How Exactly Does Affiliate Marketing Work? Without a doubt, the Internet has changed the way we do business, both personally and as a culture. Thousands of people are daily looking for opportunities, both as a way to save money and also to make money. While there is a multitude of ways to make money on the Internet, one of the most popular and easiest ways to begin is with affiliate marketing.
While this article is not meant to be a detailed treatise on affiliate marketing, more an overview, affiliate marketing stated basically is where one person places an advertisement or link for a second company or person, and then they are paid a commission for every sale that is generated from their efforts.
This is a solid and sustaining relationship, where the affiliate delivers potential customers (also known as traffic) to the seller and the seller in turn pays a commission, most normally for a sale, but sometimes simply for a lead. While the term affiliate marketing may be new, the actual business model has been around for generations.
Amazon.com launched its own affiliate program in the middle 1990s, allowing a visitor who clicks a special link on a website, then purchased a book or product, then the affiliate received a commission. Amazon certainly wasn’t the first with this idea, but they were among the best to implement it, providing affiliate tools and easy implementation of their products, receiving a patent for their methods in 2000.
With social media (termed Web 2.0) and the advent of nearly instant communication, blogging, commenting, and ratings, affiliate marketing has grown into a massive industry, with top affiliates earning hundreds of thousands, if not millions of dollars.
While the rates may vary, most affiliates will be compensated in the area of 25 to 70% for each sale based on a customer following a link they’ve placed somewhere on the web. This compensation is based on either the number of clicks, leads or in most cases an actual sale between the merchant and the customer.
When you look at these percentages, you will immediately realize that affiliate marketing can be a very profitable business, particularly if done right. When an affiliate marketer can drive significant traffic to the merchant’s website, they in turn can potentially make a six-figure income each and every month (certain variables apply). For this reason alone, thousands of people turn to the Internet daily, believing they can strike gold by becoming an affiliate marketer.
Here are a few of the benefits of becoming an affiliate marketer:
There are no actual product development costs, instead, the merchant will either develop the product and/or provide the inventory.
The affiliate need not concern themselves with shipping costs; again this is the responsibility of the merchant if dealing with a tangible product.
Customer support is provided by the merchant, not the affiliate marketer.
There is no limit to the number of products you can market, nor any long-term contracts (in most cases) that you need to be concerned with.
Depending on your interests, or the focus of your website or niche, there is a multitude of products to choose from.
Set up costs are low, normally only requiring to establish a web presence and hosting.
There are no geographical limitations (in certain instances this may not be the case), allowing an affiliate to market from anywhere they have an Internet connection.
Affiliate commissions, especially with digital products, can often be as high as 70%.
Money can be made 24/7/365 – as long as your marketing is in place and your website running, the potential of making money happens continuously
Becoming an affiliate marketer can be exciting and profitable. If you’re considering becoming an affiliate marketer, do as much research as you can, choose a product or niche, then take the next step by putting your website online.