work trip for Uncommon James, travel expenses comp’d in exchange for social promotion
Austin- with Andy’s company as a company retreat - see my Austin guide from other trips here.
La Paz- Work trip with tourism board, comp’d in exchange for detailed social promotion
Los Cabos- part anniversary trip/work trip, hotel comp’d in exchange for social promo.
Do you feel like your relationship with other bloggers are genuine or forced?
The best way to look at it is this is my job/work place. Like your work, you have peers in the industry, work friends who stay work friends, work friends who become bffs IRL and people you have to work with that you don’t love but it’s work and you deal with it. I choose to spend my time with those that I vibe with most.
Insight into the Influencer Industry
I’m frustrated when influencers complain about responding to DM’s, sharing links, answer qs.
My take is that I answer every DM because without YOU I don’t have a job. I’m invested in our relationship more than a swipe up. BUT I do think it’s important to remember that you’re receiving a FREE service. I don’t get paid every time I answer a DM. With 300+ DM’s a day I’m spending 2-4 hours a day responding. That’s 50% of my work week (if I worked a reg 40 hour job) spent on tasks I’m not being directly compensated. Additionally you could argue my “employer” aka brand partners DON’T SEE that I’m doing. Sure I can tell brands that I have this kind of interaction with my followers but there’s no IG stat that can show them this. They can only see what happens on the feed with likes and comments which is why you probably see influencers saying: “hey, would appreciate a comment or like on this post” because more and more people are going straight to DM’s instead of engaging on the public content. We get work based off the public content not the DM’s. Next time an influencer answers your DM maybe take 2.5 seconds to go on their actual feed and “like” their most recent posts to support them!
What system do you use for tracking invoices/ensuring you get paid?
I have a manager and agency that does this for me and it’s a dream. Agencies handle: payments + contracts (2 huge parts of our job), brand conversations once we’ve signed a campaign, helping with pitching, biz dev and strategy. You can really get yourself in trouble and/or get screwed with money if you don’t thoroughly understand contracts, so it’s nice to have the support of an agency if it makes sense for your business.
3-5 programs you cannot live without? Lightroom, Videoleap, Google drive and Dropbox.
What happens if Instagram all comes crumbling down? Back up plan?
Friendly reminder that I have a website with a 10 yrs. worth of travel, beauty, fashion, and lifestyle content, multiple Facebook communities: EDP Babes + EDP MAMAS, email list, podcast and like.to.know.it profile. All of which don’t limit the content you see (if you follow/subscribe/etc.) These platforms are a priority for me right now. I run my business like any small business and have to make sure I diversify and strategize. I’ve been in this business for over a decade and have seen a lot of changes, most recently the coronavirus. I don’t think anyone is prepared for what COVID-19 will do to the economy. It’s safe to say we are all just trying to figure it out. xx - Ash
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