Affiliate Marketing: How It Works and How It Can Help You

If you have an online business, one of the chief ways you can boost your income is with affiliate marketing. An affiliate is a site owner who promotes their company on your site. In return, they pay you a commission when certain results occur. Ideally, an affiliate arrangement benefits both parties.




How Does Affiliate Marketing Work?

There are several different ways of arranging affiliate agreements. In one common arrangement, your affiliate pays you a commission whenever any of your site visitors are directed to their site. Other arrangements might pay per click, per purchase, or with another result. Basically, whatever benefits both parties can become an affiliate marketing agreement.

In another scenario, you might agree to affiliate with, say, an ecommerce site. That site owner would provide you with ads that you would run alongside your content, ads that promote their products or their site in general. Whenever one of your site visitors clicked on one of the ads on your site and purchased an item featured in that ad, your affiliate would owe you an agreed-upon amount as your commission. In this case, your affiliate gets advertising that costs only when a sale is made, and you earn commissions on those sales. In other words, you both win.


Here’s an Example of Affiliate Marketing in Action

For example, let’s say a shopper has a question about a phone she wants to purchase. She asks a question about it in Google’s search bar, and one of the answers that pop up leads her to your site. She lands on a blog post you’ve written in which you examine the features and benefits of several popular phones.

While she’s reading your post, she spots an ad on the page beside your article. What’s more, it’s an ad for the phone she wants. When she clicks the ad, it takes her to your affiliate’s ecommerce store. She ends up buying a phone from your affiliate’s site. That makes your affiliate happy. You receive a commission on that sale, and that makes you happy, too.

This is a pretty simplistic explanation, and the reality is a bit more complicated than that, but not much.


The Benefits of Affiliate Marketing

One of the chief benefits of affiliate marketing is that advertisers can promote their products and services to a wider audience than they can reach on their own. Additionally, when consumers click through to an affiliate’s site from your site, the analytics that accompany those actions will provide your affiliate with valuable data about trends and consumer demands.




The Downside of Affiliate Marketing

When affiliate marketing goes well, everyone benefits, as we’ve said. However, affiliate marketing has its downside, too, and there is a lot to watch out for.

For example, if you affiliate with a site that allows false advertising, your company’s reputation could become tarnished. Also, some affiliates fail to pay the commission fees they’ve agreed to pay. Other sites that promote themselves as affiliates actually require money up front from sites that want to affiliate with them. If you run across a site like that, beat a hasty retreat.

To make matters worse, there are even unscrupulous individuals who hijack others’ affiliate links and steal their commissions.

On the other side of the equation, watch out for shady affiliate programs that give you less than what they promised, even though you pay them the commission fees you’ve agreed to.

Even with reputable affiliate sites, you need to be careful. For instance, don’t allow so many affiliate ads on your site that your commission costs become burdensome. Always ensure that any affiliate marketing agreement you sign benefits you as well as the other party.


How to Get Started

Despite the drawbacks, you could gain a lot with a good affiliate marketing agreement. Just be sure to do your homework before you sign on the dotted line, know the site you’re affiliating with, and keep a close eye on the transactions.

To help you get started, you can sign up with an affiliate network which can help you to manage all the details and ensure that everything runs smoothly.