How Does Affiliate Marketing Work?

How Affiliate marketing works is quite easy to explain actually. The creation and marketing of a product are split between different parties. It is able to combine the abilities of several individuals in order to make a product’s marketing more efficient. The result form that is that the parties are splitting the profit between themselves instead of it going to one particular person. Parties required for this method of marketing to work are:

1. Seller and product creators;
2. The affiliate or advertiser;
3. The consumer;

Let’s have a deep look into what should be done by these three parties in order to make sure that affiliate marketing works properly.

1. Seller and product creators.

It doesn’t matter whether you are a large enterprise or a solo entrepreneur, all that matters is that you are a merchant, product creator, a retailer, or vendor with a product that needs to be advertised and sold. The product can not only be an object, such as technology or toys, but also a service, like tutorials for example.

The seller, also recognized as the brand, is not required to actively participate in the product marketing. The thing is that, they might, as well, be the advertiser, which means that they can benefit from the revenue sharing connected to the affiliate marketing.

For instance, the vendor might be an ecommerce merchant who has started a dropshipping business and has set a goal to himself to attract more clients utilizing affiliate websites to promote them. A SaaS company could also act as the seller, this time though they will use affiliates to increase the sales of their marketing software.

2. The affiliate or publisher.

The affiliate or publisher, is the person or the company that is responsible to market the seller’s product in a way that will attract clients that will eventually buy it. Otherwise said, the product is being introduced to the customers in a way which will make them think that the product is extremely beneficial to them. If the product ends up being purchased, the publisher is rewarded with a piece of the revenue made.

Most of the time, the affiliate has a particular group of people to which they market, and they will often stick to the group’s interests. In result to that, a defined niche or a personal brand is being created. This niche will be in assistance to affiliates in terms of attracting clients who will probably react on the promotion.

3. The consumer.

Whether they are aware or not, the customers are the force that pushes affiliate marketing forward. Publishers share the products with their consumers on blogs, websites, and social media.

When a product is bought, the affiliate and the seller share the income. From time to time, the affiliates decide to be honest with the consumer and confess that they are getting paid for the sales they make. Sometimes though, the customer might be totally unaware of the whole affiliate marketing infrastructure that stands behind his or her buy.

Anyway, there are very few cases in which consumers will pay more for the product bought trough affiliate marketing. The part of the profit which is dedicated for the affiliate is included in the product’s cost. Although the customer has huge impact on the affiliate marketing system, the product they are receiving after they complete the purchase, still remains the same.

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