The Business Of The 21st Century: Affiliate Marketing

Since 1930, Network marketing has been very famous. The network marketing business model is based on person-to-person sales by a network of distributors. Nowadays affiliate marketing is famous for increasing sales using online affiliates/partners that increase awareness about the products and increase sales using online platforms, while doing so they earn commissions. Due to the fast Internet services, various online platforms and ease of doing financial transactions readily available worldwide, Affiliate marketing is going to be the Business of the 21^st Century.

What is Affiliate Marketing?

Affiliate means an individual who contracts with a merchant in order to help sell that merchant’s product. The product may be anything someone is willing to pay for it, whether it is tangible (such as clothing), virtual (such as electronic books or downloadable software), or information (such as expert advice).

Online affiliate marketing:

An online affiliate program is a contractual agreement you make with a merchant to acquire targeted traffic, generate a sales lead, or sell a product. This product may be physical (such as books), virtual (such as electronic books or downloadable software), or information (such as expert advice) available online platforms like Amazon, Flipkart, and eBay.

Online affiliate programs began in the mid-1990s and are currently a popular way to earn money online and it is going to be the Business of the 21st century. In fact, research shows that affiliate marketing is the most cost-effective way to generate online sales.

Affiliate marketing is a way for you to earn money by selling a brand’s products. As strictly a marketer, you have no inventory and work for commission. Generally, affiliate marketers receive payment when a consumer referred buys a product or service or completes a specific task.

In other words, it’s a way that businesses can outsource their marketing to you in a way that’s strictly performance-based. This offers businesses a 100% return on their investment, which makes it unique among online marketing methods.

It also means that you have the opportunity to make a good deal of money by selling a product that isn’t yours. The more you sell, the more you earn.

And since you don’t have to worry about shipping, overhead costs, or customer service, your input is as small as you want it to be.

But to make money as an affiliate marketer, you have to understand all parties involved and what they stand to get out of the relationship. Knowing each role and how they can potentially help you make money is an essential first step when starting out as an affiliate.

 Overall success requires building relationships that rely on three distinct parties:

A) Advertiser:

The first party, typically referred to as the advertiser or merchant, is the party that’s selling the actual product or service.

This is the party that you will be working with. They usually have an established affiliate program, and leave it to you to carve out your space on the web and sell their products.

The product or service could be a physical product like phones or laptops, furniture, household items or even less tangible items like insurance policies.

B) Affiliate:

The second part is the publisher, more commonly referred to as the affiliate marketer.

This is you, the individual working with the merchant to sell in exchange for a commission. You’ll have a contract in place, and you’ll seek to push traffic in the form of links, ads, or in some cases unique phone numbers that you incorporate on your site.

Affiliate marketers fall under a very broad umbrella and could be just about anyone on the web. If you follow a blog or a popular social media profile, the chances are good that they are an affiliate of a brand.

The Advertiser/Affiliate relationship is a highly strategic one, as both parties need to make money for the relationship to continue. Since you’re working so closely, you need to be on the same page about your roles, responsibilities, and payment.

C) Consumer:

Finally, you have the consumer or the party that will be (hopefully) buying your product. Thus, the relationship between the affiliate and the consumer should be one of trust.

The consumer finishes out the relationship triangle by interacting with your marketing efforts (like clicking a tracked URL or ad) and then moving further into the publisher’s sales funnel. Once they’ve bought something or completed the action agreed upon by the affiliate and merchant, everyone receives their piece of the exchange.

All three groups centre on the relationship created by the affiliate and will receive their product or payment through you. Of course, you’ll also get paid when a purchase goes through.

Once you know how each party plays its role, you start to gain a better picture of how the entire process works.

You, as an affiliate, publish ads or content that encourages a consumer to buy from a merchant. You’ll have a set affiliate marketing method that will allow you to build an audience and promote to them.

Using various technologies and platforms, the merchant can track when you send a customer to them and will pay you if they buy a product or service.

As a third party to the brand, you have no say over what you sell or the price it sells for, but you also carry less risk.

When every aspect of affiliate marketing works together, every party benefits. Consumers get their products, merchants generate revenue, and the affiliate makes a commission.

If you do this process well, you can make money in the long term by keeping a consistent strategy and building stronger relationships with all three involved parties.

Why should you be an affiliate?

The three main reasons to become involved with affiliate marketing are money, dreams, and freedom.

1. Money

You already have a concept. Why not make your knowledge work for you? Strategically placed paying links can bring in extra income. The amount you earn, of course, depends on a number of factors but, if you have visitors, you can harvest this traffic and convert it to revenue.

2. Dreams

Money and dreams are not mutually exclusive, and online affiliate marketing allows you to have both. Here’s how it works. If you always wanted to sell fine jewellery, books, cookware, or other tangible items, now you can. Unfortunately, you don’t get to fondle the merchandise, but you also don’t have to worry about buying, storing, or shipping it.

3. Freedom

Online affiliate marketing allows you the freedom to choose your own schedule and to work from home, from the road, in the middle of the park, or on the beach.

Who are affiliates?

Affiliates fall into three types. For clarity, By excluding big shopping houses and large corporate sites, we will call three types of Affiliates to exist i.e. power affiliates, mid-range affiliates, and non-productive affiliates.

1. Power affiliates:

Power affiliates, who make a living wage, are a minority of those using affiliate marketing programs. They usually have a network of sites, and spend several hours daily maintaining traffic to these sites. Power affiliates create a large revenue stream for the merchants. Therefore, they enjoy several perks; for instance, power affiliates often have the influence to bargain with merchants for more advantageous deals.

Power affiliates often work from home. Many power affiliates are also merchants to vendors who want to expand their revenue base. Power affiliates account for roughly 10 per cent of all affiliates.

For example, a highly influential site with a small amount of traffic can command high rates because of its market impact.

2. Mid-Range Affiliates:

The second type of affiliate makes some supplemental income. These people often maintain full-time “dirt world” occupations.

These affiliates may have one popular site or a network of small sites, but they either control significantly less traffic, or less targeted traffic than the power affiliates, or have difficulty converting page views to clicks, actions, or sales. These affiliates comprise about 10 per cent of all affiliates. Merchants like to cultivate these relationships because many mid-range affiliates can go on to be power affiliates.

3. Non-Productive Affiliates:

So what about the other 80 per cent of affiliates? Unfortunately, they make little or no money. Many of these sign up for a program, intending to use it, but never even put up paying links. Others put up the links, but don’t control enough traffic to support sales. Few just don’t have the knack.

The majority of non-profitable affiliations result from ignorance or apathy. Affiliate marketing is a competitive business environment, and, as in any industry, many who attempt the business will fail to perform.

Once you understand the complete picture of Affiliate marketing, you can start taking action to earn money online and take part in the Business of the 21st Century. On my blogging site www.punewala.com I will also provide you with details about the best affiliate marketing website. So keep visiting.