Explanation of Affiliate Marketing
By: Steve Ellias – May 26, 2013
When you promote, advertise, and try to sell businesses products and/or services you make a commission from these sales. The sale take place in most cases on the Advertisers website and people find the Advertiser of these products and services through you. When they come from your site, there is an Affiliate ID number which is saved on their website as a cookie and this tells them that the customer came from your site. After verification is done to confirm purchase and your affiliate ID from that Advertiser (supplier), they grant you a commission and pay you via Pay Pal or some other form of payment such as check or bank deposit. Normally the commission is paid one month after the sale has taken place. Sometimes this is 2 weeks, it could also be more. It all depends on the merchant and what products or services you are selling.
Affiliate Marketing (programs) Explained in More Detail.
Advertiser – This is the Business end, the people who actually have the physical products or the services that you wish to promote on your internet site. The advertise is also referred to as the merchant or the supplier.
Publisher – This is the person like you and I who wish to promote a certain product or service on our internet site. The publisher is also referred to as the Affiliate. When we sign up for an account with the Advertiser, we aquire an unique ID that is attached to us and this tell the Advertiser who we are when a sale comes through their site with our ID.
Possibly the simplest method to discuss affiliate marketing is that it is a method of making money online whereby you as a publisher are rewarded for helping a company by promoting their product, service or site.
There are a lot of forms of these types of promotions however in many cases they involve you as a publisher making a commission when somebody follows a link on your website or blog site to another site where they then purchase something.
Other variations on this are where you earn an amount for referring a site visitor who takes some kind of activity– for instance when they sign up for something and give an email address, where they complete a study, where they leave a name and address etc
Commissions are frequently a portion of a sale — however, they can also be a fixed with amount per conversion.
Conversions are typically tracked when the publisher (you) uses a link to a code just being made use of by you embedded into it that enables the marketer to track where conversions originate from (generally by cookies). Other times a marketer might give a publisher a ‘discount coupon code’ for their readers to make use of that and it helps to track conversions.
Advertisers typically prefer affiliate advertising as a means to promote their products because they understand they’ll only should pay for the advertising when there’s a conversion. Advertisers know when they began an affiliate program that while they would earn less for each sale that having a network of affiliates advertising it would probably increase overall sales levels for their business. Example, if an advertiser makes 5 sales at $50.00 they would make $250.00. If an advertise makes 20 sales at $40.00, they make $800.00. The cost make per product decreases, while the amount of sales increase. Normally this would make advertisers more willing to have an affiliate program to help promote, advertise, and sell their products using publishers.
Publishers frequently prefer affiliate advertising due to the fact that if they find an item that is relevant to their specific niche that earnings can go well in excess of any expense per click or expense per impression ad campaign. Most affiliate programs are free to sign up and take minutes to create banners and text ads. If a publisher has the room on their site to add a few banners or some links, they can make extra money without handling any fee’s, taxes, merchant accounts and collecting funds on their website.
Advantages and Disadvantages of Affiliate Marketing
The Advantages Of Affiliate Marketing
1. No investment is required. You CAN spend a fortune trying to get started with your own business online, however you can start off with absolutely nothing and turned it into something. There are hundreds of cost-free methods you can make use to create great earnings without costing you a single penny. This is by far the greatest advantage because you have no over-hang like merchant cost, shipping, and much more cost involved for selling products and services online.
2. No items to handle. All the handling is done by the merchant (advertiser) and you don’t need to lift a finger to ship or equip the products. All your work is completed in the marketing & promoting of the service or product.
3. Short time; long outcomes. What I mean is that you can spend 2 hours writing a short article or making a post to your blog site which exact same write-up can generate cash for the next year or even more. That’s exactly what I call residual earnings. Income you can earn over and over again and even while you are sleeping!
4. Your time is YOUR time. Yes, I can be redundant sometimes, but it holds true. It’s not really YOUR time when you invest most of it making someone ELSE money. Your time is yours to do with as you will. You can take your spare time and create a blog or site and promote publishers (merchant) products and services and earn extra income. There are a lot of people that has started off part-time and turned it into a full-time business.
5. No more documentation. Bid farewell to book keeping. Any of the regular small business related headaches are far from your brain. The Merchant truly manages everything and completes the deal and customer support so all you have to actually do is keep a record of the cash that keeps coming in.
6. Allows you to do what you enjoy. You truly just have to promote items that you really like, then you can simply seem like you are helping individuals instead of attempting to swindle them. When it’s a product or activity you truly like and believe in, it’s simple to blog about it or have it on your site.
7. Can be done on the side. Even if you are not prepared to stop your job to begin affiliate marketing, it’s something you can do by yourself and at your own speed and hence can work on it in your very own downtime, or even on vacation if you want.
