Understanding Affiliate Marketing – What You Need To Know

If you are well-versed with the modern digital marketing landscape, you have surely come across the term Affiliate Marketing. Definition wise, it refers to the promotion of other’s products and businesses, with a pre-agreed commission rate as the reward.

This kind of sales platform usually has multiple stakeholders. Before the sales process is in motion, the partner and seller agree on the commission amount. In recent times, affiliate marketing has gained immense popularity, mainly because of its efficiency and hassle-free application.

Both the seller and marketer’s roles are very distinctly divided, further ensuring each does what they are best at. While the seller does not need to handle orders, deal with end customers or even hold inventory, the marketer can solely focus on marketing and finding the right set of audiences.

In simpler terms, affiliate marketing is mainly a performance-based system that consists of four main elements, namely the affiliate, the merchant, the network and the consumer. These four elements are further explained below:

  • The Affiliate: Any individual or group that markets or promotes the said products and service and receives a commission on it gets known as an affiliate. They work in direct contact with the merchant who determines the products that need promotion. An affiliate usually utilizes different kinds of marketing campaigns like ads, banners and links to further find potential buyers.
  • The Merchant: More commonly known as the retailer or seller, a merchant can be an individual as well as a business. They are in the market to sell a particular product or service. To further enhance their sales, they collaborate with an affiliate marketer, helping them promote their services.
  • The Network: This is a platform that acts as the intermediary between the affiliate and the merchant. A network is typically digital and requires a high level of involvement from both the affiliate and the merchant. Popular networks include: Amazon Associates, Shareasale, Rakuten, Awin and many others.
  • The Consumer: In affiliate marketing, a consumer is an individual the product gets marketed to. They are the ones who will end up buying the product.

Affiliate marketing has gradually become one of the most efficient ways of making money online. There are an incredible amount of niches and verticals to pursue via affiliate marketing with anything from education and software to online dating and some of the best free sex sites on the internet. Nevertheless, as a concept, it is relatively new, and not everyone understands how it works. If you want to utilize this method but are still confused about its basics, this article is appropriate for you.

How Does Affiliate Marketing Work?

Whether you are just starting in the industry or have an established presence, good marketing of your product is always necessary. Affiliate marketing is one of the most efficient ways of bringing in more customers.

For instance, say an E-commerce store has been in the industry for quite some time but is not satisfied with its present customer base. This is when they will opt for affiliate marketing.

They will set a sales target for the marketer, on achieving which the marketer will get a pre-decided commission. These marketers then have the full responsibility of promoting the product or service. They can utilize a number of ad campaigns by building websites or using other forms of marketing.

The main motive of affiliate marketers is to reach new markets and further increase the existing customer base of the company.

Why Should You Consider Choosing Affiliate Marketing?

There are many reasons why you, as a business, should consider choosing affiliate marketing. Some of the main ones include:

Easy Management

This is perhaps the most common advantage you can experience with affiliate marketing. A business has many concerns to cater to, one of them being marketing. That said, marketing is a full-time job. With the expertise of an affiliate marketer, you can better focus on your business while not having to worry about promotion.

Apart from the initial effort of choosing and screening affiliates, there is not much you have to do. They know all the best ways to promote a particular product effectively. On top of that, you will also gain the following of the affiliate marketer you choose.


Choosing an affiliate program omits the need for an advertising team or even costs of purchasing an ad space. Instead, your affiliates will come up with ideas for promotion and marketing. Since the majority of your marketing efforts are usually made by the affiliates, you do not have to bear any costs associated with it.

In addition to that, since this is a commission-based program, you are only liable to pay the affiliates for the sales they bring in. when compared to different marketing models, affiliate marketing does not interfere with your cash flow and makes it very easy to manage as well.

The low cost also means there is a lesser risk. Since the payments are only made if there is an actual conversion, there is no wastage of resources, making it ideal for businesses on a tight budget.
Given such unique advantages of affiliate marketing, it is quickly becoming the central aspect of several marketing strategies. With the market growing at this rate, it is not far when businesses of all sizes start adopting this method of promotion more frequently.