How Affiliate Marketing Works
In affiliate marketing there are usually three parties involved; the merchant, the affiliate and the affiliate scheme.
The merchant is the person or business who has a product or service to sell. They generally provide a website where people can buy the product and some information to help you sell the product. In return for you selling their items they offer either a fixed commission or some percentage of the selling price.
The affiliate (you) is the person who finds customers and sells the product to them. When we talk about online affiliate marketing you will have to find potential customers through your own website or some other means (we'll talk about that later) and get them to the merchants website where they will actually make a purchase.
The third party, the affiliate scheme, brings the whole system together. Merchants can sign up to an affiliate scheme and offer their products for sale. Affiliates can also sign up to the scheme and they are then able to market the items from the merchants. The affiliate scheme provides all the technology to allow orders generated by the affiliate (you) to be tracked through the merchant's website. Reports are generated for both the merchant and the affiliate so they can see how many orders have been placed and what costs and commissions have been generated. The affiliate scheme will also handle the commission payouts to ensure that you get the money you have earned.
If all this sounds a bit complex don't worry, it isn't. The basic process you'll have to follow is...
- find an affiliate scheme
- join the affiliate scheme
- find a product you want to sell
- the affiliate scheme will provide you with a web address
- send people to this web address
The web address that the affiliate scheme gives you includes a number of special codes that allow the customer to be tracked as they go through the merchants website. When they make a purchase that order is logged as coming from you and you will automatically be given your commission.