What is Affiliate Marketing?

In Simple Terms

What is Affiliate Marketing and why doI need to know about it?

Well, simply put, Affiliate Marketing is a means of expanding one's sales force with no overhead, or employee-related issues or costs. Or in other words, you pay others to sell your product, but only when they actually sell it - no base salary, benefits, etc...just commissions.

There are many variations on this Affiliate theme. There are affiliate programs that will pay you for leads, and some that will pay for just a click. Some affiliates pay you a one time commission, while others will pay residual commissions.

If you can think of it, there are probably programs available that will pay you to promote their product. There are literally thousands of products that you can promote and be compensated for doing so.

To help answer "What is Affiliate Marketing" we will use an example.

There are merchants who sell products or services who want to increase their market share. One means of doing so is by offering others a commission to sell their products for them.

ABC Company makes toy trains, and Mrs. Smith owns a directory website that lists online companies that sell Wooden Toys.

ABC Company has offered a 15% commission for any toy trains that Mrs. Smith sells. So, since ABC Co. offers a variety of wooden toy trains, Mrs. Smith decides to put a special link on her site that links back to ABC Co. ABC Company tracks any visitors that come via Mrs. Smith's special link and who purchase toy trains.

ABC Co. (or an Affiliate Marketing Program that handles Affiliate relationships) tracks all of the transactions, and cuts a check to Mrs. Smith on a regular interval for the commissions she has earned because she sent buying visitors to the ABC Co. website – once setup, her site will continue to send more buyers to ABC Co. and therefore...more passive affiliate income comes her way.

So, basically, as an Affiliate, you become part of the Merchant company's sales force. You promote their product or service, and you get paid for the buying customers which you refer.

There are many ways to refer potential customers. One of the main referral methods is from a website. If you do not have a website, but want to seriously consider Affiliate Marketing, it would be wise to create one. Creating a website is much easier today than it has been in the past.

The Flip-Side of Affiliate Marketing

If you sell a product, or products you should also consider be asking "what is affiliate marketing, and how can it help me?"

If you want to increase the sales of your product, you should consider creating your own virtual sales force via an Affiliate Marketing Program. If you join an Affiliate Program as the Merchant, you can expand your sales force, and hopefully your product sales.

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