Affiliate Marketing is where the affiliates use their own marketing channels to promote products or services of the merchants (sellers or product creators). This is usually accomplished through the use of an affiliate program. Affiliate Marketing is based on a reward system in which merchants pay affiliates a commission for each sale they generated.
There are three parties: Merchant, Affiliate,and Customer. The customer pays for the products. Both merchant and affiliate receive a portion of that money by following a win-win situation where the merchant can increase revenue and the affiliate receives a commission.
Affiliate Marketing Model
Also referred to as the vendor, seller, advertiser, product creator, brand, or retailer. This is the party that creates the product. Anyone can be a merchant, from a single entrepreneur, or a small business, to a large corporation. A merchant joins an affiliate marketing program with the goal to boost revenue by advertising their goods to customers.
Also referred to as publisher, influencer, partner, or ambassador. An individual person, a business, a professional affiliate, a blogger, a YouTuber, or a client who made an order on the seller's website can all be affiliates. The primary role of an affiliate is to demonstrate the value of a merchant's products to potential customers and convince them to make a purchase.
Customers are the lifeblood of any business and their actions determine the company's success. They keep the entire affiliate system going since there will be no revenue to share or no commissions to hand out without sales.
As a result of affiliate marketing efforts, potential clients can engage the merchant's products more easily. Orders placed by customers thanks to an affiliate's advertising action will be considered referral orders and will be the basis for calculating the affiliate's commission.