What is Affiliate Marketing?

Affiliate Marketing is used by the organization to sell a product or drive traffic to their website with the help of a third party (called Affiliates). It is a type of advertising module in which a business pays commission for each visitor or customer brought by the affiliate’s marketing efforts and techniques.

Nowadays 81% of brands have affiliate programs to improve their business sales. Even in India, several websites are involved in such programs. Affiliate programs do generate 15%–30 % of sales for marketers and advertisers. 

 The reason behind the success of affiliate marketing is that people trust these websites and influencers because of which people do buy the products.  

Amazon has been running affiliate programs for a while now. Amazon might not be the first website that has launched affiliate programs but it is definitely the most successful one and now Instagram has also announced affiliate marketing.

 This option will be available for Creator on Instagram and will be made available in the upcoming months. This program will help creators to earn money from the product promotions that are available in the app. According to Instagram, it’ll begin testing a new ‘native affiliate tool’, which will help creators to discover new products available for purchase in the app after that they will share those products with their followers. If the followers start purchasing products subsequently, then the creator will earn a commission.

 Although it is a good marketing strategy that can bring a lot of sales and engagement it also has some potential risks. It seems like brands will not have direct contact with creators at first and also brands will not able to decide who will promote their products which can create problems in many ways. Brands will not like to be promoted by influencers whose public image is not good or does not fit for promoting.

How does Affiliate Marketing work?

To make affiliate marketing work there is a cycle that involves relationship between three parties and these parties are

  1. Seller
  2. Affiliate or Advertiser
  3. Customer

Let us see how the relationship works

1. Seller

A seller can be an entrepreneur, a small business, or a big organization and the product can be a physical object or service. Seller lists their product on websites like Amazon, Hubspot, etc.

The reason that seller usually goes for affiliate marketing is that they want to reach a new audience by paying affiliate websites or advertisers to sell or promote their products.

2. Affiliate or Advertiser

Affiliates can now select the product they want to promote from the websites or apps. They can promote the product either by creating unique affiliate links and put them on their blogs and website or they can make videos promoting the products on social media platforms.

An affiliate can be an individual, an organization, or an advertising agency that has a unique and appealing way to promote business. Affiliate often have a specific audience whom can be targeted according to the products for example if any affiliate who is an influencer on social media and gives makeup tutorial then that influencer will have an audience who are specifically interested in make-up and beauty tips which make it perfect for selling beauty products. 

3. Customer

Customers are the ones who buy the product influenced by the affiliates. If any person clicks on the unique affiliate link shared by the affiliate then they will be redirected to the seller’s website. Once any person buys the product then the affiliate will get the commission.

How affiliate gets paid?

Everyone usually thinks that the only way an affiliate gets paid depends on how many customers purchased the product influenced by the affiliates but that’s not true.

 There are three ways that affiliate can get commission and they are

1. Pay per leads

In this process, the affiliates get paid by providing leads to the seller. Affiliates can collect leads by asking their audience to fill a subscription form, free trail forms, subscribing to an online channel, etc.

2. Pay per Click

There are many bloggers and business who wants to increase traffic on their blogs and website. In this case, the affiliate gets paid depending on how much traffic or link click they can get.

3. Pay per purchase

This method is considered as a standard structure of Affiliate Marketing. In this method, the seller pays a commission to the affiliate after the customer buys the product. The affiliate can either share a link from where the customer can buy the product or can share a coupon that will help the customer to buy the product from anywhere with a discounted price.

Top 5 High Paying Affiliate Programs
 Here is the list of top 5(unranked) affiliate programs in India that pays a good commission to the affiliates.

1. Amazon Associates
2. HubSpot
3. Flipkart Affiliate
4. AWeber
5. Yatra Affiliate

Summary

Affiliate Marketing is a performance based revenue system which helps brands and organizations to sell their products with the help of third party. It is growing very rapidly as it does generate sales and drives traffic to the websites.
Popular websites, social media platforms and apps like amazon, hubspot, facebook, instagram etc have started investing in affiliate marketing.

If you want to reach new and specific audience then affiliate marketing as an ideal way to do that.