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What Is Affiliate Marketing?

By Charles Hopkins Published 04/20/2006 | Home Based Business
Affiliate marketing is defined as a widespread method of promotion in which an affiliate (or associate) is rewarded for every view, sale, and/or registration produced through the affiliate's effort.

It's similar to collecting a finder's-fee or the commissions typical of retail store clerks. The more one sells... the more one gets paid.

Compensation calculations vary and could be based on any of the following:

PPC (pay-per-click) a specific amount is paid for each visit

PPL (pay-per-lead) where registration or sign-up counts

PPS (pay-per-sale) a specific commission per sale is paid

If your goal is to generate your total income online, you can drive traffic from your subscriber lists to affiliate links just as easily as to your own product links.

What About Product Sales and Marketing?

You'll want to watch for great products and services with the potential to benefit your niche and your mailing lists. To build trust and income, it's best to recommend only those products that will be of specific interest to them. It's a win-win situation for everyone that way.

When an affiliate is marketing any product, the cost of advertising the product is absorbed by the affiliate. It's important to keep this cost in mind when promoting products. The higher the percentage of affiliate income possible from any quality product, the more that product is worth promoting.

When a product is sold through the affiliate's link, depending on the service used, the total sale is divided up among the vendor or service, the affiliate, the taxing authority, the shipper (if any), and the payment processor.

It is common and expected that all affiliate details be spelled out in the affiliate sign-up process. However, you needn't be afraid to contact any vendor to clarify their affiliate program if you have questions. Often you can telephone or email for a fast reply.

Is a Digital Lifestyle for Me?

Many standard retailers offer very small rewards for affiliate sales while most internet marketers offer around 50%. This is why being an affiliate of digital products can be very lucrative in a relatively short period of time.

Although the number of affiliate programs for tangible goods and off-line services is rising, a completely digital lifestyle can be developed solely from digital or downloadable affiliate products that may never take physical form.

Of course it's important to note that as an affiliate of any tangible product, you generally never do more than promote a link to the product online. So in that sense it's the same as a digital product.

One of the best places to find digital products to affiliate with is ClickBank.com. They have an automatic affiliate 'hoplink' program built into their payment processing service so that affiliate payments are not left up to the product owner to process.

Three other good affiliate programs to check into are:

Amazon.com
http://www.amzon.com/gp/browse.html/102-3525955-0485737?%5Fencoding=UTF8&node=3435371 (not an affiliate link)

LinkShare.com
http://www.linkshare.com

CommissionJunction.com
http://www.cj.com

Staying with reputable, well-known internet vendors makes a great deal of sense because you know you will get paid, when to expect a check or bank deposit, and you can see your account details online at any time.

How Do I Get Started?

There are many ways to approach affiliate marketing, but a basic starting point is to have a web site with text or image affiliate links to products you want to promote. Generally you want to stay focused within a niche or interest group to increase your sales potential.

If you have used the products, your promotional efforts could include a product review based on your own experience along with images and other supporting information.

Developing an email opt-in list is helpful in affiliate marketing as it gives the promoter an opportunity to find the products with the most potential benefit for a group of like-minded individuals.

When providing a service such as this, most affiliate marketers are able to reach enough potential customers to produce some affiliate income.

When a lot of products are promoted to several targeted niche markets, it is possible to create an income of substance over time. Especially when the affiliate marketer is only promoting quality products with a real potential to benefit customers within the niche.

In summary, affiliate marketing is a great way to build an income without having a product of your own, and without having to do much more than get interested people to view product information through your affiliate links. It's very easy to get started and can eventually put a lot of money in your pocket.