When you need a hand at marketing your goods online, you would best get it from affiliate marketing. In simple terms, this involves a revenue-‐sharing venture between a site owner and an online merchant. The merchant’s products are promoted through the owner’s site by placing ads and links.
As mentioned earlier, profits are shared by both parties. How this is done depends on the agreed upon method. They may use one of three ways.
Pay-‐per-‐click – In this arrangement, a payout is made every time a potential customer clicks on a link placed on the site. The amount that site owners can earn here depends on the agreed-‐upon commission by both parties. This amount may be transferred right away or through a regular schedule.
Pay-‐per-‐sale – This time, profits are shared every time a customer makes a purchase on the merchant’s site through an affiliate link. In return, an affiliate might earn a commission based on a flat rate or a certain percentage of the product’s price.
Pay-‐per-‐lead – Every time someone registers on the merchant’s site as a potential customer, affiliates earn a certain amount with this type of deal. Marketing through affiliates benefits both parties. Merchants do not really have to do anything in this arrangement. This also saves money since they do not have to pay up if nothing is happening.
On the other hand, site owners could use their revenues to maintain their site. With enough effort, some may even work as full-‐time affiliate marketers. Of course there are a few drawbacks as well. For instance, merchants have to be careful on which sites to market their product. Affiliates need to be trustworthy enough not to drag their partners with bad publicity. Commissions that are too small could also lead to bad business relationship between merchant and affiliate.