You’ve probably heard about many types of marketing
: inbound marketing, pay-per-click, email marketing, social media marketing and so on. So now you may be wondering: what’s affiliate marketing?
To put it in simple terms:Affiliate Marketing is a system where you as an affiliate make money by promoting other people’s products and receiving a commission for your work.
Affiliate marketing is a growing industry: in the US alone, estimated affiliate marketing spending is $5.4 billion
for 2017, and it’s growing every year. There are several ways you can earn a commission by the most common one is by placing an affiliate link on your website.
When someone buys that product through that link, you earn a commission on the sale.
To track conversions, the affiliate uses a link with a code only used by him, usually combined with browser cookies. Commissions are generally a percentage of a sale, but they can also be a fixed amount. I’ll explain how the entire system works later in the post, but first, let’s take a look at parties involved in the affiliate marketing process.
Affiliate marketing core players
Depending on the definition, affiliate marketing has 3-4 core players (parties involved in the process). The three main ones are:
- Merchant (retailer, brand, advertiser)
- Affiliate (also called publisher)
And the fourth one, according to some definitions is:
I’ll explain all four parties in a moment, but what it all comes down to is the relationship between the merchant
(product creator) and the affiliate
This is the party which creates the product. It can be anyone from a solo entrepreneur to a big international company. It doesn’t matter, as long as it has a product to sell.
Also knows as the publisher. Affiliate sells the merchant’s product for a commission. They can also range from individuals to entire companies.
The person who buys the merchant’s product through an affiliate. Whether the consumer knows that they are part of an affiliate network is up to the affiliate, although many affiliates choose to be transparent and upfront about their services. (and this is required by law in some countries). Either way, this doesn’t affect the consumer in any way since the price of the product is the same for him.
The intermediary between the merchant and the affiliate. It usually handles payment and product delivery. Sometimes affiliates have to use affiliate networks even to be able to promote the products. One of the most popular affiliate networks is Amazon Associates
A closer look at the affiliate system
By now you’ve probably concluded that there are two roles you can take in this system: the merchant or the affiliate.
What role you take depends on what your goals are: if you have a product to sell, you can become a merchant
and make money by getting affiliates to sell the product for you.
On the other hand, if you want to earn money by advertising products, you can become an affiliate.
You can be both as well, selling your products through affiliates, and advertising other people’s products at the same time, as long as they’re not your direct competition.
Here’s another look at the system from the merchant’s perspective:
Affiliate programs for e-commerce
As many web shops offer affiliate programs, those that don’t are more likely to start losing their competitiveness.
There is also a difference between good and bad performing affiliate programs.
When it comes to web shops, Amazon is well known for its excellent affiliate program.
Many people have used it in their blogs, websites, forums
and some went even further by installing dedicated webshops just for their Amazon affiliate program
. This means they have webshops under their domain, but everything in the webshop is extracted from Amazon.
When the user makes a purchase, the order is received directly by Amazon, and the webshop owner receives his commission fee
from that sale without having to manage the request.
It is always a great idea to start expanding to new marketing methods, especially if your competitors aren’t using it yet.
To create an affiliate program for your e-commerce business, you need the correct tools and knowledge, and you can contact us if you need help with anything during this process.
How to start as an affiliate
If you are interested in starting as an affiliate, there are many great affiliate programs out there, but first, you need to decide on which niche
you would perform the best.
If you already have a website or some community that is interested in the specific niche, then you can capitalize that with an affiliate program from that niche. For example, if you have a website about sailing, you can register at Sebastus affiliate program.
In that case, you can start earning a commission from your website by promoting your Sebastus affiliate link via banners or widgets on various places on the website.
How to become a merchant
You can become a merchant in 3 steps. You need to:
- Have a product idea
- Create your product
- Get affiliates to promote your product
The first two steps are pretty self-explanatory. The third step usually requires you to join one of the many affiliate networks out there and follow their guidelines.
Or, you can try to find affiliates directly and ignore the network aspect completely. The tough part is finding affiliates who have the audience interested in your product. You can solve this problem by finding websites that sell similar products, contact them and try to work out a deal.
How to become an affiliate marketer
Similar to becoming a merchant, there are some steps to take to become an affiliate marketer:
- Start reviewing products in your niche. You can do this on a blog or a YouTube channel.
- Start building an email list. Collect emails from your visitors so you can reach them directly at any time.
- Grow your audience through paid advertising channels. Once you have made some sales, you can use some of the paid digital channels like Google AdWords to grow your audience even more.
You can start by joining affiliate networks and search them for products in your niche you can advertise, or you can try contacting companies directly and ask them if you’re interested in collaboration. Becoming an affiliate marketer is quite easy, but it requires some work up front.
It’s best to build your audience before you start with affiliate marketing, but even if you don’t, you can still succeed! It will just take a bit more time to get a decent number of sales.
Affiliate marketing is an excellent concept for both the merchants and the affiliates. By using a network of affiliate marketers, the merchant gets more sales, and the affiliates get a commission for every sale they make. Contact us today if you need help with affiliate marketing.