Most of us have probably bumped into the term “affiliate marketing service” and never understood what it meant. Perhaps, we’ve heard how profitable it is, too, that we can’t help but ask how it works.
We know you need sharp answers. So to clear your confusions about this topic, here are quick and easy responses to some of your most frequently asked questions about affiliate marketing services.
What Is Affiliate Marketing?
Affiliate marketing is a type of marketing that allows online merchants or businesses to promote their products or services through affiliate web site owners. Merchants pay affiliates for every visitor or paying customer they bring or refer to their web site.
Who Are the People Behind the Process?
- Merchants – (a.k.a. Retailer or Brand) they are the people that hire affiliates to advertise their products or services.
- Networks – (a.k.a. Middleman) they provide both the infrastructure and logistics for affiliate marketing to take place. They run and maintain the tracking software that credits the affiliates, recruit both merchant and affiliates, and handle all the financial details.
- Affiliates – (a.k.a. Publisher) they find leads and paying customers and refer them to the merchant’s web site.
- Customers – they are the ones who buy the products or services endorsed by the affiliates. They subsidize the whole affiliate marketing system.
Why Become an Affiliate Marketer?
- Startup costs are low.
- You don’t need to employ staff.
- You don’t need to set up your own business or products.
- You don’t need any expert knowledge.
- You can earn passive income.
- You can work on your preferred time and place.
Where Can You Advertise the Merchant’s Products or Web Site?
- Your own web site
- Your social media accounts
- Video blogs
When Will You Earn Money Through Affiliate Marketing?
- Pay Per Click (PPC) – merchants pay you for all the valid clicks that you generate regardless of leads or sales.
Pay Per Lead (PPL) – merchants pay you commission for every lead that you generate through short surveys, free trials, or online form submissions.
Pay Per Sale (PPS) – merchants pay you a percentage for all the qualified sales you referred to their business.
How Does Affiliate Marketing Work?
- A web site owner signs up for a merchant’s affiliate program to become an affiliate.
2. He/she starts promoting the merchant’s products or services and uses the given affiliate link to his/her own web site, blog, or other marketing tools.
3. Customer visits the affiliate’s web site or blog and clicks on the affiliate link.
4. A “cookie” is dropped on the customer’s computer and client is redirected to the merchant’s web site.
5. Customer purchases the product/service and leaves a “cookie” to the merchant’s web site.
6. Merchant checks the cookie and tracks the affiliate who referred the customer to their web site.
7. Merchant gives credit to the affiliate from the product or service sold.
8. Merchant updates the reports to show all the clicks and sales generated from the affiliate link.
9. Merchant awards the commission for all the leads and sales referred by the affiliate.
Also feel free to see our affiliate marketing infograph here.