What is affiliate marketing and how does it work

Hmm, affiliate marketing. You have heard something about affiliate marketing, but you are really not quite sure what it is or how it works. Have to do something with passive income, right? Make money while you sleep. That’s the dream, isn’t it? And you are right. But it is not as simple as it looks.

Today Affiliate marketing is a very large industry and has become a key source of online income for many people. Each day more and more online companies includes in affiliate marketing, and that means more opportunities for people like you and me to make money online.

Most people who want to make money on the Internet began her online adventure with affiliate marketing. They promote other people’s products and earn a commission if people actually buy something.

Let see what affiliate marketing actually is, what sides there are to it and how to get started.

So, what is affiliate marketing anyway?

According to Wikipedia Affiliate marketing is „a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate’s own marketing efforts“.

In other words one could say that here actually manufacturer and retailer (affiliate) work together towards the same goal, to sale a certain product and then share the profits. The more participants are involved in the process; earnings are divided into more parts.

It’s all about revenue sharing. If want to sell more of your products you can offer promoters a financial incentive. If you do not have product but want to make money anyway, then you can promote a someone else product that you feel has value and earn an income from selling it.

So, in Affiliate marketing you earn a commission by promoting other people’s products. In simple words you promote some products developed by others and earn a piece of the profit for each sale that you make.
There are three different parties that are involved in Affiliate marketing: the merchant, the publisher and the customer. The forth part may be affiliate network.

Now we should take a gander at all of the parts of a successful affiliate marketing system.


The Merchant

The merchant is often called the the seller, the vendor, the creator, the retailer or simply the brand. His role is to create the product. It can be a big company, or it can be a single individual (it can be you, too).
From one-man firm to multinational company, anyone could be the merchant behind an affiliate marketing system. They don’t need to be effectively included, but what is important, they should have a product to sell.

The Publisher

The publisher is also known as the affiliate. Affiliates can also be a single individuals or entire company.
An affiliate promotes one or multiple products and his job is to attract potential customers and convince him of the value of the merchant’s product. Once convinced potential buyer will actually buy it.
To achieve this goal, publisher can running a website or blog with review of the merchant’s products, for example. But it could also be an entire website dedicated to finding cool products around a certain topic, and then promoting those.

The Consumer

The customer (also known as consumer) provides fuel to affiliate marketing machine. Without sales, there are no money for merchant and no commissions to the publisher. That is why consumer is so important!
The affiliate will do everything in his power to advertise his products on social networks, digital billboards or a blog, trying to reach consumer.

The Network

Affiliate Network serves as an intermediary between merchant (seller) and affiliate (publisher). Many businesses works direct with affiliates, but there are a lot of affiliate marketers that will use an affiliate marketing network to search for good products. These affiliate networks will take a small cut of any fees generated, but they serve very well in following services that sellers and affiliate marketers need. Here is what they do:

– Aggregating offers from various sellers
– Create a directory or search engine for affiliate marketers to discover offers
– Handle the administrative obligations, payment and product delivery

For example, the most popular large network that everyone knows is Amazon. You can use their Amazon Associates program to promote any item that is sold on their platform.


How can I start with affiliate marketing?

Affiliate marketing is not all that simple and we’ll write about in more detail in another article, but simplified it all comes down to four basic steps.

1. Find a good product you want to promote.
2. Sign up for their affiliate program.
3. You will get a special link (and some banners) that allows the merchant to track the people who clicked your link.
4. If your visitors buy the product, you get a commission.

How Much Money Can You Make With Affiliate Marketing?

It is hard to say and there iss no limit as such. You definitively can make passive income with affiliate marketing. But your income depends on you, on your network and your email list. And of course, it depends on your selection of products to promote.

There are a lot of people who have become rich with affiliate marketing.

Why you wouldn’t be one of them?

About Nino Plevnik

I am in the Internet marketing area for some time now. I mostly deal with Affiliate Marketing and Domain Flipping. It took me a while until I figured it out. Now I want to transfer my knowledge to beginners, so they can start earn money online as quickly (and painlessly) as possible.

View all posts by Nino Plevnik →

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