Affiliate Marketing for Beginners

9月 9, 2021
IronFX Affiliate team

Interested in delving into the multi-dollar affiliate marketing industry? This article will help you get started.

According to statistics, affiliate marketing  spending will reach $8.2 billion in the U.S by 2022, so learn as much as you can, get started today and you will be able to make the most of it in the near future.

In this useful guide for beginners, you will learn basic affiliate marketing definitions such as what affiliate marketing is as well as who are the parties involved.

Affiliate Marketing: Useful Definition

Affiliate marketing refers to the process of recommending a company’s products or services to potential customers which will in turn generate a sale and earn a commission.

There are generally four parties involved in affiliate marketing: the merchant, also known as product creator, the affiliate network, which is optional, the advertiser, also known as affiliate marketer and the buyer.

This process is most of the time confusing for many beginners. However, there is no need. Once properly understood, this process is actually pretty straightforward.

The Parties in Affiliate Marketing

The Merchant

There are actually multiple names for this party: product creator, merchant, seller, brand, retailer, vendor or company. All in all, this is the entity that has the products they wish to sell.

The Affiliate

The affiliate is the person owning a website, blog or any other medium featuring the merchant’s products. This person also adds a special link, also known as an affiliate link, which is the one linking consumers to the target product, hence company.

An affiliate could be anyone around you, including you. Building a website suitable for the job is not complicated. However, promoting that website effectively is another matter.

The Buyer

The consumer is somebody who is asked to buy the target products. The consumer should bear in mind any recommendations made by the affiliate marketers, and then follow their customised links, and eventually purchase the products.

The Affiliate Network

The affiliate network is actually the optional party among the above. This person is the intermediary between the affiliate and the product creator. Affiliate networks work with product creators to come up with a list of products, which they will make available for affiliates to sell.

How does affiliate marketing work?

In a nutshell, affiliate marketing starts by signing upfor an affiliate program which offers you access to multiple services and marketing material. Once you have identified you niche, which is the area that your potential clients are interested in, you promote the target product on your platform via banners or withing your content. Finally, if your clients like the product, click on the affiliate link, and purchase the product, you will get a commission which is already agreed upon with the merchant.

How do affiliates get paid?

1. Pay-Per-Click (PPC)

In this model, the affiliate is paid for the online traffic they direct to the company’s website they are promoting.

2. Pay-Per-Lead (PPL)

In this model, for every lead (client that visited the company’s website) that is converted into a client (purchased the product, registered or subscribed to an email list), the affiliate is paid.

3. Pay-Per-Sale (PPS)

This is the most common model in which the affiliate only gets paid if a successful purchase is made.

The efficiency of the affiliate network depends on multiple factors including the commission levels and conversion rates of the advertisers you work with, the level of commitment and your knowledge and willingness to learn everything about your niche in order to succeed.

Disclaimer: This information is not considered as investment advice or an investment recommendation, but is instead a marketing communication