What is Affiliate Marketing?

Did you know that you can make money simply by promoting other people’s products online? Affiliate marketing is where you earn commissions by referring visitors from your website to a merchant’s website. A merchant is any individual entity or company that sells products or services online. Yahoo, eBay, Best Buy, and Overstock.com are all good examples of merchants with affiliate marketing programs. These companies have all set up programs that you can apply to directly on the web to become an affiliate. As one of their affiliates, a merchant will pay you commissions to promote their products and services online. Affiliate Programs are everywhere these days - almost every major company doing business online has one. And best of all, signing up is free, which means that you never have to spend a dime in order to make money. Sound good? Then read on.

As an affiliate you can earn handsome commissions when a visitor that you refer completes some sort of action on the merchant’s website. For example, you might earn a flat commission for every referred visitor that completes a form or downloads some software. You might also earn a generous percentage of the sale if the visitor you refer makes a purchase. Percentage commissions can range from a few cents to hundreds of dollars per sale. It all depends on what products you’re promoting and the terms of the affiliate program.

How does Affiliate Marketing Work?

The process of becoming an affiliate and referring visitors is surprisingly simple. After signing up for the merchant’s affiliate program, you’ll be given access to a set of text links and banners designed by the merchant to put up on your website. When a visitor comes to your website and clicks on one of your merchant’s links, a piece of tracking code called a cookie is put on to the visitor’s computer. A cookie is just a small text file that is placed on a user’s computer when they visit a website - almost every merchant website on the Internet uses them. The tracking code tells the merchant that a visitor arrived at their site through one of your links, so when that visitor makes a purchase or completes an agreed-upon action the merchant pays you a commission based on the referral. You’ll get a commission for every visitor you refer that completes that action - every time, for as many visitors as you can send. Commission checks are delivered by mail, direct deposit or by Paypal. It’s as simple as that.

So What’s the catch?

No catch. You don’t have to buy anything to be an affiliate - in fact, most affiliate programs are free to join. No experience necessary! And you never have to handle customer service issues, or do anything else. All you’re doing is referring visitors from your website to the merchant’s website. Affiliate programs are growing in popularity on the Internet because they provide a win-win relationship between merchants and affiliates. Most merchants only pay if an action is completed (a sale is made, a download happens or a form is filled out), and affiliates spend all the time doing the leg work promoting the products. The best part is that neither party takes on any real financial risk in the affiliate-merchant relationship. It’s a great way to market products if you’re a merchant because you only pay affiliates if a desired outcome is achieved. Payouts are just a percentage of profit so it’s virtually impossible to go into negative cashflow, which is why affiliate programs are everywhere. Ready to dig in? Check out the related posts (top of this post) to start getting comfortable with the basics of affiliate marketing so you can start earning commissions.

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