Synopsis Affiliate marketing broken down and explained as three easy steps. A detailed example is provided.

Chapter Contents What is Affiliate Marketing? Three Basic Steps Benefits of Affiliate Marketing Responsibilities of Affiliate Marketing

Three Basic Steps

Online affiliate marketing is a simple process that can be broken down into three basic steps.

1. Company ABC has a product to sell.
2. Affiliate XYZ promotes this product on his or her website.
3. When Affiliate XYZ's website generates a sale of this product, Company ABC pays Affiliate XYZ a commission.

Example:

The Acme Widget Company manufactures widgets of all shapes and sizes. Along with their conventional brick-and-mortar retail locations, the company has a website which allows customers to purchase their products online. The website has not been producing the sales that the company had hoped for, so the company decides to start an affiliate program to help boost online sales revenues. They decide to offer a 15% sales commission for all sales generated by affiliates.

Sally is a junior in college. As one of her many other hobbies, Sally operates a website that offers reviews of various widgets and widget related products. She hears about the Acme Widget Company's new affiliate program. The products that Acme manufactures fit well with her website's widget theme, and she likes the competitive 15% commission, so she decides to join the program. She writes a review of Acme's new product line and posts it on her website, along with a link that visitors can click to purchase a widget of their own.

On the other side of the country, Henry is searching for a special kind of widget he needs to complete a project. While conducting a search on the Internet he discovers Sally's website. He reads the review she has written of Acme's new line of widgets, and decides they are just what he is looking for. He clicks on a link to purchase the widgets. The link takes him to an order form on the Acme Company's website. He completes the order form, and a few days later his new widgets arrive at his door. Meanwhile, Sally awaits her commission check from the Acme Widget Company.

Consider what has happened in the above example. Sally was able to offer widgets to her website visitors without needing to research, develop, or manufacture a single widget. She has sold a widget without needing to answer a phone or take an order. The visitor to her website has received the widgets he ordered without Sally having to process, package, or ship the order. Sally has earned a sales commission without fielding a single customer support call or complaint.

You can see from this example that affiliate marketing can allow you to earn commissions promoting companies' products, without worrying about the details.