What is Affiliate Marketing?

For the person who wants to build an online business, affiliate marketing can be a powerful system. Affiliate marketing does not require having your own product to sell, or even having your own website. Before jumping in with both feet, however, you need to have a basic understanding of how affiliate marketing works.

Companies who do business on the internet need people to help them market their products and services. This help comes in the form of affiliates, people who are associated with their company and promote them to other internet users. Affiliate marketers receive their own unique link to the company website, which allows for tracking how many visitors or sales come from that affiliate. Affiliates are able to use any method of promotion they choose, as long as it is legal. In exchange for promoting them, companies pay the affiliate marketer.

How Affiliate Marketers are Paid

Different companies use different systems for paying their affiliates. The following are some of the most common methods used:

• Pay per performance. With PPP affiliate programs, the affiliate is only paid when there is an action performed. If a visitor to the company site makes a purchase or signs up for a mailing list, they have taken action. The company will specify whether they require the visitor to make a purchase or become a marketing lead. The affiliate is usually paid a percentage of sales or a flat fee for leads.

• Residual income. In residual income programs, the company uses cookies to track visitors from each affiliate link. The first time a visitor goes to the site from the affiliate’s link, the tracking begins. This allows the affiliate to get paid not only for any sale made on that visit, but also for any sale made to that visitor in the future.

• Tiers. In single-tier marketing, affiliates are paid for sales that come directly from their link. In two-tier or multi-tier marketing, the affiliate has the ability to recruit other affiliates to promote the company. The affiliate then makes commissions not only for sales that come from his or her link, but also from the sales made by anyone they have referred.

Affiliate marketing is a quick and easy way to start a business online.

While it does require time and work to be successful, it does not require special skills or knowledge. In addition, an affiliate marketer only needs to worry about promotion, not merchant accounts, shopping carts, or sales and returns. An affiliate marketer’s income is limited only by their desire to earn money.
 

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