What is Affiliate Marketing and How to use it to promote your Startup

Affiliate marketing can be used to earn income as well as promote your products through the reputed people online by publishing your product links on their website. This article will be a great to way to start begin your understanding on the same.

What is Affiliate Marketing

Affiliate by dictionary means to Keep company with or hang out with. Thats means if you want to sell your products you keep company with/hang out with the people who can influence your customers in buying your products. Say if your product is book, then you make book readers and book reviewers your affiliate, and all they have to do is to recommend your book and you share some commission with them on every sale made through their website.

e.g. If you release a book worth INR 100, and give an opportunity to people to promote your book via an affiliate program for a commission of 10% for every sale. If bloggers/reviewers sign up to be an affiliate with you, they shall be given a unique code that shall enable them to promote your book and earn INR 10 on every sale.

Its may not be always the sale, affiliate link are used to performs the other desired actions too, such as make a purchase or opt-in for downloads or newsletters on the advertiser’s site, for lead generation, etc.

Affiliate marketing is also used to increase traffic, sales, and online brand visibility.

How this Works

The concept of Affiliate marketing comprises of three key components:

1. Affiliate Site (where a website owner earns revenue by promoting products and services via banners or text links on his or her website)
2. Merchant site, who sells the merchandise
3. Customer

Startups can promote their business by offering affiliate programs on their website or they can also use third party services to track conversions. Startups, acting as a merchant can pay the Affiliate via any of the following payment structures:

Pay per Sale (PPS): Advertiser pays the affiliate a percentage of the sale that takes place

Pay per Action (PPA): Advertiser pays the affiliate for each specified action (newsletter subscription, form submission, etc.)

Pay per Lead (PPL): Advertiser pays the affiliate per Lead Generation.

Pay per Click (PPC): Advertiser pays the affiliate on per click basis.

CPM (Cost per mile / thousand impressions): Advertiser pays the affiliate for every 1000 impression

Conversions are tracked via unique code given to the affiliate that is embedded in the link which leads to the merchant website.

Why to Use Affiliate marketing

Many eCommerce websites have their own affiliate program and are seeing huge success. In 1996, Jeff Bezos, CEO and founder of Amazon.com, popularized this idea as an Internet marketing strategy. Amazon.com attracts affiliates to post links to individual books for sale on Amazon.com, or for Amazon.com in general, by promising them a percentage of the profits if someone clicks on the link and then purchases books or other items. The affiliate helps make the sale, but Amazon.com does everything else: They take the order, collect the money and ship the book to the customer. With over 500,000 affiliate Web sites now participating, Amazon.com’s program is a resounding success.

How to find Affiliates

• There are many ways like googling your keyword and see if someone is writing in the same field and connect with them
• Join an Affiliate Networks. An affiliate network will help you set up an affiliate program and work to recruit affiliates for you. You’ll have to fill out an application describing the nature of your business and your Web site.
• Maintaining an affiliate program yourself, which is a little complicated process.

Choose the best Affiliate for your Product

Affiliate marketing can work brilliantly on blogs as readers are more likely to follow the recommendations that a blogger makes. On the other hand, promoting a wrong product/service might also cost the blogger his/her reader. So, the crux of affiliate marketing lies in promoting the right product/service.

For affiliate marketing to work well, one needs to have high blog/website traffic, promotion of qualitative and relevant products, and customers in ‘buying’ mode!

Affiliate marketing is also called ‘Performance marketing’ in reference to the way salesmen/ saleswomen are compensated. Though the affiliate is not employed by the advertiser, the compensation way remains the same.

For Startups it is a feasible idea to not only be an advertiser but be an affiliate too. It makes sense to have an extra passive source of income.

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