Affiliate Marketing is a performance-based marketing system that basically involves four distinct elements: the merchant, the affiliate, the consumer and the network.
The merchant, also known as a seller or retailer, is an individual or a business that sells a product or provides a service. The merchant and affiliate marketer collaborates to promote the products and services.
The affiliate is (or can be) an individual who promotes products and services and gets a commission on each sale. The affiliate works with the merchant to promote the merchant’s products and services. The affiliate creates marketing campaigns that use ads, links, and banners to find buyers for the merchant’s products and services.
The consumer can be all of us. In affiliate marketing, a consumer is a person who uses goods or services to satisfy his or her needs.
The network, also called program or platform, acts as an intermediary between the merchant and the affiliate. The network is completely digital and requires varying levels of involvement from both the merchant and the affiliate.
Affiliate marketing has now become one of the most popular ways of making money online. However, many people still have questions about how an affiliate program works and how they could get started in affiliate marketing?
How Affiliate Marketing Works?
If you want to become a successful affiliate marketer, you must understand the dynamics of affiliate marketing,
It is easy to understand that every business wishes to scale up its revenues by attracting more customers. Since affiliate marketing is all about bringing in more customers, businesses see it as an important revenue stream
Let’s try to understand the mechanism of affiliate marketing.
Consider an e-commerce store, named ABC Inc., that sells clothing in the US. It has a website and the infrastructure for selling its products through various channels (online and traditional stores). However, ABC thinks that the current customer base is not sufficient for its business targets.
Now, to increase access to new markets and to the new customer base, ABC Inc. starts a partnership program wherein they commit to paying a commission for a certain sales target achieved by independent vendors who join the program. These vendors (who could be bloggers and other digital marketing professionals) build websites and marketing campaigns that sell the products of ABC Inc. to their customers.
Benefits of Affiliate Programs for Bloggers
For many bloggers, affiliate programs offer a host of benefits including:
Easy Management
In the case of many affiliate marketing programs, all the marketing material is provided by the merchant. Thus, the blogger does not have to design banners or create links. They just use the merchant-generated content on their marketing channels.
No Financial Risk
What is interesting for the blogger is that affiliate marketing has almost no financial risk. In many cases, the blogger does not have to invest a single penny in the merchant’s business.
Multiple Sources of Income
If you have free time, you could promote online products and services and increase your income by receiving a commission for the sales. The good thing is that a blogger could work with several affiliate marketing programs to generate multiple income streams.
Easy to Join
You do not need to be a business graduate or expert in order to be a success in affiliate marketing. All you have to do is sign up for an affiliate program and start promoting the products. So the cycle of an affiliate marketing program is: Join, Promote and Earn!
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