If you’re new to all things affiliate marketing you might be asking yourself this question….
What on earth is affiliate marketing and how does it work?
Affiliate marketing is a business model used by thousands of companies to generate more leads and sales for their business. They do this by recruiting “affiliates” that promote their products and services. The affiliate goes out and promotes the products through various means and gets paid a commission every time the company makes a sale from the affiliate’s recommendation.
Tracking mechanisms allow companies to attribute sales to affiliate ID’s by placing a cookie on a customers machine. This cookie contains a unique identifier for the affiliate so the merchant knows exactly who referred the customer. The affiliate then gets paid accordingly.
After doing some research, I came across this really cool infographic that breaks down affiliate marketing nicely…
You should now have a brief understanding of how affiliate marketing works and how companies love their affiliate programs.
An affiliate can make a company a heck of a lot of money. Many bloggers leverage the power of affiliate marketing to monetise their blog. Some bloggers have a huge readership and align themselves with a product that is relevant to their niche. There are bloggers out there making tens of thousands of dollars a month just from using affiliate marketing on their websites.
I think it is fair to say that affiliate marketing is big business. Most people don’t realise how much this business model is now used.
Anytime you’re comparing products, whether that is insurance, flights, hotels, phone deals, these websites all use affiliate marketing to make money. The merchant pays these companies to bring them leads and sales.
Affiliate marketing is so popular because the business model works on a win win basis for both the merchant and the affiliate. In most cases, the merchant only pays the affiliate when they have made a sale so they’re never losing out on money. At the same time the affiliate gets paid a commission every time they refer someone and make a sale. Most affiliate programs are free so its not like there is a massive startup cost or even any risk in diving deep into an affiliate program.
Affiliate marketing also has the advantage of being internet-based. You don’t need to rent out office space or hire any additional members of staff. You can run an affiliate marketing business as a one man band until you’re well up into the high-six figures per year, even seven figures in some cases.
You should now have a brief understand of what affiliate marketing is and how it works on the internet today.