How Does Affiliate Marketing Work

Many wonder, how does affiliate marketing work for them? Those who are looking to begin an internet business, or add a stream of income to already existing ones may find themselves interested in the ins and outs of affiliate marketing, which truly is not a difficult concept to understand. Affiliate marketing is beneficial for both the merchant and the individual who partners with the company, and with a successful relationship, this form of Internet advertising can, in the long run, be quite lucrative. The Internet is rife with companies selling products or offering services to people who surf the web. More so than even in a traditional market, advertising is extremely important online. The competition is so fierce on the World Wide Web because of the fact that companies are no longer competing with others in a general geographic area, they are having to go up against others who offer similar goods but that could be based anywhere in the world. This is why advertising is so essential.

Understanding the changing business climate important when finding out the answer to how does affiliate marketing work. So, considering the suddenly steep competition, merchants began to try and think of new ways to get the word out about their companies. This is where the individual website owner plays a vital role. Business owners began to realize the potential that independently run websites have in reaching a large section of the population. Companies began contracting these people to advertise on their websites. And it was not before long, considering the success of these ventures, that many began to ask themselves, "how does affiliate marketing work?"

But how does affiliate marketing work for the individual? For those thinking about beginning an Internet-based business, this brand of marketing can often be a wise investment to make. It operates under the confines of an already existing website. So it is wise to make sure that an individual has his own website first before looking into affiliate marketing opportunities. Once there is a steady stream of traffic that visits the site on a consistent basis, a person will begin looking attractive to potential companies.

One of the next most frequently asked questions after "how does affiliate marketing work," is "how much effort does a person have to put into this?" The answer to the last question varies. An affiliate can basically decide how much work he wants to put in on his end of the bargain. While sometimes companies may have preferences about what they expect, for the most part, that decision is left up to the website owner. Some choose to write actual advertisements out for the company, posts or entries that detail the highlights of the product being advertised. Others are simply content to just post a banner or ad on their website and wait for people to click on it, without any extra urging.

So what happens once a person clicks on an advertisement? How does affiliate marketing work in this aspect? First, in order to answer this question for a seller, one must look at his contract for the specifics, although there are standardized business practices across the board that affiliate marketers can look at when trying to get a general idea. Depending on the agreement with the company, some merchants will offer pay per click or pay per sale. Pay per click, while not in popular use today, is the practice of paying a commission to a website owner every time a reader clicks on an advertisement for the company. Once a reader mouse clicks over the banner, it redirects them to an offshoot of the company's site; the website owner has a specialize code linked to the URL, that tells the merchant how many people were directed there from the banner. The merchant then pays the commission accordingly; these, however, have declined in popularity since their inception.

Because of the fact that dishonest individuals were able to find ways to fool the computer systems and scam merchants into paying for customers who did not actually visit the companys site, many companies have tried to find other ways to measure the success of an advertisement. As a result, most merchants have moved to a "pay per sale" method. This pays the commission to the website owner each time a customer purchases something from the business after going through the affiliate's ad. While this certainly benefits the merchant more than the individual, seeing as how the company only has to pay once results are seen, this method also safeguards the individuals in a way. This assures that individuals will not have to be victims of fraudulent practices as well. Although, this method of payment will generally not generate revenue as quickly as the pay per click would.

How does affiliate marketing work differently from other forms of Internet business? A person does not have to spend exorbitant amounts of time fostering business for the company. As long as he continues to do what he had been doing previous to becoming an affiliate, the work should not add any extra stress to his life. "Be thou diligent to know the state of they flocks, and look well to thy herds" (Proverbs 27:23). If a person is able to watch over his own interests, then there should not be any reason why being a marketer should not add increased revenue. No longer will anyone have to ask, "how does affiliate marketing work?" As shown, clearly it can and does work, and can work for anyone

Affiliate Marketing Commissions

Affiliate marketing commissions are of course the number one concern for those who are already involved in, or who want to be part of the Internet profit making business of affiliate or colleague marketing. For the most popular websites in the Internet, profits each month can reach as high as fifty thousand dollars, but the average affiliate marketing commissions are not more than five hundred dollars. There are many intricate pieces to the puzzle that make up affiliate commissions and making high monthly income from colleague networks is becoming an exacting science. Hundreds of thousands and perhaps millions of savvy Internet entrepreneurs are involved each day in devising new ways to drum up and create business. The pursuit for profit making through colleague marketing is not for the faint of heart nor for those who believe that once a network is created it's time to sit back and watch the profits roll in.

An affiliate marketing network is a large group of websites that share a common theme. The theme may be websites that are somehow related to debt, or they might be related to travel, or sports or politics or any other shared interest. They will include websites as well as blogs and articles on Internet magazines that share a common interest in a specific subject. As a visitor enters the Internet and begins looking for information on a specific area of interest, he may be carried along a vast string of interrelated websites, some carrying only information, others touting products for retail sale, but all having some commonality of subject matter. What may appear to some as a haphazard clicking one's way through an Internet maze can be a very well thought out and profit making guided tour designed well ahead of the day the visitor begins his tour. And as the visitor moves from site to site, affiliate marketing commissions are being generated for each and every colleague whose site is visited along the way.

Affiliate marketing commissions are not a one size fits all proposition. Rather, each network and each colleague's commissions are based on the product being presented. For example, a retail clothing network whose affiliates are selling single items of clothing will probably be a pay per click entity while a network whose main theme is financial services may be a commission-based program only paying for loans that are actually secured. A travel based network may be more interested in building client list for a future email campaign and so is based on a pay per action basis. This means that only when a visitor fills out a data field such as name, email address, phone number and other information is a commission paid. The Bible is clear that Jesus has promised that He will one day return and take all believers with Him to heaven. "And if I go and prepare a place for you, I will come again and receive you unto myself; that where I am there ye may be also." (John 14:3) Our responsibility in this is to be prepared spiritually for His return.

Here is a fictional example of how affiliate marketing commissions might be generated on a colleague network. A stay at home mom is looking for a way to make some extra money with her passion to design costume jewelry. She types in the keywords "at home jewelry based businesses" and is taken to a search page that is filled with blogs, companies and articles on making money at home designing costume jewelry. The woman clicks on a blog that a designer has started and reads articles about how his Internet business originated. Along the right hand side of the article column are links to other jewelry designers, jewelry making suppliers, and retail sellers of costume jewelry. The woman spends an entire afternoon clicking on various links that are provided at each website she visits, and they are all related to costume jewelry. The woman's questions are slowly answered, the ideas for her own business are beginning to emerge, and during her hours of moving from link to link, the woman has made money for all the websites she has visited.

This example was a pay per click affiliate marketing commissions network. Each time the woman clicked on a different website, she placed seventeen cents in the coffers of each website that sponsored a link she routinely visited. Pay per click commissions can run from one cent to tens of dollars, depending on the network and the colleagues on that program. When a person has a number of websites that can be placed on multiple networks, the opportunity for making more money rises exponentially. But affiliate marketing commissions are also based on other actions besides a simple mouse click.

For example, the pay per action commission is paid only when a visitor pays for a data field being filled. Many companies are hungry for email list building information, and are not necessarily pressing for a sale at the time. A network based on these types of affiliate marketing commissions may include financial, educational, loan and perhaps travel industry members. Customer information can be almost as vital to these industries as the sale itself. Depending on the network a filled data field may be worth more than a simple pay per click and so the commission rates can be higher. And of course there are the straight commission networks that pay much higher rewards for actions that lead to high dollar transactions. Rewards for an ad that leads to a large mortgage loan may bring a host website hundreds of dollars in commission fees.

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