What is Affiliate Marketing?

By: Kathryn Beach
Submitted: 2007-01-17 12:54:55
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Have you ever wanted to make money online without having to stock products and do all the necessary accounting, credit card transactions, and shipping? Then affiliate marketing just might be what you're looking for.

Affiliate marketing is a profit-sharing business venture linking a webmaster and an online business. The website owner will position advertisements on his websites to sell the merchant's goods and/or to send possible clients to the merchant's website, and then profits are shared accordingly.

There are three ways to earn money through affiliate marketing:

Getting paid for clicks - Whenever a potential purchaser leaves the affiliate website by "clicking" on the link leading to the merchant's website, a certain amount of money is deposited in the affiliate's account. This amount can be pennies or dollars depending on the product and amount of the commission.

Getting paid for completed sales - Whenever a sale is made as a result of advertising on the affiliate's website, a percentage, or commission, is deposited into the affiliate's account.

Getting paid for sign-ups - Whenever a potential client registers at the merchant's website as a result of the advertisement on the affiliate's account, a previously determined amount is deposited into the affiliate's account.

For many website owners, this is a good way to make some additional cash by doing something once and then continuing to reap the rewards over time. All it involves is placing an ad on your website. There's no special selling or promotion of any kind. The affiliate leverages additional income off of the website promotion he is already doing.

It's also beneficial to the merchant. He doesn’t have to spend any money out of pocket for promotion until a product has sold.

Affiliate marketing has its benefits, but there are also a few drawbacks. For the merchant, there is a danger that an affiliate’s dishonest or unscrupulous practices will tarnish his company’s image and reputation.

The affiliate has to do thorough research on the merchant before agreeing to affiliation. To ensure a satisfying and lucrative business arrangement, find out the answers to these questions before entering into any affiliate agreement:

1. How much commission does the merchant pay? 50% is a good starting point; any less than that and you’ll be spending most of your income on advertising.
2. How often are commissions paid? Make sure you have the financial resources to keep on selling a product if you have to wait a long time before you get paid. Also, find out the minimum commission that you have to earn before you get paid. Of course the best situation is getting paid as soon as you sell.
3. Does the merchant use tracking cookies? You want to make sure that you get recognition as the referring vendor if the customer returns and buys at a later date
4. Does the company pay on successive sales? It is vital that you get paid no matter what approach the customer returns by if you are to build a sustainable income.
5. What promotional means does the merchant offer? Does he offer ads, websites, or articles? It usually works best to write your own promotions, but whatever is provided gets you off to a good start.

Affiliate marketing can be a first-rate starting point for anyone new to internet promotion. Linking up with just the right merchant for you might be tricky; the tips in this article can help, and you need to trust your own judgment. Only you can make the right decisions that will help you achieve your personal financial goals.

Hop on over to Affiliate Marketing Tips where you'll find an expanding universe of small business promotional tools and tips you can use right away to build your business using smarter marketing.

Article source: Expert Articles