Affiliate marketing is the process by which a person (affiliate) earns a commission for selling another person’s or company’s products. The affiliate simply finds a product they enjoy then promotes that product and earns some of the profit from each sale they make. Each sale is tracked via affiliate links  you receive from the person or company one website to another. 

How Does Affiliate Marketing Work?

Because affiliate marketing works by spreading the responsibilities of product marketing and creation across several parties, the company manages to leverage the abilities of a variety of individuals for a more effective marketing strategy while providing contributors with a share of the profit. To make this work, three different parties must be involved:

  1. Seller and product creators.
  2. The affiliate or advertiser (You).
  3. The customer.

Let’s dig into the complex relationship these three parties share to ensure affiliate marketing is a success.

  1. Seller and product creators.

The seller, whether a solo entrepreneur or large company, is a vendor, merchant, product creator, or retailer with a product to market. The product can be a physical object, like household goods, or a service, like different  video tutorials. Also known as the brand, the seller does not need to be actively involved in the marketing, but they may also be the advertiser and profit from the revenue sharing associated with affiliate marketing.

  1. The affiliate or publisher (You).

The affiliate can be either an individual or a company that markets the seller’s product in an attractive way to potential customers. In other words, the affiliate promotes the product to persuade customers that it is valuable or beneficial to them and persuades them to purchase the product. If the customer does end up purchasing the product, the affiliate receives a portion of the profits made.

Affiliates often have a very specific set of viewers, to whom they market, generally following that audience’s interests. This creates a defined niche or personal brand that helps the affiliate attract consumers who will be most likely to act on the promotion.

  1. The customer.

Whether the customer knows it or not, they (and their purchases) are the drivers of affiliate marketing. Affiliates share these products with them on social media, blogs, and websites.

When customers buy the product, the seller and the affiliate share the profits. Sometimes the affiliate will choose to be upfront with the consumer by disclosing that they are receiving commission for the sales they make. Other times the customer may be completely oblivious to the affiliate marketing infrastructure behind their purchase.

Either way, they will rarely pay more for the product purchased through affiliate marketing; the affiliate’s share of the profit is included in the retail price. The customer will complete the purchase process and receive the product as normal, unaffected by the affiliate marketing system in which they are a significant part.

 


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