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Affiliate marketing is a performance-based marketing strategy where a business rewards one or more affiliates for each visitor or customer brought by the affiliate’s marketing efforts. Essentially, it’s a way for individuals or companies (affiliates) to earn a commission by promoting someone else’s products or services.
The internet has increased the prominence of affiliate marketing. Amazon popularized the practice by creating an affiliate marketing program whereby websites and bloggers put links to the Amazon page for a reviewed or discussed product to receive advertising fees when a purchase is made. In this sense, affiliate marketing is essentially a pay-for-performance marketing program where the act of selling is outsourced across a vast network.
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This can be an individual or a company that promotes products or services of another company (the merchant) in exchange for a commission.
The merchant is the seller or the creator of the product or service. They provide the affiliate with a unique link or code that tracks the referrals sent by the affiliate.
The consumer is the person who clicks on the affiliate's link and makes a purchase or performs a desired action, such as signing up for a service or filling out a form.
When a consumer makes a purchase or completes the desired action through the affiliate’s link, the affiliate earns a commission. The commission structure can vary depending on the agreement between the affiliate and the merchant. It can be a fixed amount per sale or a percentage of the sale.
Affiliate marketing is popular because it benefits all parties involved:
Overall, affiliate marketing is a win-win-win situation when done ethically and effectively.
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