What is Affiliate Marketing? Explained In 100 Words.

Are you wondering “What is Affiliate Marketing?” If so, you are in the right place!

Affiliate Marketing is the process through which a person (affiliate) promotes another brand’s products earning a commission if other users actually end up buying the item promoted by the affiliate.

This is a type of performance-based marketing where affiliates get paid only when a conversion occurs. For this reason, it is advisable for affiliate marketers to be specialized in a specific niche. The more specific, the better for content creators and product experts that should choose something they’re really interested in.

What players are involved?

How does Affiliate Marketing Work – Source: bigcommerce.com

• Merchant: Brands (eg. Manufacturing companies) provide each affiliate with a unique UTM so they can track who was responsible for a conversion.
• Affiliates: as a partner the affiliate works a seller for the company. The affiliate might also be a publisher driving traffic and sales to the merchant’s website. Affiliates may be bloggers, influencers, Youtubers, Twitcher, product reviewers, news sites or even other brands.
• Affiliate Networks: there are a number of networks to join. This depends on the niche and level of expertise. Each one has a different level of competition and profitability. It’s not mandatory joining a program.

How much does it cost for brands?

Brands have to recognize commissions to their affiliates depending on two factors:

1. Negotiation: if the two parties did not join in a network they may negotiate their commission freely. Free products or discounts may be included in the deal as a reward. The Merchant may track sales autonomously.
2. Affiliate program: on Amazon’s affiliate program, for example, you can earn up to 10% commissions. Some networks are more profitable than others. On Shopify earn an average of $58 for each paid signup. Click here to see what are “the best affiliate programs”.

Affiliate Marketing is suitable both for startups and for well-established companies although startups might find it more cost-effective. If you have any questions on this topic, drop me an email! I will be very glad to help!