The answer to that question has two parts, because it depends to which end you are referring. On one end is the person who is promoting the offer or program for some form of compensation. This person is often referred to as an affiliate.
On the other end is the person who has the product (or service) and is using an army of affiliates to sell it. Often they are referred to by the program as the vendor, seller, publisher and have someone who manages it.
The following 2 sections goes into more detail about each one.
Before we answer what is affiliate marketing, let me ask you a question. If you are looking for a job online and want to make money, would you like to work as a commission only salesperson? That means you only get paid when you make a sale (or referral) and only when you make one! All the other time and effort you put in is not paid for until you make a sale. Is that worth it to you?
Well, affiliate marketing from that standpoint is the same thing. It is nothing more than being an online commission salesperson promoting another person’s product or service, and only getting paid when you make a sale. However like most things, it isn’t quite that simple.
Unlike an offline commissioned sales person who can more easily PROVE a sale, an affiliate marketer only gets credit when their affiliate link (proof) is clicked and a purchase is made by the visitor. In most cased, the proof of sale is in the cookie set on the visitor’s device when the link is clicked.
Even so, a cookie can be easily manipulated by others or the visitor as well. Before a visitor is sent to the vendor’s site, the cookie in your link can be changed or even eliminated before the visitor gets there. When this happens, all the effort you put in or money you spent is lost. And to make matters worse, there are web browsers that block your cookie so in effect, you are sending that vendor FREE traffic on your dime!
Too often an affiliate marketer’s job is shown to be glamorous with numerous tips and programs being offered to help you. They make it sound like you are your own boss. In reality, the only control you have is when you start, how to approach your promotions (and even that can be limited) and what products or services you are willing to promote. Otherwise, everything else is under control of the affiliate program or vendor’s terms and conditions. In short you work for the man.
Now don’t get me wrong, there are a legitimate number of people who are successfully working as an affiliate marketer online making a decent living doing it. But being an affiliate marketer IS NOT for everyone. The most successful marketers are the ones who are very well connected in large social networks. Or who have large mailing lists.
They work to generate unlimited stream of people pouring into their own sales funnel and then capture that information to make more sales. And each one has developed their own system that works for them (but it might not necessarily work for you).
To summarize, being an affiliate marketer can be rewarding. But it takes allot of time and effort when you first start. Many times competition is stiff. And if you are a beginner, you’ll most likely spend many hours and lots of money until you find or develop a system that works for you.
Affiliate marketing is just one avenue for making money online, but it is not for everyone. If you are considering becoming an affiliate marketer as a choice, do your homework and compare it with other ways that you can make money online. Remember to choose wisely.
If you are a vendor with a product(s) or service, one way to promote your offer is through affiliate marketing. Having affiliates sign up to promote your offer and bring in free traffic to your site sounds easy, even great. But there is a number of things you need to consider before launching an affiliate program.
First you need a way to track incoming affiliate links to give credit to the affiliate who sent you the traffic, and hopefully, lead to ultimate sales. You also need to setup incentives for affiliates to join in the first place. Most affiliates won’t even bother if you don’t offer at least 50% of the sale to them, have a low priced product or service, or have a low level product or service.
You also need to monitor how affiliates are promoting your product or service. You don’t want them sending out mass spam mailings or spamming social network sites for example, that will lead to destroying your brand or company name.
Then there is a matter of customer returns and removing commissions from the affiliate when this happens. If you have a 60 day return policy, most affiliates will not wait 60 days to be paid! And once they are paid, they are not so willing to return funds.
You can enlist the services of a company like Clickbank, Commission Junction, JVZoo or other similar sites to handle your affiliate program for you (which is wise if you are just starting out or haven’t developed an online presence yet). On the downside, you will not make as much once a sale is made. You will be paying for commissions and services. Also you may not have much control who your affiliates are who promote your product or service.
The bottom line with an affiliate program is the amount of traffic and sales it will generate for you and the cost it will take to do it. There are always other alternatives to promoting your product online. And just because you sign up to a service to run your affiliate program (their way), doesn’t mean you will have affiliates signing up to do it. I have seen a number of offers sitting on Clickbank waiting for some time to have affiliates sign up to promote it. As always, it is best to have at least several methods (tools) to drive traffic to your offer that you can afford.
Michel has actively been online as an Internet and affiliate marketer since 2009. He has experience with many systems and programs that he has used throughout those years, finding some to be great and many not so good. He’s learned what works, and what doesn’t work and is willing to share it with you. And it is always changing!
6 Steps to Affiliate Sales Conversion
Affiliate Programs – Which One Should I Choose?
Affiliate Marketing Separating Fact from Fiction
How to Find Hot Affiliate Niches