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What is affiliate marketing?

 
 
Nathanael
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      02-01-2005
Hi Guys,
You probably have heard of affiliate marketing before but what exactly is
affiliate marketing? In this introduction you'll find an explanation of the
basics of affiliate marketing.

The principle of affiliate marketing

The principles of affiliate marketing are pretty easy. A merchant who wants
to sell more may decide to offer an affiliate program. Using this affiliate
program he will attract webmasters of other sites, so called publishers, who
are willing to sell or promote the merchants product on their site. In
exchange the webmaster who promotes the merchant or sends him a sale gets a
commission. The handling and shipping is all taken care of by the merchant,
basically you only send him a new customer or prospect.

'Send' him a sale, how you mean?

The internet is based on links that you can click to go to another website.
Just the same with affiliate marketing: the merchant provides a unique link
that the publisher places on his website. When people click on that unique
link, the visitor is taken to the merchants site.

When do I get money?

Sometimes just clicking the link will earn you money. This is called a pay
per click affiliate program. Most of the times however just referring a
visitor won't do to get paid. Often the referred visitor will have to buy
something: these are pay per sale affiliate programs.

There's a third type of program that exists, namely the pay per lead
affiliate programs. This type of affiliate programs requires the referred
visitor to act in a certain way before the publisher is paid. The most
classical example of pay per lead affiliate programs is the one where a
referred visitor needs to subscribe to a newsletter. When the visitor clicks
the publishers link and subscribes to the newsletter, the publisher gets
paid.

Why do merchants start an affiliate program?

For a merchant the goal of having an affiliate program is to earn even more
money with their own website: the more sites that promote his products, the
more sales he will make. Pretty simple and just as in real life.

Why do webmasters join affiliate programs?

Basically a webmaster has 2 reasons why he wants to join an affiliate
program. First being an obvious one, is making money and financing his
website or even make a living out of it.

However, there's also a second reason: a webmaster should always be
interested in improving his website . He can do this by adding links to his
site. Affiliate programs allow webmasters to offer their visitors links to
products that are interesting for that target group.


Basics on How to join an affiliate program

Most affiliate programs are very easy to join and easy to stop with and it's
free (if you have to pay to participate, don't even consider joining) . You
fill in an online form on the merchants site and the merchant provides you
with a unique link. Once you have placed the link on your site, you are
ready to go.



Want to learn more about affiliate marketing? Take a look at following
Affiliate programs types :

Affiliate Program Types

In this Affiliate Program Type section you will find more information on the
several methods to earn money using affiliate programs. You decide which
type of affiliate program you want to join. We advise you to read this
Program Type section carefully as the choice of type of program will
determine your revenue!

An affiliate basically has placed links to a merchants website. Your site
enables the merchant to process sales or qualified leads or even visitors.
In exchange, you receive a commission for all the actions that you brought
to the merchant. There are different types of commissions : pay per click,
lead and sale are the most common ones but still there are other ways of
earning money. Below you'll find an overview of the possibilities.

Pay Per Click

Pay per click programs ( also called click-trough programs ) are loved with
webmasters of smaller sites. Most importantly this is because of the fact
that visitors do not have to buy something in order for the publisher to
make a money.
All your visitors need to do is click on the unique affiliate link in order
for the publisher to get paid.

Pay Per Lead

The last few years lead programs are getting more and more popular. There
are even affiliate networks who only run leads.
The big advantage with lead programs, just as with the click programs, is
that your visitor doesn't have to spend anything in order for the publisher
to get paid. Also the variety of available affiliate programs is a big
advantage: the publisher can get paid for sending new subscribers to a free
e-zine or just by giving away free coupons or reports.

Pay Per Sale

Pay per sale affiliate programs are the oldest type of affiliate programs.
An affiliate earns commissions when he refers someone to the merchants site
and the visitor buys something with the merchant. The commission you receive
normally is a percentage of the total price but sometimes however you a
fixed amount per sale is agreed. The main advantage is that the earned
commission is substantially higher than the pay per lead or pay per click
programs. On the downside of course is the fact that it's much harder to
make someone buy something than just sending a visitor.

Two Tier Programs

Two-tier programs are affiliate programs with an extra dimension: These type
of programs all pay commissions at least two levels deep. This means that if
you refer other webmasters to the merchants affiliate program , you receive
a portion of the referred webmasters revenue. We have devoted an entire page
to the two tier system : take a look at our two-tier affiliate programs page
for more information.

Affiliate Programs offering residual income

Residual Programs are very popular among webmasters. This type of affiliate
programs gives the publisher the opportunity to keep making money from one
initial sale.

For example, suppose a publisher sends a sale to a hosting company. He will
be paid an initial commission for bringing the merchant a new sale. However
when someone renews his hosting account for a year the publisher will be
paid again provided the affiliate program offers residual income. Once the
referred visitor has made a purchase or signed up for a service, you will
receive additional commissions as long as they remain customers.

Pay Per Impression

Pay per impression is very similar to paid advertising. It's actually just
the same. The merchant pays you only to show his banner . This means that
you get paid even though your visitor doesn't purchase anything or even
clicks trough to their site. All they have to do is see the banner on your
page that takes them to the merchants site. There are very few programs like
this available and you are better of with advertising agencies if you want
to profit from banner advertising.

Final words of advice

Select the type of programs that you think are suitable for your site. Don't
waste your time on affiliate programs that aren't worth of it. Most of the
times a mix between pay per clicks, leads and sales is the most profitable
one.

To your success,
Nathanael
http://www.top-ebiz-secrets.com


 
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