“Affiliate Marketing” What Is It?
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 about by the affiliate’s own marketing efforts. The industry has four core players: the merchant (also known as ‘retailer’ or ‘brand’), the network (that contains offers for the affiliate to choose from and also takes care of the payments), the publisher (also known as ‘the affiliate’), and the customer.
It’s kind of like paying a person a finder’s fee for the introduction of new clients/customers to a web based business, product or service. Compensation may be made to the affiliate based on a certain value for each visit (Pay-per-click), registrant (Pay-per-lead), or a commission for each customer or sale (Pay-per-Sale). In essence, the affiliate becomes the advertiser for the merchant.
Lucrative for Both the Merchant and the Affiliate
Say the merchant has a new ebook for sale at $50. The merchant has a mailing list of 200 people and from advertising his/her book to those 200 people, 2% buy the book. That’s 2 books at $50, the merchant makes $100.
But if the merchant announces that he/she is willing to pay an affiliate 50% for every book sold through his/her marketing efforts. What just happened? There’s leverage by incentivizing others to promote your product for you.
An example would be a merchant has signed up 100 affiliates and each affiliate promotes or advertises the book to their email, on their website or other contact through social media.
200 people buy the book at $50/book. The total sale is $10,000. The merchant makes $5,000 and the other $5,000 is paid to the affiliates who promoted the sale.
Using the Affiliate marketing model the merchant receives more exposure and sales. The affiliate is rewarded for each person that he/she directs to the site and buys the ebook.”