What is Affiliate Marketing and How Does it Work?

Affiliate Marketing is growing very fast. While you are ready to sell your products to your online users, it is not always easy to find desirable users online who are equally good to buy your products. In such cases, you may use some sources that can promote your products well and these are known as affiliates in the digital world.

Affiliate marketers are one who promotes your products via their channels and earns through this promotion. When someone has interest and skills to promote products online and attract potential customer for buying it, he can become an affiliate. In simple word, just like retail outlets act as a middleman for display and sale of the original product to consumers, Affiliates are the middle man for conducting a successful online sale.

In no times affiliate marketing has grown as a common medium for companies who want to sell their products online. Affiliate marketing is an amazing way of online promotion through digital marketing mediums. It is beneficial for product owners because this acts as a word of mouth promotion strategy for them. It is equally profitable for affiliates because this helps them earn an equitable amount of profit through commission which they get for their efforts for carrying out a successful sale of a product.

What is Affiliate Marketing?

Affiliate marketing is actually a performance-based online marketing technique that pays commissions as a reward to affiliates for their efforts to bring visitors or customers for buying the products online. Each customer brought by affiliate can help him earn a profit.

In simple words, Affiliate marketing can be said as an online process of promoting the product of any company or individual to others with a motive of earning some amount of profit for each sale made. Affiliate marketing is a chain and thus it involves several key players who are responsible for the success of an affiliate marketing process. These key players are:

Key Players of Affiliate marketing

In the affiliate marketing there are four major players which help accomplish the task of affiliate marketing online:

The Merchants

Merchant in simple words is a creator of a product that is to be sold online. This can be anyone who is the creator of a product which can be the seller, the retailer or the vendor. This party creates the product that is to be actually sold online. This can be anyone who has a product to sell. He may or may not be involved as an active participant in affiliate marketing chain; he is just the owner of a product.

The Networks

When a merchant needs to sell their products through affiliates online, he needs to find a place where he can successfully promote his products. This can be found with the help of affiliate networks. This network can act as an intermediary between the merchant and publisher. This network helps one find those websites which are offering affiliate programs and are of respective segments of the product.

The Publisher

The publisher or the Affiliate can be said as a middleman in business online. This is a party that is responsible for the promotion of the product for selling it online. He is responsible for actual marketing. It’s the duty of a publisher to attract potential customers for the product so that they buy the product. An affiliate can be an organization or an individual who market product to earn some commission.

The Customer

The customers are the final buyer of the marketed product. It is a consumer that is responsible for the success of affiliate chain. A customer may or may not know that the chain of buying and selling includes affiliate marketing. In cases, when it is affiliate products that he is purchasing the cost of the product is already included in the retail price of the product.

When a merchant feels a need of selling any product online and is unable to find desirable customers through his efforts, he hires an affiliate who can promote these products so that they reach to their desired customers in a manner that they get attracted to the product and buys it. These affiliates are hired from affiliate networks. For each sale that has been successfully gathered by an affiliate, he is paid some amount known as the commission. Affiliates may not always be an individual, affiliates can be a company who is ready to promote these products through its website or by promotion strategies online. Often innovative promotional techniques are used by affiliates to promote these products online on several sources.

It is no wrong to say that affiliate marketing is a commission based marketing strategies used by owners of the product of merchants. It is a good way for people who are looking to earn the profit with their effective marketing skills but here it is important to remember that only actual conversion can help them earn a real profit and not a mere promotion.

How does Affiliate Marketing Work?

Affiliate marketing is a complete process that starts from a merchant to the final end users which involve the middleman. Affiliates are actually responsible for carrying out these sales of a product. This is life cycle that has several stages including:

Merchant is Ready to Sell Products Through Affiliate Marketing

The first and initial need of carrying out this process is the merchant need to promote its product through affiliate marketing. It is only the choice of the owner of the product that he wants his products to be sold with affiliate marketing.

Finding the Affiliate Marketer

The merchant when made his mind to sell via such process start to search the affiliate. Many affiliates are also searching for such opportunities. The merchant can search for suitable affiliate via different networks.

Affiliate Agrees to the Process

When affiliate agrees to promote the products he is given a particular id and URL of the product which he needs to promote for carrying out the final purchasing process.

Selection of the Business Model

There are various sources with which affiliates can promote this product and it is the affiliate who chooses one of this source and model to successfully promote the products. This includes posting of articles, social media promotion, review sites, classified, PPC ad camping etc.

Bringing Visitors to URL

The affiliate then works dedicatedly to bring more and more users to the URL on which products are listed. He needs to work really hard to bring potential customers to this site because not all customers coming to the site do necessarily purchase the product.

Final Sales

The mere promotion of any product is not sufficient, it is very important that the affiliate carry out the actual sale of this product.

Payment of Commission

Once the sale of the product is finally done, all this sales data get listed in the account of the affiliate on the basis of which the final payment is done as a commission to the affiliate.

In simple words, when a marketer and the merchant agree with each other to carry out a successful affiliate marketing process, a marketer is provided a unique URL code and an Affiliate ID. He then shares this URL on different online sources that include classified ads, social networks etc. When any visitors click this URL software typically records this click and when any user who clicks this link to get to the product and actually buys it then the affiliate is paid for this sell which he made. This is a complete process of Affiliate marketing that includes affiliate marketing merchant, affiliate marketer, and a consumer.

Affiliate marketing is an effective way to attract desirable users online for initiating the final sale and earning the profit. This is important because this helps in promotion of a product and helps build a long-term relationship between merchant and the end users. For affiliate marketers, it is a good source of earning the profit in terms of commission for their efforts of promotion online.

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23 thoughts on “What is Affiliate Marketing and How Does it Work?

  1. This was a great article that described all aspects of affiliate marketing! I am very familiar with it but for someone just starting out, this article will be very helpful to understand how affiliate marketing works. Thanks for sharing!

  2. Affiliate Marketing is obviously a great way to attract customers but does it really help? I am asking this because this sounds risky.

  3. Thanks for this post, it was really helpful. I need to get into affiliate marketing more as it could be a good source of revenue through my blog!

  4. While affiliate marketing is one of the nice ways for bloggers to monetize their sites, to succeed in such definitely requires skills. Either way, glad you shared the basics. Hoping to see more on this.

  5. You have covered most of the aspects of affiliate marketing. I was in the need to make an affiliate campaign at the firm I work at and this article has been really helpful.

  6. Very informative post. I am hearing Affiliate Marketing a lot but didn’t get a chance to research about it. Thanks for sharing this information.

  7. I have tried some affiliate marketing but I’m not so good at it. My friends, though. have made it big. It seems I don’t have the patience to do it.

  8. thanks for sharing this informative post. i think affiliate marketing is a great source of great source of generate online income

  9. I started blogging as an affiliate….everyone should start somewhere and from tgete I tried other ways to monetize blog

  10. This is a very good post about affiliate marketing. You give plenty of background information and can help people get started in the business.

  11. I think that affiliate marketing is a great way to connect with your customers or people. I don’t know much about affiliate marketing but these are good tips.

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