What is Affiliate Marketing?
Affiliate marketing is the process by which an affiliate earns a commission for marketing another person’s or company’s products or services. Affiliate marketing is a popular less traditional performance-based marketing tactic to drive sales and generate significant online revenue.
Affiliate marketing is extremely lucrative to both brands and affiliate marketers. It has been noted that 16% of all online orders can be attributed to the impact of affiliate marketing and that 81% of brands and 84% of publishers leverage the power of affiliate marketing. It is estimated that affiliate marketing spending in the United States will reach $6.8 billion by 2020.
To get started, all an affiliate needs to do is search for products and services they like, promote and earn a piece of the profit from each sale they make. If done right, an affiliate could make money at any time, from anywhere — even while they sleep!
To make this work, three different parties must be involved:
- Sellers, vendors, service providers or product creators.
- The affiliate or advertiser.
- The consumer.
A] Sellers, vendors, service providers or product creators.
This is the person or company with a product or service to sell.
B] The affiliate or publisher.
The affiliate can be either an individual or a company that promotes the product or service to consumers in return for a portion of the revenue made. Affiliates can sign up directly with the company or vendor or go through affiliate networks to find products to promote.
C] The consumer.
This is the group that purchases the products and services and are the drivers of affiliate marketing. The affiliates share the products with them on blogs, websites, email, social media and messaging apps with trackable affiliate text links or banners. When the consumer buys the product or service, the seller and the affiliate share the proceeds.
Commissions on physical products are usually fairly low because of the overhead of production costs, storage costs, shipping, etc. so you’ll have to sell a whole lot more products to make a decent income. If you still decide to promote physical products, you should avoid commodity products that your readers can buy anywhere and choose high-quality, distinctive products.
Digital products, services and courses usually have greater earning potential and generally pay higher commissions than physical products because there is much less overhead to produce and distribute them. Many hosted services will offer a recurring commission – meaning you’ll get paid for as long as the customers you refer continue to use the service or like the case in Naijafund, continue raising money on their campaign.
Affiliate Marketers Payment Methods
Affiliates are paid differently depending on what method the affiliate program adopts.
1] Pay per click.
This structure compensates the affiliate after redirecting consumers from their platform to the merchant’s website. The affiliate is paid based on the increase in web traffic to the merchant’s website.
2] Pay per lead.
This program compensates the affiliate based on the conversion of leads for example, filling out a contact form, signing up for a trial of a product or service, subscribing to a newsletter, or downloading software or files.
3] Pay per sale.
This is the standard affiliate marketing structure. In this program, the merchant pays the affiliate a percentage of the sale price of the product after the consumer purchases the product as a result of the affiliate’s referral.
Advantages of Being an Affiliate Marketer
1]Passive Income: Affiliate marketing offers you the opportunity to earn residual income. You can be an affiliate marketer while holding down a regular job or studying and you get paid for your successful marketing effort even while you are away from your computer or sleeping. Once you put in the time and effort into marketing your products and services, you will start having an inflow of revenue as your referrals make purchases. Your earning is purely based on your performance so while you earn the same salary with a regular job, with affiliate marketing the sky is the limit when it comes to earning potential.
2] Work From Home: As an affiliate marketer, you can work from the comfort of your own home promoting products and services. You get to set the hours you work.
3] Flexible and Cost-effective: You are essentially a freelancer and free from travelling to work daily. You can also sign up as an affiliate for free without any upfront investment and you are free from customer support. Your job is just to link the merchant with the consumer and get paid when a sale is made.
To join the Naijafund affiliate program, CLICK HERE.