8. Can Work from anywhere. If you can get a net connection you can work, and with wi-fi all over now, you can even get some work done in the restroom for crying out loud. I love to work on the go, so this is a great PRO to affiliate advertising. It does not matter where you live or play, online woork can be done from anywhere.
9. Big commissions. Depending what Merchant you are using, you can make from $50 to $100 PER sale. With commissions of 50 % and greater it will not take many sales per day to keep bread on your table and the earnings to get where it has to be.
10. Won’t cost you a cent in gas. Well we can all stand and shout on this one. Working from home is excellent for a great deal of evident reasons but not having to spend all that money for your commute is a substantial benefit. The best method to go green is to go affiliate advertising! You save on the environment as well.
Disadvantages of Affiliate Marketing Programs
1. It in fact takes work. I’m not Joking either. If you think you can just kick back and write a couple of posts a week and make your millions, you are well mistaken. It requires time and perseverance. Especially in the beginning. It takes a great deals of advertising, marketing, and blogging to get that services and product observed by others. You just cant develop a website and include a couple of affiliate items and just anticipate to generate income. People have to discover your site and without putting work towards it, this will not happen.
2. Affiliate business charge a fee. It’s a puny little fee, and you just pay it when you make something but I thought it reasonable to discuss it. There are even some affiliate programs out there that charge a monthly or yearly fee. This does not matter if you are making sales or not. Its a fee that you have to pay regardless just to promote their products or services.
3. One of my biggest concerns with affiliate marketing is the fact that you work so hard to get that one sale. What if you get a sale, what stops your customer from just going to the Merchants site next time to make another sale? The return of customers is very low with affiliate marketing. Unless you can offer some kind of promotion, coupon, or even be involved in a reward point system, returning customers are a very low % with affiliate marketing. Think about it… If you found a site with a product and service you liked, clicked the buy now or banner, went to the suppliers (Merchants) site and completed the sale. Why would you return to that affiliates website and not the Merchants for a future sale?
4. There are Scam artists out there. Some products you might WANT to advertise might in fact be scrap. Always make sure the website looks nice and that it is a respectable business, because YOUR name is on the line when you are recommending something, even if it IS just to make a few bucks. Look at their page rank, Alexa rating, and check history of their business and website using Google. This is the best source for scam reports!
5. Some companies might not pay you. Now I have NEVER had this occur however I have actually heard some reports. This is another instance where you would always do research on the affiliate Merchant before you work your butt off promoting their products and services on your site. make sure they pay and pay well!
6. Slow Start Up And Results. It will take time to grow your online business. You will learn a lot of exactly what to do and exactly what NOT to do along the way. It’s OK to make mistakes, just do not make the same ones. If you keep at it, you will see rewards like you have actually never ever seen before. Its take hard work, dedicated, and perseverance.
Summary Of Affiliate Marketing
Affiliate advertising has actually led to the development of several online business and Net online marketers. The internet serves as the most effective platform for small business advertising as it can target a large customer base. Merchants are not required to look for their customers. Rather, clients come looking for them!
An affiliate marketer does not need to make big financial investments. In addition, he/she does not have to worry about customer support and record keeping. All an affiliate online marketer needs to do is work to advertising and promoting the product or service provided by the Merchant.
The potential of producing income is another crucial advantage of affiliate marketing. Both company merchants and internet sites enjoy affiliate advertising, without any additional expenditure of time or money. In fact, executing affiliate advertising methods does not need any technical know-how. Adding more sites to an affiliate marketing program to cover a wider range of products and services can increase one’s earning capacity. As long as the customers continue with online company transactions, there is no stopping for affiliate advertising. It is endless on what you can do and what you can promote. There are literally millions of products and services online you can use to make extra money promoting as an affiliate.
Affiliate marketing can be a fantastic and successful adventure that one undertakes. It clearly has its advantages over traditional marketing and advertising schemes, but it needs to be understood that there are lots of restrictions too. It is a joint partnership between merchants and affiliates which runs on a commission basis. When someone buys something on a website, the affiliate is given a commission of the revenue based upon per click, per lead or per sale.
The evident benefits of affiliate advertising are that business have a wider environment generating more services and products representing even more sales. No additional time is invested in advertising with merchants and they can acquire more clients by doing this too. If done properly, knowing customer needs and desires can create a knowing of market trends which can assist future sales in the sense that the website understands ways to market products more effectively next time.
The evident disadvantage is that you can work really hard to get that one sale and in return not have the customer come back for an additional sale. Another disadvantage is the work involved and competition of selling affiliate products and services on the internet. If its that easy to set up, imagine how many others are doing it.
Popular Affiliate Programs And Merchants
Amazon Associate Program
Avangate Affiliate Program
Click Bank Affiliate Program
Commission Junction Affiliate Program
Linkshare Affiliate Program