What Is Affiliate Marketing And How Does It Work?

What Is Affiliate Marketing And How Does It Work?

What was your initial thought when you encountered the word affiliate marketing? Have you ever wondered whether people in your area are aware of it?

Internet Marketing

Maybe some of the initial questions you had were the same as mine. What is affiliate marketing? How does affiliate marketing work? How much can you earn and so on and so forth.

I hope to help you answer those questions through this short post.

Affiliate Marketing Explained

Affiliate marketing is an advertising model wherein a company or business pays compensation to a publisher in order to generate traffic or customer through the publisher’s marketing strategies. This process is done through affiliate programs.

In order to get a picture of what affiliate marketing is all about, let’s go over the core players involved in this model:

(1) Merchant – this is the company or business who owns the product. An example would be Amazon, Walmart, Etsy and any other business offering a product. It could also be any brand you can think of.

(2) Publisher – this is also known as affiliate which could be a website owner or a blogger

(3) Customer

However, not all merchants are offering an in-house affiliate program like the above-mentioned model. Some preferred to go through a third party partner called affiliate network which serves as the middle man between the merchant and the publisher.

Affiliate networks have list of affiliate programs where publishers can choose from and they are also the one taking care of publisher’s compensation.

Is Affiliate Marketing Popular In Your Area? – Let’s find out

You might be wondering how many people in your area are even aware of affiliate marketing? Maybe it is something people never heard of before, maybe not. So let’s find out.

The best way to answer this question is to go to our go-to-place whenever we have questions. Yes, it is Google! Google has a pretty cool product called Google Trends – and don’t worry, it is one of Google’s free products.

If you go to Google Trends, and type affiliate marketing on the search term, you will see a screen that looks like this:

You can change the country you are in or the country you are interested in order to see whether people are searching for the word affiliate marketing.

The higher the number, the more it is popular in your chosen area – the peak being 100.

In my own search above, where I chose U.S. as the country, it shows that affiliate marketing is trending most in the state of Nevada, followed by Utah, New York, Florida then Arizona.

How Does Affiliate Marketing Work?

Affiliate Marketer

Now that you find out how popular or not popular affiliate program is in your area, you might be wondering how does this industry work?

Basically, there are 2 ways to approach the process of affiliate marketing.

(1) You can look at it at a point of view of the merchant wherein you offer an affiliate program to publishers or affiliates

or

(2) You can look at it at a point of view of a publisher wherein you sign up as a business’s affiliate of the merchant or the brand.

As a publisher, I will touch more on the publisher or affiliate side.

The first step is to apply as a business affiliate of a merchant (e.g. Amazon) or a brand (e.g. Wealthy Affiliate).

As soon as your application is approved, they will give you a unique link which you can use within your content to promote their products.

Then, whoever visits your site and buy any products through your affiliate link, you will get credit for that sale.

Online Shopping

So, you will simply refer traffic as an affiliate to another website where people can buy what they are looking for and you will be able to earn money. They don’t even need to buy the product you are promoting. If they see other products in that website and they bought it, the same will be credited to you as a sale.

How Much Can You Earn?

Now, the next question would be how much can you earn and for how long you can earn them?

Monetize

The compensation varies depending on the business that offers the affiliate program. Some companies are offering a percentage of their sales and some based on the volume.

I keep on making Amazon as an example because they have the largest affiliate program so far. Although their affiliate program pays only between 1 to 10%, they have half a billion products on their website and is still growing daily.

Some affiliate programs pay a certain amount to their affiliates. An affiliate program I know pays $100 per sale. A fellow entrepreneur I know is getting $1000 per sale. So, compensation varies from one business to the other.

You can earn compensation for as long as your website is getting visitors who buy products through your affiliate link.

Where To Find Affiliate Program?

There are thousands of affiliate program available for any niche. The key is to find an affiliate program with good reputation.

Tips In Finding Affiliate Program

– Check the background of the company. How long has it been in the industry? Is it paying on time?

– Affiliate networks have centralized list of affiliate programs where you can join through one network. You can promote different programs and receive one payment. ShareAsale, Clickback, Rakuten Linkshare, Commission Junction are just a few examples of affiliate networks.

– Some affiliate programs like the one from Amazon will not approve your application especially if your website is new. Don’t give up. You can always reapply in the future. Try other affiliate programs – there are hundreds and thousands of them out there.

Conclusion

Affiliate marketing is one of the growing industry today. It is one way of earning a passive income and a lot of internet marketers are now positioning themselves to tap this lucrative industry.

The good thing about being an affiliate marketer is that you can earn as much as you can for as long as you can. There is no timeframe and limit in your earnings. You will reap the rewards of your own effort.

If ever you have any questions, please leave a comment below and I will be more than happy to help you out.

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