How Does Affiliate Marketing Work?

By September 26, 2011Affiliate Marketing

Affiliate marketing is an approach to promoting web businesses by selling products on behalf of other businesses. It’s sort of like having your own store with anything and everything you want in it. Only you don’t have to keep any inventory, you send people to the “home office,” and get a commission for every sale you make. In essence, you’re rewarded for all the visitors, subscribers, or sales to your suppliers’ websites.

Affiliate marketing has different methods of compensation, depending on the business and their model. You could be rewarded through Pay-per-click, Pay-per-lead, or Pay-per-sale. that is, you could get paid if 1) someone clicks a link to their site, 2) someone provides contact information to the company, or 3) someone buys something off their site.

Suppliers don’t have to pay the affiliates until a certain number of results are achieved. (For example, Amazon.com doesn’t send out any affiliate checks until they reach $25 in a quarter.) Web businesses love this type of marketing because they don’t have to handle the selling or word-of-mouth marketing, and can instead bring on affiliate marketers to boost their sales. Since the affiliate marketers handle all of the selling, they have their own website or blog in order to host the products and services that they are choosing to sell. 

There are a variety of different programs that the merchant web business can use when operating the affiliate marketing. Some affiliate programs are customized by sites such as Amazon.com, while others use third-party programs provided by affiliate marketing intermediaries.

Affiliate marketing works by helping consumers with their purchase decision and attempting to complete as many sales as they can. The marketers try to answer as many questions as they can, and make buying as easy as possible, for the shopper to make their decision.

For example, a shopper who is looking to buy a digital camera might find a site that not only answers all kinds of photography questions, and even has some how-to videos on the site, but even has a link that goes directly to the manufacturer’s website where the shopper can buy that camera.

By providing all sorts of educational information, and even answering questions or providing user reviews, the affiliate marketer has earned the shopper’s trust, and they’re more likely to buy click the link on the marketer’s site.

Affiliate marketing is a win-win for all parties: merchants leave the affiliates in charge of selling their products and services, affiliates make a living, and consumers are able to find their products and services that they are looking for more easily at a lower price.

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