Affiliate marketing is the process of earning a commission by promoting other people’s (or company’s) products. You find a product you like, promote it to others and earn a piece of the profit for each sale that you make.
Discover Affiliate Marketing: Best Online Business
Wake up at an ungodly hour. Drive to the office through total gridlock, streets jammed with other half-asleep commuters. Slog through email after mind-numbing email until the sweet release at five o’clock.
What if, instead of dealing with the monotony and stupor of the rat race to earn a few bucks, you could make money at any time, from anywhere — even while you sleep?
That’s the concept behind affiliate marketing.
Affiliate marketing is a popular tactic to drive sales and generate significant online revenue. Extremely beneficial to both brands and affiliate marketers, the new push towards less traditional marketing tactics has paid off. In fact:
- 81% of brands and 84% of publishers leverage the power of affiliate marketing, a statistic that will continue to increase as affiliate marketing spending increases every year in the United States.
- There is a 10.1% increase in affiliate marketing spending in the United States each year, meaning that by 2020, that number will reach $6.8 billion.
- In 2018, content marketing costs were gauged to be 62% of traditional marketing schemes while simultaneously generating three times the leads of traditional methods. In fact, 16% of all orders made online can be attributed to the impact of affiliate marketing.
- In March 2017, Amazon’s affiliate structure changed, offering rates of 1-10% of product revenue for creators, providing the opportunity for affiliates to dramatically increase their passive income based on the vertical they’re selling on.
- The affiliate marketing of Jason Stone, otherwise known as Millionaire Mentor, was responsible for as much as $7 million in retailer sales just in the months of June and July in 2017.
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What Is Affiliate Marketing?
Affiliate marketing is the process by which an affiliate earns a commission for marketing another person’s or company’s products. The affiliate simply searches for a product they enjoy, then promotes that product and earns a piece of the profit from each sale they make. The sales are tracked via affiliate links from one website to another.
How Does Affiliate Marketing Work?
Because affiliate marketing works by spreading the responsibilities of product marketing and creation across parties, it manages to leverage the abilities of a variety of individuals for a more effective marketing strategy while providing contributors with a share of the profit. To make this work, three different parties must be involved:
- Seller and product creators.
- The affiliate or advertiser.
- The consumer.
Let’s delve into the complex relationship these three parties share to ensure affiliate marketing is a success.
Seller and product creators
The seller, whether a solo entrepreneur or large enterprise, is a vendor, merchant, product creator, or retailer with a product to market. The product can be a physical object, like household goods, or a service, like makeup tutorials. Also known as the brand, the seller does not need to be actively involved in the marketing, but they may also be the advertiser and profit from the revenue sharing associated with affiliate marketing.
The affiliate or publisher
Also known as a publisher, the affiliate can be either an individual or a company that markets the seller’s product in an appealing way to potential consumers. In other words, the affiliate promotes the product to persuade consumers that it is valuable or beneficial to them and convince them to purchase the product. If the consumer does end up buying the product, the affiliate receives a portion of the revenue made.
Affiliates often have a very specific audience to whom they market, generally adhering to that audience’s interests. This creates a defined niche or personal brand that helps the affiliate attract consumers who will be most likely to act on the promotion.
Whether or not the consumer knows it, they (and their purchases) are the drivers of affiliate marketing. Affiliates share these products with them on social media, blogs, and websites.
When consumers buy the product, the seller and the affiliate share the profits. Sometimes the affiliate will choose to be upfront with the consumer by disclosing that they are receiving a commission for the sales they make. Other times the consumer may be completely oblivious to the affiliate marketing infrastructure behind their purchase.
Either way, they will rarely pay more for the product purchased through affiliate marketing; the affiliate’s share of the profit is included in the retail price. The consumer will complete the purchase process and receive the product as normal, unaffected by the affiliate marketing system in which they are a significant part.