Fundamental understanding
Affiliate Marketing definition
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Affiliate Marketing is where the publishers (affiliates) use their own marketing channels to promote products or service of the merchants (sellers or product creators). This is usually accomplished through the use of an Affiliate Marketing program. Affiliate Marketing is based on a reward system in which businesses pay affiliates a commission for each sale generated by their efforts.
There are three parties that involve in affiliate marketing: Merchant (product seller), Affiliate and Customer. Customer will pay the money for the products. Both merchant and affiliate receive a portion of that money by following a win-win situation where merchants can increase revenue and affiliates receive commission.
Affiliate Marketing Model
1. Merchant
Also referred to as the vendor, seller, advertiser, product creator, brand or retailer. This is the party that creates the product. Anyone can be the merchant behind the affiliate marketing program, from single entrepreneur, a small business to a large corporation. When a merchant joins the affiliate marketing program, their goal is to boost revenue by advertising their goods to customers.
2. Affiliate
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 demonstrate the value of a merchant's products to potential customers and convince them to make a purchase.
3. Customer
Customers are the lifeblood of any business and their actions determine the company's success. This party helps the entire affiliate system to go round 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 as referral orders and this will be the basis for calculating the affiliate's commission.
Last modified 7mo ago
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