What is Affiliate Marketing and How it Works

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If you are new to blogging then you might have heard of affiliate marketing but you may not be knowing about it. Experienced professionals in blogging and online marketing know what is affiliate marketing and how does it work. Till first half of the last year I was not aware of affiliate marketing and its benefits. But in the later part I came to know about it while studying over internet about marketing and then I started applying it on my blog. After putting my leg into affiliate marketing all I can say is it can produce a great deal of profit for you.

I know most of us know about the affiliate marketing and how it works but still I would like to share the basics of affiliate marketing and some FAQs related to it for the benefit of new comers.

What is Affiliate Marketing

From the definition of WikiPedia: “Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate’s own marketing efforts.” In very simple words affiliate marketing is the technique of  marketing where you refer some one to any product [online/offline,Here I am not going to cover the offline affiliate marketing] and when that person buys the product, you get a commission out of it. This commission can be a fixed amount or it can be a percentage of the profit and believe me this commission can typically vary from $1 – $500 depending on the product you are promoting.

How does Affiliate Marketing Work?

After joining an affiliate program you become an affiliate for that business and your job is to recommend the product and get get your commission. So now the question arises, how does the affiliate marketing work? All right, I will try to explain in a simple way.

affiliate marketing

Affiliate Marketing Structure

Let us say “XYZ” is a company which sells WordPress themes and they do have a revenue sharing program as well. This revenue sharing program is nothing but the affiliate marketing program. So any affiliate who refers a client to purchase their theme will get a commission out of it. Now you want to join the affiliate program of “XYZ” company, all you have to do is to fill out an online form where you have to provide some of your basic details. Once your application is accepted you can log into the online system and get your affiliate details. Typically this affiliate details contain a unique URL with the product id and your affiliate id. They offer rotating or static text links, banners or buttons. Once you get these affiliate details, you need to place them on your website as a static link or in the form of banner. Any user who clicks on these affiliate links will be redirected to “XYZ” company’s sells system. The system will recognize the referral URL with the unique affiliate id and will keep of it. When a successful purchase occurs through your affiliate link then you get some commission out of it. This will be deposited into your affiliate account and when a certain threshold limit reaches you can withdraw the amount(mostly via PayPal).

Most of the affiliate programs work by using a combination of a unique affiliate identification number and cookies to track your leads and subsequent revenues.

That’s how most of the affiliate programs work. So by now you must have understood the basics of the affiliate programs.

Now lets see some of the general terms associated with affiliate programs.

Affiliate: An affiliate is a person or system who/which uses affiliate programs to promote a product to make sell and get some commission out of it.

Affiliate Market Place: An affiliate market place is a common place for all affiliate programs in different categories.

Affiliate Link: It is the unique tracking link given by your affiliate program in order to track your referrals to a particular product.

Commission: It is the reward any affiliate gets after making an affiliate sell. This can be in percentage of the sell amount or a fixed amount.

Affiliate Id: It is the unique id generated by an affiliate system which signifies a particular affiliate in the system.

Different Types Of Affiliate Programs

All right, as of now you must have got some idea about what is affiliate marketing and how it works, not lets see what type of affiliate programs are available in the market. Different advertisers offer different types of affiliate programs, hence it would be very difficult to categorized them in short. But in a broad sense I can widely categorize them into 2 parts:

  1. Pay Per Lead
  2. Pay Per Sale
1. Pay Per Lead

Pay Per Lead affiliate programs are kind of affiliate programs where the affiliate generates a lead for the programs and gets paid for it. For example you recommended a visitor to complete a survey for a program and when the user completes it you get paid for it as you have made a lead for the program. So depending on the advertiser you may get paid depending on the lead generation by you.

2. Pay Per Sale

Pay Per Sale is most widely used affiliate program type. In this type of programs you recommend a user to purchase a product and when the user buys it successfully you get your commission. The important point is even if the user visits the product page but did not purchase it then you will not get paid, you will only be get paid once the user buys the affiliate product.

I hope this affiliate marketing guide will help you in understanding the concept of affiliate marketing and helps you in getting started with your first affiliate marketing promotion. If you have any questions please feel free to leave a comment back.

Guru

+Ayodhyanath Guru holds a B.Tech degree in Electrical Engineering and has worked with various prestigious clients in the IT industry and presently working as a Software Engineer. He is a part time blogger and presently authors the Jafaloo.Com blog. Being a tech enthusiast Guru likes to surf the web and blogs about interesting technical topics like How-To guides, freewares, Tutorials, Software, Gadgets, web applications etc. Apart from blogging he likes coding in Java/J2EE and PHP.

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