Affiliate Marketing Meaning
Affiliate marketing is a part of performance based digital marketing in which an affiliate (marketer) refers a lead to buy a product or service through his referral link for which he gets a commission.
Affiliate Marketing for Beginners
Affiliate marketing gives an edge to the product creators or sellers by giving them the opportunity to market their product with the help of affiliate marketers who have some authority in their domain which they can leverage to make their audience perform desired action. Their effective marketing strategies gets them a share of the profit. There are four parties involved in it to make it a success:
- Seller– Also known as a brand, vendor, merchant, retailer, or product creator can be an entrepreneur or an enterprise. They have a product to market. The product can be physical or digital. The seller need not be actively involved in the marketing but may also advertise to profit from the revenue.
- Affiliate– Also known as a promoter, advertiser or publisher can be an individual or a company. They promote products to potential customers to persuade them to purchase the product. If the consumer buys the product they receive a portion of the revenue.
- Buyer– Also known as a customer or consumer can be a listener, viewer or reader. Whether the buyer knows it or not, their purchasing decision is driven by affiliate marketing. Affiliates share the affiliate product link on social media (on landing page), blogs, and websites.
When consumer buys the product, the profit is shared between the seller and the affiliate. Some affiliate marketers will be open to tell that the product, the buyer is going to purchase through the affiliate link will give them a commission on sale, others will not.
Rarely does it happen that the cost of the product will be more due to affiliate commission. The affiliate’s share of the profit will be included in the retail price. The buyer completes the purchase process and receives the product, unaffected by the affiliate marketing structure.
- Network– Also known as affiliate marketplace is an intermediary between the merchant and the affiliate. While the advertiser can promote the affiliate product on their blog or website, one can also arrange a direct revenue sharing model with affiliate networks to handle the payment and product delivery that puts a serious impression on one’s affiliate marketing tactic.
The affiliate marketer has to go through the database of listed products on the affiliate network, to promote the ones close to his niche. This happens if the affiliate program is only available on that network.
Why become an Affiliate Marketer?
Affiliate marketing is a proven way to make passive income at no cost at all except dedicated time. The affiliate’s website should be trustworthy to generate traffic to make sales for the business. You don’t need your own product to sell.
- Passive Income– Invest initial amount of time to make money while you sleep. You get a return on the purchase of a product within the cookie period.
- No after sales service– After selling the product, you don’t need to deal with customer complaints. The seller provides customer support for the product sold.
- Work from home– This is the perfect job for office non-goers. You can work from anywhere without leaving the comfort of your home.
- No fee– To work as an affiliate marketer you do not need heavy investment. Affiliate programs are free to sign up and you do not need to create a product. It is hassle free, low cost, and quick to start.
- Choose how you work– You get to become a freelancer means you set your own goals, choose the products that interest you, and set your own time. This means you can diversify your portfolio or you can be focused on one particular niche.
Affiliate Marketing Business
Affiliate marketing companies that sell products online have an affiliate program which is free to join. Just create your online profile on these affiliate marketing websites by signing up for the program and get your unique tracking link and when you write about their product review who can use this affiliate tracking link to land them on company’s product purchase page. If the reader buys the product through that link, you get a commission.
Every company which is in its expansion phase uses affiliate marketing to reach new interested audiences through their affiliates who promote their products in return for a commission they get for referring them. This has long been used as marketing outreach tactic. It sounds similar to referral marketing or influencer marketing but it’s different. The best affiliates are the already happy users of the product.
The affiliate gets paid according to these commission payment models-
- Cost per sale– This is the standard affiliate marketing payment method. In this, the affiliate gets a percentage of the sale price of the product by the merchant when the consumer purchases the product. This means, the affiliate gets a commission after a sale by the merchant.
- Cost per lead– This type of affiliate program compensates the affiliate based on the conversion of leads. The affiliate’s work is to make the consumer visit the merchant’s website and complete the desired action like, filling a contact form, signing up for a trail of a product, subscribing to a newsletter, or downloading software or files.
- Cost per click– This kind of affiliate program incentivizes the affiliate to redirect the readers from there website to the merchant’s website. This means the affiliate has to persuade the readers to the extent that they move from affiliate’s site to the merchant’s site. The affiliate is paid based on the increase in web traffic.
Affiliate marketers are the best kind of digital marketers because they take the person from AIDA (awareness> interest> desire> action) funnel entirely and they only get paid for each sale/lead/click they make. They need to be performance driven and result oriented.