What is Affiliate Marketing?
The definition of affiliate marketing is “a marketing arrangement by which an online retailer pays a commission to an external website for traffic or sales generated from its referrals.” That’s a lot of verbiage to say that affiliate marketing refers to a company with a product or service to sell, is willing to pay a middle man (the affiliate marketer) to bring the end consumer to that said company to purchase the product or service.
Affiliate marketing works because of revenue sharing. You can use affiliate marketing to sell more of a product that you have or you can promote a product you don’t have, but feel it has value enough to make money by promoting it.
4 Parts to Affiliate Marketing
You can find affiliate marketing explained as being comprised of 3, 4 or 5 parts. I think explaining it in terms of 4 steps gives a good outline to the process.
Part 1 – The Advertizer or Merchant: This is the company with the product or service to sell
Part 2 – The Affiliate Marketer or Publisher: This is the company that promotes the merchant’s product or service to the end consumer who will purchase the product or service. I like to think of this as being the “middle man” who brings the merchant and the consumer together for that successful business transaction.
Part 3 – The Consumer – This of course is the vital part to the equation of affiliate marketing. Without the consumer making the final purchase of a product or service, there will be no “revenue to be shared.”
Part 4 – The Commission – The final and most important part that makes affiliate marketing work, the commission paid to the affiliate marketer after the sale has been made to the consumer. Remember, affiliate marketing works because of revenue sharing.
I think what makes affiliate marketing so interesting is the fact the consumer may or may not know they’ve made a purchase because of an affiliate marketer. An affiliate marketer looks to connect with a consumer in whatever manner they feel is viable. It used to be that affiliate marketing was kind or a secret way for a company to find consumers. However now it is more out in the open that companies will “revenue share” if you bring them customers, which is what affiliate marketing does. Making a sale makes the merhant and the consumer happy, why not give a piece of the action to the person who brought them together? Without the affiliate marketer, the two parties to the transaction may never have found each other. There is nothing wrong with a little “quid pro quo!” That’s what makes affiliate marketing work! The merchant is eagerly willing to give up a little piece of the profit to the affiliate marketer who brought him one more customer. The end consumer shouldn’t care that an affiliate marketer is going to make a little money off their sale, because without the affiliate marketer, the consumer may never have found the desired product.
Is It Difficult To Make Affiliate Marketing Work?
Affiliate marketing doesn’t have to be hard at all. What’s good about it:
- You don’t need your own product
- You can promote a product already at market
- You don’t have to deal with customer service, inventory, shipping, etc.
- You don’t deal directly with consumers
- There is no hard selling, you’re only referring potential customers
- There can be some very generous commissions, almost 50% in some cases
- It is usually free or minimal investment involved
- Low risk because of lack of monetary investment
- Low maintenance, in that, once you share a link, commission can be earned over and over again
- With the right product and strategy, income potential is exponential
What’s bad about it:
- It can take time to build the necessary trust from consumers
- You don’t control the product or service, so if you recommend a bad product, it will reflect badly on you
- With so many affiliate marketers out there, it can be hard to distinguish yourself
- It’s not hard work, but you have to be disciplined to do the necessary work
- There are bad affiliate partners to be aware of
Sounds Exciting…Where To Go From Here?
Let me remind you, affiliate marketing is not a get rich quick business. It’s not a scam either. It is a legitimate money-making business that will work for you, if you have the patience, desire and proper training to do it efficiently and effectively. I suggest checking out Wealthy Affiliate, which is a large community of super successful affiliate marketers that provide that necessary complete training.. I’ve made the decision that affiliate marketing is worth the effort to delve into and will use this website to track my journey and hopefully help others to learn about successful affiliate marketing.
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