What is Affiliate Marketing and How Does it Work?
A modern 9-5 job seems to have many advantages, such as a steady paycheck, job security, and incentives, but at what cost? You are forced to stick to a schedule that requires you to get up early and commute in an overly populated mode of transport, get to the job, do the assigned, and then go back home drained and exhausted by the compulsion of being nice to your co-workers.
All of the above, in return for a paycheck that barely covers the bills which set in the life of monotony and frustration, does not seem worth it, does it? Wouldn’t it be nice if you were hired for a job that would allow you to make money anywhere, anytime, even when you are asleep?
It sounds like a dream indeed or even a scam. But, believe it or not, this is the very integral concept of Affiliate Marketing and is widely used throughout the world.
Affiliate marketing is a modern marketing tactic that benefits both the brand and the affiliate marketer. This process is a quick and significant way of generated online sales and revenue without the general 9-5 agenda but through promotions and advertisements.
But What Exactly Is Affiliate Marketing?
In simple terms, Affiliate marketing is a form of modern marketing where the marketer or affiliate earns a commission for publicizing and marketing a brand’s or company’s product.
It is modern advertising at its best, the marketer or affiliate browse for a commodity they prefer and would use themselves, and then promote that product on the media platform of their choice.
This promotion and advertising will help these affiliates earn a small piece of commission based on the profit from each sale they make of that product.
Every year, affiliate marketing spending increases by 10% and is predicted to reach $6.8 billion by the end of 2020.
How Does Affiliate Marketing Work?
Affiliate marketing works in a very unique yet straightforward manner. Here, the responsibilities of product marketing are spread across three main groups of people. This division manages the equal and reasonable distribution of the work according to the ability and type of group involved.
Each group gets a chunk of the shares of profit based on their role in the whole process of this marketing. Let us dive into this form of marketing.
Here the three main groups involved are:
- The brand or creator of the product
- The affiliate or promoter
- The customer or consumer
Let us have a look at their roles in the whole process and the complicated relationship these three groups of people share to make sure that the affiliate marketing process is successful.
1. The Brand or Creator of the Product
The brand, company, or even a solo entrepreneur is the vendor of the product who also functions like the merchant, retailer of his/her product. This product can be a physical commodity or even a specific service that the creator might want to offer. Here, the creator of the product is not actively part of marketing or promoting the product.
2. The Affiliate or Promotor
The affiliate or promotor is the ambassador of the product. Also known as a publisher, this individual sells the product in an appealing way to a niche crowd. In other words, the affiliate promotes the product in an effective method to a crowd is more inclined to purchase that sort of product. For example, a YouTuber from California would promote RAW products.
If the consumers are persuaded and do buy the product, the affiliate gets a portion of the profit in the form of commission. Affiliates typically have a specific audience, and hence, most affiliates today are influencers and semi-famous personalities.
3. The Customer
The customer is the key part of the whole concept of affiliate marketing. The affiliate marketers share products and promotions on social media, blogs, and other websites, and after that, the customers are convinced and on board with the product and would purchase it.
So, when a customer buys the product, the revenue gained by the brand or seller, is split and shared with the affiliate based on an agreement. Unaware of his/her role in the whole process, the customer comes across such a promotion, then eventually purchases it, the profit gained travels from the seller to the promoter and hence, concludes the affiliate marketing process for that product.
Different Ways in Which Affiliate Marketers Get Paid
1. Pay Per Sale
It is one of the most standard methods in which affiliate marketers get paid. In this process, the company or seller pays the affiliate a percentage of the selling price of the product, but only after the product has been sold with the help of the affiliate.
2. Pay Per Lead
It is a more complex method of getting paid. In this process, the affiliate is compensated based on the lead or in other words, a potential customer. Here, the affiliate does sell the product but gets paid when the affiliate convinces the consumers to visit the seller's website and fill out a form or gets them to sign up for a trial, etc. The affiliate is paid per consumer who fulfills the required action.
3. Pay Per Click
This type of payment works based on incentives. Here, the affiliate has to redirect customers from the platform of advertisement to the seller's website. So, the affiliate has to engage and convince the customers enough to visit the website and is paid based on increased traffic on the merchants' website.
Affiliate marketing has reached new highs in 2019 and is predicted to get larger by next year. Many companies today rely on affiliate marketers to get their product out to that niche crowd, and in return, help the promoter earn.
The best way to earn is to get associated with a brand or seller who has an affiliate marketing program that allows people to enlist for the job. Many people prefer affiliate marketing is because it can be done from anywhere in the world, by just the least bit of effort to get the product or service name out there. There is no loss on the company's end, either on the marketers. These programs are an excellent way for future entrepreneurs to get into the market and learn their way around companies, sales, and marketing.
Xtracted CBD is one such company that has a very attractive affiliate program that allows the affiliates to work from the comfort of their homes while simply publicizing tracking links that promote ebooks, and different products while earning a commission of 10% on each sale! So, don’t just become another clog in gear and start working towards a faster and modern method of entrepreneurship.