What Is Affiliate Marketing

January 3, 2012 admin

Discover What Is Affiliate Marketing And Profit

“What is affiliate marketing?” is a question asked by those who are new to the world of online marketing, new to the fact that it is possible to make money without having anything to sell, and new to the concept that marketers are prepared to pay high commissions to anyone who can help them sell more product and bring more customers into their sales funnel. To these newcomers, this seems an extraordinary concept as there was little to compare with it in the days before the dramatic growth of the Internet. There have always been commission based sales agents, but affiliate marketing operates in a completely new and unique way.

Affiliate marketing, put simply, is the art of selling other people’s products to earn commissions on each sale made. These commissions are the reward which the product vendor will pay to you for bringing them more sales and more custom. These affiliate commissions vary from a single figure percentage to a full hundred percent in rare cases. The product vendor will set the commission rate which is paid to affiliates, and has to strike a balance between allowing some profit and attracting experienced affiliates who can make a lot of sales.

If you are wondering why anyone would pay a commission for someone to sell their product, the reason is simple. Or, at least, the main reason is simple. Normally, anyone in business whether online or offline has to spend money on advertising to attract buyers to their products or services. When you can recruit commission based affiliates to sell for you, you have no expense of either time or money other than some basic administration duties. The money you would have spent on advertising can be paid to the affiliate. The great advantage of affiliate marketing for the vendor is that there are no commissions to be paid unless sales are made, unlike advertising fees which are payable even if you don’t make a single sale.

When people ask “What is affiliate marketing?” they are often quick to understand why vendors would offer a commission to anyone who can help sell their products, but they are usually completely baffled by the fact that some product owners are prepared to pay a full 100% commission and take absolutely nothing for themselves. Why would anyone want to make sales if they receive absolutely no money for doing so? The answer is simply that anyone who becomes a customer of a business can be marketed to again and again, so long as they stay on the marketing list of the product owner.

Obviously, this 100% commission is only used on digital download products which involve no cost in manufacture or shipping, and only on relatively cheap products which do not take a lot of time to develop. The 100% commission is still a loss leader program of sorts, as there is inevitably an expense of either time of money in creating the product in the first place. Sometimes, a vendor will do a quick launch of the product to cover the expense of product creation, and then start the 100% commission sales, and other times they will simply make sales through their own marketing funnels to cover this expense.

On the other side of the coin, you may be wondering what is affiliate marketing going to offer those who sell products which only offer a small percentage of each sale as a commission? The simple fact is, huge companies such as Amazon sell a vast quantity of products each day, and they have built up such a good reputation that conversion rates are exceptionally high. Affiliates may not get the high commissions they get with digital products, but the volume of sales more than makes up for that.

Starting an affiliate marketing business is something which can be done by anyone even if they have virtually no capital to invest and little or no online experience. Indeed, an affiliate marketing business should be started cheaply. The days when you could simply buy traffic using Pay-Per-Click campaigns and then send that traffic to affiliate offers are long gone. There is far too much competition for keywords, the prices per click are too high, and you will never cover your expenses unless you are collecting subscriber names yourself.

No, until you learn what is affiliate marketing and what is the right way to go about it you are far better off keeping expenses to a minimum. There is good money to be made from promoting the products of others, and the greatest benefit is that you will never have customer service or support issues to deal with. The downside of affiliate marketing is that you are selling the same products as all of the other affiliates, and competing for the same traffic. You can still make a good living when you learn to position yourself in the market and learn what is affiliate marketing.