How Affiliate Marketing Works

How Affiliate Marketing Works

Interested in becoming an affiliate marketer? Perhaps you have plans of working with affiliate marketers and are curious about how affiliate marketing works?

If you are that person right now with limited knowledge about how affiliate marketing works then don’t worry, the concept isn’t hard to grasp and in a few minutes time, you’ll have a thorough understanding.

What Is Affiliate Marketing?

Affiliate marketing is an internet marketing channel where companies (sometimes referred to as advertisers or merchants) pay other people or companies based on their performance promoting an offering. Publishers can be individuals or companies that get paid for the providing leads or sales of products for the company.

In a nutshell, if you are an affiliate (sometimes referred to as the publisher), you use your skills as a marketer to refer others to a desirable product. When that person decides to buy the product based on your recommendation, you can then get a commission or kickback.

Who Are The Affiliates?

An affiliate can be an individual or a company but generally, these are bloggers or other content makers that may be in a similar to the industry to the company they are promoting.

They are people who help promote the product or service by writing posts, making videos and other marketing. When one of their visitors makes a purchase or submits a lead form on the company’s website, the affiliate gets paid. How much and for what they get paid depends on the affiliate program terms.

They also promote the company by putting up ads via banner ads, search box and text links. Whenever a lead is generated, the publisher gets paid a commission which is often a percentage of the amount sold or it could also be an amount agreed upon by the advertiser and publisher.

Who Are The Companies?

A company (also known as the Merchant, Advertiser, Retailer or Brand) that sells products and services can be any company that is willing to offer commissions to people who have the marketing skills to promote their products.

They partner with affiliates so they can generate more leads and sales.

These companies then pay their affiliates for helping them gain whatever it is they’re after. This can be done in a Pay Per Click, Leads or Pay Per Lead and Pay Per Sale. This can sometimes be more commonly known as “Performance Marketing”.

This is much more advantageous to the company compared to traditional Pay Per Click advertising where a ton of money can be spent without producing any actual leads or sales.

How Affiliate Marketing Works

As an affiliate, you are paid for performance.

Here’s are the different types of performance-based models common to affiliate marketing:

  • Pay Per Click or PPC – where an affiliate gets paid for all the valid clicks generated regardless if it made sales or leads.
  • Pay Per Lead or PPL – where companies pay a fixed commission for every qualified action that it generated. This action could be Installation, Online Form Submission, Free Trial, Short Survey and many others.
  • Pay Per Sale or PPS – where companies pay a percentage of all sales that are qualified. These could be a percentage which was agreed by the company and it’s affiliate. Among the most common PPS program is the Amazon Associates where a publisher can earn up to 15% depending on the products that were sold. Here’s a list of places where you can find products to promote.

What Are Affiliate Networks?

Affiliate Networks add another layer between the companies and their affiliates in exchange for managing the relationship and providing third-party checks and balances.

Some popular networks include ClickBank, Commission Junction and ShareASale.

They track, report and manage payments to the affiliates. Companies have the liberty to choose the affiliate network they want to work with and affiliates may choose to worth with multiple companies within the Affiliate Network.

Recap Of How It Works

Here’s a quick recap of how affiliate marketing works:

First, you need to sign up for an affiliate program. After signing up you will get an affiliate link or a special URL that contains the Username or ID of the affiliate. You can then use this link whenever you mention the advertiser in your website.

Whenever a visitor clicks on an affiliate link a cookie is dropped into their browser to track them. If they become a customer, ordering something from the company’s website, then the company is notified that they received that customer from the respective affiliate and gives them credit for making the sale.

Commission payouts by the company are usually given on a monthly basis, but this varies depending on the affiliate program terms. It could be a weekly payout or a monthly payment for all the leads or sales that you have made.

Does It Cost To Join An Affiliate Program?

There are no charges for joining an affiliate program but the cost will depend on the promotion technique you will be using. For example, your blog is free, but the PPC marketing, email campaigns, etc, all have a price.

Do You Need Qualifications To Be An Affiliate Marketer?

Truth is anyone can join and there no qualifications needed.

However, knowing how to write is a big plus because it means you don’t have to pay for content in the beginning.

Knowing how to string a great review together or doing video can give you a massive leg up.

If you already have knowledge about marketing then this could also be an advantage on your part.

Start Earning Today

There is no limit to what you can earn with affiliate marketing. It’s up to you to see how far you can scale this incredible business model.

The amount you earn will depend on a number of factors:

  1. The program you are promoting
  2. The conversion rate
  3. How many visitors you are sending through those links
  4. The buyer’s motivation

But when you hit that sweet spot and all of those things align, it’s a great feeling.

Now that you know how affiliate marketing works, why not test the waters? This could be your golden goose but of course, will never know unless you try, right?

3 thoughts on “How Affiliate Marketing Works

  1. Bloggers and internet marketers who have been working into online marketing for years are used to with an affiliate marketing, and also with the fact that it is the most productive way to make money online. In the quick words; an Affiliate Marketing is one of the popular practices of selling wherein you suggest someone to any online product and when that person purchases the product based on your suggestion, you receive a commission.

    Anyways, learned a lot here today, thanks for giving info on affiliate marketing. I have been an affiliate for few programs but failed to make a profit because I haven’t done it correctly. Also, web traffic on your site requires to be really good and targeted to get things work. Require to work on traffic first and then you can go for affiliate marketing. An Affiliate Marketing also depends on what niche are you blogging about. If you have a technology blog, you can join Amazon, Flipkart, Snapdeal. If you talking into web-hosting, then you can join the affiliated programs derived by Webhosting companies.

    Thank you for the clear to understand information and plain descriptions. This will be quite helpful for all bloggers and online publishers…

  2. Hi my name is Debabrata upadhaya I am a beginner of affiliate marketing although I know I have lots of traffic in my social media but still I think it would not so easy to earn only through traffic you need to do something creative so that people visit your network so I am still working on this.

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