Affiliate Marketing FAQ(#1): What Is Affiliate marketing

In the past days, I was asked several times about affiliate marketing by others who don't know it very well. Although I am currently not an expert in affiliate marketing, but to make it understood by a complete newbie, I investigated and gathered much material and will compile this into a brief series. Let's call it The Affiliate Marketing FAQ. This series assumes you don't know anything about affiliate marketing and covers the most basic information about it. If you are a Guru in this field, please ignore it.

FAQ #1: What is affiliate marketing

Affiliate marketing is a marketing practice that the affiliates promote a merchant's products or services and get paid from the merchant if a customer is redirected to the merchant's site by the affiliate and take a required action successfully (eg. making a purchase, filling out a from, etc). Affiliate program is also called "associate programs" or "partner programs".

In this process, three parties are involved: the merchant, the affiliate and the customer.

A merchant is an online business who provides certain products and/or services to its customers. Yes, not all the merchants have an affiliate program, but some of them would like to have an affiliate program and share the profits with their affiliates, for the purpose of increasing the sales volume and maximizing their profits.

An affiliate does not have his own products and/or services to sell but is a member of the merchant's affiliate program and helps to promote the merchant's products and/or services. As an affiliate, your task is to refer the potential custmors to the merchant's site and make a purchase or fill out a form. Once the customer take the action required by the merchant, you will get a commission.

Affiliate programs use The affiliate links to identify which affiliate should be credited. An Affiliate gets paid only if the customer is redirected by his affiliate link. You can not expect a commission from the merchant if the customer go to the merchant's website directly and buy something.

The concept of revenue sharing—paying commission for referred business—predates affiliate marketing and the Internet. But the fisrt well-known company who use affiliate marketing online is Amazon. Amazon launched its associate program in July 1996. The affiliate link provided by Amazon's associate program can easily and automatically track sales from its associate members and pay a monthly commission to them.

Affiliate marketing has grown quickly since its inception. "MarketingSherpa's research team estimated that, in 2006, affiliates worldwide earned US$6.5 billion in bounty and commissions from a variety of sources in retail, personal finance, gaming and gambling, travel, telecom, education, publishing, and forms of lead generation other than contextual advertising programs such as Google AdSense."(source: Wikipedia) And Today, the affiliate marketing business has become much bigger than before and will keep growing continuously.

Other topic that may interest you

Comments (0)