There are many forms of businesses online, and most of these reward you for the service or product you offer. However, there are still other forms that use third parties to direct buyers or consumers to retailer or seller. The commonest form of such business is known as affiliate marketing. If you are thinking of how to make money online, going for affiliate marketing may be a good option for you. Here are things you need to know about this type of online business:
Affiliate marketing can be described as a business which enables third party to earn commission for the customer or visitor he/she brings to a particular an online retailer. In other words, when you register as an affiliate, you can market the product of a retailer by directing customers to the retailer. If the customer eventually buys the product of the retailer, then you (the affiliate) are rewarded by some commissions. Usually, this commission may be based on the percentage of the selling price of the product.
Affiliate marketing is like referral marketing but there is a distinction between the two — affiliate marketing relies on sales before reward, while referral marketing does not necessarily rewards the individual even when sale is not make.
So, affiliate marketing a performance – based marketing and it overlaps, to some extent, other forms of Internet Marketing like: social media marketing, email marketing, search engine optimization (SEO), etc.
The nature of compensation for affiliate marketing
There are different types of rewards, commissions, or compensations associated with affiliate marketing. The types used depend on the retailer or merchant. Therefore in a particular system involving the merchant (retailer), the network (types of affiliate system), the affiliate (publisher) and the customer (buyer), any of the following types of compensations can be applied:
- Pay per sale (PPS)
- Pay per Click (PPC)
- Cost per action (CPA)
- Cost per Click(CPC)
- Cost per Mille (CPM)
The most predominant of these affiliate programs is the Pay Per Sale (PPS) method. Here are the merchant and the affiliate agrees on a revenue sharing reward. For instance, system may require that the merchant takes 60% of the sale while the affiliate earns 40%.
There are different types of affiliate networks and merchants you will see online. These are provided by varieties of websites. The bottom line is that these ensure that affiliates or participants are compensated for their performances at ensuring that the products or service of the merchants are promoted and sold.