How does affiliate marketing work?
To better understand how this type of marketing works, you’ll need to know about the three major players involved: sellers, affiliates and consumers. Together, these three parties make up the affiliate marketing ecosystem.
Sellers
The seller is the company that makes or provides the product. This could be a nationwide franchise like Best Buy or a small independent shop. The number of sellers is constantly growing. In a recent Rakuten survey, 80% of brands said they ran an affiliate program as part of their brand marketing efforts.
Affiliates
Most people get involved in affiliate marketing by becoming an affiliate. The affiliate, also known as the publisher, promotes the seller’s products on their own platforms, such as a personal blog or social media page.
Consumers
These are the buyers of the product. When they make a purchase when clicking on the affiliate link, the affiliate earns a commission on the sale.
How do affiliate marketers get paid?
Affiliate marketers have a few different ways to get paid. While pay per sale is the standard practice, it’s helpful to be familiar with the other methods too:
Pay per sale
This is the most common way affiliate marketers earn money and used by 80% of programs. Consumers must buy the product after clicking the affiliate link, and the affiliate receives a percentage of the sale price.
Pay per lead
While less common, the seller may also pay the affiliate to generate leads rather than make sales. In this case, the affiliate must persuade the consumer to complete actions such as filling out a contact form or signing up for a free trial.
Pay per click
Another unusual method is for the affiliate to earn money when consumers click on their link—regardless of whether they convert to a lead or make a purchase. Since clicks can be frauded, fewer affiliate programs compensate for that method.
Types of affiliate marketing
There are several main types of affiliate marketing, and the one you choose will depend on your niche and available resources.
Cost per action (CPA)
CPA affiliate marketing is similar to pay per lead affiliate marketing, but the commission is paid for a specific action that takes place before a potential user becomes an actual lead, such as filling out a form or downloading an app. The affiliate only gets paid if the action is completed.
Culled From: https://www.wix.com/blog/what-is-affiliate-marketing?
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