How Does Affiliate Marketing Really Work?

How Does Affiliate Marketing Really Work?

Last week we talked about how to make money from a blog. I thought I’d cover off in a little more detail how those business models work. So, let’s look at affiliate marketing.

In my other life I jointly owned a wholesale sporting goods company. We bought product from a supplier and sold it onto retailers. Effectively, we were the middleman. A broker. A wholesale agent.

Affiliate marketing is the exact same business model, only online. More frequently the stock you buy and sell is digital products although it can be physical eg if you set up and Amazon store or sold through eBay.

This infographic from Jack Media does a fine job of explaining how a sale is made and who is involved in the affiliate marketing process.

 

how affiliate marketing works

Essentially, you have a vendor, a buyer, an affiliate network or program and an affiliate marketer.

The vendor puts items for sale in the vendor network. Why? To extend the reach of the offering which generates more leads and sales. The vendor or seller is prepared to provide commissions to the marketer to be able to access those leads and buyers.

The affiliate marketer is looking for product to sell to service his/her audience/niche/target market as well as to generate income from the commission on sales.

The buyer is one of the billions of people searching the web to find the product they seek.

The affiliate network is simply a facility which matches vendors and marketers. The network takes a percentage of sales and/or a listing fee.

Who has the most work?

The network has the cost of developing the network infrastructure and building its reputation. Think Clickbank, JVZoo, WarriorPlus for examples of affiliate networks.

The vendor or seller has the cost of production and getting the product to market.

The marketer has the challenge of attracting buyers to their web properties and making the offer attractive enough to get the buyer to click through.

As an affiliate marketer, it can be a simple process or it can be complex in terms of how to promote the vendor’s product. We’ll talk more about that later.

Does Affiliate Marketing Work? Is it Worthwhile?

Firstly, I have to say it IS a method that works.

What you need is to

  • choose a good vendor and product
  • market the pants off it

I’ve made some money from AM with moderate success and little effort. I know I could work that better to make more from it.The trick is in getting your processes down into a system.

Secondly, the beauty of affiliate marketing is that it can be done with either a mailing list, a social media audience, a website … or all of these for more impact. In other words, there’s no investment to get underway.

If you take on this business model, think of yourself as a commissioned agent. Your job is to market and promote other people’s products. How well you do that directly affects your income.

What’s been your experience with affiliate marketing as a buyer or as a promoter?

10 thoughts on “How Does Affiliate Marketing Really Work?

  1. Some affiliate marketing can take time to get off the ground (people need more than one exposure to the product to be convinced)… but I also found that it’s much easier to promote to a list that TRUSTS your judgment too.

    I’ve sold products many different ways – through social media, my blog and a mailing list. I would say that the mailing list pulls in more sales than anywhere else because the people know I won’t steer them wrong.

    1. Ah yes, email marketing. I’ll add that to the list to cover! That takes getting used to – marketing more than once. But you’re absolutely right.

  2. I love affiliate marketing. I’ts one of my favorite ways to earn money online. Amazon is by far my favorite affiliate program for tangible products. I like JVzoo for informational products.

  3. I would say that one of the biggest and easiest company to promote is Amazon. Lots of product categories to choose from, very easy to get an affiliate link (unless you are in certain parts of America).

    Commissions depend on the product price but if you are just starting out, this is a great way to learn.

    1. Affiliate marketing can sound sexy. It’s just wholesaling. The marketing mechanics are where the focus needs to be. Cheers, Marilyn.

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