Affiliate marketing is a strategy that provides a win-win situation for both businesses and advertisers. This strategy provides huge benefits for people in business to reach a wider audience to help increase their sales of products or services.
It doesn’t matter how big or small your business is, even solopreneurs can adopt this strategy as part of their marketing plan, sit back, relax, and let the orders roll in.
Those who don’t include affiliate marketing as part of their business plan can be missing out on a lot!
Process of Affiliate Marketing
Affiliate marketing is a system that involves four key players:
1) Merchant: Business owners who sell products or services.
2) Affiliate Network or Program: An intermediary between merchants and advertisers.
This may be an affiliate network company that lets merchants join for a small fee to list their business so that advertisers can find products/services to promote online and gets paid commission for every sale or leads they generate.
Business owners may consider having their own independent affiliate program built into their own website for advertisers to join and promote their products or services.
3) Affiliate: An advertiser who joins an affiliate network or program and earns commission on every sale or lead they generate through their own marketing efforts.
Affiliates are given a unique link or a tracking code to use. Their promotional efforts may include a mixture of things such as pay per click, email marketing, blogging, ad placements on their own website or classified ads, and through social media.
Advertisers come from all walks of life. They can use affiliate marketing to make extra money especially if they own a functional website with plenty of website visitors. But affiliate marketing can also be done without a website.
4) Customer: Anyone who purchases products or services from a business.
Main Benefits of Affiliate Marketing
- Easy: It’s not rocket science. Affiliate marketing is a very easy and effective strategy to use online.
- Hassle-free: Merchants who join an affiliate network can easily manage their account, set a commission rate to attract affiliates, and only pay for performance. If no sale is generated, no money is paid out. Affiliates only concentrate on marketing the merchant’s products. Everything else is taken care of by the merchant such as shipping of the product, credit card processing, and customer service.
- Convenience: Affiliate marketing allows merchants to reach a wider scope of potential customers online compared to their own marketing efforts. While affiliates can have the flexibility and comfort of working from home.
How Much Can An Affiliate Earn?
The potential earnings of an affiliate can vary depending on the products they promote and the commission rate that the merchant’s set, which could range from 1% to as much as 75%.
Once a customer makes a purchase from the affiliate’s unique link, the affiliate network company processes the sale, applies some charges, and then calculates the commission rate based on the remaining net sale amount.
Here’s an example of how commissions are calculated and the affiliate’s earnings
Retail Price: $29.95
Product commission rate = 50%
Affiliate Network Charges = 7.5% + $1
Now…let’s calculate commission earned by affiliate
Retail Price ($29.95) minus Affiliate Network Charges ($3.25) = Net Sale Amount ($26.70)
Apply commission rate (50%) to Net Sale Amount ($26.70) = Affiliate Commission ($13.35)
Therefore, the referring affiliate would have earned $13.35 for the successful sale of this ebook!
Imagine if your website have a few thousand visits per month. If many of those visitors turned into customers and bought this ebook, think about your potential earnings! Affiliate marketing can be a very lucrative way of making money online. Learn more about this subject here. CLICK HERE!
The 5 Top Affiliate Marketing Networks
There are plenty of affiliate marketing network companies available online, but I’ll give you 5 most popular ones that have been around for a long time. Merchants join for a small fee and affiliates join for FREE!
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