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Affiliate marketing is a huge and growing area of internet marketing. There are two parties to affiliate marketing, the merchant, whose products are being sold, and the affiliate, who promotes and sells the merchant’s products.
The Merchant
Any business can use affilates to promote and sell their products with considerable benefit and no risk. Affiliates are paid by results, they are not empoyees or even contractors paid for their time. If the affiliate doesn’t produce results she/he doesn’t get paid. This way the business (the merchant) is guaranteed the result they specify in the affiliate agreement, unlike most forms of marketing where the business has to pay whether the promotion is successful or not.
The Affiliate
Any person or business can become an affiliate. You just need to recognise that you are being paid to deliver a specific result to the merchant business. Successful affiliates can make a lot of money from their marketing skills without having the more tedious tasks of product production, delivery, customer service and administration. It is quite possible to build a full time business just promoting and selling other people’s products.
Payment
The merchant is effectively sharing profits with the affiliate and, because of the much lower risk, is able to pay a significant share of the profit on each sale. There are several ways to be paid according to the required result:
- Payment for each visitor delivered to the merchant’s website (Pay per Click)
- Payment per lead generated e.g. a completed enquiry, quotation request or email address
- Payment per sale i.e. a specified amount for each sale, either a fixed sum or a percentage
The most common of these is the payment per sale though the others are growing in popularity.
Benefits
The merchant benefits by getting an independent sales force generating guaranteed results at much less risk than paying for advertising or employing salaried sales people.
The affiliate benefits by being able to build a good income without being tied down to a business. Affiliates are able to work when, how and where they wish and thus have much more freedom than in running a conventional business of their own.
