How Does
Affiliate Marketing Work?
So how does affiliate marketing work? Is affiliate marketing any good and does it have a future? Clear the confusion and position yourself for internet marketing success!
Before answering the question how does affiliate marketing work, we first need to define what is affiliate marketing.
What is affiliate marketing?
Affiliate marketing is NOT pyramid selling or multi-level marketing. Here is a very brief (and extremely good) video that explains what affiliate marketing is all about.
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Welcome back! Rosalind cleared that up pretty well didn't she. Basically affiliate marketing is a process that enables you, the affiliate, to earn commissions by selling or promoting other people's products or services. In a similar fashion to how e-bay unites sellers and buyers, an affiliate program unites merchants and affiliates.
The Affiliate Marketing Process
How does affiliate marketing work
for you, the affiliate?
Step One
A vendor, sometimes referred to as a merchant, has a product to sell. He/she joins an affiliate program and completes the registration process. They then receive a unique vendor/merchant ID number.
The vendor then lists their products under the most relevant category. They provide details of the payment terms that they are offering to any affiliate who is interested in promoting or selling the vendor products.
There are many different payment schemes available. Some include a flat commission per sale, others offer a payment per click or payment per lead arrangement.
How to choose a payment scheme that is the most advantageous to you can be simplified by using certain criteria - those criteria are outlined in Rosalind Gardner's Super Affiliate Handbook.
Step Two
You, as the soon to be affiliate, visits the affiliate programs website. You complete the registration details and then you are given your own unique affilate ID. Once you have your unique ID you can scroll through the affiliate programs website searching for products that you wish to promote from your website. You can choose as many products to promote as you wish.
Once you find a product and payment terms that you are happy with you then 'register' with the individual vendor/s and then place their products or services for sale or promotion on your site. The process is similar throughout the different affiliate programs available.
The vendor then gives you your own unique html code that you copy and paste onto your web pages. This code will usually include some text and also a banner or picture of the product or service that you are promoting. Each particular code is unique. You will receive a different code for each vendor and each different product that you promote.
How do you Get Paid?
When visitors to your site click on the link they are taken directly to the vendors site. But when they do, your own code is imbedded into the URL. This tracks how many visitors were introducted to the merchants site, by you!
You then receive commission in accordance with the relevant payment scheme. Some arrangements are on a per sale basis, others are per click or per lead.
It is important to carefully consider the payment arrangements when choosing a vendor and pick ones that are better suited to you and your sites visitors. There is no point affiliating with a vendor based on their huge commissons if you have little or no chance of selling their products!
Now if you are thinking that's all well and good but how do I know that I won't be 'ripped off' that's were the affiliate program comes into play. They keep track of everything.
They track which merchant products you have sold during a particular period. They track how much you are owed and co-ordinate how much you are owed from the different affiliates that you have joined.
The whole process is simplified because the affiliate program keeps track of it all for you (though you should still keep a track of it yourself).
The Future of Affiliate Marketing
The affiliate marketing industry is growing at a phenomenal rate. The industry has come a long way since it's early programs began in the mid to early nineties. Researchers may not be able to agree on the exact growth figure expected in the next few years but do agree that the industry is here to stay and that it's rapid growth will continue!
Maximise Your Chance Of Success!
Avoid Beginner Mistakes
This article has answered the question 'how does affiliate marketing work'. But it is a very general overview only and is aimed to give you a basic understanding of affiliate marketing.
If you would like more information on the whole process or you are ready to accelerate your knowledge of affiliate marketing then you may be interested in Rosalind Gardners Super Affiliate Handbook.
Read my review of the Super Affiliate Handbook.
How Does Affiliate Marketing Work
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