December 9, 2020 Last updated June 17th, 2021 1,085 Reads share

How Affiliate Marketing Works

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Are you thinking of having a side hustle along with your nine-to-five job? Or do you want to earn without getting involved in the rat race? Do you want to earn in your free time? If your answer to all of these questions is a yes, then affiliate marketing is for you.

What is Affiliate Marketing?

Affiliate marketing is a passive way of earning income in which you have to introduce products to people in your network. If people in your network actually go ahead and buy the product, you will get a commission. An affiliate is also referred to as a partner or a publisher. Affiliate marketing is also referred to as a channel. According to Pat Flynn, affiliate marketing is the process of earning a commission by promoting other people’s or companies’ products. You find a product you like, promote it to others, and earn profit for each sale that it makes.

In affiliate marketing, brands partner with an affiliate to make a business scalable to increase sales in the most efficient and cost-effective way. After the action is completed, the brand pays affiliates, or affiliates get commissions. An affiliate marketer can be a product creator or product marketer and get the revenue.

The Players of the Affiliate Marketing Framework

  • The Brand: It is also referred to as the creator, the seller, or the merchant. Here, this party can be a big company or an individual seller. Anyone can be a merchant irrespective of the size of the company. They have to have a product or a service to sell. Some examples of such companies are retail, subscription services, travel, broadband, gaming, marketplaces, etc.
  • The Affiliates: Affiliates are also called publishers or partners. Just like brands, affiliates can either be companies or individuals. Whoever fulfills the demand can be affiliates. Affiliates get a commission amount ranging from a few hundred dollars to several million dollars. An affiliate is responsible for the marketing of a product or a service. Marketing is the most important part of a business. Marketing decides the amount of profit that a business earns. An affiliate marketer’s job is to promote a product or a service and attract potential customers. To get a commission, a marketer needs to be wise enough to convert potential customers into leads. Read on to know the details of the working of affiliate marketing.
  • Affiliate Networks: Affiliate networks consist of people who make marketing more trustworthy, reliable, easy, and strong. Affiliate networks act as middlemen between affiliates and sellers. They handle the payment or work as a database of lots of products. Please do not confuse affiliate networks with ad networks. These are two different things.
  • SaaS Platforms: SaaS stands for Software as a Service. SaaS platforms help companies with performance tracking, payment, and reporting. SaaS is all about handling the technical aspects of an affiliate program. A brand chooses either a SaaS platform or an affiliate network.
  • The Customer: Customers are the end-target or the goal of the entire framework. The more customers you get through your promotion, the more commission you will get. Without a sale, there will be no commission or revenues. Consumers need not know about affiliate marketers. It is all up to affiliate marketers whether or not to tell them. The cost of an affiliate network is already included in the retail price, so customers do not have to pay a huge amount.

Detailed above were the basics of affiliate marketing. Now, let us learn in detail about our title – how affiliate marketing works. Are you excited to explore the working of affiliate marketing? Well, we are excited to explain it to you as well. Read on to get an understanding of how affiliate marketing works.

How Does Affiliate Marketing Work?

Listed below are three types of performance-based models that are commonly used in affiliate marketing:

  1. PPC Or Pay-Per-Click: In the PPC model, your link helps to get your revenue. Pay-per-click means you get paid for the clicks on the link that is generated by you. A sale is not mandatory to get paid in this model.
  2. PPL or Pay-Per-Lead: In the pay-per-lead model, brands pay when any legitimate action is completed through clicks. A fixed commission is paid in the PPL model by brands to affiliates. These qualification actions could be filling online forms, installing an app, signing-up, short-survey, etc.
  3. PPS Or Pay-Per-Scale: Here, sales matter! Amazon affiliates are the most common affiliate program. A percentage of all the sales done is paid to affiliates. The percentage goes up to 15% according to the product.

How is Marketing Done?

Affiliate networks help to get access to all the affiliate companies that are managed within the same network. Some of the prominent networks are ClickBank, Shareasale, etc. Affiliate marketers get a link and share it on different mediums such as blogs, YouTube, social media platforms, etc. The link is provided after signing in to the affiliate program. In the link, username and ID or special URL is mentioned. A cookie is dropped in the user’s browser whenever she or he clicks on the link. Through this, the brand gets to know about your work and get credit as per your task. Now you might have several questions running in your mind regarding this. We have answered all of your queries below:

Do We Need to Pay to Join an Affiliate Program?

This program is free of cost. You need to be skilled enough to perform the task in the most efficient way possible. But, sometimes, in the process of promoting and generating leads, you might have to pay if you want to avail that particular way.

Is Having a Particular Qualification Mandatory for Being an Affiliate Marketer?

There is no set criteria or degrees that are required to become an affiliate marketer. But, since this job demands marketing skills to occupy a space in the industry, you should have a sound knowledge of marketing components such as blogging, making videos, taking reviews, etc. These are not mandatory skills required for the job but are just a plus point to do it better.

When is the Right Time to Start?

Affiliate marketing does not demand any qualifications or a particular time. The right time is now. You can start with it whenever you have time. Earning is not specified; you can earn any amount of money according to your work. Earning is all up to you. The more you sell a product or a service, the more you will earn. The amount earned through affiliate marketing depends on how many visitors click on links and take further steps.

An Example of Affiliate Marketing Being Used to Drive A Sale

  • Publishers promote a service or a product on a website or other online platforms.
  • A consumer clicks on the link that is mentioned on the platform.
  • As soon as consumers click on a link, a cookie is stored in their browser. This cookie helps the company track a consumer’s progress from clicking on a link to actually putting items in the shopping cart.
  • Now, the potential customer is redirected to the website of the brand.
  • When consumers purchase a product or a service, the affiliate network or SaaS platforms automatically pay affiliate marketers.

Wrapping Up

Affiliate marketing is one of the best, coolest, and easiest ways to earn money without possessing a degree or a qualification. Here, you get the flexibility to work whenever you want to. By now, you should have got an idea of the working of affiliate marketing.

DepositPhotos – affiliate marketing

Prashant Kumar

Prashant Kumar

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