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: Affiliate marketing |
What is affiliate marketing?
Affiliate marketing is the process of making money online every time a customer purchases a product based on your recommendation. This is an online sales tactic that allows you – ‘the affiliate’ – to earn a commission and helps the product owner increase sales. At the same time, it makes it possible for affiliates to earn money on product sales without creating products of their own.
Simply put, affiliate marketing involves referring a product or service by sharing it on a blog, social media platforms, or website. The affiliate earns a commission each time someone makes a purchase through the unique link or code associated with their recommendation. Do it right, and this performance-based opportunity can be a source of additional income or help diversify the revenue streams of an existing business.
How is affiliate marketing different from influencer marketing?
If an affiliate is redirecting customer traffic to a merchant’s website, doesn’t that qualify as influencer marketing? While there is indeed a natural overlap between affiliate marketing and influencer marketing, they are not necessarily the same. It is important to understand the differences between the two and how each of them works in order to maximise the revenue-generating opportunities offered by both.
Influencer marketing is a collaboration between brands and individuals who already have a sizable audience (or influencers), where the individuals are paid to endorse or promote the brand or its products/ services. It is a marketing strategy by which brands reach their target audience and try to ‘influence’ their purchasing behaviour.
With affiliate marketing, brands incentivise affiliates to promote their products/ services online by offering a commission for every sale they cause. i.e. the affiliate receives a commission if a visitor purchases the product from a link (or code) unique to the affiliate, published on their website or channel.
In influencer marketing, the number of followers, social media impressions, and interactions measure the ‘engagement’ that an influencer could generate. This is a key factor that determines the amount paid to the influencer based on their quote, whether or not the influencer activity actually leads to sales. Typically, influencers are paid a one-time fee, or a per post/content fee, for the activity.
On the other hand, in affiliate marketing, site traffic, sales volume, and average order value are the bases on which the affiliate gets paid a commission. This may be a pre-decided percentage of the product sales effected by them or a flat-fee commission. This means, affiliates get paid on achieving a business outcome for the brand, whereas influencers are paid for the work they put in.
While these distinctions hold true, the similarity between successful influencers and affiliates is that both produce engaging content that resonates with their audience and instils a sense of trust. Therefore there is often an overlap between the two.
How does affiliate marketing work?
How does affiliate marketing work?
To participate in an affiliate marketing program, you’ll need to:
Find and join an affiliate program
Choose which offers to promote
Obtain a unique affiliate link or code for each offer
Share those links or codes on your blog, social media platforms, YouTube channel or website.
And you collect a commission anytime someone uses your links or codes to make a purchase. Commission rates vary dramatically, depending on the company and the affiliate program. At the low end, you’ll earn about 5% of the sale but, with some arrangements, you can earn as much as 25%. In some cases, affiliate marketing programs provide a flat fee per sale instead of a percentage.
Benefits of the affiliate marketing model
Affiliate marketing offers several benefits to you as an affiliate, one of which is its ease. Your side of the equation simply involves handling a part of the “marketing” side of the product’s success— i.e. educating customers. You don’t have to worry about the harder tasks, like developing, supporting, or fulfilling the offer.
Affiliate marketing is low risk. Since there’s no cost to join affiliate programs, you can start making money with an established affiliate product or service without any upfront investment. Also, affiliate marketing can generate a relatively passive income through commission. Though initially, you’ll have to invest time creating traffic sources, your affiliate links can continue to deliver a steady paycheck.
Finally, successful affiliate marketing offers the potential to significantly scale your earnings without hiring extra help. You can innovate to reach out to a wider audience while your existing work continues to generate revenue in the background.
Here’s an example to prove the point: Ankit
Warikoo introduced a giveaway gifting 12 products through product recommendations on Twitter.
