Affiliate marketing is often termed as one of the best online marketing programs that are available to small business. Why? There is no risk when it comes to affiliate marketing, you only pay after the results are delivered. Using an affiliate marketing program you agree to pay your affiliate partners a referral fee for each lead or sale that is generated.
Affiliate marketing has contributed to the rise of many leading online companies. Amazon.com, one of the first significant adopters, now has hundreds of thousands of affiliate relationships. It is not uncommon to see industries where the major players have affiliate programs--often structured in a similar manner and making similar competitive changes over time.
Affiliate marketing is also the name of the industry where a number of different types of companies and individuals are performing this form of Internet marketing, including affiliate networks, affiliate management companies, and in-house affiliate managers, specialized third party vendors, and various types of affiliates/publishers who promote the products and services of their partners.
An affiliate network acts as an intermediary between publishers (affiliates) and merchant affiliate programs. Affiliate networks offer tracking technology, reporting tools, payment processing, and access to a large base of affiliates. Affiliate networks offer such services as one-click application to new merchants, reporting tools, and payment aggregation to affiliates. It allows website publishers to more easily find and participate in affiliate programs which are suitable for their website
An affiliate manager manages affiliate programs by helping affiliates generate sales, track purchases and send commission, among other activities.
Pros and Cons of Affiliate Marketing:
Let's start with the pros
- A merchant can get more and more customers without spending valuable time in searching out for them.
- Affiliate marketing offers the merchant a wider place to sell their product and services.
- Different consumers coming from various websites can provide the merchant a good idea regarding consumer trends and demands.
- To the Affiliate Marketer. This kind of business has proved to be an easy way to create additional income for their website.
Here in affiliate marketing, the merchant handles it all. The affiliate just needs to promote and resell the product.
This online business also have some disadvantages. Just like any other businesses, this one also involves shady and even illegal practices.
- Some affiliates sometimes make claims and promises regarding the product and services which are completely wrong or they extremely exaggerate it. When this happen, the merchant usually suffers complaints and they definitely lose potential consumer.
- Sometimes unscrupulous and dishonest merchants just close down programs without informing the affiliates. And worse, they leave without paying commissions.
- There are also some merchants who attract new affiliates by promising high commissions then after a week or two, they dramatically drop those commission rates.
- When hijackers interfere, affiliates typically don't get just commission, it goes to the hijacker instead.
The shady and illegal practices involved in this kind of business include false advertising, unlawful use of trade names, logos, or other branding, spamming and hijacking.
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