Affiliate marketing is essentially referral marketing with a commission. When you refer a new customer to a business that has an affiliate program, you get paid. For example, if you’re an Amazon affiliate and you recommend a book, and people buy that book through your affiliate link, Amazon will pay you a percentage of the sale.
How are Affiliate Marketers Paid?
There are several types of affiliate programs.Most will pay you a flat rate or percentage of the sale you make (pay-per-sale).
Another common type is when you’re paid per action or lead. For example, if you refer someone who signs up for businesses free trail, the business pays you for the sign up. Although not seen as often anymore, some will pay you per click (this is seen most in contextual ad programs such as Google Adsense) or per impression (each time the ad is loaded on your website).
Some programs will pay you based on the results of other affiliate marketers you refer, in what’s called a two-tier program.
The frequency and method of payment varies as well. Most programs pay their affiliates monthly, although a few pay more frequently. Some require that affiliate earnings reach a specific threshold, which can be as low as $25 or as high as $100. Some programs don’t have a threshold at at. There are programs that pay through direct deposit into your bank, but a vast number pay through PayPal.
Pros of an Affiliate Marketing Business:
Affiliate marketing offers many perks including:
- Low start-up costs: Most affiliate programs are free to join. Since the affiliate company takes care of providing the service or product, there is no inventory or supplies for you to worry about.
- No product creation or service providing. The company takes care of everything. All you have to do is deliver the clients and customers.
- Fast to join. Most pr grams have a simple sign-up form and then you can start posting links and ads within a few minutes. Others might have more stringent acceptance into their programs.
- No shipping or hassling with returns.
- Like any online business, you can make money 24/7 while you sleep or play.
- No special license or training is required, but it helps to know how to market and the best ways to promote affiliate programs.
Cons of an Affiliate Marketing Business:
Like most things in life, affiliate marketing isn’t perfect. It has a few downsides, such as:
- It can take time to generate enough referrals to make any significant amount of money.
- Success comes from generating targeted traffic. If you don’t know or aren’t good at Internet marketing, you’ll struggle with affiliate marketing.
- Many Internet affiliate programs require that you make a certain amount of money (threshold) before they will release any funds to you.
- You need to understand how web codes work and how to paste affiliate links and ads into your website, blog or email list.
- Some programs have advertising restrictions, such as not allowing you to buy PPC ads under certain keywords, or prohibiting email marketing.
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