What Is Affiliate Marketing

Online marketing and sales are hot, so asking what is affiliate marketing can be a logical place to start when considering any money making venture. Essentially, the practice is a low-risk and high-profit agreement between a website owner and an online merchant. It's low-risk because the practice doesn't really cost either party anything to get started. However, low-risk doesn't mean risks aren't involved. The website owner agrees to allow the merchant to post an advertisement for free. And the merchant only pays for actual sales or leads. Passive advertising and sales is what this marketing technique equates to. Both parties basically just sit back and wait for sales and profits to roll in. Among other items, people pushing credit cards, dating services, health services and pharmaceuticals, and computer software use the technique. Residual income also adequately answers what is affiliate marketing. This type of income keeps coming in after all the work has been completed.

Life doesn't usually work out as easy as that though, and goes against the Biblical principle of working hard. Easy doesn't imply that the system doesn't or can't work for those who do the initial groundwork and can manipulate the system. When asking the all important question of what is affiliate marketing and how can the practice earn a little extra money, look closely all the way from the beginning of the process to the end because the system can be potentially costly and time consuming, as well as loaded with hidden dangers. Sales and marketing are in a cutthroat and always changing arena. What works one day may not work the next day. Locating the right market for a specific product or service can be difficult. And a seller knows his or her profits are directly related to keeping production, distribution, and advertising costs low. Therefore, the opportunity to get something for nothing appears as a golden ticket for unscrupulous vendors. If a person finds by way of a website a harmful product or one just not as advertised, the affiliate website owner's reputation suffers at the very least. Thorough research is the key to not getting taken in and ripped off. "Enter not into the path of the wicked, and go not in the way of evil men. Avoid it, pass not by it, turn from it, and pass away." (Proverbs 4:14-15)

Now, that the question of what is affiliate marketing has been answered, how the practice works should be broken down. In theory the process really can appear to be very simple. First, the affiliate website owner and an online merchant enter into an agreement. Then the merchant places his or her advertisement for a product or service on the partner's website. An advertisement can sell the product or service outright or link the customer directly to the merchant's website. Website owners earn what amounts to a finder's fee in a variety of different ways. For example, each time a customer clicks on the advertisement and is redirected to the merchant's website, the click could earn a commission or fee. Sales earn a commission as well. Finally, if a customer registers with the merchant's website as a result of the advertisement, the affiliate earns a commission. What is affiliate marketing paying in terms of commission and fees? The pay scale varies and could be a percent of the total sale or a flat fee. Amount and method of payment should be negotiated and determined before signing the agreement. Be very clear about the amount and method of compensation. Ambiguity in wording presents a loophole that could lead to trouble, if there was ever a dispute concerning payment.

So, what is affiliate marketing really capable of doing for a person? Some business people consider this type of marketing to be one of the best ways to make money online. However, like almost everything, there are pros and cons to be considered. Some have already been mentioned. Of course profits earned with little work are a great benefit. But sales aren't guaranteed. Getting people to the websites on which advertisements are placed presents a problem. Merchants should carefully research a potential partner's website and make a determination as to whether or not enough traffic exists to warrant investing time and effort in the site. Website owners and merchants could possibly wait around for weeks or months before the first customer hit. No advertisement dollars are lost, but sales aren't generated for bad choices. Also, what is affiliate marketing system regulator's ability to keep track of merchants capable of operating on cyberspace from just about anywhere in the world? Merchants can change business names and websites and move from place to place all before paying money owed to the affiliate. And be cautious of any plan in which the primary purpose is to recruit people rather than sell a product or service. Some merchants realize that having more people selling their product or services results in more money. Most pyramid schemes are unethical, if not illegal. Also, administrators are responsible for the material displayed on their website.

Closing the topic of what is affiliate marketing with a final warning seems appropriate. Performance driven systems are subject to abuse by all parties involved. Often times the customer suffers and ends up paying for the abuse. Internet marketing is not highly regulated because internet oversight hasn't grown as rapidly as cyberspace itself. So beware of techniques and methods used by unscrupulous affiliates. Spam, fraudulent advertising, adware, and spyware are methods used to drive traffic to a merchant's site. In addition to these techniques, other liability issues exist. Copyright, trademark infringement, and fraud are serious issues carrying heavy consequences.

