What Is Affiliate Marketing?

Affiliate marketing is a type of performance-based marketing in which a business pays a publisher (affiliate) for each visitor or customer brought by the affiliate's own marketing efforts (mostly via an affiliate website, blog or social network). There are four core players in affiliate marketing:

1)     The merchant (also known as 'retailer' or 'brand'),

2)     The network (that contains offers for the affiliate to choose from and also takes care of the payments),

3)     The publisher (also known as 'the affiliate'), and,

4)     The customer.

The market has grown in complexity, resulting in the emergence of a secondary tier of players, including affiliate management agencies, super-affiliates and specialized third party vendors.

An online affiliate program is a contractual agreement you make with a merchant to acquire targeted traffic, generate a sales lead, or sell a product. This product may be physical (such as books), virtual (such as electronic books or downloadable software), or information (such as expert advice).

How Does Affiliate Marketing Work?

The idea behind affiliate marketing is that you promote other people’s products, often through an affiliate network, earning a commission if people actually end up buying, thanks to your marketing.

Affiliate marketing is the process of earning a commission by promoting other people’s (or company’s) products. You find a product you like, promote it to others and earn a piece of the profit for each sale that you make.

When you join an Affiliate program and choose the products that you want to sell, sellers provide you with a unique affiliate code that you can use to refer traffic to the target site.

Most affiliate programs will offer ready made text links, banners and other forms of creative copies whereby you only have to copy the code and place it on your website to start referring traffic. 

When interested visitors click on these links from your site they get redirected to the product site and if they purchase a product or subscribe to a service you as the referrer make a commission.

The sellers can track your performance through your affiliate ID and the affiliate software they use. You also have complete, real time access to all sales and commissions stats.

You don’t need to sell products all the time to make a commission. Different affiliate programs can use different payment terms such as:

• Pay per Sale: You get paid when a purchase is completed on the merchant's website through your affiliate link.

• Pay per Click: You get paid based on the number of visitors you re-direct to the merchant’s website from your affiliate site, whether or not a sale is made.

• Pay per Lead: You get paid when you generate a lead to a product offer on merchant's website.
• Pay per Action: You get paid when a web visitor performs some action like filling an online form or provides a ZIP code, or phone number on the merchant's website.