What Is An Affiliate Program And How Does It Work?
Without an affiliate program, an affiliate marketer won’t be able to make any money. In this post I am going to go through the ins and outs of affiliate programs, how they work and how they benefit everyone involved.
What Is An Affiliate Program?
Affiliate programs are also known as associate programs. These are set up so merchants can reward publishers that promote their products or services.
How Do They Work?
There are three parties involved in the process:
- The customer
- The publisher
- The merchant
The customer will use a search engine to find information on a particular subject, product, service or problem. The search engine will put the websites with the most relevant content for their search to the top of their search results. On many occasion, the search results will include affiliate websites. These will have reviews on particular products or services, or they may have a guide to the best products that will be of interest to the customer.
Products that are recommended by the affiliate website will have affiliate links associated with them. These affiliate links are provided by the affiliate program and are unique to the product and to the publisher. They seamlessly take the customer to the merchant’s website, where they can buy the product or service.
Affiliate links track clicks and purchases through the publisher’s website, allowing the affiliate program to reward the publisher for their efforts.
There are a few other ways that affiliate programs work to reward their publishers:
Pay Per Click – This agreement pays the publisher based on the number of clicks on the links to their website. Nothing has to be bought and it makes no difference tot he affiliate (apart from a small amount of money for each click).
Pay Per Lead – Merchants will pay affiliates for helping them generate leads. When a potential customer signs up to a newsletter or fills in a form with their contact details on the merchants website, the affiliate website that sent them there will get paid.
Pay Per Impression – Affiliates get paid with regard to how many views the merchant’s banner advert gets. This is considered more of an advertising campaign
There are a couple of popular placement plans that are used by affiliate programs”
Multi level – These are payment plans based on sales, profit and recruitment. This means that affiliates get rewarded not just for sales, clicks or leads, but also on activity of affiliate websites that they have referred to the program. Personally, I would avoid these, as it is easy to get sucked in to an pyramid scheme.
Residual programs – These keep rewarding the affiliate if the visitors keep paying for goods or services. This could be a subscription to a course, a publication or even gift boxes.
Why Do Merchants Use Affiliate Programs?
Affiliate programs are a really efficient way of making sales. The advantage of an affiliate program over traditional advertising, is that that is risk free. Advertising is more of a scatter gun approach, used in the hope that it reaches the right people. This is inefficient when it doesn’t reach enough potential customers. With an affiliate program, the publishers do all the hard work and target people that have an interest in the product or service on offer. The merchant only pays out when a sales made. If they don’t do a good enough job of promoting the products the merchant doesn’t pay.
Why Are They Good For Publishers?
Affiliate marketing is a really cheap business to start up. With a website, a computer and an internet connection, the sky is the limit. There is a lot of work involved, but affiliate marketers enjoy lots of benefits.
The commissions on offer depend on the niche the publisher is working in, the affiliate program and the products they are promoting. But typically, the commissions range from 1 to 75% of the sales price.
There is no limit to how much money an affiliate marketer can make, nor is there any time restraints. By creating content, such as a product review an affiliate marketer has the potential to earn money 24/7, as it is sitting on the internet with a potential world wide audience.
How To Find Affiliate Programs
There is a good chance, that if you can buy something online, there will be an affiliate program for it. A simple Google search for affiliate programs for a niche will reveal loads of programs. All you have to do is apply to join them.
Affiliate programs are not just associated with manufacturers of products. Online stores have affiliate programs and are really useful for websites that want to promote lots of different products. A good example of this is Amazon. By joining the Amazon Associates program, affiliate websites can promote anything that Amazon sells. There are a few rules that affiliates need to follow with Amazon Associates. If they break the rules (even unintentionally) their account can be closed without warning. Websites that break the rules and only use Amazon products can become useless instantly.
Another way of finding affiliate programs for a niche, is to join an affiliate network.
What Is An Affiliate Network?
Affiliate networks act as mediators between merchants and publishers. They give the publisher the opportunity to join multiple affiliate programs with everything being tracked in one place. They help affiliates create affiliate links, track sales from all the programs and provide support for both parties.
The main benefit for the publisher is convenience. By having everything managed by an affiliate network and they only have one place to log in to.Additionally, they get paid one lump sum from one place rather than having to check several affiliate programs constantly.
Some affiliate programs have a minimum payment threshold before the publisher gets paid. This could mean that money is sitting in multiple programs for a long time before the publisher gets paid. An affiliate network adds up the sales from all programs meaning that unpaid money isn’t in limbo.
An example of a good affiliate network is AWIN. This has a huge list of affiliate programs that are worldwide and cover hundreds (if not thousands) of different niches.
What Is An Affiliate Program And How Does It Work?: Answered!
I hope that this has been useful to you. If you have any questions or thoughts about this subject, please let me know in the comments section below.