What is Affiliate Marketing? And How does it Work?

Affiliate marketing involves the spread of a company business with the help of affiliates. A merchant pays to affiliates a commission if they bring business to the official website of a merchant. The money is only transferred to the affiliates when there is a performance from affiliates. That is, if affiliates bring customers to their sites, then only then would get a commission out of the process. The process can be said to be as a means to promote a given product or service by increasing its network.

Working of an Affiliate Marketing

Affiliate marketing system consists of three channels namely, Advertiser, Publisher, and Consumer. It is a system in which a product is created by the merchant and the information about it is spread to the customers by affiliates. A great example of a successful affiliate marketing site that has informational and affiliate marketing content is plumbandlined.com. Below we have discussed each unit of affiliate marketing system in detail:

  • Affiliate – Affiliates are also known as publishers, advertisers, or distributors. These affiliates could range from a single individual to whole organizations. The job of the affiliates is to attract people to the customer’s website. They advertise one or more affiliate products, items or services by writing a promotional blog post about the brand. By this method, it becomes possible for the affiliates to bring the prospective customers to the merchant’s site and they get payments according to the conversion rate of visitors into customers. One thing is beneficial in affiliate marketing is that payment is only given to affiliates if a visitor gets converted into a customer.
  • Merchant – Merchant is the creator of product/item or brand. It is the entity in the affiliate marketing system which creates a product and it could either be an individual or whole organization. Any person or organization who has a product to sell can act as a merchant in affiliate marketing. Merchants could either manage their affiliate programs in-house or other simply turn management over to their affiliate network management or an external agency sometimes referred to as Outsourced program management.
  • Consumer – Affiliate can approach consumers via various channels whether these are social media or any content management channels. The commission will only be paid if visitors turn into a buyer. The cost of affiliate advertiser is included in the consumer and an affiliate need not pay any extra cost. Apart from this network is also a part of an affiliate marketing system. It is possible for affiliates to promote the product on various networks efficiently.

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