Affiliate marketing is the process of earning a commission by promoting products from other parties. You promote a product to others and earn a piece of the profit for each sale that you make.
In other words, affiliate marketing can be seen as the process of spreading product creation and product marketing across different parties, where each party receives a share of the revenue according to their performance.
That said, you can be the creator or the marketer and still profit from the fundamental idea of revenue sharing. Now let us look at all the essential parts that make up a successful affiliate marketing system.
The merchant is the party that is responsible in product creation. Sometimes they are also known as the creator, the seller, the brand, the retailer, or the vendor.
From solopreneurs to startups to big companies, anyone could be the merchant behind an affiliate marketing program. It does not even require their active involvement — they just have to have a product to sell.
Also known as the publisher, affiliates can range from single individuals to entire companies. An affiliate marketing business can produce a few hundred dollars in commissions each month or tens of millions of dollars.
It’s where the marketing happens. An affiliate promotes one or multiple affiliate products and tries to attract and convince potential customers of the value of the merchant’s product so that they actually consider buying it.
It could even be an entire website that dedicates to finding cool affiliate products and promoting them.
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The customers can be said to be operating the entire affiliate system. Without sales, there isn’t any commission to hand out and revenue sharing would not be possible.
The affiliate will try to market to the customers on a suitable platform, whether it’s on social media or a blog. Whether the customers know that they are part of an affiliate marketing system or not is mostly up to the affiliate.
Some choose to let their customers know but a majority of other affiliates tend to be transparent about it. They let the tracking system work in the background, where the customers can follow the purchase process just as usual and the affiliate still ends up being paid a commission.
Typically, the customers will not pay a higher price to the affiliate marketer, as the retail price already includes the cost of the affiliate network.
Sometimes, affiliates have to go through an affiliate network to even be able to promote the product. This is because a network works as a go-between to affiliates with merchants most of the time. For instance, this occurs if the merchant only manages their affiliate program on that network.
In addition, the affiliate network also serves as a database of lots of products where the affiliate marketer can choose which to promote. Anyone can sign up and then generate a custom affiliate link to a specific product. You will then earn a small commission if someone purchases it through your link.
In a nutshell, affiliate marketing is a diverse opportunity for both businesses and their affiliates to bring new products to potential customers.
While most people start by taking the affiliate route and it is definitely the easier path to take, building enough traffic to make a meaningful income just from affiliate sales isn’t quick or easy.
At the end of the day, this relationship is a great way for both parties to connect in new ways and help others solve a problem through a product and service.
Speaking of which, iPrima Society will be having an affiliate marketing course in the month of March. Learn more about our courses here and grab your seat before it’s too late!
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