Last Updated on February 13, 2021
When it comes to making money online there are hundreds of ways to earn your first dollar online.
Affiliate Marketing is one them and is considered to be one of the most popular and effective ways to begin your online success journey.
Affiliate Marketing is based on a simple “Refer to Earn” concept. More the sales occur through your referral (link), more the commissions you rake in. This is the crux of affiliate marketing.
Now let’s dive deeper and get on the definition of affiliate marketing in simple terms.
Affiliate Marketing is when you promote/sell other people’s/company’s product/service and get a commission for each sale that happens through your referral (link).
Let’s say you like a product and you know someone who might be interested in buying the same product. And you refer it to that someone using your unique referral link.
Now if that someone buys that product through your referral link, you get a piece of profit or a commission from that sale.
This is how Affiliate Marketing works.
Well yes, Affiliate Marketing works on a simple concept that even a 10-year-old can understand. But the whole key lies in its execution.
Simple to understand is not always simple to execute.
You just cannot copy-paste your referral link here and there and expect a sale to happen.
That sale is never gonna come nor the money you are expecting to make.
On the flip side, you’ll end up being banned by affiliate networks, product owners, and even social media websites for spamming people.
Yes, the Affiliate Marketing industry is really lucrative and there is no limit to the earning potential as well but it needs to be done right.
You can earn anywhere from $1 way up to million dollars.
It all depends on your marketing strategies and how well you understand the industry and your customers.
Moreover, affiliate marketing currently valued more than 5 billion dollar industry with an increasing worth every year.
Amazon’s affiliate marketing program i.e. Amazon Associates is one of the best and largest affiliate programs available in the market.
You can promote anything from millions of products listed on the Amazon website. Amazon’s affiliate program alone is worth millions of dollars.
Source: GoPBN
Affiliate Marketing has been around for quite a long now and is one of the oldest forms of Marketing known to human.
Affiliate Industry has grown a great deal since the late 90’s. It’s no more restrained to the offline world.
Companies in the United States alone are spending more than 5 billion dollars in Affiliate Marketing.
According to Rakuten Marketing, the Affiliate industry will grow to a whopping $6.8 billion in a couple of years. That’s huge.
And interestingly, a major portion of sales will be driven by mobile devices.
That comes as no surprise because the majority of internet consumers are mobile users today.
Not only is Affiliate Marketing beneficial for the publishers (affiliate marketers) in making some decent cash but is also an economical medium of advertising for the vendors/product creators.
Vendors get a run for their money as they no longer have to pay a heavy amount on advertising that doesn’t even guarantee the return on investment.
The vendor only pays when the publisher (affiliate) brings in the sale or lead or satisfies any other pre-defined metric, resulting in 100% ROI.
Everything is tracked through the unique affiliate tracking code that is attached to the product URL. Therefore eliminating the chances of any fraud or malpractice by the merchant or the publisher.
So Affiliate Marketing is a win-win for the merchant as well as the publisher (affiliate).
Affiliate Marketing has made businesses millions and ordinary people millionaires – BO Bennett
As the traditional means of marketing through advertisements are getting obsolete and costlier day-by-day, Affiliate Marketing is becoming a hot favorite among marketers.
It’s one of the most affordable marketing streams available that can be measured and tracked on a daily or hourly basis.
Almost every product you see day in day out has an affiliate program attached to it.
More and more companies are jumping in this arena of Affiliate Marketing and you’ll see various lucrative affiliate programs coming out daily.
Big companies manage their affiliate marketing programs on their own while other SME’s are outsourcing it to Affiliate Networks.
Most of these Affiliate Marketing Programs are legit but there are some shady ones too. Don’t fall for such programs else you’ll end up losing your time, money and efforts.
Talking about the affiliate programs types, there are mainly three major types i.e. Pay-Per-Sale, Pay-Per-Click, and Pay-Per-Lead.
Pay-Per-Sale being the most popular and widely used affiliate program pays the affiliate marketer for every sale that happens through the unique affiliate link of the publisher.
Pay-Per-Click model pays commission to the publisher for every valid click that happens on the affiliate link and leads the prospect to the merchant’s website or a product page. A sale is not mandatory for making the commission.
Pay-Per-Lead programs give commission to the affiliate marketer when a prospect lands on the merchant’s website through publisher’s affiliate URL and fills out an information form. Thus for every form filled or every lead captured, a commission is paid.
Always choose a program that is being offered by a reputable brand. Look for things like the usability of the product, its relevance, popularity and most important the percent of commission offered.
The commissions will range from $1 way up to hundreds of dollars or from 1% to 60% or even more.
Try and find top paying affiliate programs, because promoting any program will take the same amount of your efforts.
It is recommended to choose an affiliate program that gives recurring income instead of a one time buy offers.
Monthly or yearly subscriptions or memberships of a service can give you a lifelong recurring income. At least till the time, the customer is renewing their subscription.
So by far, you may have figured out how Affiliate Marketing can become a great source of your Passive Income and if done right can even replace your current primary income.
Affiliate Marketing Ecosystem – 4 Pillars of Affiliate Marketing
Affiliate Marketing Ecosystem is a group of Merchants, Affiliate Networks, Affiliate Marketers, and Customers that interact with each other in order to make a sale happen.
These four major components (merchant, affiliate network, affiliate maketer, & customer) are also known as the 4 pillars of affiliate marketing.
Let’s discuss each of these in detail.
Merchant
You can call it a producer, creator, seller, or vendor. Basically, the merchant is an individual or a company that creates and owns the product. The merchant has every copyright of the product/service and it’s completely up to them to accept or reject affiliate marketers for promoting their product.
To become a merchant you have to have a product and the right to sell it.
Affiliate Network
Affiliate Networks are not a mandatory part of an affiliate ecosystem but are important enough to get a mention.
Affiliate Networks act as the intermediary between the merchant and the affiliate marketer.
Networks come into play mainly due to two reasons.
One, if a big brand or a company does not want to invest time and resources in its affiliate programs hence they outsource this job to the well-established Affiliate Networks.
These networks manage the payment and product delivery of the affiliate products.
Some good and trusted affiliate networks are ClickBank, CJ Affiliate, JVzoo and many more.
Secondly, if small companies or small vendors cannot afford to start and manage their own affiliate portals and those who are tight on advertising budgets, take the route to these Networks to list their products and services.
Affiliate Marketer
This is where all the marketing happens. An affiliate marketer promotes the merchant product to the potential buyers through different marketing platforms and attracts the leads to buy a particular product.
Now this marketing of the product to the right consumers can be done through e-mail, content or Pay-per-click campaigns. More the experienced affiliate, better are the chances of closing the deal.
Affiliate can be an individual or an entire firm. And affiliate commission can be a couple of hundred dollars or millions of dollars depending on the marketing strategies.
Customer
Everything in the affiliate ecosystem is designed for the customer. It’s the customer that completes the sales cycle and bring revenue for the merchant and profit for the affiliate marketer.
The customer is the backbone of the affiliate ecosystem and no affiliate program can be a success without catering to the needs of the customers.
A customer might or might not come to know that they are purchasing a promoted product or an affiliate product. It’s up to the affiliate marketer to reveal whether they will earn a commission from it or not.
The customer, however, will ever end up paying more for an affiliate product as the cost is fixed accordingly beforehand.
Conclusion
There you have it. That’s affiliate marketing and it’s ecosystem for you.
That’s everything you need to know to get started with affiliate marketing.
I hope this article helped you in understanding the basics of Affiliate Marketing and what makes up the Affiliate Marketing Ecosystem.
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