Affiliate Marketing Explained

Affiliate marketing is an advertising method used by Manufacturers, Merchants or simply put Brands to increase sales of their products through middlemen known as Affiliates for a commission. This method helps to mitigate wasteful spending in their marketing budget.

Many brands have turned to innovative ways that minimize costs while still growing their customer base, while most businesses recognize that spending money on advertising is necessary, the ideal situation is to keep their costs limited to customers earned. That’s where the idea for marketing with affiliates was born.

For brands that have a product and want to sell more, they can offer a financial incentive through an affiliate program.

This article provides an introduction into the journey through the world of affiliate marketing for beginners. You’ll learn what it is, how it works, and most importantly, how you can make money doing it. And since good affiliate marketers can be hard for brands to find, you’ll learn everything you need to stand out from the crowd.

Use the links provided to join any Affiliate Marketer or brands with Affiliate program as you read along. In this stage of your journey, you’ll learn how to sell as an affiliate marketer. As you read through each section, you’ll find affiliate marketing explained to you in a way that you can relate to. Plus, you’ll find tons of examples and tips that will help you establish yourself and improve your selling methods that will grow your income over the years.

So let’s get started by teaching you the basics.

Understanding Affiliate Marketing

The first question that most people raise when they approach this topic is relatively basic: what is affiliate marketing?

Here’s a basic definition that sums it up nicely:

Affiliate marketing is a way for you to earn money by selling a brand’s products. As strictly a marketer, you have no inventory and work for commission. Generally, affiliate marketers receive payment when a consumer they referred buys a product or service or completes a specific task.

In other words, it’s a way that businesses can outsource their marketing to you in a way that’s strictly performance-based. This offers businesses a 100% return on their investment, which makes it unique among online marketing methods.

It also means that you have the opportunity to make a good deal of money by selling a product that isn’t yours. The more you sell, the more you earn.

And since you don’t have to worry about shipping, overhead costs, or customer service, your input is as small as you want it to be. But to make money as an affiliate marketer, you have to understand all parties involved and what they stand to get out of the relationship. Knowing each role and how they can potentially help you make money is an essential first step when starting out as an affiliate.

Your overall success requires building relationships that rely on three distinct parties:

Advertiser: The first party, typically referred to as the advertiser or merchant, is the party that’s selling the actual product or service.

This is the party that you, the affiliate, will be working with. They usually have an established affiliate program, and leave it to you to carve out your space on the web and sell their product.

The product or service could be a physical product like Kangen Machine, phones or laptops, or even less tangible items like insurance policies.

Affiliate: The second party is the publisher, more commonly referred to as the affiliate marketer.

This is you, the individual working with the merchant to sell in exchange for a commission. You’ll have a contract in place, and you’ll seek to push traffic in the form of links, ads, or in some cases unique phone numbers that you incorporate on your site.

Affiliate marketers fall under a very broad umbrella and could be just about anyone on the web. If you follow a blog or a popular social media profile, the chances are good that they are an affiliate of a brand.

The Advertiser/Affiliate relationship is a highly strategic one, as both parties need to make money for the relationship to continue. Since you’re working so closely, you need to be on the same page about your roles, responsibilities, and payment.

Consumer: Finally, you have the consumer or the party that will be (hopefully) buying your product. Thus, the relationship between the affiliate and the consumer should be one of trust.

The consumer finishes out the relationship triangle by interacting with your marketing efforts (like clicking a tracked URL or ad) and then moving further into the publisher’s sales funnel. Once they’ve bought something or completed the action agreed upon by the affiliate and merchant, everyone receives their piece of the exchange. Sometimes, the affiliate program requires the affiliate to first be a consumer of the product after which you have the right to sign a distributorship agreement to be an affiliate.

All three groups center on the relationship created by the affiliate and will receive their product or payment through you. Of course, you’ll also get paid when a purchase goes through. Once you know how each party plays its role, you start to gain a better picture of how the entire affiliate marketing process works.

You, as an affiliate, publish ads or content that encourages a consumer to buy from a merchant. You’ll have a set affiliate marketing method that will allow you to build an audience and promote to them.  Using various technologies and platforms, the merchant can track when you send a customer to them and will pay you if they buy a product or service.

As a third-party to the brand, you have no say over what you sell or the price it sells for, but you also carry less risk. When every aspect of affiliate marketing works together, every party benefits. Consumers get their product, merchants generate revenue, and the affiliate makes a commission.

If you do this process well, you can make money in the long-term by keeping a consistent strategy and building stronger relationships with all three involved parties.

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