How does Affiliate Marketing Work?

If you are ready to start as an affiliate marketer, the next step is to understand how affiliate marketing works. Understanding how the fundamental work will give you a good overview how the process flow, who are the main players involved and at the same time, look at its strengths and weaknesses. The diagram below is an illustration on how affiliate marketing works.

The affiliate marketing process begins when you start looking for an affiliate programs to join. The affiliate programs could be from an affiliate networks or from the merchants directly. The advantage of joining the affiliate networks versus joining the merchants directly is you can have more options on the type of affiliate programs that you are interested. Furthermore, it can help to minimize the risk if one merchant closed down; there are still other merchants to rely on.

Before you sign up for any affiliate networks, it is best you can meet the minimum criteria of having a website or a blog. Make sure your website or blog is receiving some decent traffic otherwise your application has a high chance being rejected by the merchants. However, not all merchants have this requirement so please check out carefully before you sign up.

  1. Join a Reliable Affiliate Network
    Joining a reliable affiliate network will ensure you are paid on time and provide adequate support when problems arise. There are many reliable and established affiliate networks in the industry for example, Clickbank, LinkShare, Shareasale, Pepperjam and Commission Junction. Make sure you check out their criteria, payout threshold, terms and conditions before you sign up.
  2. Sign up as an Affiliate
    The affiliate network will provide you a list of merchants who participate in its network plus other statistics information such as the average sale percentage, earning potential in future, popularity of merchants’ products, traffic report and etc. This information will give you an idea how the merchants perform.Select affiliate programs that complement to what your website or blog offers, for example if you are giving tips on reducing weight then you can look for weight exercising or weight loss affiliate programs. Also ensure that the merchants can pay you at least about 20% and above for the actual price of the deal.
  3. Insert Affiliate ID into Website / Blog
    Once you have decided which affiliate programs to join and approved by merchants (note: not all affiliate programs require approval), you will be given a unique affiliate ID with a script of code by each merchant so that you can place it in your website/blog for tacking purpose.The merchants will also supply marketing collaterals such as banners, text links, sales and email copy so that you can be incorporated them into your website/blog for promotion purposes.
  4. Start Promoting Merchants’ Products/Services
    It is up to your creativity now to promote the merchants’ product and/services to the public. You can try various marketing techniques like online advertising like pay per click (PPC), email marketing, video and article marketing to get potential customers to click on your links, banners or ads to direct them to merchants’ site for purchase.Once the customers click on your links, it will either bring them to the merchants’ site or specific landing or product page. The merchants will use a tracking program called Cookie to keep track of your referrals. As we know, not all visitors will make purchase during their first-time visit. They may visit a few times before decide to purchase so a cookie helps to keep track such activity and award you the credit when sales occur.
  5. Get Paid when Sales Occurred
    The merchants will pay the affiliate marketers by performance. In another word, you will be rewarded when your referred customers have performed the desired actions – a click, sales or registration. Most affiliate marketers are compensated about 5%-35% for each sales made but most affiliate networks require a minimum amount to be reached before the actual payout.
  6. The above is a simplified view of how affiliate marketing works. There are a lot more of activities and details involved in each steps so do stay tune to read more about them in future posts.

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