The Facts About Affiliate Marketing

When you’re searching for business opportunities affiliate marketing is a term that crops up time and time again. But what exactly is affiliate marketing, and how exactly does affiliate marketing work? There’s a lot of confusing and conflicting information out there. So here, in simple terms, is the truth about what affiliate marketing is.

So what is affiliate marketing?

Affiliate marketing as a basic concept has been around for a long time. But it’s only really taken off in the last decade with the growth in the use of the Internet. Broadly it’s a ‘cash-for-customers’ type business model. It’s a system where companies who are selling products and services on the Internet allow other businesses to promote their products and services for them. When you make a sale (or even just generate a lead in some cases) for the affiliate programme promoter you get paid a commission for it.

As I said, the Internet has made affiliate marketing straightforward and simple to do. With many schemes all you need to do is place the affiliate link you’re given on your website, blog or email. When your customer clicks through and makes a purchase your commission is automatically tracked and paid.

Pros of affiliate marketing

Here are the main pros of affiliate marketing, from the point of view of the affiliate scheme participant:

  • You don’t need your own product or service. You just promote someone elses.
  • You don’t need any capital for stock. You don’t even need any stock. And you don’t get involved with storage and shipping.
  • You can concentrate on where the money is – on sales and marketing.
  • You can (normally) take advantage of proven marketing materials, such as websites, banners or online sales promotions.

Cons of affiliate marketing

There are however a few downsides to affiliate marketing that you need to bear in mind:

  • It can be VERY competitive. You might be in competition with hundreds of other businesses all aggressively promoting the same products and services.
  • You don’t own the product you’re selling. You’re dependent on the affiliate programme owner, and they can set the price and terms and so on.
  • There are some affiliate schemes that just don’t work as promised, and some are just scams.
  • It can be harder to find customers for affiliate products and services than you think.

Checks to make before signing up for an affiliate programme

  • Does it cost anything to join the affiliate programme? Many good affiliate programmes are free to join.
  • How good is the product or service you’ll be promoting. Do people actually want to buy it? Is it a well-known and popular brand? (Or is it something totally unknown? Or, worse still something few people will be interested in?)
  • Are there already affiliate marketers promoting the product or service? Are they making a success of it? (Double check any testimonials carefully.)
  • Are sales properly tracked? Do you get credited for a sale if people come back in, say, a month and then make a purchase? Are you provided with regular reporting on sales and tracks?
  • Do they provide you with proven sales material? (Such as links, banners, classified ads., sales letters etc.)
  • Does the affiliate programme pay commissions for any sales made by those who buy from you? (Often known as second tier affiliate sales). Many affiliate marketers generate a lot of their revenue this way.
  • How are you going to attract customers? For example, you’ll need to generate good traffic for your website, blog or newsletter if you’re to make a really good level of affiliate sales.

Make no mistake about it, affiliate marketing is a proven and very successful business model. But do think it through fully and check all the details carefully before signing up for an affiliate scheme.