Understanding the ABC's of Affiliate Marketing

Internet Marketing has a lot of buzzwords and one of them is definitely affiliate marketing. The dream of easy money based upon online customers purchasing products through your links has led many straight into the depths of ecommerce possibilities.

Affiliate Marketing is not easy but it is simple. People instinctively know this. There are a few important basics that prospective marketers should be aware of before taking the plunge.

Let's have a look at what the term affiliate marketing really means.

When you join an affiliate program it means that you are a commission only salesperson. Your compensation will depend completely on the results that you achieve for the vendor that you are representing. Affiliates send online visitors to offer pages and when those online visitors purchase they receive their commissions.

It is not difficult to find affiliate marketing networks who manage affiliate programs for companies. All you need to do is search on your favorite search engine for the term affiliate marketing network and you will find an abundance of vendors.

In the affiliate marketing industry there are:
a) merchants, who are also known as advertisers who off the product or service for sale.
b) Affiliates, who are also known as publishers who promote these offers online through every traffic generation vehicle imaginable.
c) Consumers, who are the end users of the product or service that is being promoted.

This cost per action affiliate marketing business model has grown very quickly because it is very lucrative for the advertiser. One of the things that merchants love about the cost per action model is that they only pay for results.

Paying for results is very attractive to merchants because it eliminates for them the volatility associated with online advertising and marketing. It is not uncommon for marketers to see huge swings in advertising and conversion costs which dramatically affect their profitability. When a merchant insulates themselves from this volatility they have a more predictable business.

Traffic generation is the lifeblood of affiliate marketing. Marketers use traditional advertising methods as well as search engine optimization, email marketing and search engine marketing to draw visitors to their offers.

Affiliates will often craft review pages on the products they are promoting to help customers see the offer in greater detail.

The most active niches in the affiliate marketing business are the adult, gaming and retail industries. However, over the past few years corporations have been studying this business model very carefully as they explore the online business model in greater detail.

The key to successful affiliate marketing is having a real time tracking system in place that monitors sales and conversions.

Affiliate marketing is a great way to get started in e-business. However, my suggestion is to find one offer that is selling well and you are passionate about and only promote that when you are first starting out. Online marketing has tremendous potential when you know what you are doing however it is treacherous for those uninitiated newbies who have visions of grandeur preventing them from analyzing the feedback they receive from the marketplace.