In this post I’ll provide an overview about what affiliate marketing is, and how it works.
What is an affiliate?
An affiliate connects customers with vendors and earns a commission for each sale he or she refers. A vendor is someone who sells a product. They take care of the order processing and fulfillment. Amazon.com, for example, is a vendor.
So, if you sign up for Amazon.com affiliate program you can began sending them traffic through your website. That traffic will be trapped by a special link known as an affiliate link, and if any of that traffic you send to Amazon ended up purchasing a product, you would receive a commission from Amazon.
Affiliate Links and Cookies
An affiliate link will be provided to you when you sign up for an affiliate program. If you sign up for Amazon,com affiliate program, you would login to your account at Amazon.com and you will grab your unique affiliate ID. You will place this link in the various places on your website because you want your website visitors to click this link.
When someone clicks this link, a cookie is embedded in their browser. If they make a purchase at Amazon after clicking your link, Amazon would check their browser for any cookies. If they find a cookie that contained your affiliate ID, they will know to credit you with a sale. This, of course, all happens automatically. The bottom line is to get as many people as possible to click on your affiliate link.
Affiliate Programs
There are essentially two types of affiliate programs; the first type is run in-house, and the second is run through an affiliate network.
In-House Affiliate Programs – This is where vendor elects to run their own affiliate program. Usually, they use a piece of 3rd party affiliate software to take care of managing the affiliate accounts and tracking. The software will also usually calculate payments. It is the job of the company, in this case of the vendor, to processes and send out those payments.
Affiliate Networks
Many vendors, instead of running their own in-house affiliate program, elect to sign up with the network which provides the tracking as well as manages the payouts.
Affiliate Network Benefits
Affiliate networks provides numerous benefits to both the vendor as well as the affiliate. In the terms of vendor benefits, an affiliate network provides all of the tracking and since the appropriate payments for both the vendor, and the affiliates.
It also provides what is known as a marketplace. This is a consolidated listing of various affiliate programs that affiliate can browse through. Being listed within a marketplace like this provides vendor with greater exposure to potential affiliates.
Affiliate networks also provide numerous benefits to affiliates:
- They provide one-stop shop where an affiliate can easily identify the products they want to promote and the vendors that they would like to work with
- An affiliate can promote multiple offers from multiple vendors and all of the tracking and earnings will be reported and displayed in one central location that the affiliate can access
- Consolidated paychecks – affiliates can promote multiple offers within the network and all of their earnings will be consolidated.
Popular Affiliate Networks
There are literally dozens of affiliate networks out there. You can do a search for ‘affiliate networks’ on Google, and you’ll find many of them. Some of the larger and most popular networks include:
- ClickBank.com – this network only supports downloadable, digital products
- Commission Junction (physical products)
- LinkShare (physical products)
- Share-A-Sale (physical products).
CPA Networks
A CPA network is very similar to an affiliate networks. In fact, for all intents and purposes, a CPA network is an affiliate network.
The difference is that CPA network primarily support what is called cost per action offers, and action can pretty much be anything. In many cases, an action could be simply filling up an opt-in page, or signing up for a free trial, or also could be purchasing something.
The point is, in the CPA networks, the affiliate will be payed for generating whatever action vendor wants the visitors to take. This represents a big opportunity for affiliates – for instance, there are CPA offers out there that pay $30-$50 per lead.
In other word, an affiliate will be payed $30 to $50 just for getting one person to sign up for a free trial for some product. This is often very easy to do, and much easier for paying something up front like in traditional affiliate program.
Popular CPA Networks
Similar to affiliate networks there are tons of CPA networks out there. You can do a Google search for ‘CPA networks’, and find dozens of them. Some of the most popular include:
- Azoogle
- ClickBooth
- Hydra
How Do Affiliates Make Sales?
In a nut shell, affiliates make sales to what is known as Affiliate Marketing. As an affiliate marketer, your job is to generate clicks on your affiliate link from targeted, high-quality traffic. Those people clicking on your link will land on the vendor’s website, and ideally make a purchase, and this is where you make a commission.
Your Job as An Affiliate
Your job is not to close the sale. Your job is simply to pick the interest of visitor enough so that they would click your affiliate link to learn more about the given product that you are promoting. It’s the vendor’s job at that point to close the sale.
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