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How Does Affiliate Marketing Work?

Let’s start with a basic definition of affiliate marketing, it is: 

"An Internet-based system where you (as an affiliate) get paid for referring sales or customers to another business."

It’s a bit like how a real estate agent doesn’t own the houses they sell; instead they promote houses on behalf of their clients, and earn a cut of the sale price of any properties sold.

The merchant/advertiser is the person or company that creates and owns the product. Now it’s up to the merchant to work their magic and get that person to buy. If the person does decide to purchase, then the affiliate that sent them to the site earns a commission, which is a percentage of the product’s sale price. Easy, right? 

There are a lot of ways to place these commission-earning links on your website, so you don't even have to know how to make banners. One of the most popular ways to add links is to simply include them in your content. 

In a similar way, you can write (or have someone else write) content on a topic, and then link to a product that might be useful for the reader. So long as the link you use is an affiliate link, you'll be lined up to earn a commission. 

With affiliate marketing you typically have a website. Now you don’t actually need a website – there are loads of different ways to do affiliate marketing and some of them don’t even involve owning a website – but most affiliates prefer to have their own digital “real-estate”. It’s also the method you utilise as the idea is to build a brand, and grow an affiliate strategy that will profit you in on long-term basis. 

On your website you talk about different affiliate products – recommend them to readers, give detailed reviews, make comparisons and so on. 

You’ll have a special link, known as an affiliate link, for every product that you’re promoting. Affiliate links have tracking in them to make sure that you get credited with every sale you make. When someone clicks your affiliate link, then the merchant/advertiser knows it was you who sent the customer.

Let me stress that affiliate links don’t affect the customer as they don’t pay more, they don’t miss out on anything, and they will most likely never know that they purchased through an affiliate link.

All it means is that when a customer buys something within a certain time period after clicking on your affiliate link, you get the commission. 

So the big goal of affiliate marketing is to get as many people as possible clicking on your links and visiting merchant pages; the more people that click on your affiliate links, the more chances you have of a sale occurring and earning a commission. Simple, right ? 

We cover loads of different ways of getting traffic! Some of these methods are paid, such as PPC (pay-per-click) advertising, and some are free, like SEO (search engine optimization) but take a little more time and effort on your part. You can find more information on both of these traffic methods in "introduction to PPC" and "introduction to SEO."

If this all seems a bit overwhelming, don’t panic. Getting started with affiliate marketing is actually really easy. 

Most importantly, you need to take action. The most successful affiliate marketers are those who do, rather than those who think about doing. You might not get it right the first time, but the experience is what really counts when you are learning affiliate marketing. You will hone your skills and abilities over time, so don’t sweat the fine points!