Affiliate Marketing Basics

What is Affiliate Marketing?

Affiliate means member or partner, so affiliate marketing is a sort of marketing partnership. Marketing is a huge business especially on the Internet. With so much competition online, businesses want to get their names and products out there and what better way than to partner-up with other website owners.

Who uses in affiliates for marketing? Large corporations, such as Wal-Mart and Home Depot all the way down to small Mom and Pop businesses selling popcorn out of their own kitchen use affiliates to spread the word. Have you ever gone to a website and seen advertisement banners? Then you have seen affiliate programs at work and probably have even clicked on some of the advertisements and helped someone else earn profits.

Typically, the affiliate’s website will have something in common with the merchant they are advertising for. For example; if you have a website concerning gardening, you might join’s affiliate program to sell gardening books or supplies. With the same website, you could join Home Depot’s affiliate program and advertise for them as well. You can join as many affiliate programs as you want, but you don’t want to clutter up your website too much.

How Affiliate Marketing Works

The simple answer is cookies. A cookie is a small text file that links your website to the merchant. When a visitor to your website clicks on an advertisement, that visitor receives a cookie from your site that tells the merchant that the visitor came through your website. Now the merchant knows that you get a commission based on the terms of the affiliate program.

Types of Affiliate Marketing Programs

There are many types of affiliate marketing programs out there. They all pay differently depending on the actions of the visitor.

Pay Per Click programs are not as popular as they once were. The payout is small, however, depending on your website traffic; there is still money to be made here. You get paid every time a visitor clicks on the advertisement; they do not need to make a purchase. Some popular contextual advertising networks such as Google AdSense, and the Yahoo Publisher Network are good sources to start using the Pay Per Click model.

Pay Per Action programs pays you when the visitor completes an action, usually by installing and trying a particular software program. The visitor does not need to buy anything and you still get paid as long as they download and install the product. Yahoo has an affiliate program that pays when their visitors download and install their Instant Messenger application, Search toolbar, or Music Jukebox software.

Pay Per Lead programs are geared more toward the “telemarketer” type business. For example; an insurance company will pay you if a visitor fills out a form on their website. The insurance company will call or email the visitor in hopes of landing a new customer. The good news is they still pay you for providing them with a lead. Insurance and mortgage companies commonly use affiliate marketing of this type.

Pay Per Sale programs are probably the most common type of affiliate program. You get paid a commission only when a visitor buys an item through a link from your website. The commissions are usually much higher than the other types of affiliate programs; however, fewer visitors actually make purchases. Of course, higher priced items, such as computers, will generate higher commissions.

Benefits of Joining Affiliate Marketing Programs

Money is probably the number one reason to participate in affiliate marketing programs. This is not a get-rich-quick type of thing; however, if done right you can make a decent living. The amount of money you can make really depends on how much you put into it. If you put a lot of time into keeping your website rankings high in the search engines, maintaining your website and keep a god traffic flow then you will probably do very well. If you already have an established website and good traffic, then you will not have to work so hard. By having several websites, you can multiply your earnings substantially.

Flexibility is another major benefit for the full time affiliate marketer. If you have a full time or even a part time job, the affiliate marketing program may be for you. These programs can be done anytime and anywhere. The real work is getting traffic to your sites. If you were to do the affiliate programs full time, you would have no set schedule other than your personal one.

Low Cost for starting and maintaining your site is a huge plus. Domain name are usually anywhere from $10 per year to $35 per year, depending on the company you purchase it from. There are some web hosting companies that are free with minimal bandwidth and limited space, however, that may be all you need until you get a substantial amount of traffic. Then you can easily upgrade to affordable hosting packages that fit your needs and traffic load. There is no cost involved in joining affiliate programs. Google adwords is a low cost advertising solution to help move traffic to your site.

No Inventory to worry about. You simply supply the advertising space for your affiliate and let them take care of the rest.

No Customer Service to worry about. The merchant’s customers are merely visitors to your site. You are not involved in any sale, lead or action between the merchant and their customer. You only provided your visitor a link to the merchant; a middle man, so-to-speak. However, if a customer returns a product to the merchant, you may lose your commission as well.

Unlimited Growth Potential is evident with online businesses. There are millions of Internet users, not only in the United States but world wide; hence World Wide Web.

At first it may seem overwhelming getting started, with having to set up a website and all. You really don’t need to be a computer whiz to get started. Just do some Googling and price comparing to see what options you have. Once you get started I think you will find it gets easier as you go along and you will be on your way to the extra cash you were hoping for.

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Category: Marketing

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