Affiliate marketing is the process in which you earn a commission for promoting a product or service that belongs to another person or company.
In other words, you find a product or service that interests you, promote it to other people and earn a fraction of the profit whenever someone buys the product.
The cost of buying a service or product through an affiliate is similar to that of buying it directly from the owner of the product.
Product owners must pay affiliates a percentage of the sales as a commission, which means they probably make less money per sale.
However, product owners gain more because an affiliate helps them to reach more potential customers (and make more sales) than they’d have done on their own.
So, it’s a win-win.
As an affiliate, you can earn a commission on a one-off purchase or earn recurring income by promoting membership or subscription-based programs.
When it comes to the actual marketing, the affiliate equation has two main parties:
- The product creator or owner
- The seller or the affiliate marketer
However, successful affiliate marketing has about three parties:
The merchant is also referred to as the advertiser, seller, brand, vendor, retailer, or creator.
It’s the party that creates the product. It can be a single person or a big, Fortune 500 company. Anyone can be the vendor behind an affiliate marketing program.
Merchants don’t necessarily have to be actively involved. All they need is a product to sell.
Also known as the publisher, associate or partner, an affiliate can also be a single person or an entire company. Affiliates can generate a few hundreds of dollars per month or tens of millions in commission.
An affiliate plays the marketing role by promoting one or several affiliate products. The party attracts and convinces potential buyers of the product’s value so they can end up purchasing it.
This party makes the entire affiliate system to go round. Without sales in sight, there won’t be revenue to share or commissions to give out.
The affiliate will make efforts to market to customers using any suitable channel whether it’s a digital billboard, social network or content marketing on blogs.