Affiliate marketing is the perfect way for webmasters to try to earn a little extra income from their websites. For those with no products or service, such as a hobby venture, and for those who would like to add products that go well with their own offerings, affiliate marketing is the ideal solution. It allows the website owner to offer relevant products without the costs associated with large inventories. The only cost to the webmaster is his time involved in setting up the sales copy on his website.
Affiliate marketing is a system whereby merchants pay website owners a commission for selling their products. Sometimes a flat rate per lead is given and sometimes, the merchant is only looking to build an email list so she will pay for email submissions. Although any company can enter into an agreement with webmasters to promote their products, generally speaking there are four distinct pieces to affiliate marketing. The merchant is the person or company who owns the product or service. She usually contracts a network to act as the "go-to" agent between herself and the website owner. Once the webmaster is approved to enter the affiliate program, he is then called an affiliate. And of course, the final component is the customer, the end user of the merchant's product.
While contracts, "Terms of Sale (TOS)" and "Affiliate Agreements" are different per merchant and network, basically, the merchant agrees to provide promotional materials to the affiliate. The affiliate publishes or places the banner ads and/or text links on his website in the hopes that one of his visitors will follow the ad and purchase the product, giving him a percentage of the sale. The network will keep the creatives (promotional material) available in a password protected area so that affiliates can pick and choose what works best for them. The network also provides statistics to affiliates in terms of traffic, sales and payments made. Lastly, the network usually sends out the checks to the affiliates on a pre-arranged schedule laid out in the TOS.
Customer names, addresses, credit card numbers and any other information, private or otherwise, are the sole property of the merchant. The affiliate has no access and no right to that information. Affiliates generally do have access, however, to the actual information regarding the sale. For example, date of sale, amount of sale, the exact products involved in the sale, and maybe what banner or link was used to generate the sale.
Affiliates are bound by a set of rules determined by the merchant and the network. Usually these include obvious things like cheating, false or misleading statements to sell product, using the company's trademarks as one's own, and saying that one is an employee of the merchant or network. None of these are acceptable behavior and will lead to termination from the affiliate program and ultimately lost income.
On the other hand, affiliates may honestly promote the products in various ways with the sole intent of making a sale. They may bring attention to their websites or the merchant's products with pay-per-click advertising, article marketing, print advertising, links on other websites, and anything else that is deemed fair promotional practices.
And, although it may start out to be a way to supplement one's income or just pay for the hosting and costs involved in keeping a website, do not be surprised if affiliate marketing turns into a full time endeavor.
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