Affiliate Marketing – What Is It and How Does It Work?

what is affiliate marketing

Every business wants to make profits by getting as many customers as possible and increasing sales. There are many ways to do this. One that is very popular with many entrepreneurs is affiliate marketing. What is this type of marketing and what does it entail?

In simple terms, affiliate marketing means selling other people’s products or services in exchange for a commission. The person sending customers is the affiliate. The company whose product is being sold is called the merchant or vendor.

The Basics of Affiliate Marketing

The affiliate signs up for a merchant’s affiliate program. Then the affiliate  recommends the merchant’s products to customers using a special link (affiliate link). The affiliate earns a commission on every sale made through that link. It’s similar to the classic offline sales model where sales representatives would go out and make sales to get commissions.

Affiliates use conventional Internet marketing methods to send people to their affiliate links. Some of these methods are search engine optimization (SEO), email marketing, and paid advertising (such as pay per click). The affiliate usually pays all of the marketing and advertising expenses involved.

Affiliate marketing is different from referral marketing. The main strategy behind affiliate programs is driving traffic to the merchant’s offers. Referral marketing uses personal relationships and word of mouth to drive sales.

Tracking Sales

When a potential customer visits the affiliate’s website and clicks on the link, they are taken to the merchant’s website. At the same time, a cookie gets placed on the customer’s computer. The customer then makes a purchase from the merchant’s website.

The merchant’s affiliate software keeps track of which affiliate made the sale and calculates the commission due on that sale. In some cases the tracking is done through an affiliate network such as JVZoo, ClickBank, or Duvisio.

Getting Paid

Some affiliate programs pay commissions instantly to the affiliate. Most pay on a delayed basis, sometimes weekly or monthly or by whatever schedule the merchant prefers. With some programs, the affiliate must earn a specific amount, such as $100, before getting paid. That means some affiliates who make a sale or two will never receive any commissions even though they’ve earned them.

Most affiliate programs pay commissions for actual sales made. Some affiliate programs pay per click, rewarding the affiliate for each visitor sent, regardless of whether a purchase was made. There are also some programs that pay per lead, when a visitor subscribes to the merchant’s email list.

Affiliate marketing is a great way to get started in your online business. It eliminates the risk and expense of creating your own products. You can start driving traffic right away.

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The IM Dojo is the place for you to learn how to build your Internet-based business or learn how to use the Internet to market your offline business via content on the site as well as the courses in our online business training center. The IM Dojo founder Chris Lockwood has been making a full-time living online since 2002. His business career includes information marketing, copywriting, building funnels, membership sites, Kindle publishing, blogging, speaking at various marketing events, coaching, affiliate marketing, and e-commerce.

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