Affiliate Marketing is the first step towards the growth of a business for almost 99% of business owners and a way to earn money for affiliates.
Affiliates are simply the people who are attached to or connected to an organization. Affiliate marketing is when an affiliate earns a commission for marketing other people’s or other company’s products.
The way Affiliate Marketing works is simple. The affiliate has to market the goods and services of another person or company called the merchant. If a sale takes place, then the affiliate earns a commission based on the sale he made due to his marketing skills.
Pat Flynn states:
Affiliate marketing is the process of earning a commission by promoting other people’s (or company’s) products. You find a product you like, promote it to others and earn a piece of the profit for each sale that you make.
It is a two-way street. In the first case, one (the merchant) has the product and wants to improve its sales, then he can increase the sales through this method of Affiliate marketing. He can appoint multiple affiliates if he wants to. The second case is when one (the affiliate) does not have any products but wants to earn money. They can become affiliates and market products to earn money.
This is a revenue-sharing model. Both the parties are benefitted through this method and there is less investment involved for both. For the affiliate, an added advantage is that he does not work for the merchant. This means the affiliate gets a reward for giving the company a customer. It is a good way for anyone to earn passive income over their actual main source of income.
There are two more parties involved. First, the consumer. Affiliate Marketing cannot work if the end consumer does not buy the product marketed to them. Second, the network. The network works as a bridge between the producer and the affiliate as in some cases the merchants can be huge companies who might not even know who the affiliates are. Sometimes, affiliates have no other option but to go through an affiliate network as the merchant may be managing their affiliate program on that network.
The affiliates can market the merchant’s products in various ways like blogs, vlogs, their websites, podcasts, social media handles like Facebook, Instagram, Twitter, etc. The method of marketing the product is completely up to the affiliates and depends on their creativity.
Affiliate Marketing depends upon the audience of the affiliate. It is comparatively easy for those with huge followers or with a strong network of people to increase their revenue. The main idea is that the audience must trust the affiliate. If the audience believes that the affiliate has their best interests at heart then and only then will they consider buying the product.
Sometimes the affiliates do not disclose that they are getting monetary benefits from the merchant for promoting the products. This may misguide customers. The affiliates need to take care of such aspects if they intend to make a healthy lifelong relationship with their audience.
Benefits for Affiliates:
- Low entry barrier – Affiliate Marketing is easy to start. The cost or investment is low. Most affiliate programs or networks are free to join.
- The affiliate is not required to create the product or stock the product. or ship the products. Hence there is next to no investment.
- Low risk. The affiliate does not lose anything financially or otherwise as he is not the product owner. This significantly reduces the responsibility of the affiliate towards the customers.
- Affiliate marketing provides a way of earning passive income.
Disadvantages for Affiliates:
- Time-consuming – It takes time and effort to start earning. Sometimes even after a good amount of effort, there is no achievement. Many factors are involved in this, the product chosen by the affiliate may not be of any value or intrigue to the audience. The promotion techniques may not be attracting the audience etc.
- Less control – The affiliate does not make the product. Therefore, the affiliate has no control over the quality of the product or the experience a customer might have with it.
- Competition – If the affiliate is working through a network then there may be many others like him selling the same product. This may reduce the chances of him selling the product if the audience clashes.
- Too many offers from the affiliate on their website or social media platforms may cause the audience to lose trust or interest and not buy anything due to the constant bombarding of offers.
- Cheating – The affiliates have to be careful while choosing their merchants and the products they market. While most companies are authentic and will pay commission, some companies may not stick to their word and cheat the affiliates. The affiliates need to research the merchants and products properly.
- Cyber Threat, known as “linkjacking,” is a way when someone can steal the commission by hijacking the link of payment that is meant to be for the affiliate.
Affiliate Marketing is a great model for people looking for methods of earning quickly and effectively. Amazon Associates is one of the leading affiliate networks. In India, they offer commissions in the range of 10 to 12%. Flipkart has also adopted this model and offers up to 15% commission.
By choosing proper merchants, the affiliates can have a steady passive income and by choosing proper affiliates and affiliate networks, merchants can keep increasing their consumer base and the consumers will keep getting information and offers on various products. As long as all the parties in the transaction act carefully, this model is a win-win for all.