Affiliate Marketing – An Introduction (Part 1)

What is Affiliate Marketing?

Affiliate Marketing is a big word, loaded with meaning but it simply means marketing the products of a firm that you are associated with.

Affiliate Marketing is a performance-based marketing channel where the business rewards the affiliate for every visitor or a customer brought about by the affiliate’s own marketing efforts. You are paid a referral commission set by the merchant for generating sales, leads or clicks that lead to the merchant’s site.

Why is it critical for an Affiliate?

1. Low Investment Budget

In affiliate marketing, you don’t have to invest a lot financially to start pulling in profits. This eliminates the concern of many who are hesitant to venture into any business because of the lack of funds or the unwillingness to part with money due to uncertainties.

2. No Need For Inventories

There is no need to keep and manage an inventory as this would be taken care of by the merchant.

3. Passive Income Through Leverage Strategy

Many smart & tech savvy affiliate marketers earn their income through various leverage strategies which allow them to make money while they’re relaxing, meddling with hobbies, or having vacation in faraway places such as the beautiful beaches in Hawaii or Malaysia.

Affiliates could simply drive traffic to the merchants’ websites without having to sweat by linking to the merchants website intelligently. Search Engine Marketing, Search Engine Optimization, Social Media Marketing, Email Marketing etc are standard ways of driving traffic to merchant websites.

Affiliate eco-system

1. Publisher/Affiliate

You as an affiliate are the middle-man between your merchant and your customer. You are the one who will be marketing the merchant’s products in return for compensation based on performance.

To become an Affiliate, you must typically have your own website. Some innovative programs do offer sub-domains as storefronts to their Affiliates. A prime example of this would be the BigRock Domain & Hosting Affiliate program.

2. Affiliate Network – marketplace

An affiliate network acts as an intermediary between publishers (affiliates) and merchants. It allows website publishers to more easily find and participate in affiliate programs which are suitable for their website and allows websites offering affiliate programs to reach a larger audience by promoting their affiliate programs.

Affiliate Networks enable merchants to offer publishers a share of revenue that is generated by the merchant from visitors to the publisher’s site, or a fee for each visitor on the publisher’s site that completes a specific action (making a purchase, registering for a newsletter, etc.).

3. Merchant – runs the program

The affiliate merchant is responsible for implementing a sales tracking system, providing a selection of linking methods, attracting affiliates, monitoring results and paying affiliates.

PS: Look out for the second part of this blog post coming up soon!

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