Affiliate marketing defined

Affiliate marketing uses a revenue sharing agreement between a website owner, the affiliate, and a business owner, the merchant. In return for promoting the business owner's products and services online, he or she gets a percentage of profits, or commission. Therefore, every time a prospective customer goes to the merchant's website because he or she has been referred there by the affiliate, the affiliate gets a commission. Some of the ways affiliates make money are by having prospective customers visit a merchant site (pay per click), register (pay per lead), or actually buy something (pay per sale). If none of these things happen, then the merchant doesn't pay anything to the affiliate.

Why affiliate marketing benefits everyone

Affiliate marketing programs benefit both the affiliate and the business owner because the pay for performance methods in the agreement make this possible. Both the business owner and the affiliate benefit from this arrangement. The merchant gains wider exposure and a wider market to advertise his or her products without costing him anything extra, and the products or services get much more exposure than they otherwise would have without the countless affiliate marketers promoting a product or service for him or her.

The affiliate benefits, too. Affiliate marketing can be an easy way to make a profit. There are no production costs for the affiliate, because the product is already here. The affiliate has to advertise, and then advertise some more. The goal, of course, is to find as many customers as possible that will actually buy the product. You can also make an excellent living from home this way without having any sales experience yourself.

Affiliate marketers maximize earning potential

Affiliate marketers maximize earning potential by using the merchant's support and resources. Most affiliate programs give the affiliate marketing materials so that affiliate marketers have a basis on which to improve and expand their marketing knowledge and skills. They are most importantly responsible for getting targeted traffic to the business owner's website and turning it into customers. Because the Internet has gone global, they can find thousands of prospects. They can also greatly expand their marketing campaigns by using online marketing methods such as marketing through e-zines, e-mail, article marketing, and direct marketing.

Ultimately, affiliates can benefit from this because if they're successful, they can choose to leave 9-to-5 jobs to work for themselves, increase income, and work at their own pace.

One caveat about affiliate marketing is that there are some myths about it to dispel. Two of them are that it's easy and that you can make a fortune overnight. There can be some truth to this, in that affiliate marketing can be an easy way to make money online, but you won't make millions overnight.