Advantages Of Affiliate Marketing

There are many advantages of affiliate marketing that a person should consider when deciding on business opportunities. For those who are seeking an opportunity that requires minimal time and effort, then this particular brand of marketing may be just what they have been waiting for. Simply put, affiliate marketing is where companies recruit individuals to promote products or services on their websites. Businesses can choose from several different options when it comes to what results they expect from the marketing tactics. And with a variety of choices and the seemingly effortless nature of the program, the current fascination and enthusiasm with this type of profit sharing is easy to understand.

Among the advantages of affiliate marketing programs is the benefit to the merchant. Companies and businesses across the globe spend millions of dollars a year on advertising. In order for products to sell and services to be requested, the public has to know about them. That is why advertising companies and independent marketers are in such high demand. Everyone wants an opportunity to showcase their company to the world in the best possible light. But this frequently comes at a high cost.

This is not so with affiliate marketing. For sellers, the one of the greatest advantages of affiliate marketing is that they do not have to pay exorbitant fees for promotional materials. Once an individual agrees to post a banner, or an ad, on his website, the seller can reap the benefits without having to pay hefty costs up front. And since the website owners only get paid after results are seen, it is another good way to make sure that the money is not being needlessly wasted. And one sure way to succeed in business is to make certain that whatever decisions, even ones concern advertising, that are made, are made after careful research and thorough planning. "Every prudent man dealeth with knowledge: but a fool layeth open his folly" (Proverbs 13:16).

Included in these advantages of affiliate marketing for the merchant is the unlimited potential. There are no rules or contracts stating the number of sites a seller can have sign up to promote his business. Therefore, if the seller is able to find enough people, he can have his product being peddled on hundreds of sites. This, of course, increases the amount of product visibility, which inevitably leads to higher interest and sales. And while, certainly, not everyone on every website is going to be interested in the product, the chances of finding future customers increases with each website that links back to the merchant. Many large, successful companies today can attribute much of their success to this brand of marketing, proving that the possibility for success is not beyond reach.

Individuals also get to enjoy the advantages of affiliate marketing. The nice thing for the affiliate is that he is essentially getting paid without having to do any work. By simply posting a clickable ad on his site, the person has already done the hard work. There is no upkeep or scheduled tasks to attend to. Visitors to the website can click on the advertisements at will, any time, day or night. Thus, the individual can be making money even while he is sleeping, without having to put forth any extra effort.

Affiliates also have the luxury of advertising for more than one company. This can be a huge asset to a person. As long as the individual makes sure to thoroughly check out the companies they plan on entering into an agreement with, and find that the business practices are ethical, there is no reason why someone should not work on setting up multiple streams of Internet income. By not doing this, a person is really limiting himself, when he could be taking advantage of a variety of niches and trends in order to offer something appealing to a wide variety of readers. By partnering with several different companies, the potential for a livable income increases, and while getting rich may not ever happen, it is not unrealistic to expect that eventually, one might make a tidy sum from the venture.

Both merchants and affiliates can reap the advantages of affiliate marketing. As long as both parties are in agreement and have come to an understanding of business, and compensatory terms, there is no reason that the business relationship should not be both productive and satisfying. Individuals may, eventually, have the opportunity to work from home, either focusing completely on advertising for others, or by using that as a supplement. They also have the capability of working, or devoting time to a project, on their own terms. The hours are flexible. These non-rigid structures may also improve the general quality of life for many participants. By allowing time for doing other things that a traditional job would not, marketing online usually relieves stress rather than adding to it.

Merchants can expect to see increased revenues in the long term and small advertising payouts in the short term. And unlike with traditional marketing positions, one of the advantages of affiliate marketing is that no one has to be added to the payroll. Companies can consider the affiliates as freelancers, who only get paid with certain results. This also eliminates the added responsibilities of staffing people who specializing in advertising. As a whole, this system is beneficial to everyone involved in the process, even the customer, who may stumble upon a placed ad and discover a business whose products or services enhance their lives. As shown, the advantages of affiliate marketing are numerous, and if considered and planned properly, the downsides are few.

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