what is affiliate marketing and how does it work

what is affiliate marketing and how does it work

what is affiliate marketing and how does it work

So what is affiliate marketing and how does it work.

Affiliate Marketing is a method of promoting a product or service in which an affiliate is then rewarded for every website visitor, subscriber, customer and/or sale provided via their efforts to the actual business selling the product or service.

The compensation or commission that an affiliate receives may be based on a certain value for every exposure, visit (pay per click), new client (pay per lead), sale which is usually a percentage of the item sold (pay per sale or revenue share) or it may be a combination of any of these.

Many companies like to use affiliate marketing mainly because they do not incur any kind of marketing costs unless of course the desired result is realized.

There are also some e-commerce sites around right now which often run their own affiliate programs, while others use 3 rd party providers. These provide intermediaries who will track visitors or sales which are referred to them via their different affiliates.

There are numerous companies online today whom owe much of their growth and success to the use of affiliate marketing. It has been especially successful for small and midsize businesses on the internet.

We have now seen what affiliate marketing is, now let us glimpse at a number of reasons as why this can be a great type of online business to set up.

No Development Costs

With a good affiliate program, production expenses are no longer a issue as the product has been developed and proven to be good. Best of all, this has all come out of the merchant’s accounts and not yours.

Do not need a lot of money to set up.

All anyone will require is a desk, laptop or computer, internet connection in addition to word processing software in order to get going.

Costs Involved

Generally it is usually totally free to join an affiliate program, and most the set up costs and shipment costs will be met by the particular merchant whose products you are advertising. Plus, as you do not need anywhere to store goods, this is actually another reason for joining an affiliate program.


There are usually 1000’s of products and services that a person can choose from. So finding the correct products for possibly a site you have currently or maybe one in which you are planning to create is immense.

No need to have a Merchants Account

This can certainly be a time consuming and pricey expense for anyone setting up a business for the very first time. Without doubt, it is even more so where an online business is concerned. However, as an affiliate marketer, the merchant you are selling the product or service for will carry all costs, as well as handle the processing of all payments. So you never have to be concerned about any possible charge backs, fraudulent purchases or losing your own merchant account completely as an affiliate. Plus, no longer will you be worried with collecting and storing names and addresses of customers along with their credit card information, as this will be all done by the merchant who you are affiliated to.

Hope this helps you understand affiliate marketing.