What is Affiliate Marketing?

Affiliate marketing is basically one of the backbones of most commerce online. Especially for travel, gaming and eCommerce sites.

This is why online purchases are expanding exponentially and why so many small business entrepreneurs are finding new business opportunities.

So, What is Affiliate Marketing?

In essence, it’s a form of selling by proxy. Instead of selling items through your own warehouse, you instead become an affiliate of a larger enterprise. For example, a website owner places a link to another merchant on his or her site.

When someone buys an item through that affiliate link, the website owner receives a sum.

It’s important to note that through many affiliate programs, the web surfer does not have to buy the item that was originally linked.

If the visitor decides to buy something else as a result of linking through the affiliates website, the website owner will still make money through the program.

Therefore, if someone clicks a book link and ends up buying a more-expensive item, such as a TV, it will have a larger payout.

This formula increases the odds that affiliate sites will make money.

The benefits for the merchant

Affiliate Marketing benefits both the affiliate and the merchant because all parties receive positive results when the affiliate links to the product.

The product or service is sold and the merchant or owner profits and the affiliate receives a commission.

“Affiliate marketing is open to anybody, the only thing standing between you and that thousand dollar check is your determination and efforts!”

The affiliate is motivated to promote the products and the merchant only has to pay the affiliate when the affiliate produces results. Affiliate marketing gives the product or service a much wider base in which to reach customers because instead of just the merchant or owner promoting the products.

They can have as many affiliates doing the promoting as sign up to be affiliates. It is like having an army of salespersons who only get paid if they are successful at convincing the customer to purchase.

Affiliate Marketing Payouts

Obviously, affiliate marketing does not pay the same amount as warehousing your own merchandise. The tradeoff is that it is far less expensive to set up an affiliate site than it is to open up a warehouse-based business.

In addition, the variety of affiliate marketing plans available means that websites can tailor affiliate marketing plans to a specific demographic.

Types of affiliate payments

Panyments… why you got into affiliate marketing in the first place, right?

• CPA – Cost per acquisition. A fixed payout for a sale.
• CPL – Cost per lead. Basically the same as CPA, but for leads.
• CPC – Cost per click. Very unusual these days #sad. Unless you count Adsense.
• CPM – Cost per thousand views of a banner on your site, not that common.
• % – You get a percentage of the sale, used by 99% of eCommerce sites.
• Revshare – Popular with the gambling crowd, you get a cut of the casino’s winnings, for life. 20-50% is not unusual. Can be extremely profitable if you get the right users.

How much money can you make?

As with just about any form of self-employment, your income from affiliate marketing will depend on how much time, effort, and (possibly) money you invest. There are people making six- and probably seven-figure incomes from affiliate marketing.

It’s possible to not only do quite well financially but also stay in this field for a very long time (by internet standards, anyway). When you’re just starting out really think hard about what kind of offers you’re going to promote. Typically (but not always) the higher the payouts the more competition.

Gambling, payday loans and web hosting are examples of areas you might want to stay clear of. Unless you already have a popular site.

Types of Affiliate Marketing Programs

There are a wide-range of affiliate marketing programs available, with varying payout plans and varying products. Since affiliate marketing is a less expensive form of marketing for the host affiliate, there are as many affiliate programs as online businesses.

A successful affiliate marketer can make a stable of affiliate marketing sites, each aimed at a different customer base.

Affiliate Sign-Ups

Keep in mind that not all affiliate marketing is product-based. In fact, some of the better affiliate marketing opportunities are sign-up based. What this means is that a web surfer will click on a link that leads to a website’s sign-up form.

One example is a casino site that requires a deposit for each sign up. Another example is a lead-based affiliate marketing plan, in which a person enters his or her contact information on the site.

Any website that requires a sign-up is a potential affiliate marketing opportunity. As these types of affiliate programs are cheaper to run than shipping products out of a warehouse, they also have a larger payout.

Successful affiliate marketers employ both product-based and service-based affiliate marketing programs.